ADB Chapter 9 - Commercial Package Policy & Commercial Property Coverage

The Causes of Loss - Basic Form applicable to commercial property policies covers direct damage caused by bacteria during what period of time following policy inception?

12 months

Which of the following is not a Common Policy Condition on a Commercial Package policy?

Abandonment

Under the Building and Personal Property Coverage Form, which statement concerning the Agreed Value Optional Coverage is correct?

Agreed value coverage suspends the coinsurance requirement

Under the Causes of Loss - Basic Form of a commercial property policy, all of the following perils are excluded from coverage, except:

Aircraft or vehicles

The Causes of Loss - Special Form available for the commercial property coverage part of a Commercial Package policy will exclude all of the following losses, except:

Chemical damage to glass

An insured uses the Building and Personal Property Coverage Form for insurance on their commercial building. Building coverage provided by the form would cover direct loss to:

Completed additions

The Causes of Loss - Broad Form attached to a commercial property policy insures against:

Damage caused by civil commotion, such as employees on strike

Building coverage provided by the Buiding and Personal Property Coverage Form would cover losses to all of the following, except:

Foundations and underground pipes

Under the Building and Personal Property Coverage Form, all of the following may be covered by Coverage Extensions, except:

Increased costs of construction to comply with an ordinance regulating repair

In a Commercial Package policy, what may be added to prevent duplication of coverage?

Interline endorsements

The Causes of Loss - Basic Form covers losses to commercial property caused by:

Lava flow

Under the Business Income and Extra Expense Coverage Form, extra expense coverage applies to:

Necessary expenses incurred during the period of restoration to minimize the suspension of business

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 business

On the Building and Personal Property Coverage Form, all of the following are Additional Coverages, except:

Outdoor Property

Under the Business Income With Extra Expense Coverage Form, extra expenses are defined to include all of the following expenses, except:

Payroll

Which commercial property endorsement offers the best method of insuring a store's holiday inventory?

Peak Season Limit of Insurance Endorsement

An insured has a commercial property policy with the Replacement Cost Optional Coverage. Replacement cost coverage applies to all of the following types of property, except:

Personal property of others

All of the following are Commercial Property Conditions of a CPP, except:

Premiums

In the event that property is insured by both a Condominium Association Coverage Form and a Condominium Commercial Unit-Owners Coverage Form, the condo association's insurance acts as:

Primary insurance over the unit-owner's insurance

After a covered loss to a commercial building insured on the Building and Personal Property Coverage Form, notice of the loss must be provided to the insurer:

Promptly, by oral or written notice

An insured covers their commercial property on the Building and Personal Property Coverage Form. A salesperson employed by the insured attends a trade show and must take property off the insured premises. Coverage for this property is:

Provided as a Coverage Extension

An insured owns a commercial building worth $400,000 and insures it for $350,000 on a commercial property policy written on the Building and Personal Property Coverage Form. If the insured plans to construct a new building on the premises, coverage for the newly constructed property is:

Provided by a Coverage Extension for up to $250,000

Under the Business Income Without Extra Expense Coverage Form, coverage is NOT provided for:

Relocation expenses

An insured has a commercial property policy that uses the Causes of Loss - Basic Form. Loss by which of the following perils will be covered by the policy?

Sprinkler leakage

The Causes of Loss - Basic Form applicable to the commercial property coverage part of a Commercial Package policy would not cover losses caused by which of the following?

Steam boiler explosion

Under the Building and Personal Property Coverage Form on a Commercial Package policy, which of the following is included in coverage for the insured's business personal property?

Telephone systems

The Condominium Association Coverage Form will provide coverage for fixtures and appliances located inside condo units under what condition?

The Association Agreement requires the condo association to insure that property

An insured has commercial property coverages included in their Commercial Package policy. All three Causes of Loss forms would protect against loss caused by:

The explosion of gases within a furnace

As provided by the Common Policy Conditions of a Commercial Package policy, insurers may examine and audit an insured's books and records at any time for up to how many years after policy termination?

Three years

A commercial building insured on the Building and Personal Property Coverage Form is vacant for more than 60 consecutive days. Coverage is suspended for all of the following perils, except:

Vehicles and aircraft

Which of the following perils is insured against by a commercial property policy using the Causes of Loss - Basic Form?

Windstorm

A commercial building valued at $200,000 is insured for $140,000 with an 80% coinsurance requirement. After the building is totally destroyed, incurring debris removal expenses of $10,000, how much will the Building and Personal Property Coverage Form pay?

