AAIS THEATRICAL PROPERTY COVERAGE ANALYSIS

(August 2025)

Introduction

Eligibility

Policy Construction

IM 1505–Schedule of Coverages–Theatrical Property

IM 1500–Theatrical Property Coverage Analysis

   Agreement

   Definitions

   Property Covered

   Property Not Covered

   Optional Coverage

   Perils Covered

   Other Coverages–Collapse

   Perils Excluded

   What Must Be Done in Case of Loss

   Valuation

   How Much We Pay

   Loss Payment

   Other Conditions

Endorsements

Underwriting Considerations

INTRODUCTION

The American Association of Insurance Services (AAIS) offers Theatrical Property Coverage, which insures property used in staging theatrical productions. This coverage includes scenery, costumes, and other theatrical items specifically designed for these productions. It is intended for traveling theater companies and is not limited to specific locations.

ELIGIBILITY

Theatrical productions or plays are eligible. However, carnivals, circuses, and rodeos are not eligible. Costume rental companies and theatrical suppliers are not eligible to purchase this coverage.

POLICY CONSTRUCTION

AAIS Theatrical Property coverage requires at least these four forms:

Related Article: CL 0100 AAIS Commercial Lines Common Policy Conditions

IM 1505–SCHEDULE OF COVERAGES–THEATRICAL PROPERTY

This Schedule of Coverages is used with IM 1500 – Theatrical Property Coverage. It contains the following information:

SCHEDULE OF PRODUCTIONS

The item number, production description, and applicable insurance limit are entered in the designated spaces.

DEDUCTIBLE

The deductible amount for each covered loss must be entered in the space provided.

OPTIONAL COVERAGES

Breakage, marring, scratching, or exposure to light is not covered under the policy. If coverage is desired, a check mark must be placed in the area provided under the Optional Coverages section of the schedule of coverages.

RATES AND PREMIUM

This coverage is written on a non-reporting basis. This section provides spaces to enter the annual premium, the non-reporting rate per $100, and any applicable minimum premium.

IM 1500–THEATRICAL PROPERTY COVERAGE ANALYSIS

This analysis is of the 09 05 edition.

AGREEMENT

This section specifies the insurance company will provide the described coverage in return for the named insured paying the required premium. This agreement is subject to all terms outlined in the coverage form, the schedule of coverages, and any additional conditions that may apply. Endorsements or additional schedules included in the schedule of coverages are also applicable.

A statement indicates certain words and phrases highlighted in bold print in the coverage form are defined in the Definitions section immediately following the Agreement.

NOTE: The schedule of coverages does not have a clearly designated space to list endorsements or additional schedules that apply at inception.   

DEFINITIONS

Defined words are used throughout the coverage form. When these terms appear in the coverage form, the meaning provided in this section must be applied.

NOTE: The Editors added titles to enhance clarity.

You And Your

These are parties specifically named on the declarations as insureds.

We, Us, And Our

This definition refers to the insurance company providing the insurance coverage.

Limit

The applicable coverage amount.

Pollutant

This term is broad and covers various contaminants and irritants, including solids, liquids, gases, or thermal or radioactive substances. It encompasses acids, alkalis, chemicals, fumes, smoke, soot, vapor, and waste. Waste includes materials intended for recycling, reclamation, reconditioning, or disposal. Additionally, visible and invisible electrical or magnetic emissions, as well as sound emissions, are also classified as pollutants.

Schedule Of Coverages

Any page labeled as such containing coverage information, including declarations or supplemental declarations.

Sinkhole Collapse

A sinkhole occurs when the earth’s surface suddenly sinks or collapses into an underground cavity formed by water erosion on limestone or other rock types. The definition of sinkhole collapse excludes considerations of the land value or expenses involved in filling sinkholes.

Specified Perils

The definition contains the following specifically named perils:

•         aircraft

•         civil commotion

•         explosion

•         falling objects

•         fire

•         hail

•         leakage from fire extinguishing equipment

•         lightning

•         riot

•         sinkhole collapse

•         smoke

•         sonic boom

•         vandalism

•         vehicles

•         volcanic action

•         water damage

•         weight of sleet, snow, or ice

•         windstorm

Two of the above terms need further explanation as follows:

•         Falling Objects

This coverage does not extend to personal property stored outdoors. Additionally, it does not cover damage to the interiors of buildings or personal property stored inside buildings unless a falling object first breaches the building's exterior.

