chatper commercial coverages
Vandals do damage to glass that is a part of a covered building. Under the broad form of a building and personal property policy, each glass plate will be covered for up to
$100
Matt, the insured, took out a 20-year lease, and at the time invested $25,000 for improvements and betterments to the property. What is Matt's monthly leasehold interest?
$104.16
A pizza shop has a neon sign attached to its building. During a severe thunderstorm, the sign is damaged by wind and hail. What is the maximum amount the business's building and personal property policy will pay for the damage to the sign?
$2,500
A $100,000 house insured on a policy with an 80% coinsurance requirement has a fire that caused $40,000 of damage; the owner has a policy with $60,000 coverage. How much can the owner collect for his loss?
$30,000
An insured's building has an actual cash value of $200,000, and he has insured the property for $120,000 with an 80% coinsurance clause. A $40,000 loss occurs. How much will the policy pay?
$30,000
A commercial property special form covers property in transit up to
$5,000.
Roger owned a grocery store and had a Reporting Form Policy with a $100,000 limit for the store's inventory. The last report Roger submitted was during a slow period and showed a value of $50,000. The value increased to $75,000, and Roger failed to submit his next report when due. What is the maximum amount of coverage Roger has?
$50,000
The standard property deductible per occurrence on a CPP is
$500.
The coinsurance requirement on a Builder's Risk Form is what percentage of the completed value?
100%
An insured owns a building that is valued at $400,000. To comply with the 80% coinsurance provision of his insurance policy, how much should he insure the property for?
80% of the property's replacement cost or more
When other insurance is written on the same basis as a commercial property policy, the obligation of the insurer is to cover
A share of the loss.
Which of the following is an additional coverage provided under the Glass Coverage Form?
All of the above
A property insurance policy that insures a commercial building on a replacement cost basis includes the ordinance or law coverage endorsement. Following a loss to the structure, the endorsement would cover expenses incurred by the insured because of enforcement of any building, zoning, or land use law that result in
All of the above.
A policy that insures all property at multiple locations for a single amount is referred to as
Blanket.
A loss has occurred before the first report has been filed on a value reporting coverage form. Which is/are true?
Both A & B
What are the two causes of loss covered under the Glass Coverage Form?
Breakage and accidentally or maliciously applied chemicals
Where are most of the exclusions found in the Commercial Property policy?
Causes of Loss Forms
A Commercial Package Policy (CPP) must contain the following two elements:
Common declarations and common policy conditions.
Builder's risk is most often written on which form?
Completed value form
The extra expense coverage form provides
Coverage that will permit the insured to continue in business without interruption following a property damage loss.
In a Commercial Property, Business Income policy, which section would explain which losses are covered?
Declarations
Which of the following is true regarding the fire department service charge under the Builders Risk form?
It is an additional coverage.
Which of the following statements concerning the builders risk coverage form is correct?
It may be written on a reporting form or the completed value of the structure.
One policy type that allows the insured to select the coverage forms that best fits the individual needs of the client is called the
Modular commercial lines policy.
An owner and operator of a commercial business has included a Business Income coverage form with his commercial package policy. When the business is severely damaged by fire, the business income coverage will pay for
Net income plus continuing expenses of the business.
The insured with reporting value coverage has had a covered loss. It is discovered he underreported on the last report filed. Which is true?
No more than the amount reported divided by the actual value on the date the report was due will be covered.
When does the coverage begin under the builders risk form?
On the date construction starts
All of the following are additional causes of loss included in the broad form of a commercial property policy EXCEPT
Replacement cost.
A business owner whose inventory changes significantly throughout the year should consider having coverage written on what type of form?
Reporting form
A type of risk analysis used in commercial insurance in which the underwriter can give credits and debits for certain actions that an insured takes in the normal course of business that either increase the chance of loss or decrease the chance of loss is known as
Schedule rating method.
Greg owns several buildings, each at a different location and insured on a separate policy. What type of coverage does Greg have?
Specific
Property insurance that provides $100,000 coverage for a building and $50,000 coverage for personal property at a single location is called
Specific coverage.
Under the Commercial Property Coverage program, the Basic Causes of Loss form insures against loss caused by
Sprinkler leakage.
Which situation would NOT be covered by the Basic Causes of Loss Form under a Commercial Property Policy?
The Surf Side Club Waterfront Restaurant is damaged when flood waters rise and seep into the restaurant
Which item would NOT be covered under building coverage in a building and personal property policy?
The bulldozer being used as part of a business addition under construction that is parked 500 feet from the building
All of the following statements concerning coinsurance are true, EXCEPT
The coinsurance formula also will be applied to total losses.
Mary Smith is the loving wife of John Smith, owner of John Smith Tool Company. One day as Mary was walking through the tool shop to John's office for lunch, Mary inadvertently spilled an oil container onto the floor. One employee slipped on the oil spill and broke her hip which required surgery. Mary is NOT an employee of the company; therefore,
The commercial general liability policy will cover Mary for her negligence since she is the spouse of the insured.
Under the provisions of the business income coverage form, all of the following are true, EXCEPT
The insured is reimbursed for the loss from the date of loss to date of restoration or policy expiration date, whichever comes first.
The business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of a direct loss. Which of the following terms best describes the nature of this type of coverage?
Time element
Besides the peril of earthquake, which other peril is covered by the Earthquake Cause of Loss Form under a Commercial Property Policy?
Volcanic eruption
Personal business property out in the open is covered under Commercial Property Policy only while
Within 100 feet of the described premises.
