Chapter 7

Question 1

Commercial Package Policy

Answer 1

They can get Liability and Property policies.

Question 2

Business excluded from a Commercial Package Policy

Answer 2

Vacant at Inception, petroleum businesses, and residential risks

Question 3

Commercial Package Policy changes have to be made with an

Answer 3

Endorsement

Question 4

Interline Endorsement

Answer 4

Allows the flexibility in choosing certain enhancements or limits to the policyholder

Question 5

Commercial General Liability Policy (CGL) 3 coverages

Answer 5

A - BI and PD
B - Personal and Advertising Injury
C - Medical Payments

Question 6

CGL liability exposures (4)

Answer 6

Premises - slip and fall

Operations - Injuring a passerby

Products - Food

Completed Operations - Repairs

Question 7

Who is Insured

Answer 7

Sole ownership - insured and spouse

Partnership - Insured, all members, partners, and spouses

Corporation - Insured, officers, directors, stockholders

Employeess

Real estatre manager

Temporary custodian

Person driving mobile equipment

Question 8

Commercial General Liability provides for 6 separate limits

Answer 8

Occurrence - Maximum payable for all claims

General Aggregate - Maximum payable for the policy period for all claims

Products and completed operations aggregate - Maximum payable for all policy period for all claims arising out of products

Personal and advertising injury - Maximum payable under coverage B for one occurrence

Fire damage legal liability = sub limit for fire damage in coverage A (min $50,000)

Medical expense limit - Maximum payable under coverage C for any one person

Question 9

Difference between “Claims Made” vs “Occurrence”

Answer 9

Difference between these two forms is what initiates, or triggers the liability coverage

Question 10

Pollution Liability (3)

Answer 10

Pollution Liability Coverage Form (Standard Pollution Policy) - Clean up cost is covered only when obligated by the government

Pollution Liability Limited Coverage Form - Does not cover clean up cost

Pollution Liability Coverage Extended Endorsement - Deletes the pollution exclusion pertaining to BI and PD. Does not cover clean up cost

Question 11

Commercial Property Policy is composed of at least 2 coverages parts

Answer 11

Object being insured. There are 7 coverage forms to identify object

Cause of loss form identifies the perils that are insured against.

Question 12

There are 4 variations in a Commercial Property Policy cause of loos forms

Answer 12

Basic

Broad

Special

Earthquake

Question 13

Commercial Property Policy do they have a deductible

Answer 13

All losses have a basic deductible of $250

Question 14

Coverage Forms (7)

Answer 14

Building and Personal Property

Business Income

Extra Expense - Necessary to stay open

Builders Risk

Legal Liability - Bailee

Condominium Association - Building and personal property for condominiums

Condominium Commercial Unit Owners - Commercial Condominiums

Question 15

Selected Endorsements (4)

Answer 15

Ordinance or law coverage - Covers loss for the undamaged parts of the building, demolition cost coverage, and increased cost of construction coverage.

Peak season - seasonal fluctuations in inventory

Spoilage - spoils due to breakdowns

Value reporting form - reporting personal property values monthly

Question 16

Commercial Crimes (4)

Answer 16

Theft

Burglary

Robbery

Mysterious Disappearance

Question 17

Crime Coverage Forms (8)

Answer 17

Employee Dishonesty (Fidelity Bond)
Name schedule
Position Schedule
Blanket Coverage

Forgery or Alteration

Computer Fraud - Hacking

Outside the Premises

Inside the Premises - Theft of money and securities (money)

Inside the Premises - robbery and safe burglary (other than money)

Funds transfer fraud - Transfer money to another country

Money orders and counterfeit paper currency

Question 18

Commercial Inland Marine (Floater Policy)

Answer 18

Covers property that is subject to movement

Usually insured as replacement coverage and all risk basis

Worldwide

Question 19

Floater policy conditions (8)

Answer 19

Abandonment

Appraisal

Policyholders duty after a loss - 91 days to report loss

Other insurance

Loss to pair or set

Salvage

Transfer of right of recovery - subrogation

Policy period

Question 20

Floater Policy Coverage Forms (9)

Answer 20

Accounts Receivable - Debt, protects from the destruction of accounts receivable records.

Commercial Article - cameras, instruments

Contractors Equipment Floater - Covers mobile equipment

Equipment Dealers - dealers property of mobile equipment

Installation Floater - Materials and supplies installed by the insured

Jewelers Block - Stocks of merchandise for retail jewelers.

Signs

Valuable Papers and records - Blue prints, legal documents

Transportation Coverage - pg 146

Question 21

Boiler and Machinery

Answer 21

Covers for explosions, mechanical breakdown, and artificially generated electrical current.

Question 22

Boiler and Machinery definitions (3)

Answer 22

Covered property - What could be damaged

Accident - all risk

Object - equipment

Question 23

Boiler and Machinery forms (3)

Answer 23

Scheduled - List machinery individual

Basic - Blanket coverage for all machines included on the basic list as objects

Broad - Basic plus additional machines

Question 24

Boiler and Machinery Objects definitions (6)

Answer 24

Pressure and Refrigeration Objects

Mechanical Objects

Electrical Objects

Turbine Objects

Comprehensive Coverage

Comprehensive Coverage

Question 25

Boiler and Machinery Selected Endorsement (2)

Answer 25

Business Income

Actual Cash Value - can be added to lower premium