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43 Cards in this Set

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Additional Coverages
Coverage for indirect losses that would not otherwise be covered by the CP policy.
Agreed Value
Optional coverage that provides a predetermined amount in case of a total loss.
Bailee
One who is charged with the care of the property of another. For example, a garage is bailee of a customer’s (bailor’s) car (the bailment) and a jeweler is a bailee of customer’s jewelry while in for repair or appraisal. There are various standards of care that a bailee must meet, depending upon whether the bailment is gratuitous or a bailment for hire (paid).
Building
The building or structure described. A building must have a roof and four walls
Business Personal Property
Personal property owned and used in the business of the named insured, including personal property of others in the care, custody or control of the named insured.
Collapse
“An abrupt falling down or caving in.” This falling down or caving in may be of a building or any part of a building.
Commercial Property Policy
The principal contract for insuring the building and business personal property exposures of commercial insureds. Generally referred to in this course as the “CP policy.”
Computer Virus
An unauthorized code into a computer.
Concurrent Causation
To avoid unintended insurance recovery in situations that involve an excluded peril and a non-excluded peril, current forms contain concurrent causation exclusions; concurrent causation is a legal theory finding coverage for loss or damage to property if such loss or damage is caused by more than one peril, one of which is excluded under the terms of the policy and one of which is not excluded.
Concurrent Causation Doctrine
Holds that losses are covered if caused jointly by an excluded peril, such as flooding or earth movement, and some other peril not excluded by the policy, such as negligent construction.
Concurrent Causation Exclusions
Exclusions added to modern property policies in response to litigation activity involving the concurrent causation doctrine. They are designed to avoid unintended insurance recovery in situations that involve damage that can be said to be caused by both an excluded peril and a nonexcluded peril. Concurrent causation is a legal theory finding coverage for loss or damage to property if such loss or damage is caused by more than one peril, one of which is excluded under the terms of the policy and one of which is not excluded.
Consequential Loss
Indirect loss arising out of direct damage to property, such as spoilage of food following lighting damage to a freezer unit.
Coverage Extensions
Additional insurance for things already covered under the CP policy.
Debris Removal
Coverage for the expense of removing debris of covered property that has been damaged by a covered cause of loss.
Delay; Loss Of Use; Loss Of Market
Indirect losses that are the result of a covered loss, such as a restaurant losing customers, with the attendant revenue, while rebuilding after a fire.
Direct Damage
Damage directly caused by a covered cause of loss.
Endorsement
An attachment to a basic policy that becomes part of the policy and modifies coverage. Endorsements can add, delete, or modify provisions in the basic policy.
Functional Valuation
An alternative valuation method that provides for the replacement of a scheduled building with similar property that performs the same function but is less costly.
Increased Cost Of Construction
Coverage for the additional costs of complying with enforcement of an ordinance or law regulating the construction or repair of buildings after a loss.
Indirect Or Consequential Damage
Damage that arises as a result of a direct loss – such as loss of income when a business must shut down due to a fire.
Inflation Guard
A provision by which the limits of coverage are increased on a regular basis by a designated percentage in order to offset increasing building costs associated with inflation.
Intangible Property
Property that cannot be seen or felt – such as customer records, patents, and trademarks.
Liberalization
A broadening of coverage without an added charge to the insured.
Named Perils
A specific list of covered causes of loss, such as fire, lightning, or wind, contrasted to open perils, which provides coverage for any damage not otherwise excluded.
Open Perils
Property coverage that applies to risks of loss on a general basis, in contrast to policies that cover specifically identified (named) perils. Formerly known as “all risks” coverage.
Permanently Installed
A piece of property that is set up for use and intended to remain in the same place without fundamental change.
Personal Effects
Items usually worn or carried on a person.
Personal Property
All property other than real estate.
Physical Damage
What’s covered by property insurance policies.
Prosecution Or Abatement Policies
Insurance policy that pays for offensive litigation against a patent infringer.
Revenue Stream
What is protected by e-policies.
Separation Of Coverage
The various categories of business personal property (stock, machinery and equipment, furniture, fixtures, tenant’s improvements and betterments) may be assigned individual limits of insurance through the use of this endorsement.
Sinkhole
A hole in the ground created when water wears upon limestone or dolomite.
Structure
A broader term than building. Anything that is constructed.
Subrogation
The insurer’s right to collect payment from the ultimate wrongdoer.
Valuation
The method used to place a value on damaged property. What is the value of e-Property and Intellectual Property?
Vandalism
The willful and malicious damage to or destruction of covered property.
The commercial property policy covers business personal
property (BPP) in the following locations:
• In or on the building described in the declarations; or
• In the open (or in a vehicle) within 100 feet of the
described premises.
The CPP defines seven classes of BPP as covered:
1. Furniture and fixtures.
2. Machinery and equipment.
3. Stock.
4. All other personal property owned by you and used in
your business.
5. Labor, materials or services furnished or arranged by the
named insured on personal property of others.
6. Use interest as tenant in improvements and betterments.
7. Leased personal property for which the insured has a
contractual responsibility to insure.
Personal Property of Others
The final category of covered property is personal property
of others in the insured’s care, custody, or control. The property
must be on, in, or within 100 feet of the premises. Any loss to
property of others is adjusted for the account of the owner of the
property.
Common policy conditions form IL 00 17 contains six conditions that must be incorporated into any CP policy.
These conditions are:
A. Cancellation,
B. Changes,
C. Examination of your Books and Records,
D. Inspection and Surveys,
E. Premiums, and
F. Transfer of Your Rights and Duties Under This Policy.
The Insured’s Duties in the Event of Loss condition lists eight things that an insured must do in the event of loss or damage under the policy. The policy specifies that the insured must:
1. Notify police if a law was broken.
2. Send the insurance company a prompt notice of loss, including a description of the property.
3. Provide a description of how, when, and where the loss or damage took place as soon as possible.
4. Protect the covered property from any further damage and keep track of the expenses necessary to protect the covered property for consideration in the settlement of the claim.
5. Compile an inventory of damaged and undamaged property if the insurer so requests.
6. Allow the insurer to inspect the property, including the insured’s books and records.
7. Submit a signed, sworn proof of loss if requested within sixty days after the insurer’s request.
8. Cooperate with the insurer in the investigation or settlement of the claim.
The loss payment condition gives the insurer four options for paying for a covered loss:
1. The value of the property. The insurer will determine the value of the damaged property “in accordance with the Valuation Condition” (to be discussed shortly).
2. The cost to repair or replace the damaged property. Any insurance recovery for any extra costs due to the operation of building or zoning laws is excluded.
3. The insurer may take the property at an agreed or appraised value.
4. The insurer may repair, rebuild or replace the property with “like kind and quality.” This option also excludes any extra costs due to the operation of building laws.