CALIFORNIA COMMERCIAL INSURANCE STUDY QUESTIONS WITH
SOLUTIONS GRADED A+2025/2026
✔✔What does "We" "Us" and "Our" refer to in a Commercial Policy? - ✔✔The insurance
company providing the coverage.
✔✔What are the 9 property conditions? - ✔✔Concealment, Misrepresentation or Fraud
Coverage, Control of Property, Insurance Under Two or More Coverages, Other
Insurance, Legal Action Against the Insurer, Liberalization. No benefit to Bailee, Policy
Period and Coverage Territory, and Transfer of Rights of Recovery Against Others
(Subrogation).
✔✔What is the Concealment, Misrepresentation or Fraud Coverage condition? - ✔✔this
condition states that, if intentional concealment, misrepresentation, or fraud on the part
of the insured is discovered, the insurer has cause to void the contract and deny
coverage.
NOTE: This condition relates only to the Property Coverage portion of the policy.
✔✔What is the Control of Property condition? - ✔✔This condition expresses the
understanding that the insured may not alway have control over what happens to the
insureds property. (E.G. If someone else creates a hazard that causes a loss to the
property). As long as the condition is outside of the insured's control, the coverage is not
voided under these conditions.
✔✔What is the Insurance Under Two or More Coverages condition? - ✔✔If more than
one of the policy coverages apply to the same loss, the insurer will not pay more that
the actual amount of the loss or damage. This provision is necessary because a loss to
property might be covered under two or more coverage parts that can be included in a
single package. This supports the principle of indemnity by preventing double recovery.
✔✔What is the Other Insurance condition? - ✔✔This provision applies when there is
more than one policy that applies to the loss. This condition has two parts: Pro Rata
Liability and Other Insurance condition.
Pro Rata Liability states that, if the insured had more than one policy insuring the same
property with the same terms, conditions, perils, etc., then each company will pay its
share of the loss.
Under the Other Insurance condition, if the terms, conditions, perils, etc., are different
on each policy, one will be considered primary and tyne other excess.
✔✔What is the Legal Action Against the Insurer condition? - ✔✔An insured may bring
legal action against an insurer if the insured feels coverage was denied when it should
have been allowed, as long as two conditions have been met: 1) The suit is within two
years of the loss date, and 2) All conditions and terms of the policy have been adhered
to.
, ✔✔What is the Liberalization condition? - ✔✔This provision states that if the insurer
broadens the coverage without any additional premium being charged, the revision will
automatically apply to the coverage part. As long as it is during the policy period or
within 45 days prior to the effective date.
✔✔What is the No Benefit to Bailee condition? - ✔✔The insurance will not ignore the
obligations of the bailee for a loss to customers; property. The insurer will still pay the
insured for covered losses, but this clause preserves the insurer's right to subrogate
against the negligent bailee for the amount of the claim paid.
✔✔What is a Bailee? - ✔✔A person who has possession, care, custody , or control of
the property of customers for business purposes.
✔✔What is the Policy period, Coverage Territory condition? - ✔✔This Condition states
that loss must occur during the policy period and within the covered territory. Coverage
begins on the effective/inception date and ends on the expiration date shown in the
declarations. The time is determined by standard time at the insured's mailing address
shown in the declaration, even when the risk is located in a different time zone. THe
covered territory consists of the United States, its possessions and territories, Puerto
Rico, or Canada.
NOTE: Incase of Earthquake Insurance, coverage may apply up to 168 hours after an
initial quake.
✔✔What is the Transfer of Rights of Recovery Against Others condition? - ✔✔If the
insurer makes payments to the insured for a covered loss, the insured is obligated to
cooperate with the company in seeking recovery from the responsible
party.(Subrogation)
NOTE: The insured has the right too waive subrogation rights against another party in
writing if the waiver is made prior to the loss. Waiver of recovery may be given by the
insured after the loss, but only to someone insured by the coverage part, a tenant of the
insure, or a parent, or subsidiary company.
✔✔What is the Building and Personal Property Coverage Form? (BPP) - ✔✔The BPP is
the most commonly used commercial property coverage Form.
✔✔What are the 9 sections of a Building and Personal Property Coverage Form? -
✔✔Covered property, property not covered, additional coverages, coverage extensions,
limits of insurance, deductible, loss conditions, additional conditions, and optional
coverages.