•         Water Damage

This refers to the sudden or accidental discharge or leakage of water or steam. However, it must be a direct result of a part of the system or appliance that holds the water or steam, which is cracking or breaking.

Terms

All provisions, limitations, exclusions, conditions, and definitions relevant to the coverage provided.

Volcanic action

This action refers to the effects of a volcanic eruption, which can include airborne volcanic blasts, shock waves, ash, dust, particulate matter, or lava flow. However, it does not cover the costs associated with removing ash, dust, or particulate matter unless they cause direct physical damage to the insured property.

PROPERTY COVERED

The insurance company covers property described below, subject to any exclusions or limitations. 

Theatrical Property

1. Coverage

This form covers direct physical loss to the named insured's covered property caused by a covered peril. The covered property under this form is limited to theatrical property, such as costumes, scenery, and similar property. Additionally, theatrical property of others in the named insured's care, custody, or control is also covered.

A person holding a sword with another person in the background AI-generated content may be incorrect.

 

 

 

 

 

Example of Theatrical Property

2. Coverage Limitation

The covered theatrical property is limited to what is used in the production or productions listed on the coverage schedule.

Example: The Melancholy Players have been performing for more than ten years. Over the years, it has kept most of the props, costumes, scenery, and other property in case they may be useful for a future production. A fire destroys all of Melancholy's property. Only the property listed in the Schedule of Productions on the Schedule of Coverages form is covered for fire loss.

PROPERTY NOT COVERED

There is no coverage for the following property:

1. Animals

This form does not apply to animals. No exceptions are allowed, and no definition of animals is provided.

2. Buildings and Improvements

This form provides coverage exclusively for theatrical property used in a production. It does not cover any buildings owned by the troupe. Additionally, there is no coverage for any improvements made to a building, even if those improvements are intended to assist with the production. No exceptions apply to this exclusion.

Example: This is an example of a venue that a local or professional theater company may rent for performances in a theater space. It's important to understand that this property cannot be covered under form IM 1500, as this policy exclusively provides coverage for theatrical property utilized in a production.

 

3. Contraband

Property illegal to possess is not covered. Property legal to possess but used as part of an illegal trade or transported illegally is also not covered.

4. Furniture, Fixtures, and Other Property

These items are not covered unless they are used in the production described on the schedule of coverage.  

Example: The Melancholy Players are reviving "His Girl Friday," and an important scene in the production requires a substantial roll-top desk, along with additional desks and chairs to create a newspaper office setting. These items are currently covered, as they are part of the production's props.

 5. Jewelry

Jewelry and watches are not covered. Additionally, other items that consist of precious or semi-precious stones, as well as gold, silver, or platinum, are not covered.

NOTE: The policy does not explicitly state that jewelry and watches not made of stones or precious metals are covered. Therefore, this implies that costume jewelry is also not included in the coverage. The wording is unclear and could lead to ambiguity in the event of a claim.

6. Money and Securities

Currency, accounts, bills, food stamps, and other evidence of debt are not covered. Transportation and admission tickets, as well as money, notes, and securities, are also not covered.

NOTE: A Commercial Crime policy might be considered for the above exposures.

Related Article: Commercial Crime Coverage Analysis

7. Valuable Papers

Valuable papers and, specifically, deeds are not covered.

8. Vehicles

Motor vehicles that are licensed for use on roads or highways, or that are being used on roads or highways, are not covered. However, there is an exception: an unlicensed motor vehicle used as scenery or stage property in a production specified in the schedule of coverages is covered.

OPTIONAL COVERAGE

This coverage is optional and only applies if it is listed on the schedule of coverages.

Breakage, Marring, Scratching, Exposure to Light

This is used to remove exclusion 2.c.

Loss caused by any of the following perils damaging covered property will be paid:

·         Glass, tubes, bulbs, lamps, or glass articles breaking

·         Marring or scratching

·         Exposure to light

PERILS COVERED

Coverage applies to risks of direct physical loss, unless the loss is limited or caused by an excluded peril.

OTHER COVERAGES–COLLAPSE

1. Coverage

Loss to covered property occurs when there is a direct physical loss resulting in the collapse of a building, structure, or any part of it containing covered property.

