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Commercial Lines Rating Series: Part 8 – Causes of Loss – Special Form

February 3, 2015
Insurance Rating

Causes of Loss – Special Form

Special Cause of Loss provides coverage for risks of direct physical loss unless excluded or limited.

Theft coverage is included when using the limit of insurance (LOI) rating method, but it can be excluded.

The Watercraft Exclusion modifies coverage under Special Form. It excludes watercraft damage to retaining walls that are not part of a building, bulkheads, pilings, piers, wharves, or docks.

When rating a policy with special form, specifically rated properties as well as class rated properties are eligible. The amount of insurance and the coinsurance percentage must be the same for each cause of loss rated.

Property in offices may be written as a separate item under Special Causes of Loss and the remaining property may be written under Basic or Broad Causes of Loss forms.

There are also some eligibility requirements for Special Form:

  • Coinsurance must be at least 80% for property damage and 50% for time element Coverages.
  • Certain kinds of risks are not to be written on a Special Form policy:
    For buildings and personal property:
      • Farm or farming operations
      • Grain elevators, grain tanks, and grain warehouses
      • Nuclear reactor plants and installations
      • Neon, automatic, or mechanical electric outdoor signs erected or in the course of construction
      • Risks rated using the Rating Plan for Highly Protected Risks or Superior Risks
    For stock (unless incidental to the principal business):
      • Dealers in live poultry or live animals, etc.
      • Dealers in plants or shrubbery, florist greenhouses, nurseries
      • Wholesale fresh fruit and vegetable dealers

To develop the premium for a Special Form policy, you will need to rate:

  • Group I Causes of Loss
  • Group II Causes of Loss


  • Special Causes of Loss

Basic Group I (BGI) and Basic Group II (BGII) loss costs are determined in the same way as a Basic Form policy, regardless of whether the risk is class rated or specifically rated.

Here is an example of what the special form loss costs might look like using the LOI rating method:

Building coverage

Loss Cost: .044 (includes theft coverage)

To exclude theft from building coverage, apply a factor of .88 to the building rate.

Personal Property coverage

Special Form Loss costs:

Occupancy Category Loss Cost
Residential Apartments and Condominiums
Mercantile — High
Mercantile — Medium
Mercantile — Low
Motels and Hotels
Institutional — High
Institutional — Low
Industrial and Processing — High
Industrial and Processing — Low
Service — High
Service — Low
Territory (County) Territorial Multiplier
Balance of State

Factors to exclude theft from Personal Property coverage:

Occupancy Category Theft Exclusion Factor
Residential Apartments and Condominiums
Motel-Hotel Risks
Contractors Risks
All Other Risks

Applying rate factors:

BGI and BGII loss costs

  • The same rate factors, applied in order for a Basic form policy, also apply to a Special form policy when rating BGI and BGII.

Special Form loss costs
Apply applicable rate factors in the following order:

  • Company filed loss cost multiplier
  • Territory multiplier
  • Coinsurance adjustment, if applicable
  • Theft exclusion factor
  • Limit of Insurance relativity factor, if LOI rating method is used (interpolated)
  • Factors or charges required by individual rules
  • Taxes unless local requirements dictate otherwise
  • Payment plan factor

Apply additive factors before applying multiplicative factors unless a rule states otherwise.

“Formula” to rate a policy with Special Causes of Loss without factors or charges dictated by individual rules — using (LOI) methodology.

Group I:

Building coverage and Contents coverage

  • Basic Loss Cost X Company Loss Cost Multiplier X Protection Class Multiplier (if class rated) X Territory Multiplier (if class rated) X Coinsurance X Interpolated LOI Relativity Factor = Final Rate.
  • Final Rate X Limit of Insurance per 100 = Group I premium.

Group II:

Building coverage and Contents Coverage

  • Basic Loss Cost X Company Loss Cost Multiplier X Coinsurance X Interpolated LOI Relativity Factor = Final Rate.
  • Final Rate X limit of Insurance per 100 = Group II premium.

Note: Territory and Protection Class multipliers do not apply to Group II.

Special Cause of Loss:

Building coverage and Contents coverage

  • Basic Loss Cost X Company Loss Cost Multiplier X Territory Multiplier X Coinsurance X Theft Exclusion Factor (if applicable) X Interpolated LOI Relativity Factor = Final Rate.
  • Final Rate X Limit of Insurance per 100 = Special Causes of Loss Premium.

Note: Protection Class Multiplier does not apply.

The complete Special Form Rule (Rule 72) is found in Division Five of the Commercial Lines Manual.

Subscribers, full rating training for your staff is included in your WSRB package at no additional cost! Call Terry Krueger at 206-273-7153 or email

Article by: Terry Krueger, Subscriber Services Administrator

Check out more articles from our Commercial Lines Rating Series!

