11. The Commercial Package Policy
Who is responsible for making the premium payments due under a commercial package policy? A) First named insured. B) All named insureds. C) Insurance company. D) Agent.
Answer: A Under the common policy conditions, certain responsibilities and obligations are assigned to the first named insured. It is necessary to specify the first named insured because the CPP may be issued to more than one named insured, such as business partners.
All commercial package policies must include: A) 5 or more coverage parts. B) the common policy declarations and the common policy conditions. C) commercial auto coverage. D) commercial crime coverage.
Answer: B Commercial package policies combine different commercial coverages into a simplified commercial package policy. Regardless of the coverages selected, the commercial package policy will have a common policy declarations page and common policy conditions.
Which of the following forms is NOT eligible to be written as part of a commercial package policy? A) Boiler and machinery coverage forms. B) Dwelling property coverage forms. C) Commercial property coverage forms. D) Commercial crime coverage forms.
Answer: B Dwelling property coverage is a personal lines policy and, therefore, is not eligible for inclusion in a CPP.
All of the following coverages may be part of a commercial package policy EXCEPT: A) inland marine. B) farm. C) personal auto. D) crime.
Answer: C A commercial package policy (CPP) is a means of providing property insurance for a larger business or organization. A businessowner can select from such coverages as commercial property, commercial general liability, crime, inland marine, boiler and machinery, commercial auto, and farm. Personal auto is not one of the available coverages.
The common policy declarations of the commercial package policy would provide which of the following information? A) Duties of both parties to the contract. B) Modifications to coverage. C) Insured's business description. D) Perils insured against.
Answer: C A description of the insured's business is independent of the type of coverage selected and would be common to all lines of insurance. Therefore, its inclusion in the declarations page is appropriate
The insurer has the right to examine the books and records under a commercial package policy for up to how many years after the policy expires? A) Two. B) Four. C) Three. D) One.
Answer: C The insurer may examine and audit the books and records of the insured as they relate to the policy any time during the policy period and up to 3 years after the policy expires.
Which one of the following coverages is NOT available under the commercial package policy? A) Commercial property. B) Inland marine. C) Commercial auto. D) Workers compensation.
Answer: D A commercial package policy is a common way to provide property insurance for a large business organization. This policy may include coverage for liability, automobiles, crime, and other major lines of insurance. Workers compensation is not eligible for inclusion in the commercial package policy and must be issued separately.