P&C - Chapter 7

Just like other property insurance, the 3 additional free services a BPP policy contain are: 1. Debris removal 2. Removal/preservation of property 3. Fire dept surcharge (remember, no deductible) -For debris removal, what is the maximum they will pay? -For preservation of property, how long does it protect property from covered perils while in transport? -how much is insurer on the hook for Fire Dept charges?

1. insured will pay is the MAXIMUM of either the total dollar limit of the policy or 25% of total loss + $10,000. 2. This additional coverage protects the property from all perils while it is being moved and for 30 days of ensuing storage at some other location 3. First $1,000 (no deductible required to be met by insured for this to kick in). Insured responsible for whatever is leftover

Personal property is covered within _______ feet of premises

100

#1 The First Named Insured may cancel the Building and Personal Property policy: A. at any time in writing B. only by giving 10 days advance written notice

A.

#15 A Building and Personal Property policy usually provides coverage based on which basis? A. Replacement Cost B. Actual Cash Value

B.

#20 If a business insured by a Building and Personal Property policy (BPP) acquires a new business, the new business is insured for a grace period of: A. 15 days B. 30 days C. 45 days D. 60 days

B.

#7 The owner of a business carelessly left the rear door unlocked over the weekend, resulting in merchandise being stolen. Under a Building and Personal Property policy - Special, this loss: A. will not be covered B. will be covered as a theft loss

B. My personal inclination is to somehow punish this store owner by denying coverage for the store owner's negligence. But, wait a minute! That is exactly why the store owner wants a property policy - to cover the owner's mistakes. A perfect store owner wouldn't need insurance. So, the negligence of the store owner is irrelevant - we will pay the claim

#29 Joe has a building covered by a Building and Personal Property policy. What must he do to cover a new lawnmower used to service the premises? A. list the items on an endorsement B. nothing

B. Personal property is always covered on an "unscheduled" basis. The Insured doesn't list the items in the policy but would list them in a proof of loss form. The only policies that require personal property to be listed in the policy (scheduled) are the Inland Marine policies, such as the Scheduled Personal Property Endorsement

How do you qualify for an additional 5 coverage qualities in a BPP policy? What are the 5 coverage extensions?

Buy coverage equal to the coinsurance requirement (80% of property's value) gives you 5 coverage extensions 1. Newly acquired/constructed property First, this extension provides only $250,000 of protection on each newly acquired or constructed building. Second, business property inside these structures is covered for a maximum of $100,000 per building. Third, this automatic coverage lasts for only 30 days from the date of purchase or start of construction 2. Personal Effects Coverage protects against losses to the Personal Property of the businessowner, partners, officers, and employees while it's on the business premises up to $2,500 AND the property of others (contained as one of the top 3 main coverages, but this provides just in case there is some on premise up to $2,500) 3. Valuable papers and information (pays up to $2,500 in attempts to recover information) 4. Property off premise (beyond the 100 feet) adds $10,000 of protection for business property while the property is somewhere other than at the covered business location (not including vehicle) 5. Outdoor property (paying up to $1,000 (but only $250 for any single tree, shrub, or plant) if the outdoor stuff gets zapped by fire, lightning, explosion, riot, civil commotion, or aircraft.

Which of the following is designed to cover damage to a building under construction? a. Construction Insurance b. Pre-Occupancy Insurance c. Builders Risk d. Temporary Insurance

C.

The Building and Personal Property policy covers each of the following EXCEPT: a. fire extinguishers b. building materials used to make repairs c. appliances furnished by the land lord in a tenant's unit d. a tenant's furnishings

D. The BPP covers tenant's improvements and betterments to the physical structure but doesn't cover their furnishings (stuff)

Building materials used for repairs are not covered for: a. vandalism b. wind and hail damage c. fire damage d. theft

D. Whether we are talking about a HO policy or a BPP, building materials are not covered for theft.

T or F: All of the BPPs cover explosions like an exploding boiler

F -- covers explosions except an exploding boiler

Since inventory is a major factor in obtaining BPP, and inventory can vary month to month, what is required and how often to maintain adequate coverage?

Insured send a reporting form each month containing a dollar limit required for the upcoming month *since some buildings may be empty, can have $0 business personal property limit on a BPP policy

What is the 4th free additional service a BPP policy contains and what limits?

