Commercial Lines

Question 1

Commercial Lines Coverage

Answer 1

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.

Question 2

What type of valuation is used

Answer 2

Commercial property policies use actual cash value (ACV) valuations, with very few exceptions.

Question 3

Commmercial Dec Page includes

Answer 3

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.

Question 4

Commercial Exclusions

Answer 4

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)

Question 5

Commercial Cancellation/ Non-Renewal

Answer 5

The State of Georgia requires insurers to provide a 45 day written notice of non-renewal or cancellation of a commercial policy.

Question 6

Control of Property

Answer 6

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.)

Question 7

Commercial Policy Deductibles

Answer 7

the standard deductible on a commercial policy is usually $500.00.

Question 8

Business Personal Property

Answer 8

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.

Question 9

Personal Property of Others

Answer 9

Personal property of others refers to property in the care of the insured up to $2,500.

Question 10

Property Excluded From Coverage

Answer 10

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

Question 11

Property Off-Premises

Property Off-Premises

Answer 11

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.

Question 12

Increased Construction Costs

Answer 12

Increased construction costs activate when a covered loss must be replaced under the application of new building ordinances.

Question 13

Newly Acquired Properties Coverage

Answer 13

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.

Question 14

Valuable Papers and Records

Answer 14

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.

Question 15

Business Income Coverage

Answer 15

Business Income Coverage is designed to provide insurance protection for the loss of business income due to damages caused by a covered loss.

Question 16

Business Interruption Coverage Form

Answer 16

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

Question 17

Extra Expense Coverage

Answer 17

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

Question 18

Condominium Coverage Form

Answer 18

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.

Question 19

Leasehold Interest Coverage

Answer 19

provides protection for a tenant in the event their lease is terminated due to a covered peril or condemnation of a leased property.

Question 20

Legal Liability Coverage

Answer 20

pays for the insured negligently damaging property owned by others while in the insured’s care or on the insured’s premises.

Question 21

Commercial Basic Form

Answer 21

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.

Question 22

Commercial Broad Form

Answer 22

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.

Question 23

Commercial Special Form

Answer 23

open peril policy which covers all known perils except for those specifically listed in the exclusions section of the insurance coverage.

Question 24

Comprehensive General Liability - CGL

Answer 24

1. Direct liability resulting from a business premises and its operations.
2. Liability from manufactured or sold products and completed operations.
3. Indirect liability as the result of actions taken by employees, agents, contractors or representatives.
4. Contractual liabilities, where an insured party contractually agrees to indemnify others against certain risks (very common in landlord-tenant leases).

Question 25

CGL who is insured

Answer 25

In general, we can assume most CGL policies will cover executives, partners, employees, managers, volunteers, agents, representatives, and sometimes even spouses.

Question 26

“Occurrence” Coverage Trigger

Answer 26

An occurrence trigger CGL policy provides insurance coverage for any accident that occurs during the policy period.

Question 27

“Claims Made” Trigger

Answer 27

The claims made trigger CGL policy covers all claims made during the policy period, regardless of when the accident occurred.

Question 28

Personal and Advertising Injury

Answer 28

False arrest, detention, or false imprisonment
malicious prosecution
wrongful entry or eviction
libel and slander
infringement of copyrights

Question 29

Business Owners Policy

Answer 29

“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.

Question 30

Business Owners Policy - Not Eligible

Answer 30

Bars and pubs
Auto service garages and body shops
Manufacturing businesses
Amusement parks and arcades
Banks and credit unions

Question 31

Commercial Crime Policy Coverage

Answer 31

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

Question 32

Employee Theft Coverage

Answer 32

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.

Question 33

Forgery or Alteration Coverage

Answer 33

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.

Question 34

Discovery Coverage

Answer 34

Discovery coverage indemnifies the insured for all losses discovered during the policy period +60 days.

Question 35

Loss Sustained Coverage

Answer 35

Loss sustained coverage indemnifies for criminal losses that occurred and were discovered during the policy period.