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P&C > Untitled spreadsheet - Sheet1 (1) > Flashcards

Untitled spreadsheet - Sheet1 (1) Flashcards

1
Q

What pieces make up a Commercial Policy?

A

Common Policy Declarations Page, Common Policy Conditions, Interline Endorsements(if required), Coverage Parts.

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2
Q

What are the 7 coverage parts that may be included in a Commercial Package Policy?

A
  1. Commercial Property 2. General Liability 3. Crime 4. Equipment Breakdown 5. Auto 6. Inland Marine 7. Farm
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3
Q

What are interline endorsements?

A

Endorsements that apply, or could apply, to more than one coverage part.

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4
Q

What does a coverage part consist of?

A

Declarations and conditions, all of the coverage forms, endorsements and other attachments applicable to a single line of insurance.

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5
Q

What major liability coverages are included in Commercial General Liability Coverage Form?

A

Coverage A- Bodily Injury and Property Damage Liability

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6
Q

How is a coverage part triggered?

A

There will be a premium amount shown next to it on the declarations page.

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7
Q

Name 3 types of legal entities

A

Sole Proprietor, Partnerships, Corporations

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8
Q

What does Building and Personal Property Coverage form cover?

A

Direct loss or damage to building, business personal property, and/or property of others in the insured’s care, custody and control.

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9
Q

What does Building Coverage insure?

A

The building described, including outdoor fixtures and furniture, items used to service the property, permanently installed machinery and equipment, and additions under construction, including the materials, supplies and equipment within 100 feet of the premises. $2500 for outdoor signs attached to the building.

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10
Q

What is used to insure buildings while under construction?

A

Builders Risk

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11
Q

How is builders risk written?

A

It is most often written on a completed value form but may be written on a reporting form basis.

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12
Q

What does Business Income Coverage Form cover?

A

The consequential loss of business income that occurs when a business must supend operations because of a direct loss. Also called Time element form. There is a 72 hour waiting period (time deductible) before the coverage begins.

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13
Q

What does Extra Expense Coverage Form cover?

A

Consequential losses. It will reimburse the insured for extra expenses they incur to keep the business operational following a direct loss to the business property.

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14
Q

What are the perils named in the Basic form for Commercial Property Coverage?

A

Fire, Lightning, Explosion, Windstorm or Hail, Smoke, Aircraft or Vehicles, Riot or Civil Commotion, Vandalism, Sprinkler Leakage, Sinkhole Collapse, and Volcanic Action.

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15
Q

What 3 causes of loss does the Broad form for Commercial Property Coverage add?

A

Falling Objects; Weight of Snow, Ice or Sleet; Water Damage

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16
Q

If Commercial Property Coverage is written in special form what causes does it cover?

A

All risks except those specifically excluded.

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17
Q

What can Inland Marine Coverage be written on?

A

Almost any type of property that is portable. Also instruments of transportation and communication, such as bridges, wharves, and docks.

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18
Q

What are the 4 general classes of risks that may be the subject of Inland Marine Coverage?

A
  1. Domestic shipments and transportation risks.
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19
Q

What is the difference between a filed and an unfiled Inland Marine Coverage?

A

Filed coverages have standardized coverage forms. Unfiled classes are those that present a unique exposure to loss and in which standardized forms have not been developed.

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20
Q

What is a Commercial Floater?

A

An Inland Marine policy designed to cover movable commercial property, wherever it may be located (worldwide coverage)

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21
Q

How is valuation determined in an Inland Marine Policy?

A

The insurer will determine the value of an item following a loss based on the lesser of: The actual cash value of the item, The reasonable costs to restore the property, The cost of replacing the property with like kind.

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22
Q

What is Accounts Receivable Coverage form?

A

One of the most important and popular of the Inland Marine Coverage Forms, coverage is provided for property that is at a fixed location. It provides protection for losses of accounts due from customers that become uncollectible because of a loss to the insured’s accounts receivable records.

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23
Q

What are Bailee’s Customers coverage forms?

A

Used to cover losses to customers property in the custody or control of the insured. They are unfiled coverages.

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24
Q

What is Warehouseman’s coverage?

A

Written to apply as excess over other valid and collectible insurance of the property owner for customers property while it is stored at a warehouse.

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25
Q

What coverage generates more premium industry-wide than any other Commercial Inland Marine Coverage?

A

Contractors Equipment Floater

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26
Q

What was Equipment Breakdown Coverage Form formerly called?

