CIC COMPLETE QUESTIONS AND VERIFIED
ANSWERS COMMERCIAL PROPERTY EXAM
PRACTICE 2024 UPDATE
Learning Objective 1A - Rights and Duties of the first Named Insured
1. Authorization to Cancel
2. Receive Cancellation
3. Make Changes with Insurer Consent
4. Responsible for Payment of Premium
5. Payee (Receiver) for Return Premium
Learning Objective 1B - How does Coinsurance apply?
Amount Carried/Amount Required x Loss = Recovery-Deductible (Settlement) or
"Did Have"/"Should Have" x Loss = Recovery - Deductible
Components of "Common Policy Dec" IL DS 00 09 08
1. Named Insured
2. Mailing Address
3. Policy Period
4. Biz Description
5. Premium for Coverage Parts
6. Forms Applicable
ACV vs Replacement Cost
ACV - Default valuation method of Property policies. Cost to replace covered property at
time of the loss, minus depreciation.
RC - Valuation commonly desired, but usually must be requested. Replace covered
property at a premises with like kind and quality in today's dollars. Triggered with (X) on
Dec Page.
Agreed Value
Optional coverage on CP Dec Page. Expiration date only. Suspends coinsurance
clause. Can apply to covered property and/or Business Income.
BPP Limited International Coverage endorsement (CP 04 32)
Coverage for BPP in or enroute to a Foreign Coverage Territory listed in Schedule
Property in the Process of Manufacture by Others Limited International Coverage
(CP 04 33)
Coverage for raw materials and in-process goods in the process of manufacture in a
Foreign Coverage Territory. Manuf facility not owned or operated by Insured.
"Building and Personal Property Coverage Form (BPPCF)" CP00 10 10 12
componets
A. Coverage
1. Property Covered
2. Property Not Covered
3. Covered Causes of loss
,4. Additional Coverages
5. Coverage Extensions
B. Exclusions and Limitations
C. Limits of Insurance
D. Deductible
E. Loss Conditions
F. Additional Conditions
G. Optional Coverages
H. Definitions
Learning Objective 2A: What is Covered Property on BPPCF?
3 categories...
a. Building
...1) Completed Additions
...2) Fixtures, including outdoor fixtures
...3) Machinery and Equipment (considered permanently installed by INSURER)
...4) Personal Property used to Service the Building
...5) IF NOT COVERED BY OTHER INSURANCE
b. Your Business Personal Property (within 100 ft)
...1) Furniture and (Trade) Fixtures
...2)Machinery and Equipment
...3)Stock
...4)All other personal property owned by you and used in your business
...5)Labor, materials or services furnished or arranged by you on personal property of
others
...6)Your use interest as tenant in improvements and betterments.
...7)Leased property - contractual responsibility to INSURE (not just loss or damaged)
c. Personal Property of Others
...1) Property entrusted to the named insured for the insured to work on
Additional Building Property CP 14 15
1. Used to clarify certain items which might be in a "gray area" are covered under
Building.
-Permanently installed machinery and equipment
-Fixtures, including outdoor fixtures
2. Covers certain BPP under Building (i.e. freezer cases in supermarkets, large
production equipment)
3. Must already have coverage for Building
Additional Property Not Covered CP 14 20
1. Used to add specific types of Building property or BPP to list of "Property Not
Covered" if named insured/insurer does not want or need to cover such property (e.g.
tenants improvements & betterments for owner of building where lease requires tenant
, to insure these)
2. May also make an unacceptable risk acceptable
Stock
Merchandise held in storage or for sale, raw materials and in-process or finished goods,
including supplies used in their packing or shipping.
Leased Property endorsement CP 14 60
Used to insure personal property leased to the NI as BPP istead of Personal Property of
Other
Your BPP - Separation of Coverage endorsement CP 19 10
Can separate out and specify a LOI for any of the 7 categories of BPP.
Learning Objective 2B: Property Not Covered Property on BPPCF?
17 categories of Property Not Covered!
a. Money and Securities
b. Animals (not stock)
c. Autos held for sales
d. Bridges and paved surfaces
e. Contraband or illegal property
f. Excavation cost
g. Foundations of structures if found below lowest basement floor
h. Land and crops
i. Personal Property while airborne or waterborne
j. Docks or Wharves
k. Property covered under another coverage form
l. Retaining walls not part of a building
m. Underground pipes and drains
n. Electronic Data
o. Valuable Papers
p. Vehicles licensed for public road use
q. Certain Outdoor property (Grain, fences, radio or television antennas)
Learning Objective 3A: Advantages and Disadvantages of Blanket Coverage
Advantages:
1. Named insured can apply insurance where needed when more than one type of
property is covered on a blanket basis
2. Handles fluctuating values between locations or fire rated divisions
3. Reporting forms easier to handle
4. Named insured may have 100% insurance to value at each location, but only has to
carry 90%.
