CIC Commercial Property Exam Prep
Questions and Answers5
Endorsements used to modify coverage extensions (6) - ANSWERS-1. newly acquired or
constructed property - increased limit
2. higher limits
3. specified bpp temporarily away from premises
4. additional covered property
5. radio or television antennas
6. trees, shrubs, plants
Explain replacement cost - ANSWERS-- without deduction for depreciation
- claims are paid on acv until repairs or replacements is complete and then difference is paid
- does not apply to pp of others, contents of residence or fine arts
Optional Coverage - RC PP OF OTHERS - ANSWERS-- applies rc to property of others but limited
to the lessor of amount required by contract or RC
Loss Payment options (4) - ANSWERS-1. Pay the value
2. Pay the cost to repair or replace
3. take the property at an agreed or appraised value
4. repair, rebuild or replace with like kind and quality
Vacancy provision - describe and apply - ANSWERS-1. Tenant - does not contain enough BPP to
conduct customary operations
2. owner - must be at least 31% leased and used by lessee to conduct customary operations
, 3. Under construction or renovation are not vacant
4. vacant for 60 consecutive days - theft, vandalism, sprinkler leakage, glass breakage, and
attempted theft are not covered perils
5. all other causes of loss payment is reduced by 15%
Endorsement that modify valuation provision (6) - ANSWERS-1. Manufacturers selling price
(finished stock)
2. market value - stock
3. manufactures consequential loss assumption
4. Functional personal property valuation
5. functional building valuation
6. increased cost of loss and related expenses for green updates
Describe increased cost of construction - green endorsement - ANSWERS-includes additional
cost to repair or replace with green materials
- coinsurance does not apply
- a limit must be selected for green upgrades
- a percentage must be selected (10%, 20%) and the most the policy will pay is the amount paid
for the loss plus deductible times the % selected
coinsurance formula - ANSWERS-did/should x loss
elements of the financial statement that impact business income loss - ANSWERS-Gross Sales -
Cost of Goods Sold = Gross Profit
Gross Profit - Operating expenses = Net Profit
What will be paid and for how long for business income - ANSWERS-NICE
Questions and Answers5
Endorsements used to modify coverage extensions (6) - ANSWERS-1. newly acquired or
constructed property - increased limit
2. higher limits
3. specified bpp temporarily away from premises
4. additional covered property
5. radio or television antennas
6. trees, shrubs, plants
Explain replacement cost - ANSWERS-- without deduction for depreciation
- claims are paid on acv until repairs or replacements is complete and then difference is paid
- does not apply to pp of others, contents of residence or fine arts
Optional Coverage - RC PP OF OTHERS - ANSWERS-- applies rc to property of others but limited
to the lessor of amount required by contract or RC
Loss Payment options (4) - ANSWERS-1. Pay the value
2. Pay the cost to repair or replace
3. take the property at an agreed or appraised value
4. repair, rebuild or replace with like kind and quality
Vacancy provision - describe and apply - ANSWERS-1. Tenant - does not contain enough BPP to
conduct customary operations
2. owner - must be at least 31% leased and used by lessee to conduct customary operations
, 3. Under construction or renovation are not vacant
4. vacant for 60 consecutive days - theft, vandalism, sprinkler leakage, glass breakage, and
attempted theft are not covered perils
5. all other causes of loss payment is reduced by 15%
Endorsement that modify valuation provision (6) - ANSWERS-1. Manufacturers selling price
(finished stock)
2. market value - stock
3. manufactures consequential loss assumption
4. Functional personal property valuation
5. functional building valuation
6. increased cost of loss and related expenses for green updates
Describe increased cost of construction - green endorsement - ANSWERS-includes additional
cost to repair or replace with green materials
- coinsurance does not apply
- a limit must be selected for green upgrades
- a percentage must be selected (10%, 20%) and the most the policy will pay is the amount paid
for the loss plus deductible times the % selected
coinsurance formula - ANSWERS-did/should x loss
elements of the financial statement that impact business income loss - ANSWERS-Gross Sales -
Cost of Goods Sold = Gross Profit
Gross Profit - Operating expenses = Net Profit
What will be paid and for how long for business income - ANSWERS-NICE
