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CNA S8146916D (Ed. 12-19) THIS ENDORSEMENT CHANGES THE POLICY. PLEASE READ IT CAREFULLY. CALIFORNIA CHANGES This endorsement modifies insurance provided under the following: BUSINESSOWNERS SPECIAL PROPERTY COVERAGE FORM BUSINESSOWNERS LIABILITY COVERAGE FORM BUSINESSOWNERS COMMON POLICY CONDITIONS A. The Businessowners Special Property Coverage Form is amended as follows: 1. With respect to an "open policy', the following is added to any provision which uses the term actual cash value: a. In the event of a total loss to a building or structure, actual cash value is calculated as the Limit of Insurance applicable to that building or structure or the fair market value of the building or structure, whichever is less. b. In the event of a partial loss to a building or structure, actual cash value is calculated as b.(1) or b.(2), whichever is less: (1) The amount it would cost to repair, rebuild or replace the property less a fair and reasonable deduction for physical depreciation of the components of the building or structure that are normally subject to repair or replacement during its useful life. Physical depreciation is based upon the condition of the property at the time of loss; (2) The Limit of Insurance applicable to the property. c. In the event of a partial or total loss to Covered Property other than a building or structure, actual cash value is calculated as c.(1) or c.(2), whichever is less: (1) The amount it would cost to repair or replace the property less a fair and reasonable deduction for physical depreciation based upon the condition of the property at the time of loss; (2) The Limit of Insurance applicable to the property. d. An "open policy" is a policy under which the value of Covered Property is not fixed at policy inception, but is determined at the time of loss in accordance with policy provisions on valuation. 2. Paragraph E.2. Appraisal Property Loss Conditions is replaced by the following: 2. Appraisal s If we and you disagree on the value of the property or the amount of loss, either may make written request for a an appraisal of the loss. If the request is accepted, each party will select a competent and impartial appraiser. N Each party shall notify the other of the appraiser selected within 20 days of the request. The two appraisers s will select an umpire. If they cannot agree within 15 days, either may request that selection be made by a judge of a court having jurisdiction. The appraisers will state separately the value of the property and amount of loss. If they fail to agree, they will submit their differences to the umpire. A decision agreed to by any two will be binding. Each party will: a. Pay its chosen appraiser; and b. Bear the other expenses of the appraisal and umpire equally. If there is an appraisal, we will still retain our right to deny the claim. 3. Paragraph E.4.e.(1)[a) of the Loss Payment — Building and Personal Property Property Loss Conditions is deleted. 4. Paragraphs E.4.e.(1)(b)(1), E.4.e.(lxbxii) and E.4.e.(7) of the Loss Payment— Building and Personal Property Property Loss Conditions are deleted and replaced by the following: (b) We will not pay on a replacement cost basis for any loss or damage until the lost or damaged property is actually repaired or replaced. Prior to such repair or replacement, we will pay the actual cash value of the lost or damaged property as described in paragraph A.1. of this Endorsement. If the actual cash value does not exhaust the applicable Limit of Insurance, we will then pay the difference between the replacement cost, provided that the repair or replacement is completed: SB146916D Ed. 12-19� Pwecoveor3v. RYsk Nranagernena Crerirvl'Aticre Copyright, CNA All Rights Reserved. Includes copyrighted material of Insurance Services Office, Inc., with its permission.