Commercial Property

Question 1

Jim receives a letter in the mail from his insurer notifying him that his commercial policy will not be renewed thirty days from now. Jim protests, saying he needs at least two months time to find a new policy. Jim ends up receiving an additional 30 days’ coverage at the same premium as before, because:
A.
Jim prepays his insurance two months at a time.
B.
Jim’s insurer did not notify him by phone.
C.
Jim is an exceptional negotiator.
D.
Jim’s insurer did not provide him with 45 days’ notice.

Answer 1

D.
Jim’s insurer did not provide him with 45 days’ notice.

Question 2

When an insurer decides to not renew an existing commercial property policy, it is obliged to follow the Cancellation and Nonrenewal condition of supplying notice to the policyholder 45 days in advance. If the insurer fails to meet this deadline, it must:
A.
offer the same premium rates and policy coverage as before for an additional 3 months.
B.
offer an additional 30 days of coverage without charging any premium.
C.
offer the same premium rates and policy coverage as before for an additional 30 days.
D.
pay a fine of up to $5,000.

Answer 2

C.
offer the same premium rates and policy coverage as before for an additional 30 days.

Question 3

When a fire burns through The Chronicle newspaper company, it takes out two permanently-installed printing presses, three employees’ personal laptops, five rolls of newspaper stock, and in a twist of irony, two fire extinguishers. Which of these would be covered under Coverage A - Buildings and Structures?
A.
The printing presses only
B.
The employees’ personal laptops
C.
The printing presses and newspaper stock
D.
The printing presses and fire extinguishers

Answer 3

D.
The printing presses and fire extinguishers

In a commercial property policy, Coverage A of the Building & Personal Property Form covers the buildings as well as machinery fixtures, and equipments inside the building if permanently installed (printing presses), and property used to maintain the business (fire extinguishers).

Question 4

Which of the following is NOT a universal commercial property policy exclusion?
A.
Warfare
B.
Floods
C.
Earthquakes and land movements
D.
Lightning

Answer 4

D.
Lightning

Question 5

Tom leaves his personal laptop at Smith & Co. so a colleague can work on a presentation. While the laptop is in the care of Smith & Co., it is destroyed by a fire in the break room. The laptop was worth $3,200. How much indemnification would Smith & Co.’s Business and Personal Property Form provide for the damaged laptop?
A.
$0
B.
$700
C.
$2,500
D.
$3,200

Answer 5

C.
$2,500

Question 6

Helen’s business is growing rapidly, so she decided to add an annex onto her office and hire another worker. A storm blows down most of the annex structure while it is under construction, forcing Helen to restart from scratch. Assuming she maintains the 80% coinsurance requirement on her commercial policy, which coverage extension could help Helen rebuild?
A.
Outdoor Property
B.
Reasonable Repairs
C.
Property Off-Premise
D.
Newly Acquired Property

Answer 6

D.
Newly Acquired Property

The Newly Acquired Property extension provides thirty days of insurance coverage for new buildings under construction at the insured premises, or for any newly acquired business properties located off the insured premises.

Question 7

Extended coverage under a commercial policy often provides coverage for damage to outdoor trees, plants, and shrubs. When covered, what is the maximum per-plant amount?
A.
$250
B.
$200
C.
$100
D.
$50

Answer 7

A.
$250