Commercial Property

studentdavid's version from 2017-06-02 21:31

Assignment 1- Loss Exposures, The BPP, and Causes of Loss

Question Answer
AssetAny valuable item exposed to loss
Propertyanything with value
Real Propertysomething of value that can not be brought with you ex. home
Personal Propertyanything of value that can be brought with you ex. gold necklace
ContentsAn item inside a building

Assignment 1 - 2

Question Answer
Peril or Cause of lossresponsible for causing reduction in asset value
Financial consequences of lossthe reduction of an asset's value depending on type of asset exposed to loss, the cause, and the severity of the loss
Property in Transitpersonal property carried by truck, car, bus, aircraft, etc.
Property in the Possession of othersPersonal Property exposed to loss at a temporary location
Floating PropertyPersonal Property that does not stay at a fixed worksite, and insured under inland marines

Assignment 1 - 3

Question Answer
Commercial Property Declarationsoffers info about the property insured, the kinds and amounts of coverage, the covered causes of loss; the mortgagees; the deductible,; the coverage forms and endorsements; and any coinsurance
Commercial Property Coverage Formcontains insuring agreements, the description of covered property, the additional coverages and coverage extentions, the provisions and definitions that apply to that coverage form
Causes of Loss Formspecify the perils covered
Commercial Property Conditionscommon policy conditions
Endorsementstailor coverage

Assignment 1 - 4

Question Answer
Buildingincludes the described building; its addition; its permanent fixtures and equipment; and personal property used to maintain
Your Business Personal Propertyincludes anything in building or within 100 feet from premises, also includes any betterments and improvements
Improvements and BettermentsAnything upgrades a tenant adds to the building they rent but legally cannot take with them when moving
Personal Property of OthersPersonal Property in your care, custody, or control and located in the building or within 100 feet ex. a suit in the dry cleaners
Baileeone that keeps personal property of others usually to run a business such as a car at a repair shop
BailorOne that lends their personal property to another individual

Assignment 1 - 5

Question Answer
Debris RemovalCovers Covered Property damaged by a covered loss including the cost to clean up on premises pollution caused by insured peril
Preservation of PropertyInsurer will cover covered property that is being moved from a covered loss (including war) for up to 30 days
Fire Department Service ChargeOnce fire dept stops a fire, this Covers the fire department Service charge for up to a specified limit with no deductible
Pollutant Cleanup RemovalLimited coverage to extract pollutants from land or water at the described location but only if their release was caused by a covered loss during the policy period
Increased cost of ConstructionOut of the amount of insurance, this coverage will use the lesser of 5% or $10,000 paid in addition to the policy limit but only if the replacement cost optional coverage was selected

Assignment 1 - 6

Question Answer
Electronic DataProvides very low limit of coverage per year to replace data destroyed by a covered cause of loss
Newly Acquired or constructed propertyAutomatic Coverage applies for any building built on premises or any bought elsewhere, or warehouse use and covers business personal property at new locations except at fairs or exhibits and coverage is automatic 30 days after purchase date or when insurer is notified or before policy exp. date
Personal Effects and Property of Otherstheft coverage does not apply but it will cover limited contents due to personal effects and property of others while in your care, custody, or control
Valuable Papers and Records(Other than Electronic Data)Limited coverage for the cost to reconstruct lost paper Records, but does not cover cost to reconstruct electronic data
Property off-PremisesCovers covered property temporarily away from the described premises as long as it is not with a salesman, fair, in a vehicle or at a exhibit

Assignment 1 - 7

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Outdoor PropertyCovers loss to outdoor fences, antennas, trees, shrubs, and plants only if damaged by fire, lightning, explosion, riot or aircraft
Non - Owned detached trailersCoverage for leased trailers used in the insured's business and in the insured's care, custody, and control at described premises. Coverage does not apply to a trailer unhitched from a motor vehicle or being hitched
BPP Temporarily in Portable Storage UnitsCoverage up to $10,000 for property in temp portable storage units if unit is located within 100 feet of the building and the storage unit has been in use for less than 90 days
Specific Limitstates a specific amount of insurance in declarations for each building and a specific amount for personal property at each location
Blanket LimitProvides one limit of insurance for either two or more types of property or one or more types of property at more than one location

Assignment 1 - 8

Question Answer
The DeductibleInsured must pay the deductible before insurer is obligated to cover their losses, applies per occurrence not per item
Package PolicyInsures at least 2 coverage parts (property and general liability)
Monoline PolicyInsures only one type of coverage or one coverage part (Property, inland marine, crime, etc.)
Package modification FactorsAllows the insured to receive a package discount determined by applying the appropriate package modification factors to the premium for eligible coverage parts

