Chapter 4 - The Additional Coverage Forms Flashcards
3 Ways to make changes to policy
- Endorsement - change terms and condition of policy
- Rider - add additional coverage to existing policy
- Separate policy
What is covered in Sign Form?
Standard form limited to loses caused by named perils only, Sign form insures all risks including accidental breakage. Covers all types of sign (mechanical, neon, fluorescent), lettering and art work.
Excludes:
1. Wear and tear
2. Electrical currents (except resultant fire or lightning)
3. While being worked on or installed
4. Dampness or change in temperature
5. Caused by strikers or locked out employees
What is covered in Glass Rider?
Standard form covers exterior glass only, glass rider insures for all risks (internal and external) including accidental breakage. All glass types covered, glass art work and tape or foil used for burglary detection. Can be blanket or scheduled
Excludes:
1. Fire
2. Acts of war
3. Construction or alternations (except for normal repair)
4. Vacant for more than 30 days.
Basis for settlement (3-5 are specific to glass rider):
- Full replacement
- Cost of installation
- making temporary repairs
- removing obstructions (grills and bars)
- repair frame
What is Covered in Accounts Receivable?
Standard form only covers blank value and certain costs of making copies. Coverage is provided for amounts which cannot be collected, interest charges on loans taken, collection expenses in excess of normal costs, other expenses reasonably incurred (cost to reproduce AR records).
Coverage Conditions:
1. AR records must be kept in the receptacles described on the form
Excludes:
1. damage A/R damage caused by electrical or magnetic currents (except for lightning)
What is covered in Valuable Papers & Records?
Standard form limited to blank value and making copies from originals. Covers All risks loss to documents/written records, client files (doctors/lawyers), original designs/manuscripts/books/films. Blanket or Specified Articles (scheduled) basis only.
Coverage Territory:
1. Designated Premises (as stated on rider)
2. Off Premises coverage (limited to 10% of insurance or $5000, less of two) Architect or Engineer drawings transported or temporary left at clients premises
Coverage Conditions:
1. Valuable paper records must be kept in receptacles described on the form
2. Rating based on quality of storage receptacles / availability of duplicate records
Exclusion:
1. Money and securities
2. Damage to automated records caused by electrical or magnetic currents (except lightning)
What is covered in Electronic Data Processing Policy (EDP)?
Coverage to losses to data processing system, specifically:
1. Hardware (includes computer climate A/C systems, Software (Media + Data), extra expenses (when damage to electrical system, the cost of contractors hired to perform automation functions).
2. Hardware: Coverage can be blanket or scheduled (can be purchased as RC or ACV)
3. Software: Coverage is Actual cost to reproduce lost or damaged media + data
4. Coverage for extra expenses when:
a. insured premises damaged and cannot be accessed by insurer
b. A/C or electrical system damaged by an insured peril
c. when access to insured premises is denied by order of authority
Coverage on All risk expanded to include:
1. Broad Water (flood, bursting pipes, seepage, leakage)
2. Mechanical and Electrical breakdown (short circuit, power surge, rust or dampness)
*Breakdown coverage only for insured with maintenance contract
Coverage Territory:
1. Hardware: Only at Designated Premises, in transport or at temporary location for repair
2. Software: Same as hardware (excludes receivables records or other valuable papers)
What is covered in Boiler and Machinery?
Insures accidents to objects, and limit per accident. Insured without boilers can still benefit with coverage provided for equipment through this coverage. Issued as a separate policy
Specifically covers:
1. Explosion of boilers in excess of 15 sq inch which are owned, operated or controlled by insured
2. Mechanical and electrical breakdown of boilers, pressure vessels, machinery (photocopier, phone systems, A/C, electric motors, electrical panels)
What is covered in Water Escape? What is covered in Flood?
- Water Escape: Covers escape of water from sewer, septic tank, sump. Payment ACV.
- Flood: Covers flood from all bodies of water (including driven by wind). Subject to occurrence limit of $10,000
What is covered in Consequential Loss Assumption?
Covers damage to stock dependent on cooling or heating, which occurs when refrigeration equipment was damaged by insured peril
What is covered in Bylaws Coverage?
Covers increased cost of construction to meet building and bylaw requirements, as well replacing undamaged portion of building and its cost to demolish in a loss if current bylaws require it to be demolished to meet with bylaws.
What is covered in insuring off premises coverage?
NO PST
Newly Acquired Location - insures stock and equipment for 30 days in newly acquired location owned/rented/control by insured, or in vehicles 100 meters from location
Other Transit - insures stock and equipment that is in transit (other than parcel post), locked vehicle warranty when attached to insured’s own vehicle
Parcel Post - Insures stock equipment by Canada Post (Advantage over Canada Post, no need to insure each package separately and quick settlement)
Sales Representative - Insures stock and equipment when in custody of sales representative (in transit or otherwise) (property does not have to be in possession of sales person at time of loss)
Temporary Locations - insures stock and equipment at locations not indicated in policy and property, that is not owned/rented/controlled by insured. In transit is not considered temporary location
What is covered in Installment Sales Contract Floater?
Standard form has no coverage for stock and equipment loan or rented or sold on deferred payment plan. Named perils coverage only. Scope of coverage for:
1. While in transit in own or other vehicle
2. While in custody of purchaser until paid for
3. When returned for repair or servicing, covered for 10 days
Exclusions:
- losses arising out of infidelity of purchaser, losses arising out purchaser failure to pay for property (Coverage can be paid for single interest or dual interest - cover vendor and purchaser)
What is covered in Peak Season Endorsement?
Insure predictable increases in stock value in advance, standard coverage only covers ACV only, Peak season insures RC lost or damaged (building, stock, equipment).
What is covered in Replacement Cost Endorsement?
Standard coverage only covers ACV only RC requires repair and replacement as soon as possible, must be on same site or adjacent site, settlement only after replacement has been made
What is covered in Inflation Protection Endorsement?
To reduce effects of inflation on building values
