Ch. 8: Commercial Property Insurance
Under the Common Policy Conditions of the Commercial Package Policy the insurer does not have the right to do which of the following? A Require written consent of insurer before the insured's rights can be transferred B Examine the insured's records at any time up to 5 years after the policy expiration C Cancel the policy D Inspect the insured property
B
When considering insurability of a commercial property for renewal, the insurer can use: A Lie detector test B Physical inspection C Price of company stock D Police records
B
Which of the following business personal property is not covered under a Condominium Commercial Unit-Owners Coverage Form? A Alterations B Leased appliances C Improvements D Fixtures
B
Which of the following is found in the Common Policy Declarations of the CPP? A The provision granting the insurer the right to make inspections of insured property B The deductible C The insurer's cancellation right D The provision that the first named insured is responsible for all premiums
B
Which of the following is not found in the Common Policy Declarations page of a Commercial Package Policy? A The policy premium B Exclusions C The inception and expiration date D The insured
B
Which of the following is true regarding Property Off Premises coverage under the Building and Personal Property Coverage Form? A There is a coverage limit of $5,000 on Property Off Premises B Property in a motor vehicle or in the care, custody, and control of a salesperson is included C Property Off Premises is covered only for 30 days after its removal from the premises D It is offered as an Additional Coverage
B
Choose the false statement regarding the Value Reporting Form. A The insured is only required to report up to 80% of value of the property B Late reporting or under-reporting will result in a penalty in the event of a loss C Reports may be filed either daily, weekly, monthly, or quarterly D The insured pays an advance premium at the beginning of the policy period
A
Choose the true statement regarding the Value Reporting Form. A Late reporting or under-reporting will result in a penalty in the event of a loss B The final premium is based on the values reported in the last report of the policy term C The Value Reporting Form contains an 80% coinsurance clause D The form may be attached to any Commercial Property coverage forms
A
The Builder's Risk Coverage Form will not cover which of the following? A Roof antenna B Building materials within 100 feet C Service equipment D Fixtures that will be attached to the completed structure
A
Under the Common Policy Conditions of the Commercial Package Policy the insurer does not have the right to do which of the following? A Examine the insured's records at any time up to 5 years after the policy expiration B Cancel the policy C Inspect the insured property D Require written consent of insurer before the insured's rights can be transferred
A
Which is true of the Personal Property of Others coverage provided by the Building and Personal Property Coverage Form? A The policy covers property of others that is in the care, custody, and control of the insured B The policy covers the property of others against loss by theft C Property of others is covered at up to $5,000 per described location. D The policy covers the interest of others in property that the insured is purchasing on an installment plan
A
Which of the following is not a coverage extension under the Building and Personal Property Coverage Form? A Inflation guard B Outdoor property C Personal effects and property of others D Newly acquired or constructed property
A
Which of the following is true regarding the Earthquake Cause of Loss Form? A It can be used only with another Causes of Loss Form B It can be used by itself to provide a stand alone Earthquake policy C It includes coverage for earthquakes that start within 168 hours after the expiration of the policy D It provides coverage for mudslides
A
The Condominium Association Coverage Form is used in place of which coverage form when insuring a condo building insured by the association?
Building and Personal Property Coverage Form
The Building and Personal Property Coverage Form does not cover which of the following? A Buildings B Personal property of others C Liability D Business personal property
C
Which of the following is not a cause of loss form used with the Commercial Property Coverage Part? A Broad B Special C Standard D Basic
C
Which of the following is true of the Transfer of Your Rights and Duties Condition under CPP? A The insured's rights may be transferred by written request of the First Named Insured B The insured's rights may be transferred by written request of any insured C The insured's rights may not be transferred without written consent of the insurer D The insured's rights may not be transferred to others
C
Increased Cost of Construction
In the event of damage to a covered building for a loss to which Replacement Cost Optional Coverage applies, the insurer will pay the increased costs, up to a $10,000 aggregate limit, incurred to comply with enforcement of an ordinance or law regulating the repair, rebuilding, or replacement of damaged parts
Each of the following is covered under the Legal Liability Coverage Form; except: A Defense costs B Loss of use C Damage to real or personal property owned by others when it is in the insured's care D Loss of income
D
The Extra Expense Coverage Form covers:
necessary expenses incurred during the period of restoration
What is the limit of coverage for business personal property away from the premises under the Business and Personal Property coverage form?