2. Covered Perils

The only collapse coverage provided is collapse caused by one or more of the following:

3. Collapse Means

Collapse refers to the sudden and unexpected sinking or caving in of a building, structure, or parts of it, making the structure unusable for its intended purpose.

4. Collapse Does Not Mean

The following buildings and structures are not considered to be in a state of collapse:

5. Coverage Limitation

The covered property limit does not increase for this coverage.

Example: The Melancholy Players are scheduled to perform at Perilous Towers. Although they have expressed some concerns about the creaky sounds coming from the building, they were assured that it has passed all inspections and is structurally sound. All of their belongings have been moved in, and rehearsals have begun.

However, during the night, part of the roof suddenly collapsed, destroying all of the Melancholy Players' property. Fortunately, the loss is covered by insurance, as the collapse was unexpected and caused by hidden decay that the insured was not aware of.

PERILS EXCLUDED

1. Primary Exclusions

The first group of exclusions is essentially absolute. Subject to specific exceptions, loss or damage by each is fully excluded, regardless of any other cause or event contributing to a loss, either concurrently or in any other sequence. The insurance company does not pay for any direct or indirect loss or damage caused by or resulting from any of these events.

a. Civil Authority

There is no coverage for loss resulting from orders issued by any civil or government authority. Such orders may include seizure, confiscation, destruction, or quarantine of property. However, this exclusion is not limited to these specific actions. The only exception is when a civil authority destroys property to control a fire that causes loss or damage. This exception applies only if the fire is caused by a covered peril

b. Nuclear Hazard

The insurance company does not cover loss or damage from any nuclear reaction, radiation, or contamination, whether the incident was controlled or not, or caused by any means. Any loss caused by the nuclear hazard is not considered a fire, explosion, or smoke loss. However, coverage does include direct loss or damage caused by fire resulting from the nuclear hazard.

c. War and Military Action

The insurance company does not cover loss or damage caused by any act of war. This includes undeclared wars, civil wars, or warlike actions by military forces. Additionally, measures taken to hinder or defend against actual or expected attack by any government or sovereign authority using military personnel or agents are also classified as war and are not covered.

In addition, acts of insurrection, rebellion, revolution, or unlawful power seizure, along with any government measures to prevent or defend against these acts, are excluded. If any such action involves nuclear reactions, radiation, or contamination, this exclusion overrides the nuclear hazard exclusion. 

NOTE: This means the exception for fire resulting from a nuclear hazard does not apply when it is caused by war.

2. Secondary Exclusions

The second group of exclusions applies to loss or damage caused by or resulting from any of the following events. Some of these exclusions have exceptions, conditions, or limitations that should be carefully noted and reviewed. The insurance company will not cover any loss or damage caused by any of these events.

a. Acts or Decisions

There is no coverage for losses caused by or resulting from acts or decisions made by any person, organization, or government entity. This exclusion also applies to instances where there is a failure to act or decide.

However, there is an exception to this exclusion. If an act or decision, or a failure to act or decide, leads to a covered peril, then the loss or damage caused by that peril is covered.

b. Animal Nesting, Infestation, or Discharge

Coverage does not extend to loss or damage caused by nesting, infestation, or the discharge or release of waste, secretions, or other substances by animals. This definition of "animals" includes, but is not limited to, birds, insects, and vermin. However, if any of these excluded events lead to a covered peril, the resulting loss or damage from that peril is covered.

Example: The Kensington Players are presenting a summer outdoor program. Unfortunately, the way the backdrop was constructed attracted bees. The players were dismayed when bees swarmed, and honey began to drip down the walls. As a result, the backdrop had to be destroyed and rebuilt. No coverage is provided due to this exclusion.

c. Breakage, Marring, Scratching, or Exposure to Light

Loss or damage caused by the breaking of glass objects or items made mostly of glass is excluded. Additionally, when loss or damage is caused by property being marred, scratched, or exposed to light; there is also no coverage.

However, if breakage, marring, scratching, or exposure to light results in a “specified peril,” theft, or attempted theft, coverage will apply provided the loss or damage is caused by one of these three exceptions. Additionally, there is coverage if the property is in the custody of a carrier for hire.