It’s a WSRB F.I.R.S.T.!

December 23, 2014


Yes, it’s our Fully Interactive Risk Search Tool in PropertyEDGE!


Did you know, when you log in to PropertyEDGE our Class and Specifically Rated risks will appear in an overlay on the map with a link to the loss cost? This overlay will automatically load when you’re zoomed in to approximately the .2 mile aerial overview level. For some areas, the overlay will outline the individual building with a flag showing the risk number. In most areas, there will be a flag on the street next to the address location of the building.

In the picture above, you can see the flags and risk numbers along the street. This indicates links to loss cost information for these rated risks.

In the picture above, you can see the flags and risk numbers along the street. This indicates links to loss cost information for these rated risks.

The above image shows the outline of a rated risk with the risk number and link in the middle.

The above image shows the outline of a rated risk with the risk number and link in the middle.

This overlay feature works with any of the basemaps in PropertyEDGE.

New Picture (5)

Accessing Reports and Loss Costs

Before accessing a loss cost, be sure that your popup blocker is turned off. Once the map is loaded, search for your address in the Address bar. The map will zoom in to this location and the overlay will automatically appear.

At the top left side of your screen, click on “Tools” to open the Tools menu.

New Picture (6)

–          Once the Tools menu is opened, click on “Identify Risk.”

–          Once “Identify Risk” is selected, simply click on the outline of the building or the flag on top of it to see the loss cost page.New Picture (7)

Note: The loss cost search page will appear as a popup. If you don’t see the loss cost page:

    • Is your popup blocker turned off? If you’re not sure how to check, contact your IT Department or give us a call.
    • Did it appear behind the PropertyEDGE window? If so, try minimizing PropertyEDGE and other programs to see if it’s open behind everything else.

–          Clicking the building or flag will bring up the loss cost page with the risk number automatically entered into the Risk Search box.

Check to be sure the appropriate LOI (Limits of Insurance) and Rule 85 buttons are clicked and hit “Search.”

–          The loss costs and a link to the inspection will appear!

New Picture


Turning Layer Off

New Picture (1)

–          To turn this overlay OFF, simply go to the Layers menu on the right hand side of your screen.

–          Click the down arrow or the word “Layers.”

–          Click on “WSRB Rated Buildings” to uncheck the box.



Why won’t my map pan?

–          If you’re having trouble moving the map, be sure you’ve unchecked the “Identify Risk” button in the tools menu.

New Picture

Why isn’t the loss cost page showing up?

–          If the loss cost page doesn’t appear:

  • Be sure you’ve selected “Identify Risk” before clicking on the map.
  • Minimize your windows to be sure the page didn’t appear behind the PropertyEDGE window.
  • Be sure your popup blocker is turned off.

Handy Tips for Using PROTECTION and PropertyEDGE™

November 20, 2014

If you are a WSRB Subscriber, you probably use PROTECTION or PropertyEDGE™, our two programs for finding Protection Class (PC) information and other data in Washington State and beyond.

Although our GIS department is constantly updating these map-based systems, you still may occasionally come across a property that doesn’t show up. Over the years, our Customer Service team has developed some tricks of the trade that we’d love to share to make your job easier:

  • Use abbreviations (Ave instead of Avenue): Our addresses come from county assessors, who generally use abbreviations. When you enter an address, the closer it is to the assessor’s, the more likely our system will find it.
      • Hint: One common abbreviation head-scratcher is State Route. Try SR!
      • Exception—because there’s always one: Write out the word Loop.
  • Enter the Zip Code, but leave city name blank: Many times, an address doesn’t come up because it doesn’t match the city entered; a property that is between two cities may be commonly considered part of one city but technically assigned to another. Zip Codes are more precise, so you have a better chance of finding the property.
  • Find a PC even without an address match: If you know exactly where a property is but the address isn’t found, you can still get a PC.
      • In PROTECTION, you can zoom to a Public Land Survey (Section, Township, and Range), Zip Code, or Lat Long to help target the area. Then, Turn Map Select ON to get a PC anywhere you click on the map.
      • In PropertyEDGE™, zoom to Zip Code, Lat Long, or PLSS (Section, Township, and Range). Use Geocode Point to click on the map and get information about PC, soil type, active wildfires, distance to fault lines, census data, and much more.