10,000
Under the Commercial Building and Personal Property Coverage Form, the building is considered vacant, unless at least what percentage of the square footage is rented or is used to conduct operations?
31%
A Building and Personal Property Coverage Form, will pay up to what percentage of the building coverage for debris removal?
25%
Debris Removal
Pays the expense of removing debris following a covered loss and is subject to a maximum of 25% of the coverage applying to direct physical loss. However, in the event of a total loss where the limit of insurance on the building is exhausted, the policy will pay up to an additional $10,000 for debris removal
Electronic Data
Pays up to $2,500 aggregate in any one policy year, regardless of the number of locations, for the cost to replace or restore electronic data that has been destroyed or corrupted by a covered cause of loss
What are additional coverages?
The coverages extend the insurance provided and are automatically included at no extra cost to the insured
Which of the following forms provide coverage for indirect loss? A Building and Personal Property Coverage Form B Commercial Glass Coverage Form C Business Income Coverage Form D Legal Liability Coverage Form
C
All of the following coverage forms may be added to the Commercial Property Coverage Part, except: A Building and Personal Property Coverage Form B The Businessowners Policy C Legal Liability Coverage Form D Commercial Builders Risk Coverage Form
B
Which statement is false regarding the Building Personal Property Coverage Form? A The optional agreed value coverage negates the coinsurance clause B There is no coverage for automobiles that are held for sale C Preservation of Property Coverage provides named-perils coverage for 10 days D The optional inflation guard coverage automatically increases the face amount of the policy
C
All of the following are Causes of Loss forms under the Commercial Property Coverage Part, except: A The Basic Form B The Broad Form C The Special Form D The Standard Form
D
Which statement is correct concerning the Agreed Value optional coverage under the Building and Personal Property Coverage Form? A The Agreed Value is the amount of loss agreed upon by the insurer and the adjuster B Agreed Value coverage suspends the coinsurance requirement C Agreed Value coverage requires coinsurance of at least 90% D Agreed Value coverage eliminates the deductible in loss payment
B
Which of the following is true regarding the Broad Form under the Commercial Property policy? A The water damage coverage includes sewer backup B After 60 days of vacancy, coverage for glass breakage is suspended C Water damage coverage includes repair of broken or ruptured plumbing D It provides limited coverage for fungus, wet or dry rot, and bacteria up to $25,000
B
All of the following are correct in regards to Extra Expense coverage, except: A It is considered to be a Time Element Coverage B It covers necessary expenses incurred during the period of restoration that would not have occurred if there had been no direct physical loss C It includes costs to equip a temporary location D Extra Expense coverage cannot be included in the Business Income Coverage Form
D
The Extra Expense form pays the necessary expenses incurred by the insured during what period?
period of restoration
Which of the following conditions under a Building and Personal Property Coverage Form determines how losses will be paid?
valuation clause
Which of the following would be included in the definition of Business Personal Property under the Building and Personal Property Coverage Form? A Stock on consignment held for sale by the insured B Furniture and machinery owned by the insured C Accounts, bills, and currency of others on the premises in the insured's trust D Business Personal Property of others rented to the insured
B
Choose the false statement about the Building and Personal Property Coverage Form. A Building Coverage includes the building structure, completed additions, permanently installed fixtures, machinery and equipment B Tenant's improvements that are not legally removable are included in the Personal Property of Others Coverage C Personal property owned and used to service the building is included in the building coverage D Personal property of others that is in the insured's care, custody, and control is automatically included up to $2,500 under coverage extensions
B
The Builder's Risk Coverage form automatically ends at the earliest of all of the following, except: A 60 days after construction is complete B Policy expires C Property is sold D Property is abandoned
A
What is designed to cover the risk of a business that experiences a specified increase in business personal property during a designated period?
Peak Season Endorsement
Under the Building and Personal Property Coverage Form, a limit of how much is applied to business personal property temporarily away from the premises.
