Insurance Broker Level 1 Set 4 Commercial Property

Question 1

A farm policy is:

Answer 1

A two part policy consisting of a Home policy to cover the home and contents and a policy covering the farm operation will be added.

Question 2

Rates and types of coverage for farm buildings are based on:

Answer 2

• construction
• use of building
• type of heating
• age

Question 3

The Deferred Loss Settlement Clause or Rebuilding clause is used when:

Answer 3

• Buildings are no longer used for their original purpose
• Not replaced after a loss
• Farmers will receive 50% of the amount payable up front, and
• the remaining 50%, if the building is replaced within nine months of the date of loss and
• within 200 feet of the original building.

Question 4

Farm Livestock Coverage is:

Answer 4

Purchased on a blanket coverage
Named perils include impact by vehicles and theft.
Loss at stockyards is excluded

Question 5

Farm - Vehicle Liability

Answer 5

• Motorized vehicles that are not subject to registration are now included
• Other motorized vehicles that are required to be registered are only insured while on the farm property

Question 6

Commercial Property Insurance includes:

Answer 6

1. Building
2. Stock
3. Equipment

Question 7

Theft is only coved under the Broad form of Commercial Property ins. and covers:

Answer 7

Theft of stock and equipment only

Question 8

Rates for commercial property are based on COPE;

Answer 8

Construction
Occupancy
Protection
Exposure

Question 9

Under commercial building;

Answer 9

Normal repairs and minor alterations ARE covered.

Supplies to do major repairs or renovations are NOT covered, a separate coverage is required.

Question 10

Stock coverage includes:

Answer 10

All merchandise or things sold which are usual to that business
Packing, wrapping and advertising materials
Property belonging to others for which

Question 10

Stock coverage includes:

Answer 10

All merchandise or things sold which are usual to that business
Packing, wrapping and advertising materials
Property belonging to others for which the insured is legally liable

Question 11

Peak Season Endorsement covers:

Answer 11

For seasonal applications and when there are fluctuations in stock depending on the type of business.
Ensures the insured has the proper coverage at the right time and is charged the correct premium

Question 12

Equipment means;

Answer 12

All contents usual to the insured’s business
ex, furniture, fittings, fixtures, machinery, tools, utensils, appliances, photocopiers, computers, forklifts
- leased such as telephones
- alterations and betterments if the insured is leasing.

Question 13

Locked Vehicle Warranty covers theft only when;

Answer 13

the vehicle is securely locked and the windows are fully closed. It must be a forced entry, of which there is visible evidence.

Question 14

Builder’s Risk does not cover:

Answer 14

Contractors tools and equipment
The cost of making good faulty or improper material, workmanship or design except for resultant damage to other completed work.

Question 15

Business Interruption Insurance

Answer 15

Covers income loss when a business is forced to shut down due to a loss. The earnings approach - coverage ends once the business re-opens. This is usually subject to a 80% and 50% co-insurance clause.
The profits approach continues the coverage even after the business re-opens, up to 1 year if required.

Question 16

Safe Burglary covers:

Answer 16

The actual or attempted safe burglary

The resulting damage to the premises and damage to the property inside the premises.

Question 17

The Comprehensive Dishonesty, Disappearance Policy covers the following;

Answer 17

A. Employee Dishonesty
B. Loss inside the premises
C. Loss outside the premises
D. Money orders and counterfeit paper currency
E. Depositors forgery

Question 18

Bailee Customers Floater covers;

Answer 18

Insures damage to customers property while in the bailees possession whether or not the bailee is legally liable for the loss.
ex. repair shops, dry cleaners

Question 19

Bid Bonds

Answer 19

Required when a contractor bids on a project.

Question 20

Surety Bonds

Answer 20

Are not insurance and involves the oblige (owner), the principle (the contracting firm), and the surety (insurance company).
Are commonly used for the construction of buildings, roads, bridges, sewers and other related construction types.