CPCU 551 - Assignment 1 Exam Questions and Answers Already Passed
1.1 3 common sources of property coverage for commerical entities - Answers 1. Insurance Services
Office, INC (ISO) 2. Building and Personal Property Coverage Form (BPP) 3. Business Income Coverage
Forms (BIC)
1.1
BPP Form - Answers Building and Personal Property Coverage Form Provides coverage for buildings,
business personal property, and the personal property of others.
1.1
Would manufaturing equipment and finished clothing (stock) stored in Garmentville's warehouse be
considered covered forms of business personal property under the BPP? - Answers Yes, unless
specifically excluded.
1.1
BPP provides additional coverages and coverage extensions for... - Answers debris removal,
preservation of propety, fire department service charges, pollutant cleanup and removal, increased cost
of construction, electronic data, new property, personal effects, property of others, valuable records,
and nonowned detatched trailers.
1.1
Most organizations use insurance as... - Answers a risk control technique to pay for losses.
1.1 What techniques could businesses use to reduce risk of loss from fire? - Answers 1. Separate heat
sources from fuels 2. Install fire detection and suppression systems
1.1 What techniques could businesses use to reduce risk of loss from explosion? - Answers 1. Explosion
suppressors 2. Proper storage, use, and maintenance and inspection of expllosive materials and
equipment
1.1
What techniques could businesses use to reduce risk of loss from windstorm? - Answers 1. Design
structures to withstand strong winds 2. Add storm shutters and blinds for windows 3. Secure material
and equipment outside facility 4. Place trees and utility poles away from structures
1.1 What techniques could businesses use to reduce risk of loss from water? - Answers 1. Sensor that
detect the presence of water 2. Shut off source of water 3. Notify building management
1.1
, What techniques could businesses use to reduce risk of loss from crime? - Answers 1. Secure items 2.
Install security systems 3. Hiring guards 4. Training employees to spot crime-related activities
1.1 How is the reduction in an organization's income in resulting from an interruption calculated? -
Answers By subtracting netincome that org actually earned in a period of interruption from amount of
net income org could reaonably have been expected to earn during that period
1.1 Which sections of the BIC forms determine how much the BIC forms pay? - Answers 1. Limits of
Insurance 2. Loss Conditions 3. Additional Condition (Coinsurance)
1.1 How is the amount of BIC coverage a business should purchase calculated? - Answers Calculate the
business's estimated maximum loss (EML) of business income using business income worksheet.
1.1
Endorsements - Answers Tailor commerical property coverage to meet needs of insured OR to eliminate
coverage for certain exporsures that underwriters aren't willing to insure.
1.1
How can insurance professionals best customize property coverage for their clients? - Answers By
conducting thorough risk assessments
1.1
Net Income - Answers The difference between revenues (such as money received for goods or services)
and expenses (such as money paid for merchandise, rent, and insurance).
1.1
Business income worksheet - Answers A worksheet for calculating the amount of insurance necessary to
comply with the Coinsurance condition of business income insurance forms, for reporting business
income values to the insurer, or for providing underwriters with information they need to evaluate an
organization's business income loss exposure.
1.2 BIC Form - Answers Business Income Insurance. Also called business interruption coverage. Covers
the reduction in an organization's income when operations are interrupted by damage to property
caused by a covered peril.
1.2
What is the exact insurance recovery is determined by? - Answers The terms and conditions of the
policy
1.2 What is the severity of a business income loss is related to? - Answers the length of time required to
restore the property
1.1 3 common sources of property coverage for commerical entities - Answers 1. Insurance Services
Office, INC (ISO) 2. Building and Personal Property Coverage Form (BPP) 3. Business Income Coverage
Forms (BIC)
1.1
BPP Form - Answers Building and Personal Property Coverage Form Provides coverage for buildings,
business personal property, and the personal property of others.
1.1
Would manufaturing equipment and finished clothing (stock) stored in Garmentville's warehouse be
considered covered forms of business personal property under the BPP? - Answers Yes, unless
specifically excluded.
1.1
BPP provides additional coverages and coverage extensions for... - Answers debris removal,
preservation of propety, fire department service charges, pollutant cleanup and removal, increased cost
of construction, electronic data, new property, personal effects, property of others, valuable records,
and nonowned detatched trailers.
1.1
Most organizations use insurance as... - Answers a risk control technique to pay for losses.
1.1 What techniques could businesses use to reduce risk of loss from fire? - Answers 1. Separate heat
sources from fuels 2. Install fire detection and suppression systems
1.1 What techniques could businesses use to reduce risk of loss from explosion? - Answers 1. Explosion
suppressors 2. Proper storage, use, and maintenance and inspection of expllosive materials and
equipment
1.1
What techniques could businesses use to reduce risk of loss from windstorm? - Answers 1. Design
structures to withstand strong winds 2. Add storm shutters and blinds for windows 3. Secure material
and equipment outside facility 4. Place trees and utility poles away from structures
1.1 What techniques could businesses use to reduce risk of loss from water? - Answers 1. Sensor that
detect the presence of water 2. Shut off source of water 3. Notify building management
1.1
, What techniques could businesses use to reduce risk of loss from crime? - Answers 1. Secure items 2.
Install security systems 3. Hiring guards 4. Training employees to spot crime-related activities
1.1 How is the reduction in an organization's income in resulting from an interruption calculated? -
Answers By subtracting netincome that org actually earned in a period of interruption from amount of
net income org could reaonably have been expected to earn during that period
1.1 Which sections of the BIC forms determine how much the BIC forms pay? - Answers 1. Limits of
Insurance 2. Loss Conditions 3. Additional Condition (Coinsurance)
1.1 How is the amount of BIC coverage a business should purchase calculated? - Answers Calculate the
business's estimated maximum loss (EML) of business income using business income worksheet.
1.1
Endorsements - Answers Tailor commerical property coverage to meet needs of insured OR to eliminate
coverage for certain exporsures that underwriters aren't willing to insure.
1.1
How can insurance professionals best customize property coverage for their clients? - Answers By
conducting thorough risk assessments
1.1
Net Income - Answers The difference between revenues (such as money received for goods or services)
and expenses (such as money paid for merchandise, rent, and insurance).
1.1
Business income worksheet - Answers A worksheet for calculating the amount of insurance necessary to
comply with the Coinsurance condition of business income insurance forms, for reporting business
income values to the insurer, or for providing underwriters with information they need to evaluate an
organization's business income loss exposure.
1.2 BIC Form - Answers Business Income Insurance. Also called business interruption coverage. Covers
the reduction in an organization's income when operations are interrupted by damage to property
caused by a covered peril.
1.2
What is the exact insurance recovery is determined by? - Answers The terms and conditions of the
policy
1.2 What is the severity of a business income loss is related to? - Answers the length of time required to
restore the property