Disadvantages:
1. 90 or 100% coinsurance required
2. Blanket may not be possible because of UW restricts
3. Statement of values must be obtained
4. Rates for one year only
5. Must have some causes of loss for all covered property
6. Must list all ownership interests with locations
Limitation on Loss Settlement - Blanket Insurance (Margin Clause) CP 12 32
ANSWERS COMMERCIAL PROPERTY EXAM
PRACTICE 2024 UPDATE
Learning Objective 1A - Rights and Duties of the first Named Insured
1. Authorization to Cancel
2. Receive Cancellation
3. Make Changes with Insurer Consent
4. Responsible for Payment of Premium
5. Payee (Receiver) for Return Premium
Learning Objective 1B - How does Coinsurance apply?
Amount Carried/Amount Required x Loss = Recovery-Deductible (Settlement) or
"Did Have"/"Should Have" x Loss = Recovery - Deductible
Components of "Common Policy Dec" IL DS 00 09 08
1. Named Insured
2. Mailing Address
3. Policy Period
4. Biz Description
5. Premium for Coverage Parts
6. Forms Applicable
ACV vs Replacement Cost
ACV - Default valuation method of Property policies. Cost to replace covered property at
time of the loss, minus depreciation.
RC - Valuation commonly desired, but usually must be requested. Replace covered
property at a premises with like kind and quality in today's dollars. Triggered with (X) on
Dec Page.
Agreed Value
Optional coverage on CP Dec Page. Expiration date only. Suspends coinsurance
clause. Can apply to covered property and/or Business Income.
BPP Limited International Coverage endorsement (CP 04 32)
Coverage for BPP in or enroute to a Foreign Coverage Territory listed in Schedule
Property in the Process of Manufacture by Others Limited International Coverage
(CP 04 33)
Coverage for raw materials and in-process goods in the process of manufacture in a
Foreign Coverage Territory. Manuf facility not owned or operated by Insured.
"Building and Personal Property Coverage Form (BPPCF)" CP00 10 10 12
componets
A. Coverage
1. Property Covered
2. Property Not Covered
3. Covered Causes of loss
,4. Additional Coverages
5. Coverage Extensions
B. Exclusions and Limitations
C. Limits of Insurance
D. Deductible
E. Loss Conditions
F. Additional Conditions
G. Optional Coverages
H. Definitions
Learning Objective 2A: What is Covered Property on BPPCF?
3 categories...
a. Building
...1) Completed Additions
...2) Fixtures, including outdoor fixtures
...3) Machinery and Equipment (considered permanently installed by INSURER)
...4) Personal Property used to Service the Building
...5) IF NOT COVERED BY OTHER INSURANCE
b. Your Business Personal Property (within 100 ft)
...1) Furniture and (Trade) Fixtures
...2)Machinery and Equipment
...3)Stock
...4)All other personal property owned by you and used in your business
...5)Labor, materials or services furnished or arranged by you on personal property of
others
...6)Your use interest as tenant in improvements and betterments.
...7)Leased property - contractual responsibility to INSURE (not just loss or damaged)
c. Personal Property of Others
...1) Property entrusted to the named insured for the insured to work on
Additional Building Property CP 14 15
1. Used to clarify certain items which might be in a "gray area" are covered under
Building.
-Permanently installed machinery and equipment
-Fixtures, including outdoor fixtures
2. Covers certain BPP under Building (i.e. freezer cases in supermarkets, large
production equipment)
3. Must already have coverage for Building
Additional Property Not Covered CP 14 20
1. Used to add specific types of Building property or BPP to list of "Property Not
Covered" if named insured/insurer does not want or need to cover such property (e.g.
tenants improvements & betterments for owner of building where lease requires tenant
, to insure these)
2. May also make an unacceptable risk acceptable
Stock
Merchandise held in storage or for sale, raw materials and in-process or finished goods,
including supplies used in their packing or shipping.
Leased Property endorsement CP 14 60
Used to insure personal property leased to the NI as BPP istead of Personal Property of
Other
Your BPP - Separation of Coverage endorsement CP 19 10
Can separate out and specify a LOI for any of the 7 categories of BPP.
Learning Objective 2B: Property Not Covered Property on BPPCF?
17 categories of Property Not Covered!
a. Money and Securities
b. Animals (not stock)
c. Autos held for sales
d. Bridges and paved surfaces
e. Contraband or illegal property
f. Excavation cost
g. Foundations of structures if found below lowest basement floor
h. Land and crops
i. Personal Property while airborne or waterborne
j. Docks or Wharves
k. Property covered under another coverage form
l. Retaining walls not part of a building
m. Underground pipes and drains
n. Electronic Data
o. Valuable Papers
p. Vehicles licensed for public road use
q. Certain Outdoor property (Grain, fences, radio or television antennas)
Learning Objective 3A: Advantages and Disadvantages of Blanket Coverage
Advantages:
1. Named insured can apply insurance where needed when more than one type of
property is covered on a blanket basis
2. Handles fluctuating values between locations or fire rated divisions
3. Reporting forms easier to handle
4. Named insured may have 100% insurance to value at each location, but only has to
carry 90%.
Disadvantages:
1. 90 or 100% coinsurance required
2. Blanket may not be possible because of UW restricts
3. Statement of values must be obtained
4. Rates for one year only
5. Must have some causes of loss for all covered property
6. Must list all ownership interests with locations
Limitation on Loss Settlement - Blanket Insurance (Margin Clause) CP 12 32