Example: Melancholy's current production is Guess Who's Coming to Dinner. It requires a well-set table with lovely china and crystal. These items are carefully packed, but when they are unloaded, a cast member, who was moving too quickly, tripped over the open crate, resulting in half of the items being smashed. Because of this exclusion, no coverage applies. However, if the optional coverage for Breakage, Marring, Scratching, or Exposure to Light had been purchased, coverage would apply.

d. Collapse

Loss caused by collapse is not covered unless the collapse is included under Other Coverages - Collapse, in which case coverage applies. Additionally, if an excluded collapse results in a covered peril, coverage extends to the damage or loss caused by that peril.

e. Contamination or Deterioration

Loss or damage caused by contamination or deterioration is excluded. This includes, but is not limited to, corrosion, decay, fungus, mildew, mold, rot, and rust. It also applies to any quality, defect, or weakness in the covered property that leads to self-damage or destruction, although this list is not exhaustive.

However, if contamination or deterioration results in a covered peril, the resulting loss or damage from that peril is covered.

f. Criminal, Fraudulent, Dishonest, or Illegal Acts

Coverage does not apply to loss caused by, or resulting from criminal, fraudulent, dishonest, or illegal acts committed by any of the following, whether alone or in collusion with others:

·         The named insured.

·         Others with an interest in the property.

·         Others to whom the property has been entrusted.

·         The named insured's partners, officers, directors, trustees, joint venturers, members or managers, as applicable, based on the named insured’s type of business organization.

·         Employees of any of the groups listed above. Employees are excluded even if the act occurs when they are not considered to be working.

However, this exclusion does not apply to covered property in the care of a hired carrier.

g. Electrical Currents

There is no coverage for loss or damage caused by artificially generated electrical currents that damage electrical equipment or wiring inside the insured property. This exclusion specifically applies to the property that generated the electrical current.

However, there is an exception to this exclusion. If electrical currents lead to a fire or explosion, the loss or damage resulting from that fire or explosion is covered.

h. Fault, Defect, or Error

Loss or damage due to errors, faults, or defects in planning, zoning, surveying, site plans, grading, compaction, land use, or development is not covered. Additionally, loss caused by errors, faults, or defects related to property design, blueprints, specifications, workmanship, building, maintenance, installation, renovation, remodeling, or repair is also excluded.

An important provision included in this exclusion applies both on and off the designated premises and remains valid regardless of any negligence. However, if loss or damage from one of the listed events leads to a covered peril, any loss or damage caused by this peril is covered.

i. Loss of Use

There is no coverage for loss resulting from delay, loss of use, or loss of market.

j. Mechanical Breakdown

Loss to insured property caused by mechanical breakdown or failure is excluded from coverage. Additionally, losses resulting from rupture or bursting due to centrifugal force are also not covered. However, if an excluded loss leads to a covered peril, the resulting damage from that covered peril will be covered.

k. Missing Property

This is the unexplained or mysterious disappearance of covered property, and it is not covered when there is no physical evidence indicating what happened to it, especially if the only proof of a loss is based on an audit or physical inventory. However, this rule has an exception. It does not apply to covered property in the custody of carriers for hire.

Example: Melancholy's prop master is beside himself. The elaborate centerpiece for the dinner table is missing. It does not belong to the company, and he cannot imagine who might have taken it. There are no obvious signs to indicate it was stolen. He knows it was in the room when he locked up the night before, but it was not there when he opened the door in the morning. Since there is no proof a covered peril occurred, there is no coverage.

l. Pollutants

There is no coverage for loss caused by or resulting from any release, discharge, seepage, migration, dispersal, or escape of pollutants. However, when a pollutant release results in a specified peril, the resulting loss from that specified peril to covered property is covered.

m. Process to Repair, Adjust, Service, or Maintain

If loss or damage occurs due to the repair, adjustment, service, or maintenance of covered property, it is generally excluded from coverage. There is an exception to this rule: if any actions result in a fire or explosion, the resulting loss or damage caused by the fire or explosion will There is an exception to this rule: if any actions result in a fire or explosion, the resulting loss or damage caused by the fire or explosion will be covered.be covered.

n. Temperature or Humidity

Coverage is not provided when dryness, dampness, humidity, or changes and extremes of temperature cause or result in loss or damage to covered property.

