Commercial Property Pt 2 Flashcards
Added coverages
If you’re a commercial business and need to have coverage for property in transit, what do you need?
Inland marine insurance
Who has an insurable interest when property is in transit?
Both owner and carrier
How is coverage for a portable item added?
By adding a floater
Who is a transportation floater for? What does it cover?
Used by owners that covers property in transit using own vehicle or Carrier
What does a trip Transit policy cover?
Insuring single shipments. You are an owner making a one-time trip
Who does the motor truck cargo Rider cover? What does it cover?
For carriers. Provides third-party coverage for damage to owner’s property so who
What are the three types of carriers?
- Private carrier- they haul their own Goods using owned or leased vehicles
- Contract carrier- hauls goods for people they have a contract with
- Public carrier- hauls Goods for the General Public
What does the transportation floater broad form all Risk insure?
- Your own Goods
- Goods delivered to clients that you are responsible for I.E good sold but not delivered
- business goods from supplier
What perils are excluded on the transportation floater broad form?
- Improper preparation, unexplained shortage or rough handling
- gradual deterioration
- Delay , loss of Market or vermin
What is the difference between the limited and broad from for the transportation floater?
Limited has no coverage for losses due to the hitching or unhitching of trailers loading or unloading or contacted any stationary object
Under a contractor’s insurance policy, Newly acquired equipment is automatically covered if:
- It is similar to covered equipment
- Covered up to 30 days then it must be added to policy
- Limited coverage
Name 3 common exclusions on the contractor’s policy
- Overload, wear and tear, break down- mechanical and electrical
- corrosion,
- temperature.
What does Builder’s risk AKA course of Construction insure?
The contract price plus additional values
additional values are debris removal, inflation, Consultants, temporary structures, legal fees
What are three components covered by Builder’s risk?
- Property owned by insured or others in course of construction, repair and installation
- Landscaping that are part of the project
- Temporary structures if values included only if necessary
Name three extensions available on Builder’s risk
- Property in transit
- Property at other locations example building materials awaiting pickup
- Debris removal including property that have stuff blown onto it
What is the limit of insurance on Builder’s risk?
Estimated completed construction cost including incidentals
Who is responsible for getting an installation floater
Subcontractor
What does an installation floater cover?
Property of insured plus the property of others that they are legally liable for incidental or to use in installation
What will an installation floater not cover?
Property on insured’s premise
Tools and equipment owned by insured or others
Faulty material, workmanship or design
( but remember the resultant fire or explosion is okay)
What does business Interruption insurance cover?
Lost income and expenses that are not covered in commercial property
What are 6 common causes of business interruption
- Physical damage to insured property, suppliers and customers, product quality for example a recall,
- cyberdata loss,
- Transportation disruption
4 Interruption of public utility, - physical damage to a neighbour,
- actions of regulatory Authority evacuation
What are the four types of business Interruption coverage?
- Gross earnings form
- Profit form
- Rental income endorsement
- Extra expense endorsement
What is the difference between the gross earnings form and the profit form under business Interruption coverage?
Gross= Indemnity. Equals from loss in till damage is fixed
Profit= Indemnity continues until income is restored period Stated on policy ie 12,18, 24 mo.
What does the extra expense endorsement on business Interruption coverage pay for?
Extra expenses needed to get the business up and running again. Prevents loss of reputations are customers. For example rent a space, overtime pay, equipment rentals
True or false
Business Interruption carries the same perils as your commercial policy
True.
True or false
the business Interruption coverage is the same indemnity peroid as your commercial property policy
False. It is separate from the commercial property insurance and can exceed this fiery date. Ends when property or income is restored
What 3 types of property are susceptible to crime?
- Real property
- Tangible property example stock and equipment
- Intangible property for example trade secret
What are three types of security protection?
- Physical protection for example bars fence
- Electronic protection for example alarm, sensor
- Monitoring for example security guard
Who can be considered a custodian?
Insured, partner, employee authorized to have custody of insured property. security guard, janitor or Porter is Not
What are the four coverage areas under a crime insurance policy?
- Property covered
- Perils insured
- Location of property covered
- Person causing loss
What is the difference between burglary and robbery?
Burglary is the unlawful taking of property with evidence of forced entry or exit.
Robbery is wrongful taking of stuff using force and fear
Define theft
All means of taking without owner’s consent
Define kidnapping
Violently compelling a custodian to help a person gain entry to a close premise
What does stock and Equipment burglary Rider cover?
