Exam 1 Part F Flashcards
Covers Of Loss Form (Broad) Additions to Basic coverage
”- 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”
Causes of Loss Form (Special)
”- Unique - special form
- All Risk coverage unlike basic and broad
- Covers Perils listed under B&B
- Additional Exclusions”
Additional Exclusions in Causes of Loss Form (Special)
”- Wear and Tear
- Smog
- Flood damage
- Pollutants
- Settling, cracking, shrinking, or expansion”
What makes it Special
”- Burden of proof in court on insurer
- Everything is covered unless specifically excluded
- Very few exclusions”
What type of risk is Special coverage best for?
Dynamic Risk
Big reason for purchasing Special Coverage?
Theft
Debris Removal Steps
“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”
Who does the loss option belong to?
Insurer
Loss Payment options
“1) Pay value of damaged property
2) Pay amount to repair or replace
3) Insurer directly repairs damaged property”
Property Endorsements
”- Ordinace or Law Change
- Spoilage Coverage
- Brands and Labels”
Ordinance or Law Endorsement
”- 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”
Spoilage Coverage Endorsement
”- Covered damaged to perishable stock
- Losses due to power outage, machine breakdown having impact on refrigeration or cooling”
Brands and Labels endorsement
”- When insurer claims damaged stock
- Insured can stamp salvage on the material
- Insured can remove brands or labels
- Cannot physically damage the merchandise”
Business Owner Policy (BOP)
”- Packaged policy
- Most small businesses are written under BOP policies
- Combines Property and Liability
- Looks like homeowner insurance”
What does a BOP include?
”- Combines Property and Liability
- Small and Personal Liability
- Business Interruption
- Business Income”
BOP Benefit
Lower processing costs for insurer and insured
What type of risk is BOP best for?
Small, less complex risks
BOP Eligibility
”- Main Street Businesses
- Apartment Buildings
- Office Building
- Contractors
- Restaurants”
Main Street Business Requirements for BOP
”- Limitations of size; usually 25,000 feet or less
- Furniture and hardware stores, small offices”
Apartment Building Restriction for BOP
Usually cannot exceed six stories or 60 units
Office Builing Requirement/Restriction
”- Limitations on size: Six stores
- Usually 25,000 feet or less
- Tenants in large office buildings may be eligible”
Contractor Requirement/Restrictions For BOP
”- Small Contractos
- Payroll limit of $300,000
- High risks excluded”
What high risks are excluded in Contractor eligiblity for BOP
”- Demolition
- Work with insulation
- Use a crane”
Restaurant Restriction/Requirements for BOP
”- Must have automatic fire extinguishing facility
- Limited cooking facility: fast food”
Who are inelgible for BOP?
"- Auto business - Bars, grills, and large restaurnts - Manufacturing firms - Places of amuesmen - los of kids - Financial Institutions "
BOP Features
”- 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”
BOP Additional Coverages
”- EE disonesty
- Money and securities
- Outdoor Signs
- Equipment Breakdown
- Accounts Receivable”
BOP Differences From BPP
"- BOP uses allrisk coverage more often - BOP uses replacement cost more often - BOP excludes less property - BOP Covers less: BOP coverage limits "
Why does BOP cover less than BPP?
“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”
Business Income Insurance
Business Income Insurance
