5- Commercial Property Policies Flashcards
Breach
breaking or failing to observe a law or agreement
Direct damage
physical damage to property that results from inability to use the damaged property
Monoline policy
a policy that covers one type of insurance
Modular policy
a policy that consists of several different documents which together form a complete policy
Personal effects
privately owned items normally worn or carried on the person
Commercial package policy (CPP)
Pre-designed policy that consists of multiple coverage parts
7 coverage parts of a CPP
- General Liability;
- Commercial property;
- Inland marine;
- Commercial auto;
- Equipment breakdown;
- Crime; &
- Farm
Modular parts
parts combined to create a full contract
CPP Cancellation
first named insured may cancel at any time with given written notice
CPP changes
Changes may only be made by endorsements issued by insurer. First named insured may request them.
Examination of books
insurer is granted rights to audit books and records relating to the policy for up to 3 years after the end of the policy.
Inspections & surveys
Insurer is granted right to make inspections, surveys, reports, and recommendations relating to the insurance.
Interline Endorsements
endorsements that apply or could apply to more than one coverage part.
Why do Interline Endorsements exist?
To eliminate redundancy and minimize number of endorsements on a policy
CPP building and property coverage form
Main package used to cover buildings, business property, and property of others.
CPP building coverage
Insures buildings described in declarations, outdoor fixtures & furnishings, & items used in service to property.
Business Personal Property Coverage (BPP)
Covers property located in or on the buildings or structures described in declarations, within 100 ft of the building
What does Personal Property of others cover?
property that is in the care, custody, or control of the insured, id located on or in the building described or within 100 feet.
What animals are covered under Personal Property of Others?
Animals owned by others and boarded, or those owned by the insured as “stock” while inside the building
Pollutant cleanup and removal
Pays up to $10,000 for expenses incurred to remove pollutants if discharge was from a covered peril.
Coverage extensions
Property that can be covered if the policy has over 80% coinsurance percentage.
Newly acquired or constructed property must be added to the insurance when?
30 days for new buildings & property, up to $100,000 coverage
Valuable papers and records
$2,500 for the cost to research, replace, or restore lost information from valuable papers and records that are not electronic data.
Property off premise
Up to $10,000 for property, including stock, temporarily off premise (trade show, fair, exhibition)
Safety glazing material
glass treatments to make them less likely to break or to make pieces pose less of a threat when broken.
Builders Risk form
insures buildings while under construction.
Property covered under a Builders Risk form
buildings or structures, temporary structures, machinery, equipment, materials, and supplies within 100 ft
Property not covered under a Builders Risk form
land or water, outdoor lawns, trees, shrubs, bushes, satellite dishes, or signs.
4 additional coverages of a Builders Risk form
- Debris removal
- Preservation of property
- Fire dept. service charge
- Pollutant cleanup and removal
2 coverage extensions of Builders Risk form
- building materials and supplies of others
2. Sod, trees, shrubs, and plants
Coverage for indirect losses is
NOT automatic with CPP
Business income formula
business income=net profit or loss (before taxes) + continuing normal operating expenses include payroll
Suspension
slowdown or cessation of the insured’s business activites
Operations
business activity at premises
Period of restoration
the time period within 72 hours of a direct physical loss for business income.
Civil Authority
coverage will be extended if the insured suffers extra expenses because of neighboring property (no more than 1 mile).
Civil authority coverage limit
4 weeks and a 72-hour waiting period.
Commercial Extensions of Coverage
- Additional insureds
- Newly acquired organization
- Newly acquired property
Commercial Newly acquired ventures include
new organizations, other than partnerships or joint ventures, but only for 90 days or until the end of the policy period, whichever is sooner.
Commercial Newly acquired property includes
coverage for buildings or personal property that comes into insured’s control, care, or custody after the beginning of policy period
Coverage of Commercial Newly acquired property ends when
the policy expires, 30 days after property comes under insured’s control, or when values are reported to insurer- whichever comes first
Commercial concealment, misrepresentation, or fraud condition
If insured commits fraud, then coverage will be voided as it relates to the policy at the time.
Filed Coverages
standardized coverage forms through state authorities
Uniled Coverages
Present unique exposure to loss where standardized forms do not yet exist.
Nationwide Marine Definition
statement about the types of coverage that may be properly written on Inland Marine and Ocean Marine insurance forms.
NAIC
National Association of Insurance Commisioners
4 General Classes of risk for Inland Marine coverage
- Domestic shipments and transport risks;
- Bridges, tunnels, and other instrumentalities of transp & comm;
- Commercial property floater risks;
- Personal Property floater risks
What is the typical deductible for Filed forms of Inland marine coverage?
$250 for any one loss.
Inland marine covers what?
mobile equipment, material, or products
Accounts receivable coverage
Form that provides coverage in the event that accounts of customers are lost in a way that makes it impossible to collect from them. (Ex. Accounts receivable records are lost)
Bailee’s Customer form
covers loss to customer’s property in care, custody, or control of the insured
Commercial article form
Covers interest of the owners of commercial cameras, musical instruments, and similar property
Contractor equipment floater
Unfiled form to cover mobile equipment and contractor’s equipment owned, rented, or borrowed by contractors.
