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RMI 3502 > Exam 1 Part F > Flashcards

Exam 1 Part F Flashcards

1
Q

Covers Of Loss Form (Broad) Additions to Basic coverage

A

”- Falling objects

  • Glass Breakage
  • Weight of snow, ice, and sleet
  • Water damage: leaking of water or steam from damage to heating, ACT, or other sysetems appliance
  • Collapse: from any covered losses broad form, hidden decay unkown to insured, hidden insect or vermin damage
  • Weight of people
  • Defective construction material
  • Weight of rain on roof”
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2
Q

Causes of Loss Form (Special)

A

”- Unique - special form

  • All Risk coverage unlike basic and broad
  • Covers Perils listed under B&B
  • Additional Exclusions”
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3
Q

Additional Exclusions in Causes of Loss Form (Special)

A

”- Wear and Tear

  • Smog
  • Flood damage
  • Pollutants
  • Settling, cracking, shrinking, or expansion”
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4
Q

What makes it Special

A

”- Burden of proof in court on insurer

  • Everything is covered unless specifically excluded
  • Very few exclusions”
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5
Q

What type of risk is Special coverage best for?

A

Dynamic Risk

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6
Q

Big reason for purchasing Special Coverage?

A

Theft

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7
Q

Debris Removal Steps

A

“1) First ask will loss be covered

2) If yes, then do direct property damage calculation first
3) Complete debris calculation
- If coinsurance, use in direct property damage calculation”

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8
Q

Who does the loss option belong to?

A

Insurer

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9
Q

Loss Payment options

A

“1) Pay value of damaged property

2) Pay amount to repair or replace
3) Insurer directly repairs damaged property”

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10
Q

Property Endorsements

A

”- Ordinace or Law Change

  • Spoilage Coverage
  • Brands and Labels”
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11
Q

Ordinance or Law Endorsement

A

”- Value of any undamaged property that must be demolished

  • Cost to demolish undamaged property and remove debris
  • Increased cost to rebuild the property due to law or building code”
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12
Q

Spoilage Coverage Endorsement

A

”- Covered damaged to perishable stock

- Losses due to power outage, machine breakdown having impact on refrigeration or cooling”

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13
Q

Brands and Labels endorsement

A

”- When insurer claims damaged stock

  • Insured can stamp salvage on the material
  • Insured can remove brands or labels
  • Cannot physically damage the merchandise”
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14
Q

Business Owner Policy (BOP)

A

”- Packaged policy

  • Most small businesses are written under BOP policies
  • Combines Property and Liability
  • Looks like homeowner insurance”
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15
Q

What does a BOP include?

A

”- Combines Property and Liability

  • Small and Personal Liability
  • Business Interruption
  • Business Income”
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16
Q

BOP Benefit

A

Lower processing costs for insurer and insured

17
Q

What type of risk is BOP best for?

A

Small, less complex risks

18
Q

BOP Eligibility

A

”- Main Street Businesses

  • Apartment Buildings
  • Office Building
  • Contractors
  • Restaurants”
19
Q

Main Street Business Requirements for BOP

A

”- Limitations of size; usually 25,000 feet or less

- Furniture and hardware stores, small offices”

20
Q

Apartment Building Restriction for BOP

A

Usually cannot exceed six stories or 60 units

21
Q

Office Builing Requirement/Restriction

A

”- Limitations on size: Six stores

  • Usually 25,000 feet or less
  • Tenants in large office buildings may be eligible”
22
Q

Contractor Requirement/Restrictions For BOP

A

”- Small Contractos

  • Payroll limit of $300,000
  • High risks excluded”
23
Q

What high risks are excluded in Contractor eligiblity for BOP

A

”- Demolition

  • Work with insulation
  • Use a crane”
24
Q

Restaurant Restriction/Requirements for BOP

A

”- Must have automatic fire extinguishing facility

- Limited cooking facility: fast food”

25
Q

Who are inelgible for BOP?

A 
"- Auto business
- Bars, grills, and large restaurnts
- Manufacturing firms
- Places of amuesmen - los of kids
- Financial Institutions
"
26
Q

BOP Features

A

”- Covers more features than CPP (Commercial Property Policy)

  • Uses mostly replacement costs
  • No coinsurance provisions
  • Automatic season increase provision eliminates the need for peak season endorsement”
27
Q

BOP Additional Coverages

A

”- EE disonesty

  • Money and securities
  • Outdoor Signs
  • Equipment Breakdown
  • Accounts Receivable”
28
Q

BOP Differences From BPP

A 
"- BOP uses allrisk coverage more often
- BOP uses replacement cost more often
- BOP excludes less property
- BOP Covers less: BOP coverage limits
"
29
Q

Why does BOP cover less than BPP?

A

“BOP covers less and provides less protection (from perspective of endorsements you can add the coverage maximums you can purchase
- BPP allows you to tailor the coverage to fit your specific needs; BOP is a one size fits all”

30
Q

Business Income Insurance

A

Business Income Insurance

RMI 3502 (20 decks)

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