Ins Exam G - Commercial Property Flashcards
COMMERCIAL PACKAGE POLICY (CPP) OVERVIEW **
> a comm pkg policy consists of
- Common policy Dec & Conditions
- 2> coverage parts (if one cvrg needed, monoline policy is applied for)
Business selects cvrgs needed or desired
NO MANDATORY CVRGS (VARIES BY STATE) - PQ
CPP CVRG OVERVIEW **
a CPP can incl almost any comm cvrg the insured might need (w/ exception of Ocean Marine, W/C, & Aviation ins), Incl:
- Comm Prop - Comm GL - Comm Inland Marine
- Boiler & Machinery - Comm Crime - Prof Liab
COMMON DECLARATIONS **
applies to entire policy whereas each indiv crvg has own DEC PAGE (5 Ps):
- Person/ Property
- Policy #
- Policy Term
- Policy Limit
- Premium - by coverage
COMMON CONDITIONS **
apply to all cvrg forms:
- Cancellation Condition - sets forth the circumstances under which policy may be Cancelled
- Insurer Cancellation: - Non-Renewal: 60 Days
- Non-Payment of Premium: 10 Days
- Other Reasons: 30 Days
- Rate Increase >25%: 60 Days
- Insurer Cancellation: - Non-Renewal: 60 Days
CPP ENDORSEMENTS **
> Mandatory - Cancellation Changes
- Used if any prop cvrg is added for a building
INTERLINE ENDORSEMENTS
- may be used w/ more than one line of ins and thus apply to more than one part of a multi-line policy
Commercial Property Basic Form: CP1 *
Coverages: - Fire
- Lightning
- WCSHAVVER
- Vandalism
- Sprinkler Leakage
- Sinkhole Collapse
Commercial Property Broad Form: CP2 *
- CP1 Coverages
- Weight of Ice, Snow, Sleet
- Accidental discharge or overflow of water or steam
- Continuous seepage and freezing excluded
- Falling Objects
- Limited Mold
- Collapse, if caused by certain Perils
Commercial Property Special Form: CP3 *
- Insured against ALL PERILS not specifically excluded
- Open Perils
BUILDING and PERSONAL PROPERTY FORM: BUSINESS PERSONAL PROPERTY
Covered when located in or on the building or in the OPEN W/IN 100FT OF THE BUSINESS PREMISES
- furniture, stock, and other personal property
- additional locations added by endt
- personal property of others in the care, custody, or control of the insured located in or on the building or in the open w/in 100ft of the described premises
BUILDING and PERSONAL PROPERTY FORM: EXTENSION of COVERAGE
if the insurance amount purchased is equal to or higher than THE COINSURANCE PERCENTAGE OF 80% OR MORE as shown in the Dec, the following cvrg extensions are incl in the policy:
- Newly Acquired Building or Building Under Construction
- $250k max ea builder
- must maintain 80%> coinsurance
- Business Property @ Newly Acquired Building
- $100k max
- Expiration - extensions expire the earlier of
- the end of the policy period
- 30 Days after u acquire the property or begin construction
BUILDING and PERSONAL PROPERTY FORM: OTHER CONDITIONS
- VACANCY PROVISION - if building vacant more than 60 consecutive days before the damage or loss, there is no cvrg for vandalism, glass breakage, water damage, theft, or sprinkler leakage
- Loss Valuation - depends on the form used.
> Coverage Options - Replacement Cost, inflation guard, and stated value covrg avail by endt
> Additional cvrgs incl: - debris removal: $10k
- Fire Dept Svc Charge: $1k
> Trees, Shrubs, and Plants - $250 per item- was $500 on Personal Property
BUSINESS INTERRUPTION
the interruption of operations must result from a direct loss to property by a covered Peril
- requires one cause of loss from which identifies the covered Peril
- CVRG FOR NET INCOME (profit or loss before taxes) that would have been earned before loss
- cvrg for continuing operating expenses (payroll and utilities)
- covers rental value - loss of lease values
CONTINGENT BUSINESS INCOME
- CONTRIBUTING LOCATIONS
- RECIPIENT LOCATIONS
this cvrg is written to protect certain types of businesses from financial loss sustained when a non-owned property has a loss and it affects the insured’s business profits or expenses. ex: biz cannot get supplies to make product
> CONTRIBUTING LOCATIONS - needed when the insured business depends on a business at another location that cannot continue to supply material or services for the insured
> RECIPIENT LOCATIONS - needed when an insured business depends on a business at another location to receive its products or services
CONTINGENT BUSINESS INCOME
- MANUFACTURING LOCATIONS
- LEADER LOCATIONS
> Manufacturing Locations - needed when an insured business has a sales contract w/ the manufacturer of products who can no longer deliver those products to the insured’s customers
Leader Locations - insured can no longer depend on a business at another location (eg: next door) to attract business to the insured’s location.
Business Income Coinsurance Clause Alternatives
- Agreed Amount Endt *
These options are available on the commercial property policy as an alternative to a standard coinsurance requirement
> Agreed Amount Endt
- substitutes a $ amount for the coinsurance %
- in effect, this waives the coinsurance requirement replacing it w/ an agreed amount. EX: if the insured purchased business income at the agreed amount, there will not be a penalty if the insured’s gross earnings have increased above the agreed amount