$150,000 After a total loss, the policy will pay the face amount, which covers only the building damage. Because the additional debris removal expenses exceed the limit of insurance, the $25,000 additional amount provided by the Debris Removal Additional Coverage is activated to pay the $10,000 for debris removal. $140,000 + 10,000 = $150,000. The coinsurance requirement only penalizes the insured for not carrying insurance to value in the case of a partial loss.

Under commercial property insurance, the Causes of Loss - Special Form extends coverage to apply to property in transit, up to what limit of insurance?

$5,000

ABC Industries has insured a factory building for $80,000. The replacement value is $150,000. If the commercial property policy insuring the building has an 80% coinsurance clause, how much will ABC's insurer pay for a $12,000 covered loss?

$8,000

A Building and Personal Property Coverage Form will pay up to what percentage of the building loss amount for debris removal expenses incurred after a direct physical loss?

25%

An insured has a Commercial Package policy with the Building and Personal Property Coverage Form. After a covered loss to a commercial building, the insured incurs increased expenses to repair the building due to the enforcement of an ordinance regulating repair. These increased costs of construction are covered by:

An Additional Coverage

The Building and Personal Property Coverage Form considers all of the following to be covered property, except:

Automobiles held for sale

Which of the following statements regarding commercial property conditions is NOT correct?

Breach of a condition at one covered location will affect coverage at all covered locations

Under the Spoilage Coverage Endorsement of a commercial property policy, the insured may protect their perishable stock from loss due to:

Breakdown or contamination and power outage

The Condominium Commercial Unit-Owners Coverage Form does not cover which of the following?

Building exterior wall

Which commercial property coverage form provides coverage for an indirect loss?

Business Income Coverage Form

The Causes of Loss - Basic Form applicable to an unendorsed commercial property policy does not cover losses caused by:

Earth movement

Which of the following is not a named peril under the Causes of Loss - Basic Form applicable to commercial property policies?

Earthquake

Which of the following is considered property not covered under the Building and Personal Property Coverage Form?

Electronic data

Which of the following kinds of property may be covered under a Building and Personal Property Coverage Form?

Grain stored inside a building

After a fire loss to a commercial building, an insured incurs expenses when they move business operations to a temporary replacement location while the building is repaired. Under the Extra Expenses Coverage Form, coverage for these expenses begins:

Immediately

An insured rents a space for their business and has property coverage on a CPP through the Business and Personal Property Coverage Form. Business personal property coverage under the form protects what items of property?

Improvements and betterments made by the insured to the building

All of the following are Coverage Extensions under the Building and Personal Property Coverage Form, except:

Inflation Guard

Endorsements that coordinate Commercial Package policy coverage parts to avoid duplication are called:

Interline

All of the following are Common Policy Conditions that apply to a Commercial Package policy, except:

Interline endorsement

Under the Building and Personal Property Coverage Form, which of the following is correct about the Preservation of Property Additional Coverage?

It provides open perils coverage for 30 days on insured property temporarily stored at another location because of the endangerment of a covered peril

The Building and Personal Property Coverage Form does not cover:

Liability

Which is NOT a Common Policy Condition under a Commercial Package policy?

Liberalization

An insured has a Commercial Package policy with commercial property coverages. When writing the property coverages, the Building and Personal Property Coverage Form:

May be written to include building coverage, personal property coverage, or both, as chosen by the insured

If an insurer cancels a Commercial Package policy, the premium will be refunded on a:

Pro rata basis to the first named insured

Under the Earthquake and Volcanic Eruption Endorsement attached to the commercial property coverage part, which of the following statements is correct?

The endorsement's deductibles apply separately for each building, personal property in each building, and personal property in the open

As provided by the Common Policy Conditions, which of the following statements about Commercial Package policies is incorrect?

The insurer has the obligation to perform safety inspections

An insured owns a commercial building and business personal property, insured on the Business and Personal Property Coverage Form with the Replacement Cost Optional Coverage. After a total loss to the building, the insured chooses to rebuild at a different location. Which of the following best describes the insurer's liability?

The insurer will pay the amount that would have been incurred if the building was rebuilt at the original location

Under the Building and Personal Property Coverage Form, after the insurer receives the sworn proof of loss, or the insurer and insured reach an agreed-upon settlement, loss payment must be made within how many days?

Thirty days