Section 8- Commercial Lines Insurance
In a commercial property policy, the company providing the insurance is referred to as:
"We".
Determine the actual cash value in the following situation: 8 years ago price of office equipment was $9,000: and has depreciated at time of fire--by $5000; Current replacement cost-is $12,000, what is the amount the insurer will pay:
$7,000.
Under a Builder's Risk form, how much insurance is required to pay any loss without a penalty for underinsurance?
100% of the completed value.
Both the Commercial General Liability Policy and the Business Auto Policy have definitions of the terms "automobile" and "mobile equipment". These coverages:
Are very different; thus avoiding overlaps or gaps in coverage between the two policies.
A bulldozer an insured is using to level
Commercial General Liability.
Abstracts, maps, and mortgages are covered under which of the following?
Inland Marine.
All of the following are listed on a Commercial General Liability declarations page, EXCEPT:
Pollution liability limit.
The broadest form of crime coverage is:
Theft.
Why is the examination of books and records condition important in a commercial policy?
To ensure that the proper amount of premium is charged.
Which of the following is eligible for Business owners Policy?
A furniture store.
Which of the following is covered by a Building and Personal Property coverage form (BRP)?
A light pole.
If an insured discovers an occurrence 75 days after the expiration of a claim-made Commercial General Liability Policy, what must the insured have in order for the loss to be covered?
Basic extended reporting period endorsement.
Yacht policies typically provide for:
Hull, protection and indemnity.
The commercial property policy part- "causes of loss-broad form", includes an exclusion for "concurrent causation." The effect of this exclusion is:
If two or more perils happen at the same time to cause a loss, there is no coverage is any of the perils are excluded.
What type of crime form covers losses during the policy period, regardless of when the loss is discovered?
Loss sustained form.
Which of the following type of coverage would pay for a theft which occurred during the policy period and is found for up to one year after policy termination?
Loss sustained.
The liability coverage in a Yacht Policy is referred to as:
Protection and indemnity.
A commercial property policy can provide coverage for all of the following, EXCEPT:
Intangible losses.
Which of the following risks are eligible for a Business owners Policy?
A three-story, 12 dwelling unit building.
Ordinance or law coverage provides protection for which of the following losses?
All of the above are covered.
A Commercial General Liability (CGL) Policy is quite broad in scope. However, there are a substantial number of exclusions. Three of the four following exposures are excluded. Identify the loss exposure that is covered by an unendorsed CGL- property damage or liability arising out of:
An employee accidentally injures a customer while working at the customer's home.
The Commercial General Liability (CGL) contract contains exclusion for liquor liability. The purpose of this exclusion is to exclude coverage for liability arising from:
An insured's special loss exposures resulting from the insured being involved in the alcoholic beverage business.
Which of the following is commonly found in liability policies, thus creating the need for inland marine coverage?
Care, custody, control exclusion.
All Workers' Compensation policies provide:
Compensation for work related injuries without regard to fault.
All of the following are typical exclusions in an Inland Marine Policy, EXCEPT:
Earth movement.
All of the following statements concerning business owner's policy are true, EXCEPT:
It contains simpler reading which lower handling costs for insurers.
The ordinance and law exclusion found in property policies, such as the commercial property coverage and the Homeowner's Policy, have the following effect:
It excludes part of the loss resulting from the enforcement of a building ordinance or law.
Which coverage protects physicians, surgeons, and dentists for their personal activities?
Malpractice coverage.
The equipment dealer's coverage form covers all of the following types of property, EXCEPT:
Motor vehicles designed for highway use.
Coverage on an annual transit policy is usually provided on which of the following basis?
Named peril.
Under a commercial property coverage form, all of the following properties are included in the definition of "building", EXCEPT:
Patio.
All of the following are mandatory coverages of a Business owners Policy, EXCEPT:
Professional liability coverage.
A physician is being sued by a patient for misdiagnosing terminal cancer. What type of insurance would protect the physician against this type of mistake?
Professional liability.
A physician may have misdiagnosed a patient for terminal cancer. What type of insurance would protect the physician for this type of mistake?
Professional liability.
Under the common policy conditions, who is authorized to make changes to a commercial insurance policy?
The first named insured (with insurer's consent).
All of the following contribute to the rising cost of Workers' Compensation Insurance, EXCEPT:
The growing population.
What causes of loss are covered under the Business Income Coverage form?
Those shown on the declarations.
If a property owner is insured under a building and personal property insurance form, when is the property considered vacant?
When less than 31% of the building space is rented to others or in use by the insured.
If a tenant is insured under a Building and Personal Property coverage form, when is the property considered vacant?
When there is insufficient business personal property to conduct customary operations.
When an employer has a choice to purchase Workers' Compensation insurance from a state fund or a private carrier, the state fund would be called:
A competitive state fund.
Under the Business Income coverage form, extra expense are:
Excluded.
When a state program is a company's only option for purchasing Workers' Compensation insurance, it is called:
A monopolistic state fund.
All of the following equipment would be covered under the Equipment breakdown Policy, EXCEPT:
Aircraft.
Under the commercial Building and Personal Property coverage extensions, property off-premises is covered while the property is located:
At a trade show or a fair.
Under the "examination of your books and records" condition of a commercial policy, when may an insurer examine an insured's books and records?
At any time during the policy period and up to three years afterwards.
Which property coverage form is best suited for a structure under construction?
Builders Risk coverage form.
Who is responsible for damage to improvements in a leased building?
Building owner.
Which of the following would best be described as using forcible entry to steal property when a business is closed?