A

Boiler and Machinery coverage form

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27
Q

What does Equipment Breakdown Coverage Form cover?

A

Direct loss to covered property caused by an accident of an insured object described in the declarations. The object must be in use, or connected and ready for use, when the accident occurs in order for coverage to apply.

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28
Q

What is not included in the term Accident in Equipment Breakdown Coverage Form?

A

Depletion, deterioration, erosion, or corrosion; Wear and tear; Leakage at valves, joints or fittings; Breakdown of any vacuum tube, gas tube or brush; Breakdown of any computer or electronic data processing equipment; Breakdown of a foundation supporting the object; The functioning of any safety or protective device.

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29
Q

Why is Farm Coverage unlike other Commercial Coverages?

A

Because it not only insures the property and liability exposures of the farm business operation, but also may include the personal residential exposures of property and liability of a family living on the farm premises.

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30
Q

What are the 4 coverage forms of Farm Coverage?

A
  1. Farm Property 2. Farm Liability 3. Mobile Agricultural Machinery and Equipment 4. Livestock
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31
Q

Name some risks eligible under Farm Coverage

A

Growing and marketing of field crops, fruits, mushrooms, vegetables, flowers, greenhouse or nursery stock or sod; Raising or keeping of livestock (other than a commercial feed lot operation), poultry, fur bearing animals, bees, ect; Aquiculture operations (fish farm)

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32
Q

What are the Farm Coverages?

A

Coverage A-Dwellings; Coverage B-Other Private Structures; Coverage C-Household Personal Property; Coverage D-Loss of Use; Coverage E-Scheduled farm Personal Property; Coverage F-Unscheduled Farm Personal Property; Coverage G-Other Farm Structures; Coverage H- Bodily Injury and Property Damage Liability; Coverage I- Personal and Advertising Injury Liability; Coverage J- Medical Payments

33
Q

What are the exclusions specific to farm operations?

A

Use of any animal, with or without accessory vehicle, to provide rides for a fee or in connection with a fair, charitable event or a similar function; Use of any animal in racing, speed or strength contest or a prearranged stunting activity at the site designated for the contest or activity; Rental or holding for rental of an insured location; Losses out of any premises where a building or structure is being constructed, other than a dwelling to be occupied by the insured or a farm structure for the insured’s use; Bodily injury to any insured.

34
Q

What additional coverages are included with Farm Coverage?

A

Debris removal, reasonable repairs, grave markers, water damage, fire department service charges, removal of trees, credit card and transfer funds coverage up to $500, Cost of restoring farm records up to $2000 and extra expense and collapse.

35
Q

What is the difference between a per occurrence limit and an aggregate limit?

A

An aggregate limit is the most a policy will pay for total losses within the policy period. Per occurrence is the most that will be paid per occurrence or accident.

36
Q

What does an Occurrence form pay for?

A

Bodily Injury and Property Damage that occurs during the policy period, even if the loss is not discovered or reported until months or years after the policy expired.

37
Q

What does the Claims-made Form pay for?

A

Bodily Injury or Property Damage reported during the policy period(as long as the loss occurred on or after the retroactive date). Loss must be reported before policy expires or there will be no coverage.

38
Q

What is a Mini-Tail

A

An automatic 60 day tail in the claims-made policy where claims that occurred during the policy period and are reported to the insurer within the 60 days following the expiration of the policy will be covered.

39
Q

What is a Midi-Tail

A

Claims-made policy includes a period of 5 years covered for any potential loss that occurs during the policy period and is reported to the insurer during the policy period or within the 60 day mini-tail.

40
Q

What basically Converts a claims-made policy into occurrence form for a cost of 200% of the annual premium?

A

Supplemental Extend Reporting Period Endorsement

41
Q

What coverages are provided on the Pollution Liability Coverage Form?

A

Bodily Injury or Property Damage liability caused by a pollution accident and clean up costs mandated by a government entity. Coverage can be purchased for voluntary clean-up costs which are necessary to prevent or curtail a pollution accident and in which the insurer provides written consent for an additional premium.

42
Q

Why is pollution almost always excluded from a policy?

A

It is considered a potentially catastrophic exposure

43
Q

Define the differences between burglary, theft and robbery

A

Theft is an act of stealing and encompasses both burglary and robbery. Burglary is the crime of forced entry into or out of a premises with felonious intent. Robbery is the taking of property from the care and custody of a person by one who has caused or threatened to cause that person bodily harm, or committed and obviously unlawful act witnessed by that person.

