Ch 8 Commercial Package Coverages Flashcards
0
Q
Does commercial property coverage have its own dec page an conditions?
A
Yes
1
Q
How are the contents of a mono line policy different from a CPP?
A
The amount of coverage parts added.
2
Q
What are some of the commercial property forms available?
A
1) building and personal property
2) business income
3) extra expense
4) builders risk
5) condo association
6) condo commercial unit owners
7) legal liability
8) leaseholder interest
9) glass
10) mortgageholders e&o11) tobacco sales warehouses
3
Q
What are the two coverages of building and personal property?
A
A building
B personal property
4
Q
Does building coverage cover a $3000 sign not attached to the building?
A
No only covers up to $2500
5
Q
What is considered business personal property?
A
Furniture, portable machinery, equipment, inventory, stock, personal property owned by the insured and used for business purposes.
6
Q
How far away from a building is business personal property covered?
A
100 feet in the open or in a car.
7
Q
What is the limit for personal property owned by others?
A
$2500
8
Q
When is the only time animals are covered on business personal property?
A
When considered stock or inventory
9
Q
What are the additional covered under personal property?
A
Debris removal
Preservation of property (30 days)
Fire dept charges ( $1000)
Pollutant cleanup and removal
10
Q
How much is the maximum debris removal coverage?
A
< 25% of the amount paid for damage to property (includes deductible), plus an additional $10k if needed.
11
Q
When are coverage extensions provided
A
When 80% coinsurance percentage is on dec page
12
Q
When is a building considered vacant?
A
When 70% of units vacant
13
Q
How many days are newly acquired buildings covered?
A
30 days
14
Q
How much is covered for newly acquired buildings
A
$250k structure, $100k personal property
15
Q
This coverage extension includes coverage to trees, shrubs, plants, fences, satellite dishes/antennas ($1000 max).
A
Outdoor property
16
Q
Which perils are outdoor property covered for?
A
FLARE fire, lightning, riot, explosion
17
Q
What types of locations are covered for property off premises?
A
1) temporarily at location you do not own, lease or operate.
2) in storage of lease started after policy effective
3) at any fair, trade show, exhibition
18
Q
What is the vacancy clause?
A
If vacant more than 60 days for following perils aren’t paid;
Vandalism, sprinkler leakage, internal water damage, glass breakage, theft, attempt theft
Fore damage and other perils have coverage reduced by 15%.
19
Q
What can be added to a policy to provide sprinkler leakage and vandalism coverage when a building is vacant over 60 days?
A
Vacancy permit
20
Q
Building under construction are/are not considered vacant?
A
Are not
21
Q
If am insured rents an office condo when is the building considered vacant?
A
When it no longer contains enough business personal property to conduct the customary operations of the insured tenant.
22
Q
When an insured owns the building, when is it considered vacant.
A
At least 31% of the total square footage has to be used by the owner to conduct customary operations.
23
Q
Of the insured has a 80% coinsurance clause and the replacement value is $100k, if the building suffers a $85k partial loss and the insured has maintained 80% insurance to value, what is paid?
A
$80k. Loss cannot exceed 80% of replacement cost.
24
This cause of loss form covers same perils as DP Basic (fire, lightning, extended coverages, vandalism, sprinkler leakage and sinkhole collapse. (Exclusions: glass, water damage, falling objects, weight of snow, ice, sleet, collapse)
Basic Cause of Loss
25
A property form which contains Basic form perils plus: glass breakage, damage weight of ice, etc.; falling objects; internal water damage ((discharge from appliance or bursting pipes). FLOOD NOT COCERR Collapse is an additional coverage.
Broad cause of loss.
26
This cause of loss form is all-risk. Contains all broad form perils and any perils that aren't excluded. Even theft.
Excluded perils: earth movement, war, nuclear hazard, flood, sewer backup, drain backup, power failure off premises, ordinance or law, etc. SAME exclusions AS HO3
Special cause of loss
27
When an earthquake form is added what is the definition of a single occurrence?
168 hour period
28
What is the minimum earthquake deductible?
