cpcu 551 assignment 4 Exam
Questions with 100% Correct Answers
| Verified 2026 | ASSURED SUCCESS
E Breakdown insuring agreement - CORRECT ANSWERS The covered cause of loss for the
insuring agreements is "breakdown" to "covered equipment." While the policy definition of
breakdown includes failure of pressure or vacuum equipment, mechanical failure, and electrical
failure, multiple exclusions apply—for example, a computer virus does not qualify as a breakdown,
and vehicles, aircraft, and watercraft (including covered equipment mounted on them) are
excluded
What are the advantages of packaging e breakdown and commercial property coverage - CORRECT
ANSWERS avoiding claims disputes that can arise if the two coverages are written by
separate insurers.
E bdown Property damage insuring agreement - CORRECT ANSWERS - Insurer agrees to
pay for direct dame to covered property (defined more broadly than covered equipment).
- ISO contains loss condition which gives the insurer the right to defent the insured in court (not
duty). Some policies do impose the duty
Expediting Expenses - CORRECT ANSWERS Expenses incurred to speed up the repair or
replacement of covered property. examples are OT wages and overnight shopping charges
what is the difference between expediting expenses and extra expense coverage - CORRECT
ANSWERS Expediting expenses = make repairs faster.
Extra expense coverage = keep the business operating while repairs happen.
Spoilage Damage - CORRECT ANSWERS - Covers spoilage damage to raw materials,
property in process, or finished products while in storage or in the course of being manufactured.
- The spoilage damage must result from lack or excess of power, light, heat, steam, or refrigeration,
and the insured must own or be legally liable for the property.
Insuring Agreements for Time Element Coverages - CORRECT ANSWERS - The loss of
critical equipment can interrupt operations and cause the insured to not just lose business income
but also incur extra expenses.
- Such losses are not covered under regular business income and extra expense forms unless the
applicable causes of loss form have been modified to include breakdown as a covered cause of
loss.
Time element coverage agreements the insured can choose from - CORRECT ANSWERS -
BI Insuring agreement
- Utility Interruption insuring agreement
- Contingent BI Insuring agreement
BI Insuring agreement (EB Time element) - CORRECT ANSWERS 1. The dec page
indicates whether the agreement provides Bi w EE or just EE
, 2. Under this period or festoration continues for 5 consecutive days
Utility Interruption insuring agreement(EB Time element) - CORRECT ANSWERS 1.
Includes loss resulting from breakdown of covered equipment owned or controlled by local or
private utility or distributor.
Contingent BI Insuring agreement(EB Time element) - CORRECT ANSWERS 1. Covers Bi
w. Extra expense or just extra exp arising from bdown of covered equipment that is not owned or
operated by the insured
2. Must be prevent delivery of services or materials to/from insured or result in loss of sales
Newly Acquired Premises - CORRECT ANSWERS - This insuring agreement extends other
coverages provided by the policy to apply at newly acquired premises the insured buys or leases.
- Coverage begins when the insured acquires the property and continues for the number of days
shown in the Declarations for Newly Acquired Premises.
- The insured must inform the insurer in writing of the newly acquired premises as soon as
practicable and agree to pay additional premium determined by the insurer.
Errors and Omissions - CORRECT ANSWERS 1. Errors and omissions (E&O) coverage
commits the insurer to pay for loss or damage not otherwise covered under this form.
2. An error or unintentional omission must be reported and corrected when discovered, and the
policy premium will be adjusted to reflect the date the premises should have been added to the
policy.
3. Many equipment breakdown forms do not contain an E&O provision, but insureds may request
to add it to their property insurance policies.
Brands and Labels - CORRECT ANSWERS 1. . The insurer agrees to pay reasonable costs
the insured incurs in stamping merchandise with the word "Salvage" or removing brands and
labels, but the total
2. The insurer pays for such costs, and the value of the damaged property cannot exceed the
applicable limit of insurance on the property.
Does E Bdown apply to bodily injury to employees? - CORRECT ANSWERS No, that
would be under their workers comp
Does Ebdown cover property of others that's not in the insured's care, custody, or control at a
described location - CORRECT ANSWERS No. For example it wouldn't cover damage to
the neighboring building. The loss to a neighboring building would likely be covered by the
insured's commercial general liability policy.