This exclusion has an exception: if any of the above results in a covered peril, the loss or damage caused by that peril is covered.

o. Theft from an Unattended Vehicle

Coverage does not apply to theft of covered property from an unattended vehicle unless the vehicle was locked, its windows securely closed, and there was visible evidence of forced entry into the vehicle. However, it does not apply to covered property in the custody of carriers for hire.

Example: Melancholy is excited about its upcoming production of Cats. It is the most elaborate production they have attempted. It is using Props and Things, a carrier for hire, to transport most of the large set pieces.

When items are stolen from one of the trucks, coverage applies even if the truck was unattended and unlocked at the time of the theft.

p. Unauthorized Instructions

Coverage does not apply if a loss occurs because the property was transferred to another person or sent elsewhere due to unauthorized instructions.

Example: We R Quick Delivery Service received a call from someone claiming to be the prop master for Melancholy, stating that the production had moved to a different city. Acting on this information, We R Quick delivered the props to the person who opened the door at the theater.

The following day, the real prop master from Melancholy contacted We R Quick, furious because the props had not been delivered as expected. He was upset to learn the items had been delivered to another theater and were now missing. His frustration grew when he discovered that their policy did not cover items given to others based on unauthorized instructions.

q. Voluntary Parting

Loss of covered property voluntarily given to others is not covered, regardless of whether the surrender was due to fraud, trickery, or false pretenses.

r. Wear and Tear

Loss or damage caused by wear and tear is not covered. However, if wear and tear leads to a covered peril, the resulting loss or damage from that peril is covered.   

s. Weather

Loss or damage due to weather conditions is excluded, but only when the loss is caused by a weather condition combined with a cause of loss excluded in 1. Primary Exclusion above. However, if weather conditions lead to a covered peril, then the loss caused by that peril is covered.

WHAT MUST BE DONE IN CASE OF LOSS

1. Notice

The named insured must promptly notify the insurance company or its agent of any loss. The notice should clearly specify the property that has been lost or damaged. If a criminal act caused the loss, the relevant law enforcement agency must also be informed. The insurance company may request that the loss notice be provided in writing.

2. You Must Protect Property

During and after a loss, the named insured is required to take all reasonable steps to prevent further damage to covered property. The insurance company will cover reasonable costs incurred by the insured for this purpose, provided they maintain accurate records to verify the costs. The expenses are part of the policy limits and not in addition to them.

However, there is no coverage for repairs or emergency measures taken for property not already damaged by a covered peril.

NOTE: Any such costs incurred will reduce the amount available to pay the actual loss.

3. Proof of Loss

The named insured must complete and return the insurance company's required proof of loss forms within 60 days of the company's request. The information provided should include the time, place, and circumstances of the loss, as well as details about any other insurance coverage that may apply.

The proof of loss must also specify the named insured’s interest and the interests of others in the property involved, including liens and mortgages. Any changes to the title of the property during the policy period must be disclosed, along with any other reasonable information the company may need, such as inventories, specifications, and estimates for settling the loss.

4. Examination

The insurance company may require the named insured to be examined under oath regarding the loss. These examinations can be requested more than once, but such requests must be reasonable. If multiple individuals are examined, the insurance company has the right to question each person separately.

5. Records

The named insured is required to provide any records related to the loss. The insurance company must be permitted to copy and extract information from these records whenever reasonably requested. Such records include, but are not limited to, tax returns and bank microfilms of all related canceled checks.

6. Damaged Property

Both damaged and undamaged property must be accessible for the insurance company's inspection as frequently and as reasonably needed. Additionally, the insurance company should be permitted to take samples and conduct inspections of the property.

7. Volunteer Payments

The named insured has the right to make payments, assume obligations, offer rewards, or incur other expenses. However, without written approval from the insurance company, they cannot expect reimbursement. The only exception is for costs related to property protection, as described in item 2 above.

8. Abandonment

The insurance company determines when and if it will assume ownership of the property belonging to the named insured. As a result, the named insured is not permitted to abandon damaged property to the insurance company unless they receive written approval to do so.

9. Cooperation

The named insured is required to cooperate with the insurance company. Any actions stipulated in this policy must be completed by the named insured.

VALUATION

1. Actual Cash Value

The valuation of covered property is subject to two main factors: (2) Pair or Set, and (3) Loss to Parts. The value of all covered property is determined by its actual cash value at the time of loss. Actual cash value is calculated as the replacement cost (new value) minus depreciation.