Burglary.
Which of the following lines of insurance would cover the loss of net income a business incurs due to a fire?
Business income insurance.
If the named insured is not the owner of the building, improvements and betterments are covered under the:
Business personal property.
Which commercial property form contains most of the exclusions that apply to a commercial property policy?
Causes of loss forms.
Which of the following types of policies pays for bodily injury or property damage which occurs, or is discovered, during the policy period?
Claims made commercial liability policy.
Diamond Toy Company is being sued for a death caused from a child choking on a piece from one of its transformers. Where would Diamond find coverage for the defense of this law suit?
Commercial General Liability Insurance.
A person with a commercial policy is burning leaves. The fire gets out of control causing smoke damage to a neighboring property. The loss is covered by:
Commercial General Liability.
Which of the following types of coverage would be needed to cover a contractor's bulldozers which are used in the contractor's business but are not held for sale?
Contractor's equipment floater.
Your insured has a ten-year lease on his store. He has spent $50,000 on shelving, wall-to-wall carpeting, partitions, lighting, etc., all of which are part of the building and cannot be legally removed. He is concerned that a fire might damage these changes that he has made and wants to make sure he is protected for their value. He should purchase:
Coverage B personal property.
If an employee embezzles $10,000 from an insurance company, which type of insurance would the employer need to be covered for this type of loss?
Crime insurance.
Which type of a crime policy will pay for loss, which is found during the policy period, even if the loss occurred prior to the effective date of the policy?
Discovery form.
The medical expense coverage in a Worker's Compensation Policy:
Does not have a dollar limit or a time limit.
If an insured's employee embezzles $10,000 from the company's bank account, which of the following coverages would need to be in force for the loss covered?
Employee theft.
Under a special cause of loss form, if a landslide is caused by an unnatural flow of water due to improper grading, the loss is:
Excluded under the concurrent causation exclusion.
All of the following types of businesses would need special inland coverage for their stock, EXCEPT:
Grocers.
The inspections and surveys condition of a Commercial Package Policy is important to the insurer for all of the following reasons, EXCEPT:
Guarantee that the insured is in compliance with safety regulations.
Your commercial auto policy insured needs coverage for his liability arising out of his employees using their own cars in his business. the best way to be sure your insured is covered is to:
Include employers non-ownership liability coverage in the employer's commercial auto policy.
All of the following causes of loss are covered by Equipment Breakdown insurance, EXCEPT:
Inherent defect.
Where would an insured find insurance coverage to protect against damage to a shipment of televisions shipped on a semi-truck for the insured's business?
Inland marine.
Which of the following types of insurance were designed to cover domestic shipments, means of transportation, personal property floater risks, and commercial property floater risks?
Inland marine.
Which of the following is a common policy condition for a Commercial Package Policy?
Inspections and surveys.
What does a release bill of lading do for a common carrier?
Limits the carrier's liability on the shipment.
If a bartender allows a patron to leave the bar, and the patron is involved in a drunk driving accident, what would the bar owner need to cover their liability?
Liquor Liability.
A commercial Building and Personal Property coverage form covers three kinds of property- one of which has "_________your business personal property." In this clause, "Your" refers to:
Only the named insured(s) shown in the declarations.
Inland marine polices nearly always provide_________________________coverage.
Open peril.
If an Inland Marine policy provides coverage for any loss unless it is specifically excluded, it would be considered which of the following?
Open perils.
If an armored car, is carrying the insured's bank deposit is robbed, what insurance would the insured need to have?
Outside the premises-theft of money and securities.
Commercial lines program policy- common policy conditions- do not include which of the following as a condition?
Perils insured.
Insurance which covers ship owners against vicarious liability claims, due to operations of the insured vessel, is:
Protection and indemnity insurance.
All of the following are differences between surety bonds and Insurance EXCEPT:
Reserves are not established.
A commercial property cause of loss forms do not cover any losses caused by:
Smoke damage from industrial operations.
An insured's Business Auto Policy specifies that the liability coverage applies to covered autos- symbol 7. This means:
Specifically described autos are covered.
In a commercial property, the insurance claim is denied because of the insured's actions. The mortgage holder will, in most cases:
Still have the right to receive the full amount of the loss payments.
Why would an insured need an Inland Marine Policy if she is shipping stock on her own trucks?
Stock is only covered if it is in the building, or within 100 feet of the building premises.
All of the following are covered by Protection and Indemnity insurance, EXCEPT:
The cost of reasonable measures that insured must take to prevent damage at the time of loss.
Extra expense insurance covers:
The extra expense that business incurs to continue a business while damage to the premises are being restored.
Hull coverage in an Ocean Marine Policy covers which of the following?
The vessel itself, including engines, and fuel.
Commercial property conditions include a condition called "liberalization". The effect of this condition is:
To automatically apply broader coverage to the commercial property coverage part if a policy form revision would broaden coverage without an additional premium.
What is the purpose of the inspections and surveys condition of the Commercial Package Policy?
To determine the rate to be charged.
A reporting form is used for property insurance:
To maintain the correct limits of coverage without over or under insuring when the value or volume of the property varies during the policy term when inventory fluctuates.
Equipment Breakdown insurance covers all of the following, EXCEPT:
Tools subject to regular replacement.
If the vacancy permit endorsement is added to a Building and Personal Property coverage form, the vacancy condition under the basic policy is:
Waived only for designated perils during the permit period.
If the vacancy permit endorsement is added to a building and personal property coverage form, the vacancy conditions under the basic policy is:
Waived only for designated perils during the permit period.