E Bdown exclusions - CORRECT ANSWERS 1. Common commercial property exclusions
2. Exclusions for perils usually insured in other policies
3. Other exclusions
Common commercial property exclusions (E Bdown) - CORRECT ANSWERS Several
exclusions in the EBP form are comparable to the commercial property exclusions regarding
ordinance or law; earth movement; water; nuclear hazard; war or military action; wear and tear or
gradual deterioration (unless a breakdown occurs); failing to use all reasonable means to save
Questions with 100% Correct Answers
| Verified 2026 | ASSURED SUCCESS
E Breakdown insuring agreement - CORRECT ANSWERS The covered cause of loss for the
insuring agreements is "breakdown" to "covered equipment." While the policy definition of
breakdown includes failure of pressure or vacuum equipment, mechanical failure, and electrical
failure, multiple exclusions apply—for example, a computer virus does not qualify as a breakdown,
and vehicles, aircraft, and watercraft (including covered equipment mounted on them) are
excluded
What are the advantages of packaging e breakdown and commercial property coverage - CORRECT
ANSWERS avoiding claims disputes that can arise if the two coverages are written by
separate insurers.
E bdown Property damage insuring agreement - CORRECT ANSWERS - Insurer agrees to
pay for direct dame to covered property (defined more broadly than covered equipment).
- ISO contains loss condition which gives the insurer the right to defent the insured in court (not
duty). Some policies do impose the duty
Expediting Expenses - CORRECT ANSWERS Expenses incurred to speed up the repair or
replacement of covered property. examples are OT wages and overnight shopping charges
what is the difference between expediting expenses and extra expense coverage - CORRECT
ANSWERS Expediting expenses = make repairs faster.
Extra expense coverage = keep the business operating while repairs happen.
Spoilage Damage - CORRECT ANSWERS - Covers spoilage damage to raw materials,
property in process, or finished products while in storage or in the course of being manufactured.
- The spoilage damage must result from lack or excess of power, light, heat, steam, or refrigeration,
and the insured must own or be legally liable for the property.
Insuring Agreements for Time Element Coverages - CORRECT ANSWERS - The loss of
critical equipment can interrupt operations and cause the insured to not just lose business income
but also incur extra expenses.
- Such losses are not covered under regular business income and extra expense forms unless the
applicable causes of loss form have been modified to include breakdown as a covered cause of
loss.
Time element coverage agreements the insured can choose from - CORRECT ANSWERS -
BI Insuring agreement
- Utility Interruption insuring agreement
- Contingent BI Insuring agreement
BI Insuring agreement (EB Time element) - CORRECT ANSWERS 1. The dec page
indicates whether the agreement provides Bi w EE or just EE
, 2. Under this period or festoration continues for 5 consecutive days
Utility Interruption insuring agreement(EB Time element) - CORRECT ANSWERS 1.
Includes loss resulting from breakdown of covered equipment owned or controlled by local or
private utility or distributor.
Contingent BI Insuring agreement(EB Time element) - CORRECT ANSWERS 1. Covers Bi
w. Extra expense or just extra exp arising from bdown of covered equipment that is not owned or
operated by the insured
2. Must be prevent delivery of services or materials to/from insured or result in loss of sales
Newly Acquired Premises - CORRECT ANSWERS - This insuring agreement extends other
coverages provided by the policy to apply at newly acquired premises the insured buys or leases.
- Coverage begins when the insured acquires the property and continues for the number of days
shown in the Declarations for Newly Acquired Premises.
- The insured must inform the insurer in writing of the newly acquired premises as soon as
practicable and agree to pay additional premium determined by the insurer.
Errors and Omissions - CORRECT ANSWERS 1. Errors and omissions (E&O) coverage
commits the insurer to pay for loss or damage not otherwise covered under this form.
2. An error or unintentional omission must be reported and corrected when discovered, and the
policy premium will be adjusted to reflect the date the premises should have been added to the
policy.
3. Many equipment breakdown forms do not contain an E&O provision, but insureds may request
to add it to their property insurance policies.
Brands and Labels - CORRECT ANSWERS 1. . The insurer agrees to pay reasonable costs
the insured incurs in stamping merchandise with the word "Salvage" or removing brands and
labels, but the total
2. The insurer pays for such costs, and the value of the damaged property cannot exceed the
applicable limit of insurance on the property.
Does E Bdown apply to bodily injury to employees? - CORRECT ANSWERS No, that
would be under their workers comp
Does Ebdown cover property of others that's not in the insured's care, custody, or control at a
described location - CORRECT ANSWERS No. For example it wouldn't cover damage to
the neighboring building. The loss to a neighboring building would likely be covered by the
insured's commercial general liability policy.
E Bdown exclusions - CORRECT ANSWERS 1. Common commercial property exclusions
2. Exclusions for perils usually insured in other policies
3. Other exclusions
Common commercial property exclusions (E Bdown) - CORRECT ANSWERS Several
exclusions in the EBP form are comparable to the commercial property exclusions regarding
ordinance or law; earth movement; water; nuclear hazard; war or military action; wear and tear or
gradual deterioration (unless a breakdown occurs); failing to use all reasonable means to save