2. Pair or Set

The value of a loss involving damage or loss of one part of a pair or set is calculated based on a fair proportion of the overall value of the entire pair or set. However, losing one part of a pair or set is not regarded as a complete loss.

NOTE: This recognizes that the value of the whole is greater than the value of individual parts, but the remaining parts still have value as separate.

3. Loss to Parts

The value of a lost or damaged part of a property, which consists of several components, is determined by the cost to repair or replace only the specific lost or damaged part.

HOW MUCH WE PAY

1. Insurable Interest

The insurance company does not pay more than the named insured's insurable interest in the covered property at the time of loss.

2. Deductible

The insurance company pays only the amount of loss exceeding the deductible amount on the schedule of coverages.

3. Loss Settlement Terms

The insurance company pays the least of the following:

All items are subject to items 1., 2., 4., 5., and 6. in this section.

o   The material must be of like kind and quality or as similar as practicable.

4. Coinsurance

This provision is applicable only to losses occurring to a production listed on the schedule of coverages.

The insurance company does not pay the full amount of any loss if the value of all covered property at the time of the loss, multiplied by 80%, exceeds the insurance limit. The following are the steps the insurance company takes to determine the amount it pays.

Step 1. Assess the value of all items that experienced a loss, excluding any property in transit, using their value at the time of the loss, from the coinsurance calculation.

Step 2. Take the total value of items in Step 1. and multiply by the coinsurance percentage of 80.

Step 3. Divide the limit for the covered property for that production, subject to coinsurance, by the result determined in Step 2.

NOTE: Stop here if the result is 1.00 or higher because no coinsurance penalty applies. Go to Step 4 only if the result is less than 1.00.

Step 4. Multiply the total amount of loss, prior to the application of a deductible, by the percentage determined in Step 3.

Step 5. Subtract the applicable deductible from Step 4.

The insurance company does not pay more than the amount determined in Step 5. or the limit of insurance, whichever is less. It does not pay any remaining part of the loss.

5. Insurance under More Than One Coverage

Multiple coverages in a coverage form can cover the same loss. In such cases, the insurance company will only pay up to the actual value of the claim, loss, or damage incurred.

6. Insurance under More Than One Policy

a. Proportional Share

The named insured may have an additional policy that falls under the same terms as this coverage form. In such cases, this coverage form will only pay its portion of the covered loss. This portion is determined by the ratio of its limit of insurance to the total limits of insurance from all policies that cover the same loss in the same manner.

b. Excess Amount

Additional coverage options may be available to address the loss, beyond what is stated in item 5.a. If this is the case, the coverage form will provide payment on an excess basis. This means it will cover only the amount of the covered loss exceeding what the other insurance covers, regardless of whether the other coverage can be collected. Any payments issued will be subject to the relevant insurance limit.

LOSS PAYMENT

1. Loss Payment Options

a. Our Options

The insurance company has the following loss payment options if a covered loss occurs:

·         Pay the value of the property that sustained loss or damage.

·         Pay the cost to repair or replace the property that sustained loss or damage.

·         Rebuild, repair, or replace the property with similar property, to the extent possible, and it must be accomplished within a reasonable time period.

·         Take any part or all of the property based on the value that has been agreed upon or determined through appraisal.

b. Notice of Our Intent to Rebuild, Repair, or Replace

The insurance company must inform the named insured of its decision to rebuild, repair, or replace within 30 days after receiving a properly completed proof of loss.

2. Your Losses

a. Adjustment and Payment of Loss

The insurance company handles all losses with the named insured and compensates them for the loss. The only exception occurs when a loss payee is listed on the policy.

b. Conditions for Payment of Loss

The insurance company will pay for a covered loss within 30 days after receiving a properly completed proof of loss and determining the amount of the loss. The loss amount is established either through a written agreement between the company and the named insured or after an appraisal award is submitted to the company.

3. Property of Others

a. Adjustment and Payment of Loss to Property of Others

The insurance company has the option to adjust and pay losses involving property of others to either the named insured on behalf of the property owner or to the property owner directly.

b. We Do Not Have to Pay You if We Pay the Owner

The insurance company is not obligated to pay the named insured when it pays the property owner. Additionally, if the property owner sues the named insured, the company has the option to defend the named insured in that lawsuit.

