Chapter 9 - Commercial Property Insurance Flashcards
The broad from wording provides insurance on an all-inclusive base. Therefore, all risks are basically the same as all losses
True
False
False
Which of the following perils is always included in all type of commercial
a. fire
b. Flood
c. equipment breakdown
d. sewer backup
Fire
As firms extended ocean marine coverages to continue insurance protection of cargo on dry land, what new line of insurance was created?
a. cargo floater
b. inland marine insurance
c. Transport insurance
d. Named-perils insurance
b. inland marine insurance
What terms are used to describe the amount it would cost to repair or replace the particular article with a new item of like, kind and quality without taking depreciation into account?
a. like kind and quality cost
b. replacement cost
c,. actual cash value
d. evaluation cost
b. replacement cost
Coinsurance clauses are designed to prevent insureds from carrying excessive amounts of insurance on their property by requiring them to bear a portion of every loss if they’re over-insured
True
False
False
Any client who has stock or is responsible for stock in transit has inventory shortage as a risk. Why does insurance generally not provide coverage for this risk?
a. There is no coverage available for stock in transit.
b. Inventory shortage is automatically covered under all commercial forms.
c. Documentary evidence is needed to prove that the stock was in the insured’s care, custody, and control at the time of the inventory shortage.
d. Inventory shortage requires reporting to the insurer on a weekly basis and is cost prohibitive for most insureds to consider purchasing.
c. Documentary evidence is needed to prove that the stock was in the insured’s care, custody, and control at the time of the inventory shortage.
How do many insurers treat the temporary location extension in the commercial property broad form (CPBF)?
Select one:
a. Insurers include this extension at little or no premium charge.
b. Insurers include this extension at a high premium charge.
c. Insurers do not include this extension.
d. Insurers will not cover an overflow of stock or equipment that is stored off-site.
a. Insurers include this extension at little or no premium charge.
Other than the peak season endorsement, what is another way to protect fluctuating values?
a. Actual cash value
b. Stock reporting basis
c. Blanket limit
d. Temporary locations coverage
b. Stock reporting basis
Under which of the following circumstances would a sales representative’s samples generally be EXCLUDED under the extension to the commercial property broad form (CPBF)?
a. When the samples are in transit to an unnamed location.
b. When the samples are with the salesperson at a client’s location.
c. While the samples are on the actual premises of the business they pertain to.
d. When the samples are held in an unlocked vehicle.
d. When the samples are held in an unlocked vehicle.
What are the common coverages listed on the named-perils form?
a. All physical loss or damage except as excluded is covered.
b. There are no exclusions on the named-perils form.
c. The named-perils form only covers all risks of a physical nature.
d. The named-perils form covers fire and additional perils named on the form.
d. The named-perils form covers fire and additional perils named on the form
What does “all risks” refer to?
a. Named perils including theft and water damage are covered.
b. All perils are covered.
c. All physical loss or damage except as excluded is covered.
d. Only the perils named in the policy are covered.
c. All physical loss or damage except as excluded is covered.
What exclusion would the client want to add back onto their policy if they were concerned about their building and its age?
a. Pollution
b. Bylaws
c. War
d. Terrorism
b. Bylaws d
What is an example of property commonly excluded under a commercial property broad form?
a. Furs or jewelry
b. An occupied vacation residence
c. An occupied cottage
d. A separate building on the property
a. Furs or jewelry
What is the coinsurance clause meant to do?
a. Ensure that the client will get paid on the claim
b. Protect equipment and stock that is at a temporary location only
c. Encourage the insured to carry adequate amounts of insurance on the property
d. Require the insured to report all stock values periodically during the policy term
c. Encourage the insured to carry adequate amounts of insurance on the property
What are the two basic perils formats?
Named perils and Broad Form, All risk
Which province has the Act Respecting the Distribution of Financial Products and Services requiring brokers to review all exclusions with the client?
a. Ontario
b. Saskatchewan
c. New Brunswick
d. Quebec
d. Quebec
There are more exclusions in an all-risks policy than in a named perils policy
True
False
True
What is CPBF
Commercial Property Broad Form
What is an Exclusion?
Exclusions can specify that certain property is not insured or that loss or damage caused by certain perils is not covered.
Exclusions are grouped into several general categories, what are they?
-Generally, not insurable
-Losses not accidental or extraneous
-Losses wholly or partly under the control of insured
-Wear and Tear losses
-losses excluded because of the particular coverage
-Covered by other specific types of policies designed to cover
What are some properties commonly Excluded?
Watercraft, furs and jewelry and vacancy
Property undergoing some work process is excluded, this is referred to as Work in progress or what?
a. Work not completed
b. Under construction
c. Undergoing process of heat
d. Being worked on
c. Undergoing process of heat
Commercial Broad form policy commonly excludes peris of Flood, earthquake, sewer backup and overland water. What are others
a. undergoing process of heat and fire
b. bylaws and inventory storage
c. Pollution and Theft
d. Equipment breakdown and vandalism
b. bylaws and inventory storage
In a commercial policy, flood coverage is often considered together with
a. fire
b. theft
c. earthquake
d. sewer backup
c. earthquake
Sewer backup is often sold along with
a. theft
b earthquake
c. flood
d. overland water
d. overland water
ON a Commercial policy most wording exclude any increase in claim amount due to the operation of building bylaws that include what?
-Increase costs due to a requirement to demolish and rebuild an undamaged portion of a building
-Additional costs to rebuild with superior construction materials
-Costs to remove an extra debris
-Increased time to build, resulting in an increased business interruption loss
There are two types of wording that will influence the insured’s decision on the amount of insurance to carry. The amount of insurance placed on the insured property is affected by whether the insured choose what?
Replacement cost value or
Actual cash value
What page will list the number of designated items and the amount of insurance as well as extensions?
a. coverage summary
b. declaration page
c. endorsement page
d. review page
b. declaration page
Newly acquired locations will be covered for how many days
a. 7
b. 15
c. 30
d. 60
c. 30
POED and COED stand for what?
property of every description and
contents of every description
Fluctuating value can be broken down into what two categories?
Stock reporting basis or
peak season endorsement
