(1) Those prohibiting the use of certain articles or methods of generating heat, light, and power. As examples of such clauses in common use are the so-called "dynamo clause," which exempts the company from loss or damage to dynamos, switches, or other electrical appliances that may be caused by electrical currents, artificial or otherwise, unless the same occur in consequence of fire outside of the appliances themselves; the "spontaneous combustion clause," which frees the company from liability for loss occasioned by the spontaneous combustion of certain articles on the insured premises; and the "consequential damage clause," which protects the company against indirect or consequential loss, as for example, loss or damage caused by change of temperature occasioned by the destruction of heating, refrigerating or cooling apparatus. Sometimes these clauses are made to apply to specific properties or articles, in which case they are given special names such as “cold storage warehouse clause," "bituminous coal clause," etc.

(2) Those permitting the use in certain places of hazardous articles (like acetylene gas and gasoline), processes of manufacture, and methods of generating heat, light, and power. These permits, however, require the observance of definite conditions. As a rule they are very detailed in character, and often contain half a dozen or more warranties, together with a considerable number of "cautions" as to the proper use and installation of the articles or processes.

(3) Those requiring the premises to be occupied only by the owner and his family, or, in the event of manufacturing and mercantile risks, limiting vacancy or unoccupancy only to one-third of the establishment.

(4) Those providing for the proper maintenance of fire protective appliances. Thus the "signaling system clause" stipulates that in view of the described premises.

being fully equipped with a good automatic fire alarm system, etc., a reduction is made in the premium, but on the understanding that if the apparatus is at any time removed at a later date, or becomes inoperative, the company shall at once receive notice of the fact, and a pro rata portion of the reduction in the premium shall be refunded to the company for the unexpired term of the policy. Likewise the "automatic sprinkler clause" provides for due diligence on the part of the insured to maintain such equipment in complete working order during the term of the insurance.

Permits, Mostly Suggested by the Policy, which Increase the Hazard. The standard policy enumerates a considerable number of hazards, the existence of which, "unless otherwise provided by agreement in writing added hereto," frees the insurer from liability for loss or damage. The policy itself, therefore, suggests the method by which the insured may obtain privileges, by way of endorsed permits, which run counter to the original policy restrictions. Many of these permits merely require enumeration in order to be understood. Others, however, are variously interpreted and require a brief explanation. Stated in the order of the appearance of the subject-matter in the policy, the endorsements referred to are those permitting:

(1) An increase in the hazard by any means within the knowledge or control of the insured. Innumerable methods of increasing the hazard following the issuance of the policy may be mentioned, such as the introduction of new processes or the discontinuance of fire prevention precautions. This section of the policy, however, is generally held to include only changes in the hazard which are of a durable rather than of a temporary character. Nor does this provision refer to an increase in the hazard

of adjacent buildings, since these are not within the insured's control.

(2) Alteration or repair of the described premises by mechanics beyond a period of fifteen days.

(3) Generation of illuminating gas or vapor on the described premises; or the maintenance or use on such premises (any usage or custom to the contrary notwithstanding") of "fireworks, Greek fire, phosphorus, explosives, benzine, gasoline, naphtha or any other petroleum product of greater inflammability than kerosene oil, gun powder exceeding twenty-five pounds, or kerosene oil exceeding five barrels." As previously noted, some of these prohibited articles are permitted if used in strict compliance with certain warranties. The phraseology, "any usage or custom of trade or manufacture to the contrary notwithstanding," was adopted to overcome certain court decisions which held that some of these prohibited articles must, by usage or custom, be considered as constituting a part of a designated trade, and that the policy is issued in view of such usage or custom. Nothing would seem less ambiguous than the clause as it now stands; yet despite the qualifying phrase certain courts have continued to follow their previous rulings.

(4) Operation of the premises, in whole or in part, if a manufacturing establishment, "between the hours of 10 P.M. and 5 A.M.," or cessation of operation "beyond a period of ten days." The policy provision that a manufacturing establishment may not be operated at night later than 10 o'clock, or that it may not cease operation for more than ten consecutive days, unless the consent of the insurer is obtained, must in most localities be construed with reference to the nature of the business under consideration. In most instances violation of this clause will not lead to a forfeiture where a temporary

suspension of the business occurs, owing to unusual and unavoidable interruptions, such as, for example, the cessation of water power.

(5) Vacancy or unoccupancy beyond a period of ten days. The standard policy provision stipulating that the insurance becomes null and void "while the described building, whether intended for occupancy by owner or tenant, is vacant or unoccupied beyond a period of ten days," is a most important one and was made expressly to read "vacant or unoccupied." The word "unoccupied" refers to those cases where the building has been abandoned for its ordinary uses, whereas the term "vacant" implies not only abandonment, but also removal of the furniture, fixtures, etc. Fire underwriters have thoroughly learned the lesson that vacant or unoccupied buildings are much more apt to burn than those which are inhabited and used. Not only is the moral hazard connected with such properties a bad one, because of their unproductivity, but the risk is greatly augmented because of the absence of persons who can exercise a watchful care. When a vacancy permit is granted, it is often agreed that the "building shall be under the supervision and care of some competent person." In other instances, vacancy is permitted to only a limited extent, such as one-third of the establishment.

(6) Coverage for loss by explosion or lightning, even though no fire ensues. The standard policy expressly exempts the company from liability for loss "by explosion or lightning unless fires ensues, and, in that event, for loss or damage by fire only." The so-called "lightning clause" covers loss or damage caused by lightning itself, meaning thereby the commonly accepted use of the term, and excluding loss attributable to cyclone, tornado, or windstorm.

(7) The placing of a chattel mortgage on the insured property, without that type of encumbrance violating the policy provision relating to this particular kind of mortgage.

(8) Continued coverage of an insured building if it, or any material part thereof, has fallen, without the damage having been occasioned by a fire. In the absence of an agreement the standard policy provides that it "shall immediately cease" under the circumstances referred to. This provision was introduced in the policy on the theory that when an insured building has fallen, in part or in whole, it is no longer the original building that burns, but simply the débris.

In addition to the various endorsements just described there are many other privileges which the insured may obtain by special agreement with the insurer and which are not suggested by any of the provisions in the standard policy. Almost any kind of a special agreement may be entered into by the parties to the contract, which, when endorsed on the policy, will supersede the regular policy provisions and will constitute the latest agreement. Thus the policy contains an extended section enumerating excluded types of property such as currency, manuscripts, drawings, evidences of debt, etc. By special agreement, however, such articles may be accepted for purposes of insurance. Again, other clauses are used which give consent for foreclosure proceedings, or protect the insurance against invalidation by the act or neglect of any other occupant of the premises.