Commercial Package Policy (CH 7)

Question 1

Commercial Package Policy (CPP)

Answer 1

Commercial insurance that combiners multiple commercial policies into one single policy with a discount, as a package.

Question 2

When a CPP is issued, it includes the following components:

Answer 2

• Common Declarations page
• Interline endorsements
• At least two coverage parts (different insurance policies)
• Common policy conditions page

Question 3

CPP: Common Policy Conditions

Answer 3

• Cancellation
• Policy Changes
• Audit by insurer
• Inspection by insurer
• Premium payment
• Transfer of rights

Question 4

Commercial General Liability Policy

Answer 4

Liability coverage for the business, no deductible and can be written for almost any type of business.

Legal liability to others resulting from negligence on the part of the insured or activities the business could be held contingently liable for.

Question 5

Two types of CGL policies

Answer 5

• Occurrence form

- Claims made form

Question 6

Extended Reporting Period

Answer 6

extends the period for reporting claim of loss. Provided if the CGL policy is:

• cancelled or not renewed
• renewed with an advanced retroactive date
• renewed by an occurrence form

also called a claims tail

Question 7

Basic extended reporting period

Answer 7

also called a “mini tail”
occurrence before the expiration date but not reported before that date, expiring policy will honor the claim if it is reported within the first 60 days beyond the expiration date

Question 8

supplemental extended reporting period

Answer 8

“maxi-tail”
optional endorsement that can be added to the policy that is expiring, issued from the insurance company one is discontinuing coverage with. It extends the expiring policy for any negotiated length of time.
paid by one time premium that could be as much as 200% of the expiring premium, but must be purchased within the 60-day mini-tail time frame

Question 9

CGL coverage for Accidents

Answer 9

A- bodily injury (BI) and property damage (PD) claims against the insured.
B- Personal and Advertising Injury Liability
C- Medical Payments to others. typical limit is $5,000 per person.

Question 10

Coverage A: Defined Occurrences

Answer 10

-Premises Liability
-Operations Liability
-Completed Operations Liability
-Product Liability
Contractual Liability
-Independent Contractors
-Fire Legal Liability

Question 11

Three Cause of Loss forms to choose:

Answer 11

• Basic
• Broad
• Special

Question 12

Basic:

Answer 12

Riot
Explosion
Vandalism, vehicle, volcano

Fire
Lightning

Smoke
Hail
Aircraft
Wind

Question 13

Broad

Answer 13

Weight of ice and snow
Water damage due to leaking plumbing
Falling objects
Freezing of pipes

Question 14

Special

Answer 14

All-risk or open peril- includes Theft

Question 15

Indirect Loss: Business Income

Answer 15

an endorsement designed to indemnify the loss of business caused by the disruption of normal operations at the insured location as a result of damage from a covered peril.

Question 16

Indirect Loss: Extra Expense

Answer 16

endorsement that pays for all new expenses during the period of restoration to keep operating or to relocate so the operation can continue.

ex. Moving, new rent, advertising, etc.

Question 17

Crime Insurance

Answer 17

special property insurance policy that may or may not be needed by a business.

Two main reasons: money and theft of contents.

Question 18

Money:

Answer 18

Currency, coins, and bank notes in current use and having a face value

Question 19

Securities:

Answer 19

Negotiable and non-negotiable instruments or contracts representing either money or other property, including tickets, stamps in current use, and evidences of debt in connection with credit or charge cards other than cards issued by the insured. Securities do not include money.

Question 20

Property other than Money and Securities

Answer 20

Any tangible property other than money and securities that has intrinsic value

Question 21

Commercial Inland Marine

Answer 21

“marine” refers to goods in transit. This coverage picks up where commercial property leaves off covering property after it is no longer within 100 feet of the insured premises.

Question 22

The six Marine categories:

Answer 22

• Imports
• Exports
• Domestic shipments
• Instrumentalities or transportation or communication
• Personal Property floater risks
• Commercial property floater risks

Question 23

Mechanical Breakdown

Answer 23

virtually any sudden and accidental breakdown of a scheduled object from causes other than normal wear and tear.

Question 24

Expediting Expense

Answer 24

an automatic additional coverage for Boiler and Machinery which blanket insures up to $25,000 to expedite necessary repairs.
Also pays for the increased cost of loss and related expenses for Green updates up to 25% of the amount of loss with a $100,000 maximum.

Question 25

Inspecting Condition

Answer 25

condition included in Equipment breakdown policy that allows the company to send out trained inspectors to inspect the scheduled machines in order to encourage preventative maintenance.

Question 26

Farm Insurance

Answer 26

A commercial lines policy that is a combination or both Personal and Commercial coverages.