Inland Marine Part 2

Question 1

What are the two types of structures for builders risk policies?

Answer 1

1. Completed Value Form - written to cover a single project
2. Reporting Form - written to cover many similar projects (like a home builder)

Question 2

What parties can be covered as insureds for a builders risk policy?

Answer 2

Project owner/developer
General Contractor
Subcontractors of every tier
Construction Managers
Architects and engineers
Material Suppliers
Mortgagees and lenders

Question 3

What are the advantages of including numerous parties as insureds?

Answer 3

Limits disputes between insurance carriers and policies
All insureds have direct rights under the policy
Avoids litigation and subrogation
Gets projects back on track quicker when there’s a loss (and avoids time element losses)

Question 4

What are the disadvantages of including numerous parties as insureds on a builders risk policy?

Answer 4

Claim payments are made payable to all those with an insurable interest on the policy
Misrepresentation or fraud by any party voids the contract for all

Question 5

What are the two types of property covered by a builders risk policy?

Answer 5

Property that will become a permanent part of the described project
Other property that will not (temporary structures)

Question 6

Where does builders risk coverage apply?

Answer 6

At the job site specifically listed in the dec page
Limited coverage for property away from the project site (sublimity, named perils)

Question 7

What property is not covered in a builders risk policy?

Answer 7

Contraband
Land
Property not a permanent part of building
Roadways and walkways
Trees, Shrubs, or Plants
Waterborne Property

Question 8

What are the coverage extensions on a builders risk policy?

Answer 8

Debris Removal
Emergency Removal
Emergency Removal Expenses
Fraud and Deceit
Limited Fungus Coverage
Waterborne Property

Question 9

What causes of loss are excluded from a builders risk policy at a level 1 (anti-concurrent causation) level?

Answer 9

Civil Authority
Earth movement
Flood
Fungus
Nuclear
Ordinance or Law
War and Military action

Question 10

What are the group 2 exclusions on a builders risk policy?

Answer 10

Contamination
Criminal/fraudulent/illegal acts
Defects/Errors/Omissions
Delay in completion and increased construction costs
Electrical Currents
Loss of use
Wear and Tear
Steam Boiler Explosion

Question 11

When does builders risk coverage end?

Answer 11

When the policy expires
When buildings are accepted by the purchaser
When it becomes occupied

Question 12

What’s the purpose of an installation floater?

Answer 12

Covers materials or equipment to be installed in an existing building or structure to cover a a particular aspect of a project.

Often used by trade contractors who have one piece of an aspect of a project and isn’t covered by the builders risk.

Question 13

What’s the difference between reporting and non-reporting policies?

Answer 13

Non-reporting is for a singular project, with the limit decided with that project in mind. Reporting covers numerous unscheduled projects with one catastrophe limit and individual job site sub limits.

Question 14

What is covered property on an installation floater?

Answer 14

Property of others in the insured’s care, custody, or control in addition to the insureds own property.

Question 15

What property is not covered by an installation floater?

Answer 15

Machinery, tools, or equipment
Airborne property
Buildings, structures, and land
Contraband
Trees, shrubs, and plants
Waterborne property

Question 16

When does the coverage end on an installation floater policy?

Answer 16

When a policy expires
When the project is accepted by the purchaser
When you abandon the project
When the project has been completed for at least 30 days