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