OTHER CONDITIONS

1. Appraisal

The insurance company and the insured may not always agree on the value of a covered claim. This condition provides one method to resolve disputed claims.

Either party can request an appraisal to determine the value of a disputed claim. Once requested, the parties have 20 days to select their own independent and qualified appraisers and to share the names of their appraisers with the other party. The two appraisers then have 15 days to choose an impartial and qualified umpire. If they cannot agree on an umpire within that period, either party may ask a judge in the court of record in the state where the property is located to appoint one.

The appraisers then assess the value of the claim. They submit any disagreements to the umpire for resolution. Once any two of the three parties agree, the loss amount is final.

Each party is responsible for paying its own appraiser, while both parties share the costs of the umpire and any other expenses equally.

2. Benefit to Others

The insurance does not directly or indirectly benefit any party holding custody of the named insured's property.

3. Conformity with Statute

Any condition in this coverage form conflicting with any applicable law is amended to conform to that law.

4. Estates

This applies only when the named insured is an individual.

a. Your Death

When the named insured passes away, the individual in custody of the insured's property remains an insured for that property until a qualified legal representative is appointed. After the appointment of the legal representative, that person becomes an insured, but only for the property covered under this policy.

b. Policy Period is not Extended

This coverage does not extend past the policy's expiration date.

5. Liberalization

A revision of this coverage form or any applicable endorsement that becomes effective during the policy period, or within six months of when coverage begins, may expand the coverage without an additional premium charge. In such cases, the expanded coverage will apply to this policy.

6. Misrepresentation, Concealment, or Fraud

This coverage is void if any insured at any time willfully conceals or misrepresents a material fact related to the insurance, the property covered, or its interest in the property. It is also void if any insured commits fraud or false swearing concerning the insurance or the property covered.

NOTE: The named insured must be truthful with the insurance company. Its rights of recovery can be lost if it intentionally misstates or hides a material fact or piece of information. This means the insurance coverage is considered to have never existed rather than simply denying a specific claim.

7. Policy Period

Only covered losses occurring during the policy period are paid.

8. Recoveries

Payment of the loss does not end the obligations of the named insured and the insurance company toward one another. Additional provisions apply if the insurance company pays a loss and the lost or damaged property is subsequently recovered, or the parties responsible for the loss pay for it.

Either party that recovers property or payment must inform the other. Recovery expenses incurred by either party are reimbursed first. If the named insured retains the recovered property, it must refund the amount of the claim the insurance company paid, unless the company agrees to a different amount.

If the claim paid is less than the agreed-upon loss due to the application of a deductible or other limitation, any recovery is prorated between the named insured and the insurance company, based on the company's respective interest in the loss.

9. Restoration of Limits

Payment of a claim does not reduce the limit available for future claims.

10. Subrogation

The insurance company acquires the named insured's rights of recovery from third parties after it pays a loss. The named insured must assist the company in securing those rights. The insurance company is not obligated to pay the loss if the named insured hinders or impairs its rights of subrogation.

The named insured has the right to agree in writing to waive recovery rights from any party if it does so before a loss occurs.

11. Suit against Us

The insurance company cannot be sued by anyone for any coverage until all the terms of the coverage form have been met. Suits must be brought within two years after the insured first becomes aware of a loss. If a state law invalidates this condition, any suit brought must comply with that law's provisions and commence within the shortest period allowed by law.

NOTE: It is common for a basic coverage form to be modified by mandatory state-specific endorsements addressing issues related to the specific state.

12. Territorial Limits

Covered property must be in the United States of America, its territories, and possessions, Canada, or Puerto Rico for coverage to apply.

ENDORSEMENTS

AAIS has not developed endorsements to use with Theatrical Property Coverage.

UNDERWRITING CONSIDERATIONS

Coverage applies to property not defined by a specific location. This property could be on the road, at a temporary storage site, or in a theater. The most important aspect of the coverage is maintaining an accurate inventory of the property assigned to each specific production. It is essential to have one person responsible for managing the necessary inventories for every covered production.

Ensuring appropriate security and protection for the property is crucial; however, these requirements may vary significantly depending on the production, the quality of the props, and the accessibility of the property.

Prior loss information is also important, as it may indicate potential weaknesses in control measures. Additionally, the method of transport is crucial, as accidents in transit could lead to the total loss of all property. Utilizing a carrier for hire may help limit exposure under the policy.