When does Contractor equipment floater form cover equipment?
When it is on a job site, in transportation to and from a job site, or while temporarily stored between jobs.
Electronic data processing form
covers businesses that own, lease, or rent data processing equipment
4 coverages for Electronic data processing
- Computer hardware that is specifically scheduled;
- Data processing media, including tapes, punch cards, discs;
- Extra expense the insured incurs to continue business after a loss;
- Business interruptions cover loss of income related to damaged equipment data
Installation floater form
Covers heating and cooling equipment intended to become permanent part of a building
Signs form
Limited coverage of $2500 for attached outdoor signs
Valuable paper and records forms
Most important and most popular coverage.
Covers inscribed, printed, or written documents; manuscripts or records; abstracts; books; deeds; drawings; films; maps; or mortgages.
Valuable paper and records does NOT include
- money or securities;
- converted data;
- programs or instructions for data processing;
- material on which such data is stored
3 categories of property carrier
- Common carriers (transport property of anyone who hires them)
- Contract carriers (transport property of those with a written contract)
- Private carriers (transport own property)
3 parties with interest in property being transported
- Shipper (co. sending the goods)
- Consignee (person receiving the goods)
- Carrier (co. transporting the goods)
Motor truck cargo policy-carriers form
Covers the carrier against liability for damage to the goods.
Motor truck cargo policy-owners form
Only covers goods in or on a vehicle while in transit and covers direct damage to owner’s property
Annual transit
Policy used by those businesses that ship goods on a regular basis.
Trip Transit
Policy used to cover specific shipments or trips. Can be named peril or all-risk basis.
Equipment breakdown was previously called
Boiler or machinery coverage
Equipment Breakdown Policy
Pays for direct loss to covered property caused by the breakdown of covered equipment.
Expediting Expenses
Up to $25,000 for temporary repairs or expediting permanent repairs or replacement
Spoilage damage
Covers damage to raw materials, property in process, or finished products
Utility interruption
If interruption is a direct result of a breakdown (electrical, A.C., heating, gas, sewer, etc)
In what time frame must equipment be fixed or replaced?
Within 24 months of the original break
What are the limits to coverage for fungus, wet or dry rot?
Breakdown covered for 12 months and $15,000 for testing, removal, and restoration.
All accidents at the same location at the same time and by the same cause are considered what?
A single accident
4 types of farm coverage
- Farm property;
- Farm liability;
- Mobile ag. machinery & equipment;
- Livestock
Farm Policy Coverage A
Dwellings. Similar to Homeowners program, but antennas, towers, & satellite are covered up to $1,000
Farm Policy Coverage B
Other private structures
Automatic limit of 10% of Coverage A for any other structures that are primarily used for farm purposes
Farm Policy Coverage C
Personal Property. Covered when owned by insured and located on the insured location.
Farm Policy Coverage D
Loss of Use. Covers additional living expenses if principal living quarters become uninhabitable.
Farm Policy Coverage E
Scheduled Farm Personal Property. Pays for direct loss of or damage to covered property.
Covered Scheduled farm property may be
- Grain & grain in sacks
- hay, straw, fodder
- Farm products, materials, & supplies
- Livestock
- Bees, worms, fish, etc.
- Poultry while in open or in coop
- Computers related to farm mgmt
- Portable buildings or structures
Coverage E- Scheduled farm property does NOT cover
Growing crops, trees, or household personal property
Special limits of Liability to Coverage E- Scheduled farm property
- Hay, straw, & fodder in the open ($10,000 oer stack);
- Misc. Farm equipment (no more than $3,000 per item);
- Poultry @ market value;
- Livestock not specifically insured to ACV
Farm Policy Coverage F
Unscheduled Farm Personal Property.
Farm Policy Coverage G
Other Farm structures. Includes Barns, outbuildings, and other strucures
Mobile Ag Machinery and Equipment Form
Includes mobile devices for everyday farm operation, such as accessories, tools, and spare parts
Livestock Coverage Form
Named peril coverage insuring losses resulting in death or necessary destruction of livestock, except by a vehicle.
Livestock Coverage may be extended to
Accidental shooting, drowning, electrocution, attack by wild dogs or animals, loading or unloading accidents, & building collapse
Custom farming
specific planting, cultivating, harvesting, or similar specific operations by an insured farm, not at an insured location
Livestock
Cattle, sheep, goats, horses, mules, and donkeys, but not poultry.
Basic loss form for Farms includes
Collision coverage for E & F when causing:
- damage to machinery
- death of covered livestock
- damage to other farm property
Broad form includes what perils
- Electrocution of covered livestock
- Attacks on livestock by dogs or other animals (except to sheep)
- Accidental shooting
- Drowning of livestock
Bankruptcy of insured farms will NOT
relieve insurer of their obligations
Business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of a direct loss. What is the nature of this type of coverage?
Time element
What is the limit payable on business property located away from premises?
$500
Peak Season endorsement
Provides higher coverage within months where a business may carry more inventory
