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Property & Casulaty > 8- Commercial Package Policy > Flashcards

8- Commercial Package Policy Flashcards

1
Q

What two parts must every policy have?

A

Property and liability

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2
Q

4 components of a CPP

A

1) common policy declarations
2) interline endorsements (as needed)
3) one or more coverage parts
4) common policy conditions

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3
Q

6 Common Policy Conditions of the CPP

A

Cancellation
Policy changes
Audit by insurer
Inspection by insurer
Premium
Transfer of rights

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4
Q

Commercial General Liability (CGL) Basics

A

Does not cover persons liability
Does cover your legal liability to others
Does cover a lawyer
Does not cover injury to employees

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5
Q

Does the CGL cover injury to employees?

A

No. That is worker’s compensation

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6
Q

Can a repair shop purchase a CGL Policy?

A

No. Dealers and repair shops have Garage Liability

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7
Q

What does the claims made coverage apply to?

A

Coverage A - BI & PD
Coverage B - personal and advertising injury liability

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8
Q

Claims Made Policy Form

A

The claim must be turned in while the policy is still in force. Normally have a retroactive date

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9
Q

Retroactive Date

A

Defines when coverage begins. Eliminates overlapping coverage.

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10
Q

Can you advance a Retroactive Date?

A

ONLY with the written consent of the named insured and the insurer must receive written consent that the insured has been informed of the right to buy an Extended Reporting Period (ERP or Tail of Coverage)

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11
Q

What is an ERP?

A

An extended reporting period does NOT extend the policy PERIOD. It only applies to BI & PD that occurred before the end of the policy period. Extends the period for reporting claims.

CANNOT BE CANCELED

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12
Q

Basic ERP

A

No additional premium. Starts at the end of the policy period and gives and extra 60 days for reporting claims that occurred during the policy period & allows a claimant to report a claim up to 5 years as long as pending claim was no later than 60 days after.

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13
Q

Supplemental ERP

A

Extends the claim reporting period indefinitely or provides a full Tail of Coverage. Named insured must request this ERP in writing within 60 days after the end of the policy period.

Additional premium may not exceed 200% of annual CGL premium

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14
Q

Operations liability

A

Not a single fixed premises, but various premises.

Building contractor would need this to provide BI & PD coverage in case someone (other than him or employees) is injured or their property damaged.

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15
Q

Premises Liability

A

Coverage for BI & PD on your FIXED PREMISES if someone is injured (not you or employees)

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16
Q

Coverage A on a GCL also had coverage for products and completed operations…..

A

For businesses that manufacture or sell products (something) or build something (completed operation). Some need both if you sell 3rd party bottled drinks and someone gets sick

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17
Q

Contractual or Assumed Liability

A

I’d you build your factory next to the railroad so you can load goods onto boxcars. Must sign agreement with railroad agreeing to assume liability.

If someone is injured by siding, you’re responsible not the railroad

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18
Q

Insured contract

A

Contract for a lease of premises
Sidetrack agreement (railroad siding)
Easement or license agreement
Obligation, as required by law, to indemnify a municipality
Elevator maintenance agreement

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19
Q

Independent Contractors Coverage

A

A general contractor may be sued for negligence of its subcontractors

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20
Q

Personal & Advertising Injury Liability

A

Doesn’t cover BI or PD
Covers the insured’s liability for financial damages due to oral or written publication of material that slanders or libels a person or disparages a persons goods, products or services, or oral or written publication of material that violates a persons right of privacy.

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21
Q

Advertising Injury means injury arising out of either of these offenses:

A

Misappropriation or advertising ideas or style of doing business

Infringement of copyright, title or slogan

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22
Q

Personal Injury is injury that can arise out of one or more following offenses

A

False arrest, detention or imprisonment
Malicious prosecution
Wrongful eviction

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23
Q

Coverage C on a GCL

A

No fault medical coverage on a per person basis

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24
Q

Up to how much in defense costs will a CGL cover?

A

Provides unlimited defense costs

25
Q

What is included with supplementary payments in the CGL?

A

Legal fees, loss of earnings up to $250 per day, bail bonds, bonds to release attachments and any interest

26
Q

What must be given no later than 60 days before policy termination?

