Unit 6 Quiz

Worldwide Warehousing has a Building and Personal Property Coverage Form (BPP) with a $1,000,000 limit on a building and a $5,000 deductible. The warehouse suffers a $1,010,000 fire loss. Which one of the following amounts will Worldwide's insurer pay?

$1,000,000

The owners of Uncle Reggie's Steakhouse are insured under a Building and Personal Property Coverage Form (BPP) that covers their building and business personal property for $350,000 and $100,000, respectively. The policy has a $2,500 deductible. A fire results in $350,000 worth of damage to the building and a $70,000 loss of business personal property. In what amounts should the policy provide coverage for this loss?

$347,000 Building and $70,000 Property

Which one of the following statements is correct with respect to the business personal property coverage provided by the Building and Personal Property Coverage Form (BPP)? a. 'Your business personal property' specifically excludes labor, materials, or services furnished by the insured on the personal property of others. b. Leased personal property for which the named insured has a contractual responsibility to procure coverage is excluded from the BPP, but the coverage can be added by endorsement. c. Except for limited off-premises coverage, coverage for business personal property applies only when the property is located in or on the described building or in the open (or in a vehicle) within 100 feet of the premises. d. The definition of business personal property limits the coverage to furniture,

a. 'Your business personal property' specifically excludes labor, materials, or services furnished by the insured on the personal property of others.

Which one of the following is a covered cause of loss under the Causes of Loss—Basic Form? a. Volcanic action b. Falling objects c. Weight of ice, snow, or sleet d. Water damage

a. Volcanic action

The Causes of Loss—Basic Form differs from the Causes of Loss—Broad Form in which one of the following ways? a. The Broad Form covers 'risks of direct physical loss' subject to the form's exclusions and limitations. b. The Broad Form provides coverage for loss caused by collapse of a building or personal property resulting from specified perils. c. The Broad Form specifically excludes rupture or bursting of water pipes and leakage of water or steam from any part of a system or appliance. d. The Broad Form adds coverage for flooding, rainfall, sewer backup, and similar causes of water damage.

b. The Broad Form provides coverage for loss caused by collapse of a building or personal property resulting from specified perils.

A description of the property insured, a list of mortgagees, and the applicable coinsurance percentage(s) are shown on which one of the following documents? a. Commercial property coverage forms b. Causes of loss forms c. Commercial property declarations d. Commercial Property Conditions

c. Commercial property declarations

Which one of the following statements is correct with respect to the Newly Acquired or Constructed Property extension of coverage of the Building and Personal Property Coverage Form (BPP)? a. It provides automatic coverage for a new building being constructed by or for the insured anywhere within the coverage territory. b. It specifically excludes coverage for a newly acquired or constructed building at any location if that building will be used as a warehouse. c. It covers newly acquired buildings, provided the purpose of the newly acquired building is similar to the use of the building described in the declarations. d. This extension applies to buildings only and does not provide any coverage for business personal property.

c. It covers newly acquired buildings, provided the purpose of the newly acquired building is similar to the use of the building described in the declarations.

Which one of the statements is correct with respect to the Building and Personal Property Coverage Form (BPP)? a. The Covered Property section is the only section that must be read in order to determine whether a specific kind of property is insured. b. The BPP includes satisfactory coverage for physical damage to automobiles owned by the named insured. c. Some property, such as building foundations below the lowest basement floor, is excluded because it may not be subject to loss by the perils insured against. d. Any type of personal property can be insured under the BPP.

c. Some property, such as building foundations below the lowest basement floor, is excluded because it may not be subject to loss by the perils insured against.

Which one of the following statements is correct with respect to the Building and Personal Property Coverage Form (BPP) deductible? a. Under the ISO Commercial Lines Manual rules, the standard deductible must be at least $2,500. b. If the Coinsurance condition or the Agreed Value optional coverage applies, the amount of the loss is first reduced by the deductible before applying any penalty imposed by those provisions. c. The insurer is not obligated to pay anything to the insured unless the loss exceeds the deductible. d. If an occurrence involves a loss that affects more than one category of covered property and a separate limit of insurance applies to each category, losses to all categories are totaled and the deductible applied to that total amount.

c. The insurer is not obligated to pay anything to the insured unless the loss exceeds the deductible.

Which one of the following statements is correct with regard to the Causes of Loss—Broad Form? a. The falling objects cause of loss provides coverage for falling objects that damage personal property in the open. b. The water damage cause of loss includes coverage for damage due to discharge or leakage from roof drains, gutters, downspouts, or similar fixtures or equipment c. The form specifically excludes the cost of tearing out and replacing any part of an insured building to repair damage to any appliance or system that leaked water or steam. d. The weight of snow, ice, or sleet cause of loss does not cover damage to personal property in the open.

d. The weight of snow, ice, or sleet cause of loss does not cover damage to personal property in the open.