Chapter 1 Flashcards
1-1 What are the components of s commercial property loss exposure?
1) property type, 2) cause of loss, 3) financial consequences of property losses
1-2 What is the difference between real property and personal property?
Real property is tangible property consisting of land, all structures permanently attached to the land, and whatever is growing on the land Everything else is personal property.
1-3 What are the four classifications of property for insurance purposes?
1) contents, 2) property in transit, 3) property in the possession of others, 4) “floating” property
1-4 Explain how a cause of loss affects property.
Adversely affects and leaves in an altered state. Thefts do not alter property but affect the owner’s ability to use it.
1-5 Identify the three main adverse financial consequences of property loss exposures
1) reduction in value, 2) lost income, 3) extra expense
1-6 Identify the components of a commercial property coverage part.
Declarations, coverage form(s), causes of loss form(s), commercial property conditions, endorsements
1-7 What information is contained on a commercial property declarations page that pertains specifically to property insurance?
Description of property, kinds and amounts of coverage and causes of loss, list of mortgagees, deductible amount, list of coverage forms and endorsements, co insurance percentage(s), any optional coverages
1-8. Identify the typical elements of a commercial property coverage form.
Insuring agreement, delineation of the property covered and not covered, additional coverages and coverage extensions, provisions and definite that apply only to that coverage form.
1-9 Identify the three types of causes of loss forms.
Basic, broad, special
2-1 Identify the three broad categories of property covered by the BPP.
Building, Your Business Personal Property, Personal Property of Others
2-2 What elements are included in the BPPs definition of building?
Buildings or structures listed and described in the declarations; completed additions to covered buildings; fixtures (including outdoor); permanently installed machinery and equipment; personal property owned by the insured and used to maintain or service the building premises.
2-3 in order to be insured under the BPP, where must Your Business Personal Property be located?
Except for an extension that provides limited coverage for property while away from the premises, coverage applies only when the property is located in or on the described building or in the open (or in vehicle) within 100 feet of the building structure or within 100 feet of the described premises, whichever distance is greater.
2-4 Identify a potential negative consequence of ignoring improvements and betterments when setting the amount of insurance a tenant should carry.
Severe underinsurance difficulties when a loss occurs
2-5 What is the purpose of coverage for Personal Property of Others?
Protect the insured against loss or damage to the personal property of others while such property is in the custody of the insured.
2-6 Identify reasons why the BPP excludes some kinds of property from coverage.
Illegal to insure; less susceptible to loss by most of the perils insured against; better covered elsewhere.
3-1 Identify the three methods an insured can use to increase the limit of insurance for BPP.
Showing a higher limit in the declarations, adding an appropriate coverage endorsement, or buying another type of policy to supplement the BPP.
3-2 Explain the purpose of the BPPs Debris Removal additional coverage.
Covers the cost of removing debris of covered oriole try resulting from a covered loss during the policy period. In some cases, the cost to remove debris of property that is not covered is also covered.
3-3 identify the circumstance under which the BPPs Preservation of Property addition coverage covers property.
Extends policy to protect covered property while it is being moved and up to 30 days at a new location.
3-4 Explain the purpose of BPPs pollutant cleanup and removal additional coverage.
Provide limited coverage for the cleanup and removal of pollutants from land or water at the described premises.
3-5 Why does the BPP exclude electronic data in most instances except as provided by the Electronic Data additional coverage.
Businesses are becoming increasingly reliant on electronic data and many insurers feel the exposure is better covered by other forms of insurance.
3-6 Building with $2M in building and $1M BPP causes of loss special with rc. Firefighters disturbed stored chemicals and site was remediate day a cost of $45k. The insured reported within 45 days. Do additional coverages apply?
The policy limit plus additional coverage amount would be covered.
4-1 List the covered causes of loss under Causes of Loss - basic form.
Fire, lightning, explosion, windstorm or hail, smoke, aircraft, vehicles, riot/civil commotion, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action. Additional coverage is available for fungus, wet rot, dry rot, and bacteria.
4-2 Identify the causes of loss that are excluded under Causes of loss - basic form.
Ordinance or law, earth movement, governmental action, nuclear hazard. Utility services, war, military action, water, fungus, wet rot, dry rot, bacteria, electrical, magnetic or electromagnetic energy, rupturing or bursting water pipes, leakage of water or steam, explosion of steam boilers, steam pips, steam turbines, or steam engines, mechanical breakdown, loss resulting from the neglect of the insured to use all reasonable means to save and preserve property at and after the time of loss.
4-3 Identify the causes of loss that are covered under the broad form that are not covered under the basic form.
Falling objects, weight of ice, snow, sleep; water damage