44
Q

Under a commercial crime policy, what specific protections does Outside the Premises provide?

A

Loss resulting directly from theft, disappearance or destruction of money and securities outside the premises in the care and custody of a messenger or an armored motor vehicle company.

45
Q

What does Computer Fraud coverage provide?

A

Loss or damage to money, securities and other property resulting directly from the use of any computer to fraudulently cause a transfer of that property from inside the premises or banking premises to a person other than a messenger outside those premises or to a place outside those premises.

46
Q

What does Extortion-Commercial Entities provide?

A

Payment, up to the limits of coverage, made in response to threats of bodily harm directed against the insured, its employees, directors or those persons’ relatives who are captured or allegedly captured. This limit of insurance may be written with a loss participation percentage. If a percentage is shown in the policy declarations, the insurer will pay the lesser of the limit of insurance or the percentage of the loss specified.

47
Q

When is advertising injury covered in the Farm coverage?

A

Only if the offense is committed in the course of advertising the insured’s farm-related goods, products or services.

48
Q

What types of businesses qualify for BOP?

A

Small to medium size businesses. Office buildings not exceeding 6 stories in height or 100, 000 sq. ft. in total floor area; Apartments and Condos not exceeding 6 stories in height or 60 dwelling units; Mercantile, processing and service establishments if total floor area does not exceed 25,000 sq. ft. or annual gross sales of $3million; Contractors including carpenters, electricians, painters, plumbers ect.; Restaurants limited to fast food types up to 7,500 sq. ft. limited beer and wine sales (25% of gross); Convenience stores with gasoline pumps, but gasoline sales are limited to 50% gross sales.

49
Q

What are the advantages of a BOP?

A

It is a prepackaged policy which includes both property and liability. The options most frequently needed by small business owners are included or available for a small additional premium. The rates for the entire package are extremely favorable, since the eligible types of risks usually have a lower potential for loss.

50
Q

What coverages are provided in Business Liability Coverage?

A

Bodily Injury, property damage, personal injury, advertising injury and medical payments.

51
Q

What does medical expense coverage include in Business Liability Coverage?

A

Bodily Injury only, including ambulance services, X-ray services, and first aid when the accident occurred. Medical, dental, hospital and funeral services incurred within 1 year from the date of an accident to a person who suffers BI by accident on or next to the insured’s premises, or because of the insured’s operations.

52
Q

What is Excluded from Business Liability Coverage?

A

Expected or Intended Injury; Contractual Liability; Liquor Liability; Workers Comp and similar laws; employers liability; pollution; aircraft, auto or watercraft; mobile equipment; war; professional services (except for retail druggist or drugstore); Property damage to property the insured owns or in the Insured’s Care, Custody or Control; Damage to the Insured’s Product or Work; Damage to Impaired Property or Property Not Physically Injured; Recall of Products, Work or Impaired Property; Personal and Advertising Injury exclusions; Electronic Data; Criminal Acts of the Insured; Distribution of Material in Violation of Statutes; Medical Expense Exclusions; Nuclear Energy Liability Exclusion.

53
Q

What are the limits in the Liability section of the BOP

A

Combined Single Limits

54
Q

What is the Hired Auto and Non-Owned Auto Liability Endorsement?

A

Provides coverage for liability arising out of the use or maintenance of a hired or non-owned auto. This typically refers to an employee’s use of their personal auto for business purposes. This endorsement can only be added to the BOP if the insured does not have Commercial Auto Insurance. It is excess over any primary insurance coverage on the hired or non-owned auto.

55
Q

Businessowners Property Coverage includes what additional coverages?

A

Debris Removal; Preservation of Property; Fire Department Service Charge; Collapse; Water Damage, Other Liquids, Powder or Molten Material Damage; Business Income; Extended Business Income; Extra Expense; Pollutant Clean Up and Removal; Civil Authority; Money Orders and Counterfeit Paper Currency; Forgery and Alteration; Increased Cost of Construction; Glass Expense; Business Income from Dependent Properties; Fire Extinguisher Systems Recharge Expense; Electronic Data; Interruption of Computer Operations; Limited Coverage for Fungi, Wet Rot and Dry Rot.

56
Q

The Businessowners Property Coverage also includes what coverage extensions in addition to the limit of insurance?

A

Newly Acquired or Constructed Property; Personal Property off Premises; Outdoor Property; Personal Effects; Valuable Papers and Records - Cost of research.