$250
29
Endorsement that increases business personal property endorsement to match seasonal inventory fluctuations.
Peak
30
Endorsement that covers perishable stock for temperature/humidity change caused by MECHANICAL BREAKDOWN OR POWER OUTAGE also covers contamination by refrigerant. Has to be beyond the insured's control.
Spoilage
31
This form covers fluctuating inventory. Final premium is calculated at end of year. A floater form can be added up cover transported property c
Value reporting form
32
Why happens if insured does not reports values of inventory on time or reports inaccurate inventory?
Losses are paid to amount last reported.
33
This form protects against loss to gross earnings due to suspension of operations due to direct covered physical loss. Two forms: business income/extra expense and just business income.
Business income form c
34
Is a business income form subject to coinsurance?
Yes. 50%-60% clause (10% increments)
35
What is the waiting period (deductible) before claims are paid on business income?
72 hours
36
This form covers net income plus continuing expenses.
Business income form
37
What are the additional coverages user business income?
Expenses to reduce loss
Alterations and new buildings ($100k)
Civil authority (cannot access building due to police/fire order)
Extended business income
38
How long is business income and extra expense covered due to civil authority?
four consecutive weeks
39
Under business income how long is loss of income covered under the extended business income extension?
39 days after restoration
40
What is sometimes use on a business income form instead of a coinsurance clause?
Monthly limit of indemnity. If used the insured will get a percentage of the policy limit for any one month business is interrupted. (Ex. $40k limit 25% monthly. Insured gets $10k for a month.
41
When do businesses use the extra expense form?
When operations continue after destruction of their facilities. Covers renting equipment, new facilities, etc, moving.
42
What is covered under builders risk?
Damage to building, foundation, fixtures, machinery, equipment to service building, temporary structures like scaffolding.
43
What is not covered under builders risk?
Existing buildings
44
When does builders risk coverage end?
1) 60 days after occupied
2) property accepted by purchaser
3) named insured abandons property with no intent to complete it.
4) policy cancels
45
Which coverage extensions can be added to builders risk?
Legal liability (property)
Condo association - protects condo association. Can be added when owners is responsible for improvements, alterations, additions
Condo commercial unit owners (if condo agreement requires)
Leaseholder interest - covers commercial tenant when lease under favorable conditions is terminated before normal date due to a peril.
46
The CGL is written on a ______ basis.
Occurrence
47
For a loss to be covered under an old CGL policy it has to occur ___________________.
During the policy period
48
What does claims made mean?
Injury or damage ha to occur after a retroactive date. The loss has to be reported during this period.
49
What is one of the main reasons for switching from occurrence to claims made?
Occurrence of latent injuries (ex. Asbestos)
50
What are the three sections of general liability?
Coverage A "BI and PD liability": 1) premises and operations 2) products and completed operations
coverage B Personal injury and advertising injury liability
Coverage c medical payments
51
Are injuries or pd caused by plows or street cleaners covered by CGL?
No.
52
How do limits work with coverage A (BI pd) on a CGL?
Ex 250/500/1 million
53
Are products and completed operations covered on a CGL?
Yes.
54
Are ATMs and vending machines covered under CGL?
No. Not a product being sold.
55
Does coverage A cover "insured contracts" and damage to premise rented to you?
Yes. Sublimit for propert rented is $100k
56
What types of contracts does A cover?
LEASE Incidental contracts such as: lease agreements, easements, incidental agreements with municipality, sidetrack agreements, elevator maintenance agreements
57
How does damage to premises rented to you work?
Protects you as a commercial tenant from damage to landlords building and personal property (7 day limit on personal property)
58
Are incidental medical malpractice, non owned watercraft and host liquor liability covered on A?
Yes. Restriction only applies if insured manufactures or distributes the liquor.
59
What are the exclusions on coverage A?