Attempted burglary
Robbery of security guard
Vandalism during
Coverage only well closed except stock and equipment in display windows that don’t open from the inside
What does inside robbery cover?
robbery of custodian on-premise plus damage to premise
Kidnapping when premise closed and custodian compelled by balance to get in
Lost two window displays
What does outside robbery cover?
Robbery of insured property on custodian away from the premise while engaged in business in Canada or the US
Theft from custodian home
Theft from night safe
What are the two perils insured by damage to building burglary or robbery Rider?
Attempted burglary or robbery
Related vandalism or mischief
What are the three d’s in the 3D crime Rider?
Dishonesty, disappearance and destruction.
What are the two forms available in 3D Policy rider?
Form A covers all employees
Form B cover scheduled employees
What are the five types of coverage you can choose from under a 3D policy?
Employee dishonesty Loss inside Loss outside Counterfeit money orders or papers Depositors forgery
Under employee dishonesty Form B, what does it mean that the limits can stock?
Form B- you can choose which position to ensure. Limit set for each position higher-risk employees equals higher limit. But limits can stack if multiple loss, the max allowed for each employee will paid regardless of total loss.
Name three risk management techniques you can recommend under depositors forgery coverage
Check employee references
Surprise audits
Two signature checks
Reduce access too checks
Define subscription policies
When a group of insurers provides Insurance together. They share the premium and the losses.
Name three risk management techniques you can recommend under depositors forgery coverage
- Check employee references
- Surprise audits
- Two signature checks Reduce access too checks
True or false
All sources of smoke damage excluding agricultural smudging or industrial operations is covered under a broad form
True
True or false
Impact of land vehicle driven by insured or employees is never covered
False covered under broad form
What is the biggest advantage to having a broad form policy
All other losses not specifically excluded are covered
What following coverage may be found in a standard package policy
- Property insurance
- Business interruption
3 liability - Crime
What are the advantage of the package policy approach to commercial
Simple application
Cost is determined on the spot
Coverage meets basic needs for most small Commercial Business
Broad coverage provides often avoid many claims problems
What does the sewer backup endorsement cover?
Loss due to water or sewage entering through sewer, drain, sub pump basically any kind of waste water drainage system
What does the sign form endorsement cover?
Insurance damage to signs including decoration and artwork.
What is excluded from the sign form?
Wear and tear Electrical current that are not lightning but resulting fires or explosions are okay Property damage will being worked on Dampness or temperatures Strikes Riot civil commotions
What does the valuable paper and record endorsement cover?
Books, Maps, films, Deeds. Can be electronic. Insurance the cost to reproduce them
Covers on premise, in transit, temporarily away
What is the off-premise coverage for valuable paper and Records?
10% of the limit, $5,000
What does the water Escape endorsement cover?
Direct damage due to freezing up or escaped from pipes. Heating, Plumbing, AC system, water main
What is excluded from the water Escape endorsement?
Freezing in an unheated part of the building during the heating season
Sewer backup
Water from trough or downspout
Vacant building
A building that is in course of construction AKA Builder’s risk
What does bylaw endorsement provide coverage for?
Add coverage for additional costs required to comply with bylaws. Example need new earthquake-proof materials.
Zoning changes are excluded
What does consequential loss assumption endorsement cover?
Damage to stock due to break down of temperature cheese for humidity control device
What does the peak season endorsement cover?
For businesses with seasonal stock fluctuations for example Christmas store
What does the replacement cost endorsement cover?
Replaces damaged property with no depreciation.
What are the qualifications to get replacement cost endorsement?
Replace with due diligence and dispatch
A place at the same or adjacent site if not possible
Pays actual amount spent after replacement has been made
What does the inflation extension of coverage provide?
Price inflation to building on renewal automatically. Midterm loss, limit gets bumped to next year’s inflation number
Common extension of coverage; Vacancy endorsement
What is the difference between vacancy permit #1 and vacancy permit #2?
#1= charge more for specified vacancy period. #2= makes the insured a co-insure for fire lightning losses
When the standard bill of lading does not accurately reflect the value of property being transported, What can the owner do?
Request a Valued bill of lading. The owner pays additional rate or fee to the carrier when the carriers liability is increased in this way.
Define standard (ordinary) bill of lading
Reflects the amount for which the carrier will be held legally liable under tariff. Usually shown as a certain amount per kilo/ pound or parcel
What does the release bill of lading cover?
It releases the carrier from any liability for the goods and is used when the property owner purchases the transportation Insurance because the value of the goods is greater or less than what is provided through standard tariff or excluded
