CIC Commercial Property Exam
Questions and Answers5
Explain to Debbie how the Debris Removal Additional Coverage will respond in the event of a
loss, as well as her options for increasing her coverage through endorsement. - ANSWERS--As
long as it was during the policy period and debris removal expenses are reported to the carrier,
within 180 days of the direct physical loss, then the carrier will pay 25% of the amount the
insured pays for the loss + deductible amount, not to exceed the policy limit.
-If the policy limit of insurance is exhausted or the debris removal exceeds the limit, an
additional $25,000 will be provided by the policy.
-If no covered property has sustained physical loss or damage, the policy will pay a max. of
$5,000 per location
-You can increase the $25k limit by adding the endorsement Debris Removal Additional
Insurance.
A Named Insured has a commercial property policy (CPP) written on a Value Reporting Form
with a monthly reporting period on the Business Personal Property. The insured has a limit of
$500k on BPP. After 4 months, the Named Insured, who has never submitted a report, has a
$10k covered loss to BPP. How much of the covered loss will the Named Insured be able to
collect? - ANSWERS-$7,500
Not submitting any reports causes a penalty. The company will only pay for $75 of the covered
loss
, The Named Insured has a CPP with 80% coinsurance on a $750k building. They purchase a
warehouse valued at $300k. escribe the Extend of the coverage for the newly acquired property
under the BPPCF.
Part 2.
Describe any endorsements that might modify coverage for newly acquired property. -
ANSWERS-- The policy provides coverage for newly acquired property as a coverage extension
up to $250k but only for 30 days, until values are reported, or until the policy expires, whichever
first
-The Newly Acquired or Constructed Property-Increased Limit
This endorsement allows the insured to replace the $250k limit with a new limit shown on the
schedule
Tom has put up a new outdoor sign for his business that is valued at $5,000. It is completely
damaged by a covered cause of loss. How much will Tom receive for the loss, disregarding any
deductibles? Are there any endorsements that would have benefited Tom in this scenario? -
ANSWERS-He would receive $2,500 for outdoor signs.
Tom could add the endorsement Outdoor Signs to insure outdoor signs for additional limits
The Named Insured has a CPP with a building limit of $1 million. The building has been vacant
for 3 months. What would happen if there was a loss? - ANSWERS-There is no coverage after
the building has been vacant for more than 60 days for certain covered causes of loss and the
payment on others is reduced by 15%
Read the following scenarios and identify the endorsement that would best meet the needs of
the client described. Also state which loss condition the endorsement modifies.
1. The named insured owns an older building and wants to insure it for a limit that reflects the
use of less costly materials in the event the building suffers a significant loss.
Questions and Answers5
Explain to Debbie how the Debris Removal Additional Coverage will respond in the event of a
loss, as well as her options for increasing her coverage through endorsement. - ANSWERS--As
long as it was during the policy period and debris removal expenses are reported to the carrier,
within 180 days of the direct physical loss, then the carrier will pay 25% of the amount the
insured pays for the loss + deductible amount, not to exceed the policy limit.
-If the policy limit of insurance is exhausted or the debris removal exceeds the limit, an
additional $25,000 will be provided by the policy.
-If no covered property has sustained physical loss or damage, the policy will pay a max. of
$5,000 per location
-You can increase the $25k limit by adding the endorsement Debris Removal Additional
Insurance.
A Named Insured has a commercial property policy (CPP) written on a Value Reporting Form
with a monthly reporting period on the Business Personal Property. The insured has a limit of
$500k on BPP. After 4 months, the Named Insured, who has never submitted a report, has a
$10k covered loss to BPP. How much of the covered loss will the Named Insured be able to
collect? - ANSWERS-$7,500
Not submitting any reports causes a penalty. The company will only pay for $75 of the covered
loss
, The Named Insured has a CPP with 80% coinsurance on a $750k building. They purchase a
warehouse valued at $300k. escribe the Extend of the coverage for the newly acquired property
under the BPPCF.
Part 2.
Describe any endorsements that might modify coverage for newly acquired property. -
ANSWERS-- The policy provides coverage for newly acquired property as a coverage extension
up to $250k but only for 30 days, until values are reported, or until the policy expires, whichever
first
-The Newly Acquired or Constructed Property-Increased Limit
This endorsement allows the insured to replace the $250k limit with a new limit shown on the
schedule
Tom has put up a new outdoor sign for his business that is valued at $5,000. It is completely
damaged by a covered cause of loss. How much will Tom receive for the loss, disregarding any
deductibles? Are there any endorsements that would have benefited Tom in this scenario? -
ANSWERS-He would receive $2,500 for outdoor signs.
Tom could add the endorsement Outdoor Signs to insure outdoor signs for additional limits
The Named Insured has a CPP with a building limit of $1 million. The building has been vacant
for 3 months. What would happen if there was a loss? - ANSWERS-There is no coverage after
the building has been vacant for more than 60 days for certain covered causes of loss and the
payment on others is reduced by 15%
Read the following scenarios and identify the endorsement that would best meet the needs of
the client described. Also state which loss condition the endorsement modifies.
1. The named insured owns an older building and wants to insure it for a limit that reflects the
use of less costly materials in the event the building suffers a significant loss.
