Chapter 8: Commercial Property and Liability Insurance

Mysterious disappearance

Property may become lost or has "disappeared"

GL Coverage B

Protection to a business owner against personal injury and advertising injury losses. - ex of personal injury: wrongful eviction, false arrest, slander

Commercial Inland Marine Coverage

Protects an insured's property used for commercial purposes while beings transported.

Earthquake form

Protects insured against loss caused by earthquake or volcanic eruption. - any eruption occurs within any 168 hour period is considered to be a single occurrence.

Coverage A/Building Coverage

Provides coverage for the named insured's BUILDING, BUSINESS PERSONAL PROPERTY, and the PERSONAL PROPERTY OF OTHERS. - signs attached/unattached cover up to $2500

Attractive nuisance doctrine

States that there is a special duty of care required with respect to conditions that could attract children and which may be dangerous such as swimming pools, construction sites, trenches, or sand piles.

Business income form: Coinsurance

The insurer will not pay the full amount of any loss if the amount of coverage carried is less than the Coinsurance percentage times the sum of the net income and operating expenses that is earned in 12 months.

GL coverage C

Will pay reasonable medical expenses of others incurred within one year of the date of the accident. - $5k medical limit but this limit is included as part of the policy's "per occurrence"

Supplementary payments

Will pay... 1. $250 for bail bonds 2. Premiums on bonds to release attachments 3. Loss of earnings up to $250 per day 4. Premiums on appeal bonds 5. Pre-judgment or post-judgment interest

Businessowners policy

- Coverage of property and liability for businesses - designed for SMALL business.

Business income form: features

- Covers 50, 60, 70, 80, 90, or 100% annual income. - includes a 72 hour or 3 day deductible.

Coverage B/Business Personal Property

- Covers all personal property owned by the insured and used for business purposes. - this property must me located in or on the building or within 100ft from the premises.

Burglary

- Illegal taking of property. - must be visible signs of forcible entry.

Commercial crime: employee theft

- Protects against theft by employee. - excludes any acts committed by the insured.

Basic cause of loss

- This form covers same perils as dwelling property basic Ex: fire, lightening, extended coverages, vandalism, plus sprinkler leakage and sinkhole collapse.

Special cause of loss

- This is an all-risk or "open peril cause of loss. - theft is covered as well

Business income form

-protects an insured if business operations are suspended due to a direct physical loss to the insured location.

Additional coverages

1. Debris removal 2. Preservation of property (up to 30 days) 3. Fire department 4. Pollutant cleanup and removal

Coverage A exclusions

1. Expected or intended damage or injury caused by the named insured. 2. Contactual or assumed liability. 3. Liquor liability which involves BI or PD 4. Injuries to employees (workers comp) 5. Pollution 6. Autos, aircraft and watercraft. 7. BI or PD caused by mobile equipment while being transported. BI or PD resulting from the use of mobile equipment during commercial operations is covered. 8. War. 9. Damage to the personal property. If electrician drops and damages a light fixture, fixture not covered, floor is covered. 10. Damage to insured's product or work. 11. Damage to impaired property 12. Product recall.

Eligibility for BOP

1. Motels cannot exceed 3 stories. 2. Convenient stores 3. Limited cooking restaurants 4. Fast food risks: - size may be up to 7,500 sq ft. - may not exceed 150 seats 5. Self storage facilities with max two story height restriction. 6. Wholesale risks where no more than 25% of total floor space is open to the public.

Business auto policy (BAP): covered autos

A land motor vehicle, trailer or semitrailer used on public roads but does not include mobile equipment, that is used for commercial purposes.

Extra expense form

After destruction of their facilities this will cover any additional expense to rent another location, lease equipment and so on.

Business income form: extended business income

Automatic coverage for 30 days after property has been rebuilt and replaced.

Business auto policy (BAP): liability coverage

Coverage for BI and PD arising out of the operation, maintenance or use of the business auto.

Commercial Crime

Coverage for burglary, robbery, and other forms of theft.

GL coverage A (bodily injury and property damage liability)

Covers an insured who is legally responsible for injury or damage to others as a result if the ownership of premises or business activities on or off the premises.

BAP (covered autos): symbol 1

Covers any auto for liability ONLY which includes OWNED or LEASED by the named insured

Broad cause of loss

Covers everything AND perils that are not covered in Basic cause of loss. - does not cover floods

BAP (covered autos): symbol 8

Covers hires autos only for liability which are those the insured leases, hires, rents or borrows. ( does not include leases from those borrowed from any of his/her partners, employees, or members of the household.

BAP (covered autos): symbol 9

Covers non-owned autos only for liability which are autos the insured does not own or lease but are used in the business.

BAP (covered autos): symbol 2

Covers owned autos only

BAP (covered autos): symbol 6

Covers owned autos subject to a compulsory uninsured motorist law

BAP (covered autos): symbol 5

Covers owned autos subject to a no-fault law

BAP (covered autos): symbol 4

Covers owned other than private passenger autos only for liability.

BAP (covered autos): symbol 3

Covers owned private passenger autos only for liability and physical damage coverage

BAP (covered autos): symbol 7

Covers specifically described autos for liability and physical damage coverage which includes only autos described in the declaration.

Messenger

Defined in a crime insurance contract, as one who possesses custody of insured property while outside the covered area.

Business income form: alterations and new buildings

Extends coverage to buildings under construction - max coverage $100k

Perils not covered in Basic cause of loss:

Glass breakage, water damage, falling objects, weight of ice or snow collapse.

Robbery

Illegal taking of one's property but involves person to person encounter

Commercial auto coverage

May be added to the commercial package policy (CPP) to protect an insured for BI or PD to others arising out of the operation, maintenance or use of an auto used for business purposes.

Business income form: expenses to reduce loss

Insurer will pay any necessary expenses incurred in order to reduce the amount of loss.

Cause of loss forms

Named insured must add a cause of loss form to specify the perils insured against.

Custodian

One who has custody of the property of another

Other commercial property forms: builder's risk

Pays for damage to structures while they are being built.

Business income form: civil authority

Pays for loss of income and extra expenses caused by civil authorities (fire department) that prevents access to the premises due to a covered peril. - coverage will apply for up to 4 consecutive weeks