CIC COMMERCIAL PROPERTY END OF COURSE
CORRECT QUESTIONS AND ANSWERS SURE A+
✔✔Specific coverage - ✔✔One location, specific amount of insurance applies to each
type of property
✔✔Scheduled coverage - ✔✔Two or more locations , still a specific amount of
insurance applied to each type of property at each separate location scheduled
✔✔Blanket coverage - ✔✔1. One limit that applies to more than one type of property.
Building $500,000 BPP $300,000 blanket on building and ybbp $800,00
2. One limit that applies to one or more types of property.. all building values and bpp
added (no matter where it is located) to equal blanket amount
✔✔Blanket coverage advantages - ✔✔1. Can apply Ins where needed
2. Handles fluctuating values
3. Reporting forms are easier
4. Insured my have 100% insurance to value but only carrying 90% for all locations
combined
✔✔Disadvantages for blanket coverage - ✔✔1. 90-100% co insurance required
2. Underwriting restrictions
,3. Statement of values required
4. Rates for one year only
5. Same causes of loss for all property
6. List all ownership interest w multiple locations
✔✔Limitation on loss settlement- blanket insurance (margins clause) - ✔✔Basically a
percentage that says you can pay more than this % for a blanketed building... ex:
buildings 1-3 are on a blanket of $4,500,000.. combined values of these buildings are
$5,000,000. Co insurance requirement of 90%.. no penalty. Value of building 1
according to statement of values is $1,000,000 margins clause % is 110% maximum
loss payable to building is $1,100,000 ($1,000,000 x 1.10)
✔✔Peak season endorsement - ✔✔Prorated amount for higher inventory for specific
dates (ex: flower shop, peak seasons are Mother's Day & weddings)
✔✔Value reporting form - ✔✔Fluctuating personal property values that are
unpredictable.. goes of of actual values.. insured needs to be willing to file reports on a
regular basis. Eligible property is personal property of named insured & others & stock
only.
✔✔Reporting provisions - ✔✔New policy first report due 60 days.. renewal policy firs
report due 30 days, all subsequent reports due 30 days.
✔✔Correct reporting - ✔✔Even though loss amount is higher than reported amount, as
long as reported amount is accurate and on time the loss will be paid accurately
✔✔Full reporting - ✔✔Must be accurate if not accurate the did/should formula applies
(reported/required) x loss = recovery (up to limit of insurance)
✔✔Failure to submit reports (first report) - ✔✔Policy will not pay more than 75% of what
it would otherwise have paid
✔✔Subsequent reports late - ✔✔Policy will pay no more than values shown. On the
most recent report at the most recent location (reported auagust of $300,000.. no
reports then loss in December of $700,000 amount paid would be $300,000)
✔✔Under reported - ✔✔Policy pays the percentage reported
✔✔In excess report - ✔✔Policy limit applies (will pay up to but no more than)
✔✔6 additional coverages in BPP - ✔✔1. Debris removal
2. Preservation of property
3. Fire Department service charge
4. Pollutant Clean up and removal
5. Increased cost of construction
, 6. Electronic Data
✔✔when is Debris REmoval covered - ✔✔when dealing with covered property as well
as some other property on the described premises from a covered cause of loss. must
be reported within 180 days of the direct physical loss or damage
✔✔when is debris removal not covered - ✔✔not covered mproperty
deposits of mud or earth
extract pollutants from land or water
polluted land or water
✔✔Debris Removal Equation - ✔✔(Paid Loss+ Deductible)x25%+$25,000= Debris
Removal
✔✔example of debris removal limit - ✔✔Limit of Insurance $90,000
Ded $500
Amount of loss: $50,000
Amount of loss Payable: $49,500
(50,000-500)
Debris Removal Expense: $10,000
Debris Removal Expense Payable: $10,000
($10,000 is 20% of $50,000)
✔✔Debris Removal Additional Insurance endorsement - ✔✔This endorsement provides
a way to increase the 25000 for additional debris removal expense
Would want to consider for buildings attached to others or containing pollutants or
hazardous substances. (anything that might increase debris removal)
✔✔Preservation of Property - ✔✔if it is necessary to move covered property from a
described premises to prevent further damage by a covered cause of loss we will pay
for any direct physical loss or damage to the property while:
1. It is being moved or while temporarily stored at another location
2. Only if the loss or damage occurds within 30 days after the property is first moved
DOES NOT INCREASE LIMIT OF INSURANCE
✔✔Example of preservation of property - ✔✔there is a large wild fire that is reaching an
office building, the owner loads all of the computers and furniture onto a truck to move it
in order to preserve the property. while driving he gets into an accident and all of the
property is ruined, this would be covered because it was in transit.
✔✔Additional coverages: Fire department service charge - ✔✔$1,000 fire department
service charge for EACH PROPERTY.
no matter how may departments arrive or what services are provided max of $1000.
