Lesson 9: Commercial Property Policy

60 days

The company can cancel coverage on a building after it has been vacant for how long?

No Benefit to Bailee Condition

A Bailee is prohibited from being reimbursed by the insured's Commercial Property insurance if the insured's property is damaged or destroyed while in the Bailee's care.

$60,000

A commercial building valued at $300,000 is insured for $250,000. If the policy is written with an 80% coinsurance clause, what amount would the insurer pay for a $60,000 loss? Ignore any deductible that may apply.

extra expense forms

All of the following must be included in each Commercial Property coverage part EXCEPT:

Collapse

All of the following would be covered under the basic cause of loss form EXCEPT:

Builder's Risk Coverage Form

An additional form that can be added to Commercial Property coverage part. It covers commercial, residential, or farm buildings that are under construction.

Control of Property Condition

Any act of neglect of any individual, other than the insured, that is beyond the insured's direction or control will not affect the insurance.

coinsurance clause

Commercial Property insurance usually imposes a penalty if, at the time of loss, the insured failed to maintain a minimum amount of coverage. This penalty may apply because of the:

Business Personal Property

Coverage is provided while the property is in the covered building, in the open, or in a vehicle within 100 feet of the covered premises.

Extra expense coverage

Due to the nature of Joe's business, it's essential that his operations continue even if a loss occurs to the business facility. If a property damage occurs to the main facility, other facilities would be used to prevent business interruption. What type of coverage would Joe need to protect his business against any consequential losses?

primary

In the case that both the Association and Unit Owners forms apply to a specific loss, the Association form's coverage is:

An 80% or higher coinsurance requirement is met or the insured purchases a reporting form

The Commercial Building and Personal Property coverage form provides certain coverage extensions under what condition?

60 consecutive days

The Commercial Building and Personal Property coverage form suspends coverage for losses caused by vandalism or theft if at the time of loss the building has been vacant for more than:

Business Income Coverage Form

The form pays for loss of income that the insured sustains due to a direct loss from a peril insured against that forces the insured to suspend operations during the period of restoration.

180

The insured must report a loss due to debris removal within ___ days of the direct physical loss or damage.

Building and Personal Property

This coverage form covers the insured's buildings, business personal property, and the personal property of others in the care, custody, or control of the insured at the business location.

Peak Season

This endorsement allows the insured to increase coverage during certain seasons of the year when inventory or cover covered property is higher than normal.

Spoilage

This endorsement covers personal property such as perishable stock that must be maintained under controlled conditions to protect it from loss or damage.

Value reporting

This endorsement is used to provide coverage based on actual values at certain locations at specific times

Ordinance or Law Coverage

This endorsement offsets the ordinance or law policy exclusion by providing coverage when an insured's loss is increased because of such laws.

Builder's Risk Reporting Form

This form allows the insured to purchase a lesser amount of insurance that progressively increases as the value of the building increases.

Condominium Commercial Unit-Owners Coverage

This form is designed for the owner of the (commercial) condo.

Personal Property of Others

This pays for damage to property of others in the insured's care, custody, or control. It does not matter whether the insured is legally liable for the loss.

Declarations

This section supplies information regarding the insured location, the particular forms that will apply, and the name and addresses of any mortgage holders.

$10,000

What is the maximum amount of coverage provided by the Property Off Premises coverage extension in the Building and Personal Property coverage form?

$1,000

What is the maximum benefit amount for the Fire Department Service charge in a Commercial Property policy?

the Association policy is primary and the Unit-Owners form is excess.

When the Condominium Association and Condominium Unit-Owners forms both apply to a loss:

Animals boarded by the insurer

Which of the following may be insured under a Building and Personal Property coverage form?

Business Income

Which one of the following is NOT one of the coverages provided by the Building and Personal Property coverage form?

sinkhole collapse

Which peril is covered under the commercial property basic causes of loss form?

contributing location

XYZ Manufacturing Company has been forced to halt manufacturing operations due to a fire causing a shut down with one of the company's major suppliers. XYZ could have insured this contingency by purchasing Business Income coverage for dependent properties. The supplier of materials to XYZ would be classified as a:

Expenses to Reduce loss

coverage that covers expenses the insured incurs to reduce loss, up to the amount the loss is reduced.

Extended Business Income

coverage that pays for loss of business income, even after operations have been resumed, until the business has been fully restored.

Extra Expense

reimburses the insured for the expenses incurred to keep a business going after a loss caused by a covered peril.