Commercial Property insurance Flashcards
1
Q
1. Which of the following perils are covered in the causes of loss—basic form? A. Collapse B. Explosion C. Volcanic eruption D. Weight of snow, ice, or sleet
A
- B. Coverage for collapse is provided as an additional coverage in the broad and special causes of loss forms. Volcanic eruption is covered under the earthquake and volcanic eruption endorsement. (The other causes
of loss forms cover volcanic action, which is not the same thing as volcanic eruption.) Loss from the weight of snow, ice, or sleet is included in the broad and special causes of loss forms.
2
Q
2. Under the earthquake and volcanic eruption endorsement, all earthquake shocks or volcanic eruptions that occur within a certain number of hours constitute a single earthquake or volcanic eruption. What is that period? A. 24 hours B. 40 hours C. 72 hours D. 168 hours
A
- D. Under this endorsement, all earthquake shocks or volcanic eruptions that occur within any 168-hour period constitute a single earthquake or volcanic eruption.
3
Q
3. Loss caused by sprinkler leakage is covered under which commercial property causes of loss form? A. Basic B. Broad C. Special D. All of these
A
- D. All of the causes of loss forms cover sprinkler leakage.
4
Q
4. Which of the following commercial property cause of loss form does NOT cover collapse? A. Basic B. Broad C. Special D. Limited
A
- A. Collapse is covered under the broad and special cause of loss forms.
5
Q
- The insured’s business sustains $25,000 damage in a fire. The fire department that was called to the scene billed the insured $1,000. The business is insured under the building and personal property coverage form for $500,000 with a
$5,000 deductible. How much will the insurance company pay for this loss?
A. $20,000
B. $21,000
C. $26,000
D. $27,500
A
- B. Fire department service charges are paid in addition to the limit of insurance, with no deductible.
6
Q
6. Which of the following properties would NOT be excluded under the building and personal property coverage form? A. Lawn B. Driveway C. Cost of excavation D. Animals held for sale
A
- D. Animals are not excluded if they are boarded or held for sale.
7
Q
- The insured buys an office building next door to her insured business. Is the new building covered under her existing building and personal property coverage form?
A. No, the insured must purchase a separate
policy for the new building.
B. Yes, up to $250,000 coverage is available.
C. Yes, up to $500,000 coverage is available.
D. Yes, up to $100,000 coverage is available.
A
- B. The newly acquired or constructed property coverage extension covers new buildings that are being built on the described premises and buildings the insured acquires. The
most that will be paid under this coverage extension is $250,000 per building.
8
Q
8. Which of the following has special loss valuation requirements under the building and personal property coverage form? A. Buildings B. Furniture and fixtures C. Glass D. Exterior signs
A
- C. Stock, glass, valuable papers and records, and tenants’ improvements and betterments all have special valuation requirements.
9
Q
9. Which of the following perils/additional coverages are NOT included in the causes of loss—broad form? A. Collapse B. Weight of ice, snow, or sleet C. Water damage D. Nuclear hazard
A
- D. War and nuclear hazard are excluded in all of the causes of loss forms.
10
Q
- Which business income coverage form covers expenses that the insured incurs to reduce loss?
A. Business income without extra expense
coverage
B. Business income with extra expense coverage
C. Builders risk coverage
D. Personal effects and property of others coverage
A
- A. The business income without extra expense coverage form covers expenses the insured incurs to reduce loss, up to the amount the loss is reduced.