CORRECT QUESTIONS AND ANSWERS SURE A+
✔✔Specific coverage - ✔✔One location, specific amount of insurance applies to each
type of property
✔✔Scheduled coverage - ✔✔Two or more locations , still a specific amount of
insurance applied to each type of property at each separate location scheduled
✔✔Blanket coverage - ✔✔1. One limit that applies to more than one type of property.
Building $500,000 BPP $300,000 blanket on building and ybbp $800,00
2. One limit that applies to one or more types of property.. all building values and bpp
added (no matter where it is located) to equal blanket amount
✔✔Blanket coverage advantages - ✔✔1. Can apply Ins where needed
2. Handles fluctuating values
3. Reporting forms are easier
4. Insured my have 100% insurance to value but only carrying 90% for all locations
combined
✔✔Disadvantages for blanket coverage - ✔✔1. 90-100% co insurance required
2. Underwriting restrictions
,3. Statement of values required
4. Rates for one year only
5. Same causes of loss for all property
6. List all ownership interest w multiple locations
✔✔Limitation on loss settlement- blanket insurance (margins clause) - ✔✔Basically a
percentage that says you can pay more than this % for a blanketed building... ex:
buildings 1-3 are on a blanket of $4,500,000.. combined values of these buildings are
$5,000,000. Co insurance requirement of 90%.. no penalty. Value of building 1
according to statement of values is $1,000,000 margins clause % is 110% maximum
loss payable to building is $1,100,000 ($1,000,000 x 1.10)
✔✔Peak season endorsement - ✔✔Prorated amount for higher inventory for specific
dates (ex: flower shop, peak seasons are Mother's Day & weddings)
✔✔Value reporting form - ✔✔Fluctuating personal property values that are
unpredictable.. goes of of actual values.. insured needs to be willing to file reports on a
regular basis. Eligible property is personal property of named insured & others & stock
only.
✔✔Reporting provisions - ✔✔New policy first report due 60 days.. renewal policy firs
report due 30 days, all subsequent reports due 30 days.
✔✔Correct reporting - ✔✔Even though loss amount is higher than reported amount, as
long as reported amount is accurate and on time the loss will be paid accurately
✔✔Full reporting - ✔✔Must be accurate if not accurate the did/should formula applies
(reported/required) x loss = recovery (up to limit of insurance)
✔✔Failure to submit reports (first report) - ✔✔Policy will not pay more than 75% of what
it would otherwise have paid
✔✔Subsequent reports late - ✔✔Policy will pay no more than values shown. On the
most recent report at the most recent location (reported auagust of $300,000.. no
reports then loss in December of $700,000 amount paid would be $300,000)
✔✔Under reported - ✔✔Policy pays the percentage reported
✔✔In excess report - ✔✔Policy limit applies (will pay up to but no more than)
✔✔6 additional coverages in BPP - ✔✔1. Debris removal
2. Preservation of property
3. Fire Department service charge
4. Pollutant Clean up and removal
5. Increased cost of construction
, 6. Electronic Data
✔✔when is Debris REmoval covered - ✔✔when dealing with covered property as well
as some other property on the described premises from a covered cause of loss. must
be reported within 180 days of the direct physical loss or damage
✔✔when is debris removal not covered - ✔✔not covered mproperty
deposits of mud or earth
extract pollutants from land or water
polluted land or water
✔✔Debris Removal Equation - ✔✔(Paid Loss+ Deductible)x25%+$25,000= Debris
Removal
✔✔example of debris removal limit - ✔✔Limit of Insurance $90,000
Ded $500
Amount of loss: $50,000
Amount of loss Payable: $49,500
(50,000-500)
Debris Removal Expense: $10,000
Debris Removal Expense Payable: $10,000
($10,000 is 20% of $50,000)
✔✔Debris Removal Additional Insurance endorsement - ✔✔This endorsement provides
a way to increase the 25000 for additional debris removal expense
Would want to consider for buildings attached to others or containing pollutants or
hazardous substances. (anything that might increase debris removal)
✔✔Preservation of Property - ✔✔if it is necessary to move covered property from a
described premises to prevent further damage by a covered cause of loss we will pay
for any direct physical loss or damage to the property while:
1. It is being moved or while temporarily stored at another location
2. Only if the loss or damage occurds within 30 days after the property is first moved
DOES NOT INCREASE LIMIT OF INSURANCE
✔✔Example of preservation of property - ✔✔there is a large wild fire that is reaching an
office building, the owner loads all of the computers and furniture onto a truck to move it
in order to preserve the property. while driving he gets into an accident and all of the
property is ruined, this would be covered because it was in transit.
✔✔Additional coverages: Fire department service charge - ✔✔$1,000 fire department
service charge for EACH PROPERTY.
no matter how may departments arrive or what services are provided max of $1000.
