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Alberta General Insurance- Level 2 > Commercial Property > Flashcards

Commercial Property Flashcards

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1
Q

What 3 things make up commercial property?

A

Building
Stock
Equipment

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2
Q

What are the two ways of covering commercial property?

A
  1. Scheduled

2. All property (property of every description) = 1 big limit for stock, equipment and building

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3
Q

What are the three ways to determine actual cash value?

A
  1. RC - Depreciation
  2. FMV
  3. Combo of 1 &2

Pair and set and parts rule apply

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4
Q

How is replacement cost determined?

A

Cost to repair replace with like kind and quality
No depreciation but needs appraisal
Most common

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5
Q

How do you determine book value?

A

Invoice price minus depreciation. It’s good for taxes but shows low insurance amount

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6
Q

What does COPE determine?

A

commercial property rates

Construction
Occupancy
Protection
Exposure

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7
Q

What does your building need to have to be classified as fire resistive

A

The walls, floors, roof are all fire-resistive materials. Example concrete, brick or other non-combustible materials with fire resistant insulation

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8
Q

What are the five types of occupancy?

A
  1. Assembly
  2. Care/ detention
  3. Business/ personal services
  4. Mercantile
  5. Industrial ( low, medium, high)
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9
Q

What are the two types of fire protection?

A

Public- proximity to fire hydrant, full-time or volunteer fire department, enough water

Private protection - gets you discounts
Fire extinguisher, sprinklers, detection system

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10
Q

Name 3 factors when looking at exposure or location of business

A
  1. Distance to other buildings
  2. Construction, occupancy of nearby
  3. Neighbourhood, dangerous?
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11
Q

What is the Fire rate?

A

The rate needed to ensure dollar amount worth of property against fire. Example charge $1 per hundred dollars

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12
Q

What is a loading rate?

A

Additional rate for other perils for example you want broad coverage or theft coverage.

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13
Q

What does the indemnity agreement state?

A

That the insurer pays for the minimum of

  • value of damaged property
  • insurable interest * how much of the property you own*
  • limit of insurance
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14
Q

If there’s more than one deductible, which one do you pay?

A

The highest one

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15
Q

When is co-insurance waived?

A

If the loss is 2% of the limit or $5,000 coinsurance is waived

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16
Q

What is the coinsurance penalty formula?

A

Did
——– X loss - deductible
Should

17
Q

When would you want to have a stated amount of co-insurance clause?

A

It’s when you buy the limit equal to 100% of the property. No coinsurance. You must file an update a comprehensive list of commercial property on a regular basis. Good if you have a very large amount of property subject to inflation

18
Q

What is the maximum refund allowed under a premium adjustment?

A

50%

19
Q

What does the verification of values Clause allow the insurer to do?

A

Inspect property and Records to verify the information given at any reasonable time during the policy. And one year afterwards.

20
Q

What does the reinstatement Clause state?

A

That limits are restored after a loss is paid. Unearned premiums may not be fully returned if loss occurs.

21
Q

What are 5 extensions of coverage for commercial property?

A
  1. Property necessarily removed- temp location
  2. debris removal- from insured peril
  3. personal property of employees officers
    4 building damaged by theft or vandalism
  4. growing outdoor plants- caused by named peril
22
Q

Provide 5 examples for common peril exclusions

A
  1. Application of Heat
  2. Artificial electricity AK a power surge
  3. Nuclear incident
  4. Radioactive contamination
  5. War
23
Q

Provide 4 examples of common property exclusions

A
  1. Bylaws- increase costs because new building materials are required
  2. Money, bullion, Securities, stamps
  3. Illegal property
  4. Vacant for more than 30 days
24
Q

What does accounts receivable form coverage provide?

A
  1. Amounts not collected due to damage to records
    Interest payments
  2. Extra collection expenses for example in sure will hire a collection agency or collect funds
  3. Other reasonable expenses to re-establish records for example hiring an account
25
Q

True or false

The accounts receivable form will cover losses due to electrical injury from a power surge

A

False. Does not cover loss due to electrical or magnetic injury, disturbance or Erasure of electronic recordings except in the event of lightning

26
Q

Name 3 item that the EDP policy will cover?

A
  1. Hardware
  2. Software
  3. Extra expenses incurred such as renting or purchasing an automated service from someone else to avoid business interruption
27
Q

What does equipment breakdown insure?

A

Loss of equipment by sudden and accidental breakdown
The resulting damage
Other contents you are liable for

28
Q

Name 5 items that equipment breakdown will NOT cover?

A
  1. Maintenance related damages
  2. Increase costs due to by Law changes or pollution
  3. Indirect loss
    4 business Interruption,
    5 spoilage
29
Q

Business Interruption Insurance.

What’s the difference between loss of gross profit and gross earnings?

A

Loss of gross profit= he’s selling price Minus cost price until gross profits are back to pre lost lives

Gross earnings= pays until property is restored.

30
Q

Equipment breakdown coverage; Additional coverages.

What does rental value cover?

A

Lost rent money plus additional cost to rent an alternate premise

31
Q

Equipment breakdown; Additional coverages

What is defined as an extra expense?

A

Anything that’s needed to continue the business during restoration

32
Q

When would a glass rider not pay out?

A

Deliberate acts of violence
Damaged during non routine maintenance or repairs
Building is vacant, unoccupied or premises closed for more than 30 days
By law enforcement

Alberta General Insurance- Level 2 (14 decks)

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