  • Check if the property is part of a new development: A new address may not yet be in the county assessor’s system, which means it won’t be in ours either. Contact our Customer Service department and we can find the exact placement. We may ask for parcel number, PLSS, owner’s name, or other identifying information so we can make sure we’re giving you the correct answer.
  • Look at the Geocode Data Source: Sometimes, a warning will come up in PROTECTION to let you know that there may not be an exact match. This typically happens in areas where assessor’s parcel data is unavailable and our system must rely on external services, such as Bing, to locate the address. That doesn’t mean the answer is wrong, but we recommend you carefully review the map image to visually verify we have placed the address correctly. You are always welcome to call Customer Service if you don’t feel confident that it’s the right location.
Geocode Data Match warning

Geocode Data Match warning

  • Let us know if we’re missing a hydrant: There are hundreds of thousands of hydrants in Washington State, and although we work very hard to capture them all, sometimes we miss one. If you can provide us with the exact placement —a picture of the location, or a description like “SW corner of Main St and 1st Ave N”—we’ll give you a corrected PC and add the hydrant to our system with our monthly updates.
  • Don’t hesitate to contact us! WSRB Customer Service is happy to help you with any questions you might have. Call us at 206-217-0101 or send an email. Representatives are available Monday through Friday, 8:00am to 4:30pm PT.

Additions to Protection Class 9 Criteria Coming Soon

September 30, 2014

The Washington Surveying and Rating Bureau (WSRB) is revising some Protection Classes in Washington State to more accurately classify fire protection capabilities that reduce fire loss.

Through ongoing research in loss experience and fire department capabilities, we have identified the need for a change to WSRB’s Public Protection Classification Manual. This change affects dwelling properties only.

What is the change?

Currently a Protection Class (PC) 9 rating applies to dwelling properties within 5 road miles of only a recognized Class B fire station (see Figure 1). Class B fire stations meet minimum requirements for staffing, apparatus, and equipment.

Figure 1: current PC 9 rating situation

PC 9 classification will continue to apply to the above current situations, and it will also apply to dwellings over 5 road miles but within 7 road miles of a Class A fire station as long as there is a standard fire hydrant within 1,000 feet or the community receives WSRB Tender Credit (see Figure 2). Class A fire stations are staffed and equipped at a higher level than Class B fire stations.

7 mile rules

Figure 2: additional PC 9 rating situation, effective Nov 1, 2014

What is the effect?

These changes give PC 9 credit to dwellings over 5 road miles but within 7 road miles of a recognized responding Class A fire station and within 1000 feet of a creditable water supply. This class is property specific; not all properties in the 5 to 7 road-mile area will qualify. Dwellings not qualifying under these new rules will continue to be rated PC 9A.

PC 10 applies to dwelling property outside the boundaries of any recognized fire district or city.

When will these changes be effective?

These changes have been filed and approved by the Washington State Office of the Insurance Commissioner and will be effective on November 1, 2014. WSRB’s website will reflect these changes to Protection Classes on this date.

Any questions? Please contact WSRB Customer Service at 206-217-0101 or

Northwest Residential Fire Sprinkler Summit

September 2, 2014

WSRB would like to encourage you to attend the Northwest Residential Fire Sprinkler Summit on Thursday, Sept. 18th, at the Heathman Lodge in Vancouver, WA. This event is an excellent opportunity to get connected to the issues, the experts, the advocates, and the resources. CEUs are available.

See the flyer below for details. More information is available here.

Immediately following the event is a “Vendor Connections” exhibit showcasing the latest technology and resources. Stay until traffic subsides while enjoying the information, networking, appetizers, and door prizes.

On Friday, Sept. 19th, NFSA’s John Corso will be instructing a one-day class entitled “Residential Fire Sprinklers: Homes to High-Rise.” It’s a great opportunity to learn more detailed information about fire sprinklers and earn additional CEUs. Registration for this class is available at

E-cigarettes and the Risk of Fire

August 19, 2014


The first time you saw someone walking down the street smoking a glass tube with an electric blue or red light on it, you were probably taken aback. Electronic cigarettes (or e-cigs) are surrounded by controversy, but whatever your opinions on cigarettes and smoking, they have revolutionized an industry. Initially, it seemed, from a fire safety standpoint, if people don’t have burning objects in their hands, much of the fire loss associated with smoking can’t happen. (An estimated 90% of forest fires are man-made, with discarded cigarettes being one of the major causes, and over 1,000 home fire deaths every year are attributed to cigarettes.) Are e-cigs any more fire-safe than the traditional cigarette, and what exactly are they?

E-cigs are battery operated devices that allow the user to inhale nicotine via a vaporized nicotine substance (sometimes called “juice”). Not all e-cigs have nicotine in their juice and it’s up to an individual user if they want the juice to contain the nicotine.  A sensor placed inside of the e-cigarette senses when the user is inhaling and a microprocessor heats and vaporizes the juice thus allowing the smoker to inhale the vapor.  Because they’re battery-powered they need to be charged and can break. Rather than exhaling smoke, e-cig smokers exhale a vapor which provides the taste and sensation of smoking.