1) expected or intended damage (except for BI to protect person or property)
2) contractual or assumed liability )hold-harmless)
3) liquor liability (only applies to liquor manufacturers/distributors)
;) injuries to workers comp eligible employees
5) pollution (can add some by endorsement)
6) autos watercraft aircraft (use includes loading and unloading)
7) BI from mobile equipment while being transported
8) BI or PD due to war
9) damage to insured's property or others' property in insured's ccc. (Basically real property of others is covered and personal isn't if in insured's control)
10. Damage to insured's product or work (work itself not covered. Other damage items are)
11) damage to impaired property (not damaged but diminished in value due to defect or deficiency)
12) recall
60
What does auto, aircraft and watercraft exclusion not apply to?
1) owned/rented watercraft on shore on premises.
| 2) non/owned craft under 26 ft not carrying people or goods for fee.
61
What are examples of personal injury covered by part B?
Wrongful detention or eviction, false arrest, slander, libel, malicious prosecution, advertising injury
62
Does coverage B (personal injury) have its own occurrence limit?
Yes
63
How long after a loss will bills be paid under coverage c medpay?
1 year from accident
64
What is standard limit for part 3 medpay?
$5k per person.
65
Do payments under medpay reduce coverage a limit?
Yes
66
Who is not covered under coverage c?
1) insured
2) leased employee
3) person injured on premises insured owns it rents that the person normal occupies
4) person eligible for wc
5) person hurt in athletics (company softball)
6) losses covered by products and completed operations
7) excluded under A
8) war
67
Who is an insured when the named insurer is an individual?
Named insured and spouse (only with respect to conduct of business of which you are sole owner.
Employee (but not temp) who is liable for bi or pd as long as in scope of employment.
Real estate manager for 1st named insur
68
Who is a named insurer in a partnership, joint venture, or llc?
Director or officer
69
Who becomes an insured if the business owner dies?
Legal rep of the owner
70
How does an aggregate limit work?
Diminishes as claims are paid during policy period
71
On which parts does a CGL list aggregate limits?
premises and operations
Products And completed operations
72
What are the six different limits in a gl policy?
1) premises and operations occurrence limit (per person and per occurrence)
2) general aggregate limit
3) products and operations completed operations aggregate limit
4) pi and advertising injury occurrence limit
5) med pay limit per person
6) damage to premises rented to you
73
Is there coverage while in course of air water travel ?
Yes, if traveling between two covered territories
74
When does worldwide coverage apply ?
When injury/damage arises out of products or goods made/sold by insured in covered territory
75
What does a supplemental extende reporting period do?
Makes time needed to make a claim unlimited as long a it occurred between retro date and policy expiration
76
How does insur frequent supplemental extended reporting?
I'm writing < 60 days after expiration Must pay premium which isn't more than 200% of annual CGL premium. Serp kicks in after berp (5 yrs)
77
Which forms are available in addition to a business auto form?
Garage insurance
| Truckers forms
78
List the 5 sections of a BAP.
1) covered autos
2) liability (BI PD)
3) phys dam
4) conditions
5) definitions
79
Are symbols used in calculating physical damage rates?
No. Only for liability.
80
What are the 9 symbols on a BAP.
1) liability only: any auto owned or leased by insured. Short term rentals hired by employee of insured on business travel, borrowed truck for business, employee's auto operated by employee in insured's business.
2. Liability & phys dam: Owned only
3. Liability & phys dam: owned pp autos only
4. Liability: owned other than pp
5. Owned autos subject to no-fault law
6. Owned autos subject to a compulsory uim law
7. Liability & phys dam: specifically described autos (must notify within 30 days when buy new auto)
8. Liability: hired autos. Doesn't include vehicles lease etc from employees, partners or hhm
9. Liability: non owned autos. Includes autos owns by employees, partners, hhm
81
Does liability coverage cover leakage of fluids (oil, transmission fluid, hydraulic fluid?) is there a sublimit.
Yes. No.
82
When I BI or pd caused by use of mobile equipment covered under a BAP?
When bring transported or towed by covered auto.
83
What are supplementary payments on section II (liability) of BAP?
$2000 bail bonds
| $250 loss of earnings
84
Who is an insured on a BAP?
Named insured
Permitted users
Owner or lessee of trailer borrowed by insured
85
Is an employee of the ni using their own auto or family members auto covered as a permitted user under BAP?
