CPCU 551 Exam Questions And Answers
Verified 100% Correct
What is the payment under BPP if the insured does not meet
the coinsurance requirement? - ANSWER -
Did/shouldxlossdeductible
(should = value of covered property x coinsurance %)
A small business owner purchased an unendorsed Building
and Personal Property Coverage Form (BPP). The limit on the
policy is $500,000 which meets the coinsurance
requirements. The deductible is $1,000. The total value of the
insured property is $525,000. The insured suffered a $510,000
covered loss to the property. What will the insurer pay? -
ANSWER -500K. The deductible comes off the loss not the
limit of insurance.
How much coverage does the Causes of Loss—Special Form
provide under its Additional Coverages and Extensions for
Property in Transit? - ANSWER -It provides $5,000 of
additional insurance for the insured's property in a motor
vehicle.
A disgruntled employee of the insured returned to his
employer's store late at night and broke into the locked
registers, taking the minimal morning cash set up. The
employee also damaged the lock boxes and took some store
merchandise. Which types of property in this scenario would
be covered under the Causes of Loss—Special Form? -
ANSWER -The damaged registers and lock boxes would be
covered as items stolen by employees are not covered.
,What condition must be met in order for the 6 BPP coverage
extensions to apply? - ANSWER -80% or higher coinsurance
or value reporting applies as additional insurance, no
coinsurance. Whatever the **** that means.
Name the 10 special form exclusions - ANSWER
maintenance, employee dishonesty, voluntary parting,
unauthorized instructions, inventory shortage, unexplained
disappearance, concurrent causation (weather,
acts/decisions, faulty planning), pollutants, production
errors.
Whats the difference between basic/broad form vs. special
form? - ANSWER -Basic/Broad forms are "named peril"
forms whereas Special form provides "all risk" coverage.
What are the main things that special form covers that broad
form does not cover? - ANSWER -theft, friendly fire, vehicle
damage, and water damage caused by ice dams
What are the four basic things covered under board form? -
ANSWER -falling objects, weight of snow, ice, or sleet, water
damage (w/ exclusions) additional coverage-collapse
what is the coinsurance requirement for blanket insurance? -
ANSWER -90%
,When does the coverage period begin for the bPP limited
international coverage endorsement? - ANSWER -When the
property LEAVES the insured's premises.
Ordinance or Law Coverage Endorsement... a? b? c? -
ANSWER -a - covers loss to undamaged portion that is not
permitted to be used. b - covers cost to demolish undamaged
portion/debris. c - covers increased cost to repair up to
standards (within 2 yrs)
SCF Company manufactures candy and has been in business
for over 80 years in the same building. Because of the
change in building materials and building codes, an
endorsement the owner should consider for replacing the
building in the event of a loss is - ANSWER -Functional
Valuation method, which also includes ordinance and law
coverage
True or False:
Blanket Insurance covers additional debris removal if the
loss only occurs at one location. - ANSWER -True
True or False:
Under the Ordinance or Law Coverage Endorsement, a
replacement building may be on the same premises or
elsewhere, but it must be intended for occupancy similar to
the damaged premises. - ANSWER -True
, The Brands and Labels endorsement - ANSWER -Cover the
additional costs to the insured when they are preparing
salvage items for sale.
Delta is a manufacturer that makes seasonal products and
insures its business personal property with a Building and
Personal Property Coverage Form (BPP) with a Value
Reporting Form. The limit of insurance is $10,000,000 with a
$10,000 deductible. Reports are due monthly. Delta suffered a
business personal property loss of $500,000 caused by an
insured peril but the prior month's report made was $400,000.
The actual value of business personal property at the time of
this last report was $500,000. What amount would Delta's
insurer pay for the described loss? - ANSWER -Delta's insurer
would pay $390,000. ($400,000 / $500,000) X $500,000
− $10,000 = $390,000
Computers XYZ Inc. that is sending a sales representative to
Mexico to unveil a new product prototype at a trade show.
The event will be held in the town square in the capital of
Mexico. The representative will be in the country with the
new product for an indeterminate amount of time in the event
that more publicity opportunities arise. Computers XYZ has a
Business Personal Property—Limited International Coverage
endorsement attached to its Building and Personal Property
Coverage Form (BPP). Will the endorsement indemnify
Computers XYZ if the product prototype is destroyed by a
covered peril? - ANSWER -No, because there is no return
date indicated for the representative or the prototype.
