Cpcu 551 - Trouble Concepts

Front 1

Cancellation provisions in the ISO Common Policy Conditions form are nearly always...

Back 1

superceded by state law.

Front 2

Regarding the Other Insurance condition of the CPP conditions, if all the terms, provisions, and conditions are the same on both policies, then...

Back 2

Each insurer pays its share on a pro-rata basis

Front 3

These causes of loss are NOT allowed on a a vacant building after 60 days

Back 3

- Vandalism
- Sprinkler leakage
- Building glass breakage
- Water damage
- Theft
- Attempted theft

Front 4

The Building & Personal Property Coverage form is best used to insure...

Back 4

Any combination of Building, Your Personal Property, or Personal Property of Others

Front 5

Which items would be considered Your Business Personal Property?

Back 5

- Furniture and fixtures
- Machinery and equipment
- Stock
- All other personal property owned by you and used in your business
- Labor, materials, or service furnished or arranged by you on personal property of others
- Your use interest as a tenant in improvements or betterments
- Leased Personal property that you have a contractual responsibility to insure, unless otherwise provided for under Personal Property of Others

Front 6

Bridges, wharves, piers, and docks are initially excluded from the Building and Personal Property Coverage Form becuase

Back 6

They require careful underwriting

Front 7

Foundations or pilings and underground pipes and flues are initially excluded from the Building and Personal Property Coverage Form because

Back 7

They reduce the amount of insurance needed to satisfy the coinsurance condition.

Front 8

Coverage extensions under the Building and Personal Property Coverage Form (BPP) differ from additional coverages in that

Back 8

Coverage extensions include up to $100,000 of business personal property coverage at most newly acquired locations.

Front 9

T or F: BPP coverage extensions apply only if at least 80 percent coinsurance or a value reporting period symbol is shown in the declarations.

Back 9

True.

Front 10

BPP Coverage Extensions

Back 10

* Newly Acquired or Constructed Property
* Personal Effects & Property of Others
* Valuable Papers and Records (Other than Electronic Data)
* Property Off-Premises
* Outdoor Property
* Non-Owned Detached Trailers

Front 11

Regarding limits and deductibles in the BPP, except for the additional coverages for pollution cleanup and removal and electronic data, ...

Back 11

None of the BPP coverages are subject to an aggregate limit capping the amount recoverable under that coverage each policy year.

The deductible applies separately to each scheduled limit when an occurrence involves loss to two or more items over covered property.

Front 12

The BPP states that the most the insurer will pay in any one occurrence is...

Back 12

The applicable limit of insurance shown in the policy declarations.

The BPP limits apply separately to each occurrence.

Front 13

Within the Building and Personal Property Coverage Form, improvements and betterments are sometimes valued on...

Back 13

a pro-rata basis that equals neither ACV nor replacement cost.

Front 14

When analyzing what deductible amount to choose for its Building and Personal Property Coverage Form (BPP), an insured should consider...

Back 14

If the items on the BPP will be listed separately or on a blanket basis.

Front 15

The BPP states that when an occurrence involves loss to two or more items of covered property that insured for separate limits, the losses...

Back 15

cannot be combined in determining the application of the deductible.

Front 16

Standard valuation for most property covered by the BPP

Back 16

ACV

Front 17

T or F: Fire that is a result of war and military action is included as a coverage for damage to a building under the Basic or Broad forms.

Back 17

FALSE.

Front 18

BPP Exclusions subject to anti-concurrent causation language

Back 18

* Ordinance or Law
* Earth Movement
* Governmental Action
* Nuclear Hazard
* Utility Services
* War and Military Action
* Water
* Fungus, Wet Rot, Dry Rot, and Bacteria

Front 19

BPP Exclusions NOT subject to anti-concurrent causation language

Back 19

* Artificially generated electrical energy
* Explosion of steam boilers
* Mechanical breakdown
* Neglect

Front 20

The War and Military Action exclusion _________ coverage for a building fire caused by an act of war.

Back 20

Eliminates.

This is true even though fire is a covered cause of loss. In contrast, some of the exclusions make an exception for fire and, in some cases, other perils that ensue from the excluded loss. For instance, the Earth Movement exclusion states that fire or explosion loss resulting form an earthquake is covered.

Front 21

The Functional Building Valuation endorsement on the BPP provides coverage that deletes...

Back 21

The coinsurance condition that is applied to building coverages.

Front 22

The optional Manufacturer's Selling Price (Finished "Stock" Only) endorsement alters the valuation approach used for unsold finished inventory to...

Back 22

The same valuation approach used for sold-but-not-delivered inventory. (i.e., at selling price, less any discounts and expenses that the insured otherwise would have had).

Front 23

An advantage of blanket insurance for an insured business that has several locations is that blanket insurance...

Back 23

Covers additional debris removal if the loss only occurs at one location.

Front 24

Blanket insurance is a preferred coverage form over specific insurance because...

Back 24

Blanket insurance covers two or more types of property in one or more buildings.

It also covers situations with one type of property in one or more separately rated buildings.

Front 25

If separate locations are involved that are not subject to the same loss, the danger of underinsurance is greatly reduced by choosing this commercial property coverage option:

Back 25

Combining the agreed value option with blanket insurance.

Front 26

ISO Spoilage Coverage endorsement provides coverage for...

Back 26

Damage to perishable stock due to power outages; on-premises breakdown (including spoilage resulting from change in temperature or humidity caused by mechanical breakdown); or contamination of the insured's refrigerating, cooling, or humidity control equipment.

Front 27

The Condominium Association Coverage Form is designed for insuring...

Back 27

The building and business personal property loss exposures of condominium associations. (Including building, your business personal property, and personal property of others.

Covers fixtures, improvements, alterations, and appliances (refrigerating, ventilating, cooking, dishwashing, laundering, and housekeeping appliance kept within the units) but ONLY if the condo association agreement requires the association to insure them.

Front 28

Commonality between the Standard Property Policy (SPP) and the Building and Personal Property (BPP) Coverage Forms with basic perils:

Back 28

They can both exclude the perils of windstorm and hail.

Front 29

The Standard Property Policy (SPP) has more restrictive conditions than the BPP conditions. These include:

Back 29

- Vacancy and unoccupancy (will not pay for loss or damage by any peril if the building has been vacant or unoccupied for more than 60 days)
- INcrease in hazard (coverage is suspended during any period in which the hazard has been increased by means within the named insured's knowledge and control.
- Cancellation (the insurer may cancel the policy by providing only 5 days advance notice.)

Front 30

Legal Liability Coverage Form

Back 30

A commercial property coverage form that provides legal liability coverage on buildings or personal property of others in the insured's care, custody, or control.

Front 31

T or F: Using the legal liability coverage form provides you with a lower premium rate than what it would cost to purchase direct property insurance ont he covered real property.

Back 31

True. This is true because the insurer is obligated to pay only when the insured is liable for the damage.

Front 32

The Condominium Association Coverage Form is designed to insure the building and business personal proeprty loss exposures of condominium associations. In addition to the building and the association's business perosnal property, this coverage form also covers which major category of property?

Back 32

Personal property of others

Front 33

Property covered by the Builders Risk Coverage Form

Back 33

The building or structure being built, building materials and supplies intended to become a permanent part of the building, and temporary structures such as scaffolding and forms.

Coverage to fire (and, I assume, other attached causes of loss) is covered.

Front 34

Property Covered by the General Property Form (NFIP)

Back 34

Coverage A - Building Property
Coverage B - Personal Property
Coverage C - Other Coverages
Coverage D - Increased Cost of Compliance