No but can add "employees as insureds endorsement"
86
Is a mechanic taking a customers car for a road test covered as a permitted user under a BAP?
No auto-related business only covered by garage liability.
87
Who is covered as a permitted user under a BAP while loading or unloading a covered auto?
Only the named insured, employees, partners, lessee or borrower of the auto. All others excluded.
88
Is a lessor covered as permitted user under a BAP?
Only if additional insured-lessor endorsement is added.
89
Are the insured's partners covered as named insured if they drive their own autos or vehicles belonging to their family or partnership business under a BAP?
No
90
List 11 exclusions under a BAP.
1) intentional injury
2) wc
3) completed operations
4) contractual liability
5) war
6) racing
7) handling of property
8) escape of pollutants that are being transported on a covered auto
9) care custody or control
10) fellow employees
11) operations involving attached equipment
91
Is physical damage coverage the same in a pap as in a BAP?
Yes
92
This BAP endorsement coverS employees who don't have a PAP when they drive cars they don't own.
Drove other car
93
This endorsement used mostly for some proprietors supplements BAP,
providing NI and family with liability and physical damage when they use BAP vehicles for personal use or no owned vehicles.
Individual named insured
94
These BAP endorsements are added when a vehicle is leased.
Hired auto
| Additional insured - lessor
95
This endorsement to a BAP provides liability coverage for borrowed non owned vehicles
Hired non-owned
96
This BAP endorsement overs mobile equipment while carried or towed.
Mobile equipment
97
This BAP endorsement covers dune buggies, ATVs, scooters, etc.
Miscellaneous type vehicles
98
The form available for business who are expose to liability from garage operations
Garage coverage form
99
What are the two sections of a garage policy?
I. Identifies covered autos
II. Covers garage liability, including auto liability and premises and operations liability. This includes completed operations and medpay.
100
Does a garage policy cover damage to a customers car?
No. They have to add the garagekeepers endorsement
101
This is a type of form on a garage coverage policy that coverages damage to customers' autos while in insured's custody.
Garage keepers liability.
102
Which perils are covered in a garage keepers policy?
The insured chooses: comp, collision (section IV is physical damage ')
103
What are sections V and VI in a gk policy?
Conditions
| Definitions
104
Is a car dealer covered under gk if he is tricked into releasing a car to someone it doesn't belong to?
No. False pretenses exclusion.
105
If a dealer sells a car without a title are they covered under gk?
No. Can add endorsement though.
106
List 5 other exclusions on garage policy.
1) other contractual liability besides insured contracts
2) insider theft
3) defective parts
4) electronic equipment
5) injuries covered by wc
107
This type of tricking company offers services to general public. (Bus)
Common carrier.
108
This type of carrier transports its own property in of on its own trucks
Private carrier
109
This type of carrier only carries property for those who have entered into contract with them.
Contract carrier
110
Why are the parts to a trucker form?
```
I. Covered autos
II. BI and PD coverage description
III. Trailer interchange coverage* damage to trailers belonging to another trucker
IV. Physical damage coverage
V. Conditions
VI. definitions
```
111
What happens when a trailer owner has a trucker transport their items in their trailer?
Trailer owner provides liability coverage for himself and the trucker.
112
Of tractor can is not used to pull trailer of another (bobtailing) or is used to pull empty trailer (deadheading) what is the coverage called? Non trucking use.
Truckers insurance for non-trucking use.
113
Deadhead
Bb
114
This act requires truckers carrying haz mat to demonstrate financial responsibility by purchasing pollution liability insurance.
1980 Motor Carrier Act
115
What are the financial responsibility requirements under the 1980 Motor Carrier Act?
1) type 1 trucker for hire (non hazmat) $750k
2) type 2 (hazardous substances (volatile chemicals) $5MM
3) type 3 (oil or substance not identified in type 2) $1MM
116
This endorsement modifies a truckers form to comply with 1980 Motor Carrier Act.
MCS-90.
117
Does commercial inland marine have its own dec and conditions form?