A

Insurer must provide information if they elect to cancel or not to renew coverage

27
Q

Commercial Property Conditions

A

Conditions spell out the rights and obligations of the parties to the contract. There are 9

28
Q

Concealment & Fraud

Commercial Property Conditions

A

The policy is void if the insured intentionally conceals or misrepresents a material fact.

29
Q

Beyond Control

Commercial Property Conditions

A

Any act by someone other than the insured and beyond their control will not affect the coverage

30
Q

Duplicate coverage

Commercial Property Conditions

A

If two or more coverages apply to the same loss, the insurer will not pay more than the actual loss

31
Q

Legal actions

Commercial Property Conditions

A

Lawsuits may be filed only if all terms of the policy have been complied with and only if the suit is filed within two years

32
Q

Liberalization Clause

Commercial Property Conditions

A

Any revision of the policy that broadens the coverage without any additional premium will immediately apply

33
Q

No Benefit to Bailees

Commercial Property Conditions

A

No one other than the insured may benefit from the policy

34
Q

Other Insurance/Pro Rata Liability Provision

Commercial Property Conditions

A

If more than 1 policy is in effect, the policies will share the claim proportionately, whether the other policy is collectible or not

35
Q

Coverage Applies

Commercial Property Conditions

A

During the period and within coverage territory: US & its territories, Canada and Puerto Rico

36
Q

Subrogation

Commercial Property Conditions

A

Permits the insurer to take the insured right of recover and attempt to recover amounts paid from negligent party

37
Q

Coverage A (CPP)

A

Covers buildings, built ins, permanently installed equipment and so forth

38
Q

Coverage B (CPP)

A

Business personal property (contents), including stock, equipment, merchandise, office furniture, etc. within 100ft of premises

39
Q

Coverage C (CPP)

A

Personal property of others

40
Q

Additional Coverages (D? On CPP)

A

Debris removal, max of 25%.
Removal of business personal property to safety up to 10 days.
Fire Department Service Charge up to $1000.
Extracting pollutants up to $10,000

41
Q

5 Extensions of coverage with 80% Coinsurance?

A

1) extended to apply to “newly acquired property”
2) personal effects of your employees and to “personal property or others”
3) researching, replacing or restoring the lost information on “valuable papers and records”
4) business personal property covered while “temporarily off premises”
5) “outdoor property” such as fences, antennas, signs and so forth

42
Q

After 60 days vacant?

A

No coverage for vandalism, sprinkler leakage, glass breakage, water damage or theft.

Coverage reduced by 15% on other perils

43
Q

Reporting Forms

A

Allow amount of insurance coverage to fluctuate during the policy period and often used by businesses that have large changes in inventory

44
Q

Standard deductible?

A

$250 per occurrence, regardless of # of buildings affected by the loss

45
Q

How does a Commercial Building & Personal Property Form pay claims?

A

On an ACV basis, RC is available as an option.

46
Q

Inflation Guard

A

Automatically increases the limit of insurance every year to make sure the property is properly insured.

47
Q

Builders Risk Form

A

Designed for buildings in the course of construction, growing to its maximum as the completed value of the building

48
Q

What are the Builders Risk Forms vacancy provisions?

A

There are none because buildings under the course of construction are not considered to be vacant

49
Q

Builders Risk Form Coinsurance Clause?

A

There isn’t one

50
Q

How does Builders Risk pay claims?

A

On a ACV basis and RC is not available

51
Q

When does coverage under a Builders Risk Form automatically terminate?

A

The insured builders interest in the property ceases.
When property is sold.
Or
90 days after construction is completed

52
Q

Time Element Losses

A

Consequential, or indirect, losses

53
Q

Business Income Coverage Form (Business Interruption)

A

Applies to losses and expenses related to an interruption of normal business operations

54
Q

Period of restoration

A

Begins on the date that the direct physical loss occurred and ends on the date that it will be repaired, rebuilt or replaced

55
Q

Business Income

A

Net profit or loss before taxes PLUS continuing operating expenses

56
Q

Contingent Business Interruption Insurance

A

Protects an insureds business income from interruption due to loss or damage of property that the insured does not own, operate or control

57
Q

Extra Expense Coverage

A

Covers actual and necessary extra expenses due to a direct physical loss.
Does not cover loss of business income

Ex- only covers the extra expenses because you had to move your business to a temporary location to continue operations

58
Q

Legal Liability Form

A

Applies to the insured’s responsibility for the property of others while in the insureds care

Property & Casulaty (7 decks)

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