Underwriting Property and Liability Insurance Flashcards
Frame construction
A class of construction that has load-bearing components made of wood or other combustible materials such as brick or stone veneer
Joisted masonry construction
A class of construction that has load-bearing exterior walls made of brick, adobe, concrete, gypsum, stone, tile, or similar materials’ that has floors and roofs of combustible materials; and that has a fire-resistance rating of at lest one hour
Mill construction
A sub classification of joisted masonry construction that uses heavy timber for columns, beams, supports, and ties; has a minimum two-hour fire-resistance rating on bearing walls; and has an absence of floor joists
Noncombustible construction
A class of construction in which the exterior walls, floor, and roof of a building are constructed of, and supported by, metal, gypsum, or other noncombustible materials
Masonry noncombustible construction
Masonry construction or construction that includes exterior walls of fire-resistive construction with a fire-resistance rating of not lass than one hour
Modified fire-resistive construction
A class of construction that has exterior walls, floors, and roofs of masonry or other fire-resistive material with a fire-resistance rating of at one to two hours
Fire-resistive construction
A class of construction that has exterior walls, floors, and roofs of masonry or other fire-resitive material with a fire resistance-rating of at least two hours
Fuel load (fire load)
The expect maximum amount of combustible material in a given area of a building, including both structural elements and contents, commonly expressed in terms of weight of combustibles per square foot
Fire division
A section of a structure so well protected that fire cannot spread from that section to another, or vice versa
Fire wall
A floor-to-roof wall made of noncombustible materials and having no open doors, windows, or other spaced through which fire can pass
Parapet
A vertical extension of a fire wall that extends above a roofline
Building codes
Local ordinances or state statutes that regulate the construction of building within a municipality, country, or state
Occupancy
The type or character of use of the property in question
Special hazards of the class
A characteristic typical of all occupancies in a given class that can cause or aggravate a loss. An example is the hazard of cooking, common to the restaurant class
Special hazards of the risk
A condition that can cause a loss but that is not typical of an occupancy. An example is the use of a welding torch in an auto repair shop
Protection
Measures taken to prevent or reduce the damage done by fire
Public fire protection
Fire protection equipment and services made available through governmental authority to all properties within a defined area
Local fire alarm system
A detection system, triggered by smoke or heat, that sounds a bell, siren, or another audible alert at the premises only
Central station system
A private detection service that monitors the systems of multiple businesses and/or residences and that calls appropriate authorities or dispatches its own personnel when an alarm is activated
Wet pipe sprinkler systems
Automatic fire sprinkler systems with pipes that always contain water under pressure, which is released immediately when a sprinkler head opens
Dry pipe sprinkler systems
Automatic fire sprinkler systems with pipes that contain compressed air or another inert gas that holds a valve in the water line shut until an open sprinkler head releases the gas and allows water to flow through the previously dry pipe to the sprinkler head
Pre-action sprinkler systems
Automatic fire sprinkler systems with automatic valves controlled by smoke or heat detectors
Deluge sprinkler system
A type of sprinkler system in which all the heads remain permanently open; when activated by a detection system, a deluge valve allows water into the system
Fire brigade
A fire service in which building personnel in establishments located far from municipal fire services respond to fire situations
External exposure
A loss exposure outside the area owned or controlled by the insured
Replacement cost
The cost to repair or replace property using new materials of like kind and quality with no deduction for depreciation
Actual cash value
A method in valuing property which is calculated as the cost to replace or repair property minus depreciation, the fair market value, or a valuation determined by the broad evidence rule
Coinsurance clause
A clause that requires the insured to carry insurance equal to at least a specified percentage of the insured property’s value
COPE
Four interdependent elements that are analyzed by commercial property underwriters when evaluation submissions for property insurance; construction, occupancy, protection, and external exposures
Vicarious liability
A legal responsibility that occurs when one party is held liable for the actions of a subordinate or associate because of the relationship between the two parties
Breach of warranty
The failure to meet the terms of a promise or an agreement associated with a product
Implied warranty of merchantability
An implied warranty that a product is fit for the ordinary purpose for which it is used
Implied warranty of fitness for a particular purpose
An implied warranty that a product is fit for a particular purpose; applies if the seller knows about the buyer’s purpose for the product
Negligence
The failure to exercise the degree of care that a reasonable person in a similar situation would exercise to avoid harming others
Strict liability (absolute liability)
Liability imposed by a court or by a statute in the absence of fault when harm results from activities or conditions that are extremely dangerous, unnatural, ultra hazardous, extraordinary, abnormal, or inappropriate
Credit scoring
A decision-making tool that uses credit report information to develop a predictive score on the creditworthiness of an applicant for additional credit
Class rate
A type of insurance rate that applies to all insureds in the same rating category or rating class
Experience modification factor
A factor that tailors manual rates to an insured’s experience based on the insured’s payroll and loss record of certain prior years
Umbrella liability insurance
Liability insurance that provides excess coverage above underlying policies and may also provide coverage not available in the underlying policies, subject to a self-insured retention
Excess liability insurance
Insurance coverage for losses that exceed the limits of underlying insurance coverage or a retention amount
Drop-down coverage
Coverage provided by many umbrella liability policies for (1) claims not covered at all by the underlying policies and (2) claims that are not covered by an underlying policy only because the underlying policy’s aggregate limits have been depleted