Yes.
118
Which perils are covered on ocean marine?
Open perils normal exclusions
119
What are some of the commercial inland marine forms available?
1) physicians and surgeons equipment
2) transportation
3) exhibition and installation forms
4) dealers forms
5) Bailee forms
6) misc ( account receivable, valuable paper/records, electronic data professing, manufacturers output, difference in conditions)b
120
What does commercial inland marine protect?
Insured's property used for commercial purposes wherever it is situated, stored, or transported.
121
Provide examples of commercial inland marine forms.
1) accounts receivable (loss of income if records destroyed)
2) Bailee customer (dry cleaner)
3) commercial articles (ex. Video photography equipment)
4) contractors equipment
5) electronic data processing
6) equipment dealers (construction equipment)
7) installation floater (equipment in transit and at location during an installation)
8) jewelers block (on premises only. Won't cover lended jewelry)
9) neon and electric signs
10) valuable papers and records (money and securities not covered)
122
Does a jewelers block cover jewelry stolen if the owner wears a piece home at night?
No. Only on premise and worn jewelry is excluded.
123
What are the exclusions of a jewelers block?
1) theft from unattended vehicle
2) theft from how window (unless coverage added)
3) property worn by insured or another employee
4) property at exhibitions
124
This policy covers property owners agains damage to their property while in a carriers possession
Transportation policy (transit insurance)
125
Policy that covers property in transit or transported on trucks by an insured.
Motor truck cargo insurance.
126
What are 3 forms available on a Motor truck cargo insurance?
Shippers form
Truckers form
Owners form
127
This form on a transportation policy covers property when the carrier has doesn't have legal liability to pay for the property.
Shippers form
128
This form on a transportation policy covers a trucker for legal liability for pd to others' property.
Truckers form
129
This form on a transportation policy covers the truckers own property while they transport it.
Owners form
130
What is a trip transit policy?
Covers single shipment of merchandise, clothes, cattle.
131
Illegal taking of property. Visible signs of forcible entry.
Burglary
132
Illegal taking of property by violence or threat of violence.
Robbery
133
Taking property without owners consent. Includes burglary, robbery, larceny, shoplifting, embezzlement
Theft.
134
Person who has custody of insured property outside covered area.
Messenger
135
This commercial crime form covers losses during policy term and discovered up to a year after expiration.
Loss sustained form
136
This from covers losses occurring after a retro date up to policy expiration if discovered up to 60 days after expiration.
Discovery form
137
Form that provides blanket coverage for insured's property, money and securities against employee theft. Excludes insured, partners, employee canceled under prior insurance, inventory shortage.
Employee theft
138
Covers forgery of documents.
Forgery or alteration
139
Comml crime form that would cover a bank for loss of money or securities Inside the premises only. Covers exterior and interior damage due to attempted theft.
Inside the premises / theft of money and securities
140
This covers a bank for damage on premises due to actual or attempted robbery of a custodian also covers exterior damage due to attempted robbery or age burglary. Doesn't cover money.
Inside the premises / robbery or safe burglary
141
Covers loss of money or securities when transported outside against theft, disappearance or destruction. Doesn't cover dishonest employees.
Covers other property (armored car)
Outside the premises.
142
Protects agains computer fraud (internal or external)... Theft directly related to use of computer.
Computer fraud
143
Coverers fraudulent eft orders and complements computer coverage. Doesn't have to involve a computer.
Fund transfer fraud
144
Covers against acceptance of counterfeit bills.
Money and counterfeit papers
145
Covers kidnap related costs (ransom, travel, ransom money during transit, consultants/negotiator/investigator
Kindap and ransom
146
Covers extortion (blackmail, unlawful demand for money by threatening harm or embarrassment. Surrender of money must occur away from premises and must report to police. Reasonable effort to report demands. PERPRETRATOR CANNOT BE INSURED PARTNER DIRECTOR AUTHOROZED REP OR EMPLOYEE)
Extortion insurance
147
What is excluded from guests property coverage (innkeepers)
Vehicles or articles for sale
