Brainscape's Knowledge GenomeTM

Browse over 1 million classes created by top students, professors, publishers, and experts.


See full index

Fundamentals of insurance > Commercial property insurnace > Flashcards

Commercial property insurnace Flashcards

1
Q

What does “All property” mean in commercial insurance policy

A

Building
Stock
Equipment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

What is “Content” in commercial property insurance

A

Stock and Equipment

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

What are the 2 types of policy in CPI

A

Named peril and Broad form

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

What are the 8 named perils

A
  1. Fire
  2. Lightning
  3. Explosion
  4. Impact by vehicle - not driven by insured or employee
  5. Riot, vandalism, and malicious act
  6. Smoke due to sudden fault of stationary furnace
  7. Leakage from fire fighting equipment
  8. Windstorm and hail
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

What are main advantages of the broad form in CPI

A

Water damages excluding flood, seepage, overflow and sewer backup
Vehicle impact by employee and insured
Smoke excluding agriculture and industrial
Theft
Collapse excluding earthquake and poor workmanship

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

What are the 5 factors affecting the basic fire rate

A
  1. Construction - Mason vs wood
  2. Protection
  3. Occupancy of commercial tenants
  4. Location
  5. Claims history
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

What factors affect the protection factor in basic fire rate

A

Proximity to fire hall, water supply, fire extinguisher, detection systems, sprinklers

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

What is Loading when determining the premium

A

After basic fire rate applied, an additional rate (eg 0.05/$100) is added to upgrade to broad form

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What are the 6 common clauses in CPI forms

A
  1. Description of property insured
  2. Co-insurance clause
  3. Debris removal
  4. reinstatement clause
  5. Subrogation clause
  6. Property protection systems
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
10
Q

What is included in the description of a “building” in CPI

A

Fixed fixtures, Awnings, Fencing and signs, construction material on premise, plants and trees for decorative purposes

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
11
Q

What is included in the description of “stock” in CPI

A

Merchandise, Packing material, advertising material, Property of others insured is liable for

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
12
Q

What is included in the description of “Equipment” in CPI

A

Furniture, rented equipment, computers and phones, improvements on a rented building, all other contents usual for business not under stock or building

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
13
Q

What is the purpose of co-insurance clause in CPI

A

Since most losses are partial, insured would purchase less than full coverage, while insurers are paying the full limit. Co-insurance applies a penalty when inadequate insurance is purchased

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
14
Q

What is the formula for co-insurance

A

(insurance purchased/insurance required) * Amount of loss = settlement

minimum insurance required = ACV *80%

Only applies when loss exceeds lesser of 2% of insurance or $5000

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
15
Q

How much will insurer pay for debris removal

A

Up to the insurance limit in combination with other losses

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
16
Q

What is the reinstatement clause

A

After a loss has been paid, the limit is reinstated to original amount

17
Q

What are examples of property protection systems

A

Sprinklers, fire detection, intrusion detection, security guards

18
Q

What can insurers do when there is interruption to property protection systems

A

Reduce coverage, charge more premiums, cancel policy

19
Q

What are the 7 common extra coverages purchased in CPI?

A
  1. Property away from premise
  2. Glass insurance
  3. Valuable papers and records
  4. Crime
  5. Boiler and machinery
  6. Contractor insurance
  7. Business interruption
20
Q

What does the “property away from premise insurance” add on cover

A

property in transit in Canada and US, break in to vehicle, temporary location

21
Q

What are exclusions for “glass insurance” add on

A

Fire, war, nuclear energy hazard

22
Q

What is the “valuable paper and records” add on

A

Cover the cost of reproduction for documents. basic insurance only covers replacement of blank papers

23
Q

What types of crimes insurance add on are available

A

Burglary, robbery, theft

24
Q

What is the difference between Burglary, robbery, and theft

A

Burglary - Sign of forced entry, unwitnessed taking of stock
Robbery - Loss of money, security and valuables, Witnessed and force threatened or used
Theft - Broadest coverages, covers the previous 2. Only need to show property taken without consent

25
Q

Why is Boiler and machinery add on required?

A

normal policy excludes loss from explosion of boiler and pressure vessels

Fundamentals of insurance (1 decks)

Brainscape helps you reach your goals faster, through stronger study habits.
© 2025 Bold Learning Solutions. Terms and Conditions