✔✔What are the 3 categories the BPP form is designed to provide physical damage
coverage for? - ✔✔Building
Personal property
SOLUTIONS GRADED A+2025/2026
✔✔What does "We" "Us" and "Our" refer to in a Commercial Policy? - ✔✔The insurance
company providing the coverage.
✔✔What are the 9 property conditions? - ✔✔Concealment, Misrepresentation or Fraud
Coverage, Control of Property, Insurance Under Two or More Coverages, Other
Insurance, Legal Action Against the Insurer, Liberalization. No benefit to Bailee, Policy
Period and Coverage Territory, and Transfer of Rights of Recovery Against Others
(Subrogation).
✔✔What is the Concealment, Misrepresentation or Fraud Coverage condition? - ✔✔this
condition states that, if intentional concealment, misrepresentation, or fraud on the part
of the insured is discovered, the insurer has cause to void the contract and deny
coverage.
NOTE: This condition relates only to the Property Coverage portion of the policy.
✔✔What is the Control of Property condition? - ✔✔This condition expresses the
understanding that the insured may not alway have control over what happens to the
insureds property. (E.G. If someone else creates a hazard that causes a loss to the
property). As long as the condition is outside of the insured's control, the coverage is not
voided under these conditions.
✔✔What is the Insurance Under Two or More Coverages condition? - ✔✔If more than
one of the policy coverages apply to the same loss, the insurer will not pay more that
the actual amount of the loss or damage. This provision is necessary because a loss to
property might be covered under two or more coverage parts that can be included in a
single package. This supports the principle of indemnity by preventing double recovery.
✔✔What is the Other Insurance condition? - ✔✔This provision applies when there is
more than one policy that applies to the loss. This condition has two parts: Pro Rata
Liability and Other Insurance condition.
Pro Rata Liability states that, if the insured had more than one policy insuring the same
property with the same terms, conditions, perils, etc., then each company will pay its
share of the loss.
Under the Other Insurance condition, if the terms, conditions, perils, etc., are different
on each policy, one will be considered primary and tyne other excess.
✔✔What is the Legal Action Against the Insurer condition? - ✔✔An insured may bring
legal action against an insurer if the insured feels coverage was denied when it should
have been allowed, as long as two conditions have been met: 1) The suit is within two
years of the loss date, and 2) All conditions and terms of the policy have been adhered
to.
, ✔✔What is the Liberalization condition? - ✔✔This provision states that if the insurer
broadens the coverage without any additional premium being charged, the revision will
automatically apply to the coverage part. As long as it is during the policy period or
within 45 days prior to the effective date.
✔✔What is the No Benefit to Bailee condition? - ✔✔The insurance will not ignore the
obligations of the bailee for a loss to customers; property. The insurer will still pay the
insured for covered losses, but this clause preserves the insurer's right to subrogate
against the negligent bailee for the amount of the claim paid.
✔✔What is a Bailee? - ✔✔A person who has possession, care, custody , or control of
the property of customers for business purposes.
✔✔What is the Policy period, Coverage Territory condition? - ✔✔This Condition states
that loss must occur during the policy period and within the covered territory. Coverage
begins on the effective/inception date and ends on the expiration date shown in the
declarations. The time is determined by standard time at the insured's mailing address
shown in the declaration, even when the risk is located in a different time zone. THe
covered territory consists of the United States, its possessions and territories, Puerto
Rico, or Canada.
NOTE: Incase of Earthquake Insurance, coverage may apply up to 168 hours after an
initial quake.
✔✔What is the Transfer of Rights of Recovery Against Others condition? - ✔✔If the
insurer makes payments to the insured for a covered loss, the insured is obligated to
cooperate with the company in seeking recovery from the responsible
party.(Subrogation)
NOTE: The insured has the right too waive subrogation rights against another party in
writing if the waiver is made prior to the loss. Waiver of recovery may be given by the
insured after the loss, but only to someone insured by the coverage part, a tenant of the
insure, or a parent, or subsidiary company.
✔✔What is the Building and Personal Property Coverage Form? (BPP) - ✔✔The BPP is
the most commonly used commercial property coverage Form.
✔✔What are the 9 sections of a Building and Personal Property Coverage Form? -
✔✔Covered property, property not covered, additional coverages, coverage extensions,
limits of insurance, deductible, loss conditions, additional conditions, and optional
coverages.
✔✔What are the 3 categories the BPP form is designed to provide physical damage
coverage for? - ✔✔Building
Personal property
