5/J - Additional Coverages

Question 1

Additional Coverages

Answer 1

Small or limited amounts of coverage for specific types of losses or expenses

• Provided in addition to major coverages
• Usually added as optional endorsements

Question 2

Time Element Insurance

Answer 2

Covers an indirect loss if it can be proven that it resulted from a direct loss

Usually purchased within a commercial package policy

Question 3

Business Interruption Insurance

Answer 3

Covers a business for loss of profits or revenue in the event of a covered peril
The adjuster must determine:
- How much would the business have made if the loss had not occurred?
- How much does the business still pay in fixed expenses?

Three different ways a Business Interruption Claim can be settled:

1. Contingent Business Loss Amount (reimburses for lost profits and extra expenses to continuing doing business)
2. Decreased Profit Amount
3. Gross Earnings Amount

Question 4

Business Interruption Insurance Continued

Answer 4

“Extra Expenses” are covered if the extra measure guarantees no other loss of income

Question 5

Law and Ordinance Coverage (a.k.a. Code Upgrade Coverage)

Answer 5

Covers the repair or upgrade cost when new building codes, laws, or ordinances go into effect
- Can be included in both Commercial & Residential Policy Packages

Question 6

Valuable Papers Business Insurance

Answer 6

Provides indemnification when a business experiences a loss of vital business records

Covers written, printed, or otherwise inscribed documents and records including:

• Books
• Maps
• Films
• Drawings
• Abstracts
• Deeds
• Mortgages
• Manuscripts

Excludes:

• Money or securities
• Converted data
• Programs or instructions used in data processing operations

Question 7

Electronic Data Processing (EDP)

Answer 7

Coverage covers the loss of computer equipment, data systems, information storage media, and expenses or income related to EDP losses.

• Always sold as an Endorsement to another policy
• Has a limit of coverage
• Will often require a secondary back-up data

Question 8

Electronic Data Processing (EDP) cont’d

Answer 8

Three parts:

1. EDP Equipment: for processing equipment (servers, computer terminals, monitors, laptops, etc.)
2. EDP Media: for data storage devices (tapes, discs, drivers, etc.)
3. EDP Data: for the data itself (concepts, files, facts, information, computer programs, etc.) and the cost of recovering it when lost

Question 9

Pollutant Cleanup and Removal

Answer 9

• Covers cost of cleaning up pollutants released due to covered loss
• Only applies if a covered loss led to the pollution
• Excludes intentional acts of pollution
• Insured must notify the insurer of the pollution within 180 days of the covered loss that led to it