PC Chapter 9

Question 1

Agreed Value

Answer 1

a method of valuation in which the insured and the insurance company agreen on the value of an insured item before a loss occurs. if and when a covered loss does occur, the company pays the agreed value of the item without considering depreciation

Question 2

Business Income

Answer 2

Coverage available under Commercial Property insurance, Business INcome is designed to replace lost income following a covered loss that interupts the income of a business. Business income is a type of business interruption insurance

Question 3

Business Interruption Insurance

Answer 3

Coverage available under Commercial property insurance including busines income coverage and the extra expense coverage,

Question 4

Business Personal Property

Answer 4

Property owned, leased, or rented by a business that is used to conduct business, ( computers, desks, file cabinets, ect. )

Question 5

Coinsurance Clause

Answer 5

a tool used by insurance in commercial property policies to encourage policyowneres to purchase sufficient insurance. claims for partial loss to property not insured to a certain percentage of a value will be reduced

Question 6

Commercial Lines

Answer 6

the P&C policies sold to business… the commercial package policy and the business owners policy for example

Question 7

Concurrent Causation

Answer 7

the concept that states when two perils ( one covered and one excluded) damage a covered property at the same time the insurance company will only pay for damage caused by the covered peril

Question 8

Coverage Extension

Answer 8

In commercial property insurance, extensions for coverage can be earned by being 80% insured to value or more on the declarations sheet

Question 9

Debris Removal

Answer 9

debris removal is additional coverage of a property policy which stipulates to what extent the policy will pay for the removal of debris after a covers loss to property has occurred

Question 10

Earth Movement

Answer 10

an exclusion foin in property policies that do not include earthquake coverage. earth movement included the shaking or movement of ground due to earthquake, volcanic eruption and other events or occurrences

Question 11

Earthquake

Answer 11

an exclusion found in property policies

Question 12

Earthquake Endorsement

Answer 12

coverage available at extra cost in a property contract to cover losses due to earthquake and volcanic eruption

Question 13

Extended Business INcome

Answer 13

a period of time automatically attached to business income coverage that allows the insured business a start up period in which they have a chance to recapture some of their lost customer base. typically extended business income is a 30 day period beginning on the date the business has been restored following a loss

Question 14

Extra Expense

Answer 14

coverage available under a commercial property policy to cover indirect losses sustained by a business following a covered lodss. for example if a business if forced to relocate after a fire, the business will incur unexpected extra expense such as additional rent , equipment cost ect

Question 15

Inflation Guard

Answer 15

an endorsement that would increase the limits of coverage in a property policy a certain percentage each year to keep up with the cost of inflation

Question 16

Legal Liability Coverage

Answer 16

Available under commercial property insurance, legal liability coverage provides coverage not unlike fire legal liability coverage but with perils other than fire being covered

Question 17

PEak Season endorsement

Answer 17

an endorsement added to a commercial property policy in the event business has an inventory that fluctuates seasonally

Question 18

Period of Restoration

Answer 18

the period is that period of time found in business income coverage during which time policyowner can collect. it is defined as the period of time between the date the damage occurs and the date the damage structure has been repaired

Question 19

Personal Effects

Answer 19

a term used in commercial property policy that refers to the insureds or employees personal property located in a covered building

Question 20

Personal Property of Others

Answer 20

in a commercial property policy, personal property of others refers to customers property that is in the control of the insured

Question 21

Policy Period

Answer 21

the length of time for which a policy affords protection

Question 22

Pollutant Clean up

Answer 22

the portion of the CGL and other liability policies which covers necessary pollution clean up

Question 23

Preservation of property

Answer 23

a requirement in most property contracts that the insured makes reasonable effort to protect the property from further damage following a covered loss.

Question 24

Sprinkler Leakage

Answer 24

a covered peril under commercial basis perils it covers damage caused by leaking sprinklers

Question 25

Terrorism

Answer 25

an act committed by an individual acting on behalf of a foreign interest whose damage within the us or to an embassy or flagged vessel of the us exceeds $5 million and is certified as an act of terrorism by the secretary of the treasury

Question 26

Vacancy

Answer 26

a property such as residence or commercial building that is devoid of both people and stuff, often , losses to buildings that have been vacant for more than 60 concecutive days

Question 27

Vandalism and Malicious Mischief

Answer 27

V&MM is covered basis peril, it covers lossed due to vandalism but not theft

Question 28

Volcanic Eruption

Answer 28

covered only if earth wake coverage is purchased. volcanic eruption covers damage caused by the movement or shaking of the group when a volcano erupts