Assignment 2 - 1

Question Answer
AppraisalBPP condition that allows the insurer and the insured to obtain their personal appraisers that form an amount go to a jury in court and both parties are then bound the the agreement
VacanyThe building was vacant over 60 consecutive days, and not enough contents to conduct business or over 70% of total area vacant
Coinsurancerequires insured to carry insurance at least equal to the specified percentage of the property's actual cash value
AbandonmentTBPP condition that states the insured cannot abandon damaged property to the insurer
Actual Cash Valuethe cost to replace damaged property with new property of like kind and quality minus depreciation and obsolescence
Coinsurance Formula

Assignment 2 - 2

Question Answer
Inflation GuardA provision that gradually and continuously increases the limit of insurance by a specified percentage over a specified time period (such as 3 percent every 3 months), overall keeping .
Agreed ValueInsurer and Insured agree on the limit of insurance so that in the future when a loss occurs it will be paid by insurer
Replacement CostA replacement cost is the cost to replace an asset of a company at the same or equal value, and the asset to be replaced could be a building, investment securities, accounts receivable or liens
SubrogationThe right for an insurer to legally pursue a third party that caused an insurance loss to the insured
Waiver of Subrogationcontractual provision/endorsement where one party agrees to limit the rights of its own insurance carrier and usually pays an additional premium for a special policy endorsement allowing for coverage under such a situation

Assignment 2 - 3

Question Answer
RatePrice per exposure unit for insurance
Loss CostsThe portion of the rate that covers projected loss payments and loss adjustment expenses
Commercial Lines Manual(CLM)contains rating procedures and loss costs for rating ISO coverages
Specific RatesIndividual commercial rates developed to reflect the unique characteristics of an insured or the insured property
Class RatingGroups insureds with similar loss exposures into rating classes and applies same rate to all insureds in a rating category or rating class

Assignment 3 - 1

Question Answer
Business Income InsuranceInsures against loss of business income directly resulting from necessary suspension of business following direct damage to real or personal property by a covered cause of loss
Continuing ExpensesExpenses that continue even after a Business interruption ex. payroll, taxes, debt repayments
Non continuing ExpensesExpenses that do not continue after a business interruption
Civil AuthorityCoverage for 4 weeks after first 72 hours of damage to the premises if prohibited as a result of an insured peril elsewhere, maximum period of coverage can be extended to 60, 90, or 180 days by endorsement
Alterations and new buildingsCovers delay in beginning operations resulting from damage by a covered cause of loss to new buildings or structures, alterations or additions to existing buildings, or machinery or building materials used in construction, alterations or additions

Assignment 3 - 2

Question Answer
Extended Business Income(EBI)Covers business income loss from the time of operations resume for up to 60 days or until business is back to normal , whichever is less.
Interruption of Computer OperationsCovers up to $2,500 of business income loss and extra expense upon the suspension of business operations due to an interruption of computer operations resulting from damage to electronic data caused by a covered cause of loss
Extended Period of Indemnityincreases the automatic 60 days' extended business income coverage up to 730 days (two years)
Maximum Period of IndemnitySuspends coinsurance but limits coverage to the lesser of loss incurred within 120 days (about 3-4 months) or the policy limit
Monthly Limit of IndemnitySuspends coinsurance , but limits payment in each 30 day period to the policy limit times the fraction shown in the declarations (1/3, 1/4, or 1/6 corresponds to restoration period of 3, 4, or 6 months

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Assignment 4 - 1

Question Answer
Commercial Crime InsuranceCovers money and securities against numerous perils and/or other property against specified crime perils
Discovery Formcovers losses discovered during policy period, even though they may have occurred before policy period
Retroactive date endorsementDate usually provided on a claims made policy but not required, the beginning period of insurance coverage
Loss Sustained Formcovers losses that occurred during the policy period and are discovered no later than one year after policy expiration
Financial Institution Bondsinsurance policies that cover the crime loss exposures of financial institutions

Assignment 4 - 2

Question Answer
Computer and Funds Transfer Fraudcovers loss resulting directly from computer fraud that results in the transfer of money securities, and other property or the debt or deletion of the insured's account at a financial institution. Furthermore covers loss resulting from fraudulent instructions that cause a financial institution to debit the insured's account and transfer money or securities from that account
Messengerany insured, relative, partner, member, or employee with care and custody of the property outside the premises
Occurrenceincludes an individual and isolated act, the combined total of all separate acts (related or not) or a series of acts
Joint InsuredThe first named insured acts as agent for all insured's
Breakdowndirect physical loss to covered equipment that operates under pressure or that controls, transmits, or uses mechanical or electrical power

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