Commercial Property Packages Flashcards
Commercial Vacancy Provision
Typically a building is considered vacant if 65% of building is not rented or used by the owner.
If vacant for more than 60 days there may be no coverage for vandalism, glass breakage, theft or attempted theft, sprinkler leakage
Building - Coverage “A”
Covers buildings and structures shown in the declarations. Also includes:
- completed additions
- permanently installed fixtures
- permanently installed machinery and equipment
- personal property used to maintain the premises
- additions, alterations, or repairs in progress including materials, equipment, supplies, and temporary structures within 100 feet of the described premises
$1000 limit for signs attached to the building
Business Personal Property - Coverage “B”
contents of the building and property in the open or in a vehicle within 100 feet of the described premises.
includes: furniture, fixtures, machinery, equipment, stock, etc…
also includes any improvements the insured has added if they are a tenant
Personal Property of Others - Coverage “C”
payment to a third party for their personal property while in the insured’s care in the building or within 100 feet. Similar to bailee’s coverage
Debris Removal
coverage for cost of removing debris as a result of a covered loss
Preservation of Property
covers any loss that occurs within 30 days to property removed from an endangering peril.
It protects against any direct physical loss or
damage and is not limited to the perils listed in the policy.
Fire Department Service Charge
up to $1000 coverage (no deductible)
Pollutant Clean-up and Removal
pays up to a small, limited amount for expenses to extract
pollutants from land or water at the described premises if the loss was due to a covered peril
Collapse Coverage
covered if causes by insured perils or by hidden insects/vermin or weight of contents.
NOT covered if the insured knew about the damage before the collapse
Broad and Special forms only
Builders Risk
Covers commercial buildings that are under construction
Coverage begins when construction is above lowest basement level or ground level. Minimum 1 year policy, but pro-rata refund if finished sooner.
Foundations and items below ground are covered unlike on Business/Personal Property form
Coverage amount is based on full or 100% of anticipated value when building is complete
Builders Risk Reporting Form
insured purchases smaller amount of initial coverage which increases as the building is completed. Insured must report value monthly
Business Income Coverage
form added to the Commercial Property Coverage that covers indirect losses
for example: covers loss of income as a result of direct covered loss
coverage only applies to period of time for repair/replacement of property with “reasonable speed”
Suspension
slowdown or cessation of your business activities
Business Income
insured’s income that would have been earned had the loss not occurred, and continuing operating expenses (including payroll)
Business Income Coinsurance
Multiple options to waive this requirement:
- Maximum Period of Indemnity - limits indemnity to no more than actual loss during first 120 days or policy limit, whichever comes first
- Monthly Limit of Indemnity - pays a selected fraction of the policy’s limits each month (ex. 1/6, 1/4, 1/3….)
- Agreed Value - if insured submits a report from previous 12 months and agrees to full value of estimated data for next 12 months
Extended Business Income (or extended period of indemnity)
included in business income coverage form. Covers insured for continuing losses for up to 60 days after the business is restored.
Extended period of indemnity is needed if coverage is wanted past 60 days. Up to a year
Extra Expense
indirect loss coverage that provides payments for expenses to continue operations after a covered loss.
For businesses that might continue operating with normal revenues but have extra expenses to do so.
Common coverage is 40/80/100:
40% max recovery for first 30 days
80% max recovery for 31-60
100% coverage for over 60 days
Legal Liability
form that provides coverage for sums the insured is obligated to pay as a result of accidental damage from a covered cause of loss to property of others in the insured’s care.
Cause of Loss Forms
Sprinkler leakage and sinkhole collapse added to Basic Form
Electrical damage removed from Broad Form
Commercial Crime
pays for loss of property due to burglary, robbery or theft
Loss sustained basis - similar to occurrence form
Discovery policy - similar to claims made policy
Theft
any loss of property by stealing - INCLUDES both burglary and robbery
Burglary
breaking and entering into premises with felonious intent, leaving visible signs of forcible entry/exit. Usually while business is closed
Robbery
taking by force or fear of force. Usually while business is open.
Robbery and Safe Burglary
covers combination of following coverages:
-Robbery of custodian: inside premises
-Robbery of messenger: outside premises
-Safe Burglary: covers loss of property, other than money/securities, from within a locked safe by force or removal of entire safe. Lock manipulation not covered