E-cigs are relatively new, so obtaining fire hazard numbers is difficult at this point. A quick google search leads to an article about one exploding in the UK, and another sparking a home fire in Oklahoma. But it appears the e-cigs themselves are not so much the issue as the lithium batteries contained within and the way in which they’re charged.

Thus far it would appear the numbers of injuries or deaths from the fire aspect of e-cigs is significantly less than those of traditional smokes. But if you’re an e-cig smoker, or contemplating switching to them, what safety precautions should you take?

  • Read the instructions! Know how your e-cig works, and don’t press the button to activate the cigarette for any longer than you need to. This can cause the atomizer (that makes the vapor) overheat.
  • Many electronic cigarettes are made to plug into walls and not vehicles.
  • Charge on a clutter-free, non-combustible surface.
  • Unplug the electronic cigarette once it’s fully charged. Because voltage can fluctuate, an over-charged device can actually result in parts of the e-cig blowing up.
  • Don’t leave your device unattended while it’s charging.
  • Look into getting a fireproof safety bag to use when you’re charging your e-cig battery.
  • Beware of the juice around small children and pets. If a small child or pet eats a traditional cigarette they’ll probably have a stomach ache, but recuperate quickly. E-cigs use a concentrated nicotine juice which can be fatal to pets and make children extremely ill. In fact, the number of animals dying from nicotine overdose has exploded since e-cigs have become more popular.

While e-cigarettes are not actively burning like traditional cigarettes they do pose their own inherent risks. Take care and be fire safe!

The intent of this article is to discuss the possible fire safety of electronic cigarettes. WSRB makes no comment on the health, use, or hazards of these devices nor does WSRB make any comparison to the health of traditional cigarettes or smoking.

Tracy’s Thoughts: Agents of Change

July 24, 2014

tracyI’ve always disliked that title. Or worse, “change agents.”  But you have to admit, they have a real ring to them: cutting edge, driver of newness, destroyer of… okay, getting carried away.

I first heard the term in the 1980s or 1990s at a seminar the company put on to teach all to be change agents. Drive the company to new heights and purge the non-believers. Maybe a bit much, but the name has this dynamic to it. Venturing into the bright new future and carrying the torch of progress!

I could never really figure out what they were wanting from us (I might have been a poor candidate).  All of the classes, hiding cheese books, and such were more and more of the same: things all around us were changing and we must keep up! The old phrase, “A keen perception of the obvious,” comes to mind. I recently saw another seminar (thankfully not from my company) that was touting the benefits of accepting change. There must be buckets of money in selling this stuff.

My father was a printer as far back as I can remember. He and his father printed some of the first Seafair programs, so I am told. Sometime in the late 1950s he traveled back east to see a new printing method that involved photography rather than type setting. Changed everything.

My first company job in insurance was in an underwriting department with World War II era double-pedestal wooden desks. Marvelous things. A few years after that we got cubicles and phones that did not have 5 buttons. Our claims sheets became printouts from this huge air-conditioned room in the basement with row after row of tape machines processing and storing information. Sometime in the late 1970s a monitor was slapped on my desk one morning and much of our stuff was showing up there and not on paper. It was called a “dumb monitor,” the only computer term I ever really liked. I invested in a company that made monitors at that time, my first venture into the stock market. The company stock went up like a rocket and blew up the same way. A bit later a new high tech company was coming along named Microsoft, but I was not going to be stupid twice…

A PC was mailed to me in 1989, I think. IBM XT. We unpacked it, stared at it, and tried to sort out what to do with it. That was resolved pretty quickly when my annual budget was mailed to me on a big old floppy disk on Lotus 123. Had to learn both to work on the budget; home office was not much help. About a year after that, we all had PCs and were linked to Home Office in one form or another. Everything was done on them. I now have a laptop computer that probably has the computing power to operate a moderate-sized country’s accounting system. I have also been issued something called a tablet that is like a computer but smaller and more annoying.

Continuing on this downhill trend, I made a mistake and bought a cell phone. My life is tied to the thing. The flip phone gave way to a Blackberry then an Android (there is probably some fellow making millions thinking up nonsense names that become commonly accepted) and now an iPhone. Bought it this year and find it has been replaced already by a newer, sleeker model.  You can’t even play golf and be away from the office. It gets emails so I have to deal with those everywhere I am. People don’t call, they email or now text. That is confusing, by the way: text is words, so everything is text, isn’t it?

I am not going to talk about the difference between my first car and the one I have now.

So what changes are they talking about that I am having trouble adapting to?

Our new series, Tracy’s Thoughts, is a once or twice-monthly smorgasbord of thoughts from our Subscriber Services Manager, Tracy Skinner. Topics will range from vending at conventions to the importance of insurance, and beyond! We hope you enjoy Tracy’s thoughts and stop by for more!


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