Commercial Lines Flashcards
Newly acquired or constructed property
Coverage is for 30 days for a newly acquired buildings and personal property that are similar in use to the property insure. This extension will pay up to $250,000 for newly acquired buildings, and up to $100,000 for business personal property
Personal effects and property of others
Coverage is for up to $2,500 for personal effects of the insured or his employees (coverage does not apply to theft). This coverage also can be applied to personal property of others in the insurance care, custody, and control
Valuable papers and records
$2500 for the cost to research, replace, or restore lost information from valuable papers and records, other than electronic data
Property off premises
Up to $10,000 for property, excluding stock, but is temporarily at premises the insured does not own, lease, or operate. This coverage does not apply to personal property in a vehicle, or in possession of a sales person
Outdoor property
Up to $1000 for fences, and radio and television antennas, or $250 for trees, shrubs, and plants damaged or destroyed by fire, lightning, explosion, riot or civil commotion, or aircraft
Nonowned detached trailers
$5000 coverage applies only of the loss occurs when the trailer is in the insured’s custody and only if the insured is contractually obligated to pay for the loss or damage. The higher limit maybe shown in the declarations. This coverage is considered excess over other
Business Personal property temporarily in portable storage units
Coverage extends to business personal property wall temporarily stored in a portable storage unit located within 100 feet of the premises. The maximum amount amount of coverage is $10,000, and the coverage ends 90 days after the business personal property has been placed in the storage
Additional conditions
Abandonment Appraisal Duties in the even of a loss or damage Loss payment Recovered property Vacancy Valuation Coinsurance Mortgageholders
Abandonment
The insured cannot abandon property to the insurer
Appraisal
If the insurer and insured cannot agree on the value of property, both parties may make written demand for an appraisal of the loss.
Duties in the event of loss or damage
- Notify the police if a wall has been broken
- Give the ensure prompt notice of the loss, and a description of how, when, and where it occurred
- Take all reasonable steps to protect property from further damage
- At the insurers request, provide an inventory of both damaged and undamage to property
- Permit the insurer to inspect the property as often as necessary
- Send of the insurer a signed, sworn proof of loss within 60 days of its request
- Cooperate with the insurer and the investigation
Loss payment
In the event of a loss or damage, the insurance company has the option to do the following:
- Pay the value of the lost or damaged property
- Pay the cost of repairing or replacing the loss or damaged property
- Take all right or any part of the property at an agreed or appraised value
- Repair, rebuild, or replace the property
- The insurer must give notice of their intentions within 30 days after receiving the sworn proof of loss
Recovered property
If property is recovered after payment has been made, the insured has the option of keeping the property and returning the amount paid
Vacancy
If the building has been vacant for more than 60 consecutive days before the loss, the insurance will not pay for damage caused by vandalism, sprinkler leakage, glass breakage, water damage, theft, or attempted theft. If the losses caused by any other peril, the insurer will reduce the amount it otherwise would have paid by 15%
Mortgage holders
If the insured denies coverage because the insured failed to comply with the policy provisions, the mortgage holder may still be able to receive payment of the mortgage holder paid any premium due under the policy, submits the signed proof of loss within 60 days, and has notified the insurer of any changes in ownership and occupancy
Basic Commercial building and personal property form
- Fire
- Lightning
- Explosion
- Windstorm or hail
- Smoke
- Aircraft or vehicles
- Riot or civil commotion
- Vandalism
- Sprinkler leakage
- Sinkhole collapse
- Volcanic action
Commercial building and personal property form EXCLUSIONS
Ordinance or law Earth movement Governmental actions Nuclear hazards Utility services War and military actions Water Neglect Artificially generated electrical current Rupture or bursting of water pipes Leakage or discharge of water or steam Explosion of steam boilers Mechanical breakdown
Broad Commercial building and personal property form
11 causes of loss from basic (vandalism includes glass breakage) PLUS 1. Falling objects 2. Weight of snow, ice, or sleet 3. Water damage PLUS 1. Collapse 2. Breakage of glass
Earthquake cause of loss form
Adds 2 perils for coverage: earthquake and volcanic eruption
Business income
Covers the consequence of loss of business income that occurs when a business must suspend operations because of a direct loss.
The most the insurer will pay is 10% of the limit of insurance for business income, up to a maximum of $100,000 per location.
Extra expense coverage form
Will reimburse the insured for extra expenses the insured incurs to keep the business operation of following a direct loss to the business property. This coverage is used when a business can afford to be shut down for repairs
Commercial package policy (CPP)
- Commercial property
- General liability
- Crime
- Equipment breakdown
- Auto
- Inland marine
- Farm
Interline endorsements
Endorsements that apply to more than one coverage part. If the policy contains more than one coverage part, it would be classified as a commercial package policy.
Equipment breakdown coverage
- loss to property owned by the insured
- Loss or damage to property of others in the insureds care, custody, or control, or in which the insured is legally liable for damage
- Up to $25,000 for expediting expenses, which are the reasonable extra expenses incurred by the insured to make temporary repairs, or to speed up permanent repairs
- There is automatic coverage for newly acquired locations of the coverage is the same as the coverage at the currently insured location
Equipment breakdown exclusions
- depletion, deterioration, erosion, or corrosion
- wear and tear
- leakage at valves, joints, or fittings
- breakdown of any vacuum tube, gas tube, or brush
- breakdown of any computer, or electronic data processing equipment
- breakdown of a foundation supporting the object
- the functioning of any safety or protective device
Refrigeration interruption coverage
Covers perishable property for spoilage to refrigerated covered property or damage caused by contact with refrigerant
Turbine units explosion coverage
Covers turbines, parts of a gas turbine unit, components of the shaft of a driving turbine, and mechanical or hydraulic mechanisms
Pressure and refrigeration objects
Covers fired and on fire vessels, boilers, steam generators, piping and valves, refrigeration and air-conditioning systems and piping, and small compressing units
Pressure of vacuum equipment
Covers equipment pill to operate under mandatory state or municipal inspection requirements
Businessowners policy (BOP)
Provides property and liability coverage in a single contract. It is a pre-package policy designed to fit the needs of the small to medium business. Instead of selecting the individuals coverages to be insured, the insurance company offers a package of coverage, which includes property and liability. The insured usually cannot elect to exclude coverage that is automatically provided in the package
- office buildings (6 stories, 100K square ft)
- Apartments and residential or commercial condos
- mercantile, processing and servicing establishments ($3M sales, 25K square ft)
- contractors
- fast food (7.5K square ft)
- convenience stores
Debris removal
25% / 180 days / $10,000
Preservation of property
30 days
Fire department service charge
$2,500
Extended business income
30 days
Extra expense
Actual loss sustained / 12 months / no waiting period
Pollutant cleanup and removal
$10,000 / 12 months / 180 days
Civil authority
72 hours / 4 weeks
Money orders and counterfeit paper currency
$1,000
Forgery and alterations
$2,500
Increased cost of construction
$10,000
Business income from dependent properties
$5,000
Fire extinguisher systems recharge expense
$5,000
Electronic data
$10,000
Interruption of computer operations
$10,000
Limited coverage for fungi, wet rot, and dry rot
$15,000
Newly acquired or constructed property
$250,000 for buildings / $100,000 for BPP
Personal property off premises
$10,000
Outdoor property
$2,500 / $1,000 per tree, shrub, plant
Personal effects
$2,500
Valuable papers and records
$10,000 on premise / $5,000 off premise
Accounts receivable
$10,000 on premise / $5,000 off premise