57
Q

What are 6 businesses that would be ineligible for BOP?

A
  1. Automobile sales and servicing operations 2. Manufacturing operations 3. Places of amusement 4. Household personal property 5. 1 or 2 family dwellings 6. Financial Institutions
58
Q

What are the coverage limitations for Businessowners Property form?

A

No Coverage for: Steam boilers, steam pipes, hot water boilers or other water heating equipment caused by any condition inside the equipment; Mysterious Disappearance; Property transferred to others based on unauthorized instructions. $1,000 per outdoor signs attached to the buildings per occurrence. No coverage for fragile items broken unless caused by the specified causes of loss. In the case of theft: $2,500 for furs, jewelry, watches, pearls, precious and semi precious stones, patterns, dies, molds and forms.

59
Q

To collect full replacement cost what percentage of the insurable value of the covered property must be insured?

A

80%

60
Q

How does the Businessowners Property Coverage form protect mortgage holders?

A

Insurer will pay covered losses of damage to buildings or structures to each mortgageholder shown in the Declarations in their order of precedence, as interest may appear. Mortgageholder has the right to receive loss payment, even if they have started foreclosure or similar action on the building or structure. Mortgageholder will still have the right to receive loss payment if the insurer denies the claim because of insured’s act or because insured failed to comply with the terms of the policy.

61
Q

What optional coverages are built into the Businessowners Property Coverage form?

A

Outdoor Signs, Money and Securities, Employee Dishonesty, Mechanical Breakdown.

62
Q

How does the Protective Safeguards endorsement modify the policy?

A

Adds a policy condition requiring the insured to maintain protective safeguards (automatic sprinkler system, fire alarm, ect) as a condition for coverage.

63
Q

What is the Utility Services - Direct Damage endorsement?

A

Coverage for direct damage caused by utility service disruption stemming from a covered peril. The location and utility service must be indicated in the endorsement. Utility services include water services, communication services and power supply services.

64
Q

What is the Utility Services - Time Element endorsement?

A

Covers the insured’s loss of business income or extra expense in the event of a direct physical loss to a utility service. The insured’s location and the utility service must be indicated in the endorsement.

65
Q

What is a Businessowners Policy?

A

It is a stand alone policy with its own forms. Provides property and liability coverage in a single contract. There is a single premium with no division or itemization of premium charged for property or liability.

66
Q

Give some examples of businesses that would normally qualify for a BOP that would not qualify and why.

A

A sporting good store that sells firearms or a clothing store that sell a large volume of furs. The exposure of loss is greater in these two businesses.

67
Q

Who is an insured on a BOP?

A

On the Declarations if the named insured is designated as a: Individual, that individual and his or her spouse are the insureds, but only with respect to the conduct of a business of which they are the sole owners. Partnership or Join Venture, Named insured and members are also insureds, but only with respect to the conduct of the business, managers are insureds, but only with respect to their duties as mangagers. Trust, the named insured and trustees.

68
Q

While not named on the Declaration who are also considered to be insureds?

A

Volunteers, while performing duties related to the insured business, or its employees; Employees in the course of employment; Any person (other than an employee or volunteer) of any organization acting as the insured’s real estate manager; Any person or organization having proper temporary custody of the property if the named insured dies; The legal representative if the named insured dies, but only with respect to his or her duties as such.

69
Q

What are the limits of insurance in a BOP?

A

A combined single limit is applicable for all bodily injury and property damage losses that arise from a single occurrence. Medical expenses are limited to the per person limit shown on the Declarations. The policy covers Fire Damage Legal Liability in addition. A separate aggregate limit of insurance also applies to the products/completed operations hazard, and a general aggregate applies to all other injuries or damages, including medical expenses. The general aggregate does not apply to the Fire Damage Legal Liability.

70
Q

Maximum coverage d limit on DP-1.

A

20% of A

71
Q

What is covg limit of part E addl living expenses?

A

10% of A

72
Q

Ordinance or law limit?

A

10% of A

73
Q

Coverage limit for trees shrubs DP2, DP3?

A

5% of A, $500/ tree

74
Q

Covg d loss of use basic limit on HO2, 3, 5 (can endorse more)

A

30% of A

75
Q

Debris removal limit on HO?

A

5% of coverage A

76
Q

Tree removal limit on ho?

A

$500/$1000

77
Q

Landlords furnishing covg under HO?

A

$2500 broad form, no theft covg

78
Q

How many employees make business non incidental?

A

3 or more

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