Commercial Lines Flashcards
Commercial Lines Coverage
Commercial property insurance is a form of insurance that covers direct and indirect losses related to business properties other than farms and one-to-four family dwellings.
What type of valuation is used
Commercial property policies use actual cash value (ACV) valuations, with very few exceptions.
Commmercial Dec Page includes
the insured party
the property covered in the policy
limits of the insurance policy
deductible on the policy
the term and expiration date of the policy
identifies the coverage forms and endorsements that apply to the policy.
Commercial Exclusions
a loss resulting from enforcement of building ordinances which regulate construction, use or repair of property.
earthquakes or land movement.
seizure or destruction by governmental action.
nuclear reaction and hazards.
loss from utility service failures.
war.
flood.
explosion of boilers, steamers, pipes and engines (available but requires endorsements)
Commercial Cancellation/ Non-Renewal
The State of Georgia requires insurers to provide a 45 day written notice of non-renewal or cancellation of a commercial policy.
Control of Property
This condition provides that any act of neglect by a person other than the policyholder beyond the direction and control of the policyholder will not affect insurance coverage (i.e. any employee causing damage will be covered by the commercial property policy.)
Commercial Policy Deductibles
the standard deductible on a commercial policy is usually $500.00.
Business Personal Property
Furniture, loose fixtures, loose machinery, loose office equipment and other stock used in the course of business.
Business property on the personal property of others, or in possession by other people.
office equipment and leased equipment that require insurance coverage.
all such property that is within 100 feet of the business premises.
Personal Property of Others
Personal property of others refers to property in the care of the insured up to $2,500.
Property Excluded From Coverage
Money, securities, bullion and other liquid financial instruments Animals Vehicles, watercraft and aircraft Outdoor radio and TV antennas Underground pipes or drains Fences, wiring and masts Outdoor signs not attached to buildings Trees, shrubs and plants
Property Off-Premises
Property Off-Premises
Property off-premises coverage provides up to $10,000 for covered property temporarily not on location of property owned, leased or rented by the insured.
Increased Construction Costs
Increased construction costs activate when a covered loss must be replaced under the application of new building ordinances.
Newly Acquired Properties Coverage
Newly acquired properties coverage provides 30 days of insurance coverage for newly acquired business properties.
Newly acquired properties coverage provides up to $250,000 in coverage for Coverage A, and $100,000 coverage for Coverage B.
Valuable Papers and Records
Valuable paper and records coverage can provide up to $2,500 worth of coverage associated with the costs of replacing or recovering valuable paperwork or computer records.
Business Income Coverage
Business Income Coverage is designed to provide insurance protection for the loss of business income due to damages caused by a covered loss.
Business Interruption Coverage Form
Business interruption coverage will indemnify the policyholder for the loss of normal business income.
Business interruption coverage begins 72 hours after the occurrence of damage, and continues until. - the date - the property is repaired or business resumes at a new location
Limited to 3 weeks
Extra Expense Coverage
providsse insurance protection for any costs associated with expediting the continuance of business operations after a covered loss.
Extra Expense coverage can cover expenses such as:
subcontracting work
relocation expenses
generators to run power
leasing and rentals
Condominium Coverage Form
The condominium coverage form provides insurance protection for the common areas of a condominium building, as well as the infrastructure of the condominium building including piping, ductwork, electrical and wiring units, and other systems important to the function of the condominium as a whole.
Leasehold Interest Coverage
provides protection for a tenant in the event their lease is terminated due to a covered peril or condemnation of a leased property.
Legal Liability Coverage
pays for the insured negligently damaging property owned by others while in the insured’s care or on the insured’s premises.
Commercial Basic Form
named peril form, meaning losses are covered only by the specific perils named in the insurance coverage. A basic policy form covers the following perils:
Fire and debris removal.
Lightning.
Explosions, not including ruptures caused by high pressure devices.
Wind and hail damage.
Smoke damage.
Aircraft or vehicles not owned by the insured.
Riot and civil commotion, including striking employees.
Vandalism and malicious mischief (excluding theft and glass breakage).
Sprinkler leakage.
Volcanic events and shock waves.
Commercial Broad Form
a named peril policy covering all the perils listed under the Basic Policy Form, and adds the following perils to coverage:
coverage from falling objects.
weight of ice, snow and sleet.
water damage insurance coverage from sources other than sprinkler leakage, such as back up from sewers or drains and slow leak damage.
Commercial Special Form
open peril policy which covers all known perils except for those specifically listed in the exclusions section of the insurance coverage.
Comprehensive General Liability - CGL
- Direct liability resulting from a business premises and its operations.
- Liability from manufactured or sold products and completed operations.
- Indirect liability as the result of actions taken by employees, agents, contractors or representatives.
- Contractual liabilities, where an insured party contractually agrees to indemnify others against certain risks (very common in landlord-tenant leases).
CGL who is insured
In general, we can assume most CGL policies will cover executives, partners, employees, managers, volunteers, agents, representatives, and sometimes even spouses.
“Occurrence” Coverage Trigger
An occurrence trigger CGL policy provides insurance coverage for any accident that occurs during the policy period.
“Claims Made” Trigger
The claims made trigger CGL policy covers all claims made during the policy period, regardless of when the accident occurred.
Personal and Advertising Injury
False arrest, detention, or false imprisonment malicious prosecution wrongful entry or eviction libel and slander infringement of copyrights
Business Owners Policy
“open perils” property insurance to cover buildings, equipment and inventory and personal property.
business interruption insurance to cover shut-downs, along with extra expense coverage.
liability protection to cover lawsuits from accidents or products, and also protection from slander or copyright lawsuits.
crime insurance.
vehicle coverage for rented or borrowed vehicles.
Business Owners Policy - Not Eligible
Bars and pubs Auto service garages and body shops Manufacturing businesses Amusement parks and arcades Banks and credit unions
Commercial Crime Policy Coverage
the average business can expect to lose 6% of its annual revenue to employee theft, and 9 out 10 crimes committed by employees.
Coverage Includes
Employee Theft Coverage
Forgery or Alteration
Theft of Money and Securities
Robbery or Safe Burglary of Other Property
Outside the Premises
Computer Fraud
Counterfeit Money Orders and Paper Currency
Employee Theft Coverage
Employee theft coverage can be written one of three ways:
Scheduled Persons Coverage- covers theft from a specifically named individual.
Scheduled Position Coverage- covers specific employee positions.
Blanket coverage- covers all employees.
Forgery or Alteration Coverage
Forgery or alteration coverage provides protections against forged or altered checks, drafts, promissory notes or other negotiable instruments. This coverage applies only to checks or financial instruments drawn on the insured party’s financial interests.
Discovery Coverage
Discovery coverage indemnifies the insured for all losses discovered during the policy period +60 days.
Loss Sustained Coverage
Loss sustained coverage indemnifies for criminal losses that occurred and were discovered during the policy period.