Verified 100% Correct
What is the payment under BPP if the insured does not meet
the coinsurance requirement? - ANSWER -
Did/shouldxlossdeductible
(should = value of covered property x coinsurance %)
A small business owner purchased an unendorsed Building
and Personal Property Coverage Form (BPP). The limit on the
policy is $500,000 which meets the coinsurance
requirements. The deductible is $1,000. The total value of the
insured property is $525,000. The insured suffered a $510,000
covered loss to the property. What will the insurer pay? -
ANSWER -500K. The deductible comes off the loss not the
limit of insurance.
How much coverage does the Causes of Loss—Special Form
provide under its Additional Coverages and Extensions for
Property in Transit? - ANSWER -It provides $5,000 of
additional insurance for the insured's property in a motor
vehicle.
A disgruntled employee of the insured returned to his
employer's store late at night and broke into the locked
registers, taking the minimal morning cash set up. The
employee also damaged the lock boxes and took some store
merchandise. Which types of property in this scenario would
be covered under the Causes of Loss—Special Form? -
ANSWER -The damaged registers and lock boxes would be
covered as items stolen by employees are not covered.
,What condition must be met in order for the 6 BPP coverage
extensions to apply? - ANSWER -80% or higher coinsurance
or value reporting applies as additional insurance, no
coinsurance. Whatever the **** that means.
Name the 10 special form exclusions - ANSWER
maintenance, employee dishonesty, voluntary parting,
unauthorized instructions, inventory shortage, unexplained
disappearance, concurrent causation (weather,
acts/decisions, faulty planning), pollutants, production
errors.
Whats the difference between basic/broad form vs. special
form? - ANSWER -Basic/Broad forms are "named peril"
forms whereas Special form provides "all risk" coverage.
What are the main things that special form covers that broad
form does not cover? - ANSWER -theft, friendly fire, vehicle
damage, and water damage caused by ice dams
What are the four basic things covered under board form? -
ANSWER -falling objects, weight of snow, ice, or sleet, water
damage (w/ exclusions) additional coverage-collapse
what is the coinsurance requirement for blanket insurance? -
ANSWER -90%
,When does the coverage period begin for the bPP limited
international coverage endorsement? - ANSWER -When the
property LEAVES the insured's premises.
Ordinance or Law Coverage Endorsement... a? b? c? -
ANSWER -a - covers loss to undamaged portion that is not
permitted to be used. b - covers cost to demolish undamaged
portion/debris. c - covers increased cost to repair up to
standards (within 2 yrs)
SCF Company manufactures candy and has been in business
for over 80 years in the same building. Because of the
change in building materials and building codes, an
endorsement the owner should consider for replacing the
building in the event of a loss is - ANSWER -Functional
Valuation method, which also includes ordinance and law
coverage
True or False:
Blanket Insurance covers additional debris removal if the
loss only occurs at one location. - ANSWER -True
True or False:
Under the Ordinance or Law Coverage Endorsement, a
replacement building may be on the same premises or
elsewhere, but it must be intended for occupancy similar to
the damaged premises. - ANSWER -True
, The Brands and Labels endorsement - ANSWER -Cover the
additional costs to the insured when they are preparing
salvage items for sale.
Delta is a manufacturer that makes seasonal products and
insures its business personal property with a Building and
Personal Property Coverage Form (BPP) with a Value
Reporting Form. The limit of insurance is $10,000,000 with a
$10,000 deductible. Reports are due monthly. Delta suffered a
business personal property loss of $500,000 caused by an
insured peril but the prior month's report made was $400,000.
The actual value of business personal property at the time of
this last report was $500,000. What amount would Delta's
insurer pay for the described loss? - ANSWER -Delta's insurer
would pay $390,000. ($400,000 / $500,000) X $500,000
− $10,000 = $390,000
Computers XYZ Inc. that is sending a sales representative to
Mexico to unveil a new product prototype at a trade show.
The event will be held in the town square in the capital of
Mexico. The representative will be in the country with the
new product for an indeterminate amount of time in the event
that more publicity opportunities arise. Computers XYZ has a
Business Personal Property—Limited International Coverage
endorsement attached to its Building and Personal Property
Coverage Form (BPP). Will the endorsement indemnify
Computers XYZ if the product prototype is destroyed by a
covered peril? - ANSWER -No, because there is no return
date indicated for the representative or the prototype.