Pollutant cleanup and removal $10,000 (beyond the policy limit) to extract the pollutant. The problem must, however, be reported to the Insurer within 180 days of the loss, and the company will not cover such an expense more than once every 12 months.

T or F: Fire extenguishers are covered under the label "building" for BPP insurance

T

T or F: If property is vacant (no people and no stuff) for more than 60 consecutive days, the building will NOT be covered for losses due to vandalism, glass breakage, water damage, theft or attempted theft, or sprinkler damage, but fire will be covered still

T

T or F: The Building and Personal Property Coverage form (BPP) is the standard policy used in America to insure most commercial property

T *it is part of the Commercial Package Policy

What losses are excluded from BPP?

○ Indirect/Consequential Losses ○ Valuable Papers - Coverage for currency, deeds, food stamps, stocks, notes, evidences of debt, and IOU's ○ Animals - Although animals (pets, guard dogs, etc.) are generally not covered, the policy will cover animals held as inventory for sale inside buildings. So, the pet store's inventory is covered but the guard dog is not covered. ○ Bridges, roadways, walks, patios, and other paved surfaces ○ Contraband - Illegal drugs are not covered. same withCuban cigars or cigarettes ○ Expense of reconstruction - This includes excavating, grading, filling, or backfilling. ○ Foundations - This includes footings, provided they are located below the basement floor or beneath the ground level if there is no basement. ○ Land - Includes crops and lawns (although we will see that the Homeowner's Policy will cover lawns). ○ Personal Property - Not covered while it is airborne or waterborne. ○ Bulkheads, pilings, piers, wharves, or docks. ○ Retaining walls that are not part of the building. ○ Underground pipes, flues, or drains. ○ Lost information - The cost of replacing lost computer data, papers, etc. is not covered except as we already Automobiles - Not covered because they are better covered elsewhere under an auto policy. ○ Vehicles that are licensed for use on public roads or which are typically used away from the business premises - There is no coverage for snowplows, street sweepers, and cherry pickers mounted on trucks. Sure, these conveyances need protection, but they are best covered by other policies. Some motorized gizmos such as forklifts, bulldozers, and the like are covered under this policy, however. Specifically covered are rowboats and canoes if they are out of the water and are on the business premises. So when the sporting goods store burns, the rowboats and canoes are covered. ○ Outdoor property - Items such as fences, antennas, satellite dishes, towers, signs not attached to buildings, trees, and shrubs won't be covered except as indicated in the Coverage Extensions section above

If a fire causes $100,000 damage and the debris removal expense is $14,000, a Building and Personal Property policy will pay how much (assuming it has adequate limits of coverage)?

$114,000 The policy will pay the loss of $100,000 plus up to an additional 25% for debris removal (plus $10,000). So, the policy could have paid a maximum of $135,000, but, because the loss was $114,000, it will pay only the $114,000

There are three kinds of property the BPP may cover. Each will have its own limit of liability (which may be zero). The three kinds of covered property are:

1. Buildings (obviously includes structures like stores and factories) + Additions to the building (even an addition under construction) + Permanent indoor and outdoor fixtures (like a fountain outside a mall); + Permanently installed machinery and equipment; + Personal Property used to maintain or service the building including fire extinguishers, outdoor furniture, lawnmowers, snow throwers, and appliances for refrigerating, ventilating, cooking, dishwashing, or laundering; + Materials, equipment, and supplies used for making alterations to the building if they are within 100 feet of the listed structure (but they are not covered for theft because they are so easily and often stolen). Note that the above items are unscheduled 2.Business Personal Property = all the stuff in the open, in a building, or inside a vehicle, as long as the Personal Property is within 100 feet of the described premises. Includes furniture, stock (inventory), raw materials, tools, and most other items used in the course of doing of business Also includes tenant's interest in Improvements and Betterments. So since tenant has no insurable interest in building, but rents building and adds a nice restaraunt, the owner can upgrade coverage to reflect these upgrades 3. Personal Property of Others - usually kept at $0, but is important for like a computer repair shop who takes possession of customer property *because of this, it is optional coverage

The Building and Personal Property policy (BPP) covers: a. a rowboat stored in the building b. fences not attached to the building c. automobiles d. retaining walls not attached to the building

A.

After a Building and Personal Property policy proof of loss is filed, the claim must be paid within: a. 10 days b. 30 days c. 60 days d. 90 days

B.