10K
Endorsements that coordinate CPP coverages to avoid duplication are called
interline
Following a large fire that requires several weeks of down time due to rebuilding, the Business Income Coverage Form will pay for:
net income plus continuing expenses of the building
Under the Building and Personal Property Coverage Form, when is abandonment allowed?
never
How much can be paid under the Business and Personal Property Coverage Form for debris removal due to a covered loss?
25% of the loss
A building is considered vacant unless what percentage of the building's total square footage is rented or used to conduct customary operations?
31%
Which of the following statements about the CPP is incorrect? A The insured's rights and duties may be transferred to another party without insurer approval B The first named insured is responsible for the payment of all premiums C The insurer may examine the insured's books and records at any time during the policy period D The first named insured may cancel the policy by mailing advance written notice of the cancellation
A
Which of the following perils is not one of the three included on the Broad Causes of Loss Form? A Falling objects B Water damage from accidental discharge C Weight of ice, snow or sleet D Steam boiler explosion
D
Which of the following would not be covered by the Ordinance or Law endorsement. A Clearance B Demolition C Increased cost of repair D Building code fines
D
Which of the following would not be found in the Common Policy Declarations page of a Commercial Package Policy? A The insured's name and address B The inception and expiration date C The policy premium D Exclusions
D
Under the Commercial Property policy's Basic Cause of Loss Form, how long is vacancy allowed before coverage against the peril of vandalism is suspended?
60 days
In the Business Income Coverage Form, Period of Restoration begins _______ after the time of loss.
72 hours
Choose the false statement regarding the Extra Expense Coverage Form. A It provides coverage for direct losses under the policy B It is considered to be a Time Element Coverage C It covers necessary additional expenses incurred during the period of restoration that would not have occurred if there had been no direct physical loss D It includes costs to equip a temporary location
A
The Condominium Commercial Unit-Owners Coverage covers each of the following, except: A Personal property B Fixtures C Appliances D Improvements
A
Which statement is false regarding the Building and Personal Property Coverage Form? A If either the insurer or the insured submits a written demand for appraisal, each will choose and pay for his or her own appraiser B The Peak Season Endorsement can be provided for a specified increase for a certain period C The standard deductible is $100 D Coverage does not apply to money or securities
C
All of the following are covered under the Building and Personal Property Coverage Form, except: A Building materials that are on or within 100 feet of the described premises B Personal Property owned and used to service and maintain the building C Completed additions D Accounts, bills, currency, deeds, evidence of debt, money or securities
D
When would a person purchase a value reporting form?
when an insured has business personal property values that fluctuate, and needs protection for the values actually at risk
The Common Policy Conditions in commercial property insurance include all of the following, except: A Transfer of Rights and Duties B Changes C Inspections and Surveys D Fire Department Service Charge
D
Pollutant Cleanup and Removal
Pays the insured's expense, up to $10,000 aggregate limit, for each described location in a policy period, to extract pollutants from land or water at the described premises if the discharge or escape of the pollutants is caused by or results from a covered cause of loss
All of the following are true of Builders Risk forms, except: A There is no vacancy provision B Coverage terminates when the policy expires or it is cancelled C Coverage does not apply to outside radio and television antennas D Coverage is always written on an open perils basis
D
The Ordinance or Law Coverage endorsement covers each of the following losses, except: A Demolition of the undamaged parts of a building B Clearance of the undamaged parts of a building C Increased cost of repairing damaged parts of the building D Loss of value in the damaged portion of the building
D
Under the Building and Personal Property Coverage Form, coverage applies to all of the following, except: A Materials that are within 75 feet of the premises B A tenant's interest in a built-in wall cabinet C Personal property used to service and maintain the building D Windstorm damage to outdoor signs not attached to the building
D
Which of the following is excluded under the Basic Causes of Loss form? A Sinkhole collapse B Sprinkler leakage C Volcanic action D Utility services
D
The Outdoor Property Extension under the Building and Personal Coverage Form insures against which 6 perils?
Fire lightning explosion riot civil commotion aircraft
Preservation of Property
Provides open peril coverage for a maximum period of 30 days on insured property that is being moved or temporarily stored at another location because of endangerment by a covered peril
Fire Department Service Charge
Provides, as an additional amount of insurance, up to $1,000 for the payment of fire department service charges when the department is called to protect insured property. No deductible applies to this coverage
