Unit 14
covered equipment includes:
- equipment built to operate under internal pressure or vacuum other than the weight of contents - electrical or mechanical equipment that is used in the generation, transmission, or utilization of energy - communication equipment and computer equipment - any equipment that is owned by a public or private utility and used solely to supply utility services to the insured's premises
breakdown
-means the following types of direct physical loss that cause damage to covered equipment, requiring the equipment's repair or replacement: -failure of pressure or vacuum equipment -mechanical failure, including rupture or bursting caused by centrifugal force -electrical failure, including arcing
equipment breakdown is designed to cover:
-mechanical breakdown -electrical arcing -artificially generated electrical currents -centrifugal force -boiler overheating, cracking, bulging, and sagging -bulging, crackling, or collapse of pressure vessels, such as water heaters, compressed air tanks, steam cookers and kettles, expansion tanks and condensate return tanks
equipment breakdown conditions
-normal property conditions (abandonment, appraisal, other insurance, etc.) -defense costs included -suspension of coverage
All of the following statements regarding the actual cash value endorsement are correct EXCEPT A. the payment will be the higher of the cost to repair or replace the damaged property with property of same kind B. the payment will be the lesser of he cost to repair or replace the damaged property with property of same kind C. the insurer will not pay for damaged property the is obsolete and useless to the named insured D. it insures older property on an actual cash value (ACV) basis rather than replacement
A
The term breakdown includes all of the following types of loss EXCEPT A. damage to any vacuum tube, glass tube, or brush B. failure of pressure or vacuum equipment C. electrical failure D. mechanical failure
A
The term breakdown includes which of the following types of loss? A. mechanical failure, including reupture or bursting caused by centrifugal force B. malfunction, including but not limited to adjustment, alignment, calibration, cleaning, or modification C. damage to any structure or foundation supporting the covered equipment or any of its parts D. leakage at any valve, fitting, shaft seal, gland packing, joint, or connection
A
All of the following types of losses may be covered by the equipment breakdown protection coverage form EXCEPT A. losses due to spoilage damage B. damage caused by fire or combustion explosion C. expediting expenses D. business income losses and/or extra expenses
B
The insured knows it may take several months for his damaged turbine to be fully repaired, so he authorized $500 for temporary repairs so production can resume. This expenditure would be covered under which coverage in the equipment breakdown protection coverage form? A. business income and extra expenses B. expediting expense C. errors or omissions D. spoilage
B
Which of the following coverages will pay extra costs necessarily incurred by the insured to make temporary repairs? A. property damage coverage B. expediting expenses coverage C. spoilage damage coverage D. business income and extra expense coverage
B
Which of the following coverages applies to direct damage to covered property located at a premises described in the declarations? A. expediting expenses coverage B. business income and extra expense coverage C. property damage coverage D. spoilage damage coverage
C
Which of the following coverages loss due to spoilage because of the lack or excess of power, light, heat, steam, or refrigeration? A. business income and extra expense coverage B. property damage coverage C. spoilage damage coverage D. expediting expenses coverage
C
The direct physical loss that causes damage to covered equipment and necessitates its repair or replacement is known as A. damage B. malfunction C. defect D. breakdown
D
Under the terms of the suspension provision in the equipment breakdown protection coverage form, coverage on dangerous equipment can be suspended A. at the end of the policy period B. with 60 days' advance notice to the insured C. with 30 days' advance notice to the insured D. immediately upon delivery of written notice to the insured
D
Which of the following coverages will pay extra costs necessary to make temporary repairs? A. business income and extra expense B. spoilage damage C. property damage D. expediting expenses
D
Which of the following is excluded in the equipment breakdown coverage form? A. mechanical failure B. failure of pressure or vacuum equipment C. electrical failure D. leakage at any valve
D
property damage
coverage applies to direct damage to covered property located at a premises described in the declarations
expediting expenses
coverage will pay extra costs necessarily incurred by the insured to make temporary repairs and to expedite the permanent repairs or replacement of the damaged property
business income and extra expense
extra expense coverage only, is similar to these same coverages under the commercial property coverage part
actual cash value endorsement
insures older property on an actual cash value (ACV) basis rather than replacement -obsolete or useless property not covered
utility interruption
is and extended coverage to business income, extra expense, or spoilage damage
covered property
means property that the insured owns or that is in the insured's care, custody, or control, and for which the insured is legally liable
brands and labels
states that if covered branded or labeled merchandise is damaged by a breakdown, the insurer will take all or any part of it as salvage and pay the insured an agreed upon or appraised value
spoilage damage
to raw materials, property in process, or finished products may be covered if these items are in storage or in the course of being manufactured at the time of loss, the insured owns or is legally liable for these items under contract, and the spoilage is due to the lack or excess of power, light, heat, steam, or refrigeration.
