Chapter 8: Commercial Property Policies Flashcards
Components of Commercial Package Policy
CPP = Declarations + Conditions + Endorsements
Information included in Commercial Policy Declarations
Named Insured, mailing address, policy period, business description
Coverage parts and premiums
Forms that apply to all included coverage parts
What are Common Policy Conditions
Cancellation, changes, examination of books/records, inspections/surveys, premiums, transfer of rights
Define & list two Interline Endorsements
*Endorsements that apply to all parts of the policy
PA Notice
PA Changes Cancellations & Nonrenewal
Farm Coverage Forms
normal COV A-D
COV E- scheduled farm property
COV F- unscheduled farm property
COV G- outbuilding
Livestock Form
Identify losses to livestock covered under Broad Form that are not covered under Basic Form
electrocution, attack by dogs/wild animals, accidental shootings on insured location, drowning, loading/unloading
3 perils unique to Farm Coverage that are covered under the Basic Farm Property Form that are not covered under the Commercial Building and Personal Property Basic Cause of loss Form
- Collision COV E&F only; collisions causing damage to covered farm machinery, death of covered livestock, damage to other farm personal property while that property is being hauled
- Earthquake loss to livestock
- Flood loss to livestock
How does the vacancy provision in the Farm Form differ from other policies
if it is unoccupied/vacant greater than 120 consecutive days then the building limit is reduced by 50%, unless an endorsement is attached to extend the period
Building and Personal Property Coverage Form
buildings, business personal property and personal property of others, listed on dec page
Property covered under Building
the building or completed addition, fixtures, permanently installed machinery or equipment, personal property used to maintain/service premise, appliances used for dishwashing/cooking/laundering, alterations/repairs under construction
Property covered under Business Personal Property
*located in/on building, in open, in vehicle w/n 100 ft of building or described premise
-furniture, fixtures, machinery/equipment, stock materials, other personal property owned by insured, labor/materials, improvements/betterments if insured is a tenant, any leased personal property
property not covered (17)
accounts, bills, insureds animals, autos held for sale, bridges , roadways, excavations, foundations of buildings, land, electronic data, vehicles - see list on page 10 of chapter 8
6 Additional Coverages
Debris Removal - $5,000 limit
Preservation of property - 30 days
Fire dept service - $1,000 limit
Pollutant clean up $10,000 limit
Increased cost of construction $10,000
Electronic Data $2,500
7 Coverage Extensions
These apply if co-insurance of 80% or more is shown on the dec page
1. Newly acquired/constructed property, up to $250,000 for new, up to $100,000 for BPP for 30 days
2. Property of others, up to $2,500, except for theft (no cov.)
3. Valuable papers $2,500
4. Property off premise $10,000 while temporarily away
5. Outdoor Property $1,000, no more than $250 for a tree
6. Nonowned, detached, trailers $5,000
7. BPP temporarily in portable storage unit $10,000 (storage unit must be w/n 100ft. of building in dec pages; $10,000 is limit up to 90 dyas)
What valuation method is used to pay claims under the BPP Coverage Form
ACV basis unless otherwise stated
What coverage does the Business Income Form provide
Actual loss of income to business when the loss results from partial or total shutdown; time begins 72hrs after loss; shutdown must be caused by direct loss or damage to property
Business Income is…
*BI=NICE
Net Income (profit or loss before income taxes), earned or incurred, plus all Continuing operating Expenses
3 optional Business Income forms
- Extra Expense or w/o (ex. generator)
- Civil Authority (ex. fir in are causing business shutdown)
*w/n 1 mile for coverage to apply - Alterations and New Buildings (loss of income w/n 100ft)
Legal Liability Coverage form
loss/damage to property of others, rented/occupied or in insureds care/control, resulting from covered cause of loss
List & Explain 3 causes of loss forms
*basic, broad, special
Basic- fire/lightening, WHARVVVESSS
Broad- all basic, plus; falling objects, weight of ice/snow, water damage from leaked appliances, collapse/breakage of glass
Special- covers everything except what is excluded
*special limits b/c included theft ($2,500- furs, jewelry, gold/silver, molds) (additional $5,000 for personal property in transit by vehicle)
*see pg. 16
Explain the following Endorsements
*Ordinance & Law
*Spoilage
*Peak Season Limit of Insurance
*Value Reporting Form
O&L- increased cost to comply w/ codes
Spoilage- meat, dairy
Peak Season- increase BPP for period of time (farmers, Walmart- Christmas)
Value Reporting- report monthly
Define Inland Marine
property off premise or in transit
What are the 5 groups for which Inland Marine insurance can be provided
- Imports
- Exports
- Domestic Shipments (w/n US)
- Bridges, tunnels, instruments of communication/transportation (pipelines, towers, radio/tv equipment)
- Property Floater Risks (personal/comm.)
Explain the two different kinds of conditions under the Commercial Inland Marine Conditions Form
Specific Conditions
-Loss: abandonment, appraisal, duties in event of loss, insurance under two or more coverages, loss payment, other insurance, pair/sets, recoveries, reinstatement of limit after loss, transfer of rights of recovery
-General: concealment, misrepresentation/fraud, legal action against us, no benefit to bailee, policy period, valuation
Difference between filed/unfiled Inland Marine Coverage forms
Filed- specific coverage form or rate (premium), must be filed with state authority; controlled
Unfiled- doesn’t have to be filed w/ state authority; uncontrolled
*major of Inland Marine is unfiled
Name and describe the 6 Filed Inland Marine Coverage Forms
- Accounts Receivable Coverage Form (money to insured)
- Commercial Articles Form (cameras)
- Jewelers Block (stock of jewelry, stones, metals in insured business; property sold not delivered; property of others in insureds care) *ACV valuation
- Sign Coverage Form
- Valuable Papers and Records
- Equipment Dealers Coverage Form (sales of equipment/vehicles)
Examples of Unfiled Inland Marine Forms
- Bailee’s Customer (dry cleaner)
- Contractors Equipment Floater (scheduled/blanket) (opened/named perils)
- Electronic Data Processing (EDP)
- Installation Floater (before installing property)
- Transportation Coverage (private, contract, common)
- Common Carrier Cargo Liability
3 different motor truck cargo forms and two transportation policy forms
Motor Truck Cargo (truckers, shippers, owner)
Transportation Policies (Annual and transit)
what is/is not breakdown
is: failure of pressure or vacuum equipment, mechanical failure, electrical failure, explosion
not: malfunction, defects/viruses, leakage of valve/fitting, damage to vacuum tube, damage to structure supporting equipment, functioning of any safety device, cracking or internal combustion of gas
What is considered Covered Equipment
- Equipment meant to operate under internal pressure
- Electric/Mechanical equipment used in energy
- Communication/Computer equipment
- Utility equipment used to supply services
Exclusions in Equipment Breakdown
see pg. 31-32
Why is the suspension condition unusual
if equipment is found to be in a dangerous condition, the insurance company can suspend the insurance for that equipment; coverage only reinstated by endorsement
