FINA 4358 MODULE 2C ASSIGNMENT
Commercial Property Insurance
Homework Questions 2c
Module 2c
The following questions pertain to the use of the Special Cause of Loss Form:
1. A PDI worker accidentally tossed an expensive piece of electronic equipment into the furnace at
the manufacturing plant. Is this covered?
Yes, friendly fire loss is covered under special cause form.
2. The guest residence in Clear Lake was severely damaged by fire. Actually, most of the damage
was from smoke stains and smell and the firewater used by firemen to extinguish the blaze. Is all
of this part of the fire claim?
Yes, the fire peril covers heat and smoke damage as well as the water damage from putting out
the fire.
3. 30 of the work station PC’s were damaged at the corporate offices by an electrical surge. Is this
covered?
The electrical surge should be covered unless it is an artificial electrical surge.
4. Significant damage occurred at the manufacturing plant when the steam boiler used to heat the
building ruptured. Is this covered?
No, it is not covered unless PDI does not own, lease, or operate the steam equipment.
5. The warehouse in San Francisco suffered serious damage when workers failed to close the cargo
loading dock door and wind driven rain was blown into the building during a storm that night.
This is not covered because the employee negligence caused the damage. The wind and rain did
not physically break through.
6. The content s of the warehouse in Houston suffered severe damage when the sprinkler system
accidentally discharged and it took 30 minutes to get the system turned off. Is this covered?
Yes, it is covered under the sprinkler leakage.
7. The warehouse in Denver was damaged when a PDI employee carelessly backed a PDI truck into
the side of the building. Is this covered?
No, this is not cover according to the collapse peril
8. The guest residence in Argentina was damaged when a sinkhole developed on the property
causing part of the building to collapse into it. Is this covered?
Unless the sinkhole was caused by man-made underground activities, this should be covered.
9. The PDI office in Greece was damaged by a shock wave when a nearby volcano erupted. The
damage was made worse by three consecutive shock waves occurring at 3 hour intervals after
the first one hit. Would this be covered? As one event or four?
Yes, it is, as one event within 168 hours
Commercial Property Insurance
Homework Questions 2c
Module 2c
The following questions pertain to the use of the Special Cause of Loss Form:
1. A PDI worker accidentally tossed an expensive piece of electronic equipment into the furnace at
the manufacturing plant. Is this covered?
Yes, friendly fire loss is covered under special cause form.
2. The guest residence in Clear Lake was severely damaged by fire. Actually, most of the damage
was from smoke stains and smell and the firewater used by firemen to extinguish the blaze. Is all
of this part of the fire claim?
Yes, the fire peril covers heat and smoke damage as well as the water damage from putting out
the fire.
3. 30 of the work station PC’s were damaged at the corporate offices by an electrical surge. Is this
covered?
The electrical surge should be covered unless it is an artificial electrical surge.
4. Significant damage occurred at the manufacturing plant when the steam boiler used to heat the
building ruptured. Is this covered?
No, it is not covered unless PDI does not own, lease, or operate the steam equipment.
5. The warehouse in San Francisco suffered serious damage when workers failed to close the cargo
loading dock door and wind driven rain was blown into the building during a storm that night.
This is not covered because the employee negligence caused the damage. The wind and rain did
not physically break through.
6. The content s of the warehouse in Houston suffered severe damage when the sprinkler system
accidentally discharged and it took 30 minutes to get the system turned off. Is this covered?
Yes, it is covered under the sprinkler leakage.
7. The warehouse in Denver was damaged when a PDI employee carelessly backed a PDI truck into
the side of the building. Is this covered?
No, this is not cover according to the collapse peril
8. The guest residence in Argentina was damaged when a sinkhole developed on the property
causing part of the building to collapse into it. Is this covered?
Unless the sinkhole was caused by man-made underground activities, this should be covered.
9. The PDI office in Greece was damaged by a shock wave when a nearby volcano erupted. The
damage was made worse by three consecutive shock waves occurring at 3 hour intervals after
the first one hit. Would this be covered? As one event or four?
Yes, it is, as one event within 168 hours
