Caib 2 Chapter 4 Question

Front 1

When the Insurer is asked to CHANGE a policy it can be done in 3 ways out?

Back 1

1. Endorsement - Changes the terms & conditions of the policy of the insureds policy

2. Rider- Adds coverage to those already in place

3. Separate policy- example would be adding Boiler & Machinery Policy

Front 2

Sign Form

Back 2

This form insures all types of signs & includes damage caused to lettering & other artwork is also insured.

exclusions: Wear & Tear, Electrical currents, while being worked on, dampness or extreme temperatures & strikers, locked out employees that could cause damage

Front 3

Glass Rider

Back 3

Included: Damage to the glass, lettering, ornamentation, tape or foil described in the schedule caused by accidental breakage

Includes

-insured or employees

-stones thrown from the tires of passing vehicles

-shifting of the building due to earth

Exclusions

Fire, War (includes riot) during construction, vacancy, arising out of the enforcement of bylaws.

Front 4

Accounts Receivable Form

Back 4

Accounts receivable form enables businesses to insure the records of the debts owed to them

4 Components

1. Form responds if the insured can confirm that the amounts collected are less than the outstanding @ the time of the loss, due to the destruction of accounts they are unable to identify those responsible for the debt

2. Form provides for payment of all interest charges resulting from loans taken by the insured to offset the amounts owed to the business & which have not been collected

3. Pays for the additional expenses incurred to collect outstanding debts, (hiring collection agencies)

4. Reconstructing accounts receivable (costs incurred to hire accountants)

Front 5

Accounts Receivable Form

Exclusions

Back 5

1. No coverage for Electrical or Erasure of recordings ( Need EDP - Electronic Data Protection)

2. Coverage applies ONLY at the premises indicated

3. Reporting Form Option- Firms having a wide variations in receivables may be well advised to insure to their MAXIMUM exposures & report monthly

Front 6

Valuable Papers & Records of Insurance

Back 6

Written, printed inscribed documents, and records including books, maps, films drawings & abstracts deeds, mortgages and manuscripts NO MONEY OR SECURITIES

Coverage applies for outside the premises- lawyers offices, being couriered,

While @ temporary locations- No conditions are specified to how the documents are kept when in the possession of others

(When removed coverage is limited to 10% or $5000 which ever is less)

Front 7

Electronic Data Processing

Back 7

1. Loss to data processing systems, including equipment & components (Designed to insure losses caused to the hardware)

2. Active data processing media including programs

3. extra expense

Includes - Broad water losses, mechanical breakdown(errors in programming, processing, short circuit, dampness, dryness, extreme temperatures, corrosion & rust, while being worked upon

Valid of a maintenance contract required

Coverage is restricted to ON premises only

Basis of settlement can be on AVC or Replacement cost

Front 8

EDP - Media

Back 8

Active data processing media including programmes

Media is the materials, including DVD's, CD's, back up hard drives, cassettes upon which the data is recorded

Front 9

Extra Expense - Under EDP rider

Back 9

-When the insureds premises is damaged by an insured peril to the extent that it cannot be accessed by the insured

-When the air conditioning unit system used is damaged by insured peril (under24,000 btu)

- When access to property is denied by civil authority 2 weeks is provided

Front 10

EQUIPMENT BREAKDOWN

(B&I)

Back 10

Coverage is provided for:

-Property of the insured and property of others in the care, custody & control

-object in use

-coverage is provided on a LIMIT PER LIABILITY basis, which is the maximum payable for loss from any one accident

-damaged property to be replaced with property of like kind, capacity & size

-Insurers liability with respect to the loss shall be excess of any applicable deductible

Front 11

EQUIPMENT BREAKDOWN - SUB LIMITS

Back 11

1. Expediting Expenses- reasonable & necessary extra expenses incurred to repair or replace equipment

2. Water damage- If as a direct result coverage applies

3. Ammonia Contamination-If as a direct result of an accident ammonia contaminates property

4. Hazardous Substances- If arising out of an accident (pays the cleanup, storage of waste)

NO COVERAGE for AMMONIA CONTAMINATION - for loss or damaged caused by

Front 12

EQUIPMENT BREAKDOWN

Covers property for loss caused by an ACCIDENT to an OBJECT

Back 12

Accident is a defined term applied to the event that triggers coverage under the policy

Elements of an accident

-must be sudden & accidental

-must be a breakdown

-there must be physical damage to the object

-there is a need to repair or replace the object

Accidents do not insure OCCURRENCES

-Deterioration

-corrosion

-Wear & Tear

-Functioning of a safety device

Front 13

EQUIPMENT BREAKDOWN

Covers property for loss caused by an ACCIDENT to an OBJECT

Back 13

An OBJECT is any property owned, leased or controlled by the Insured

Pressure Objects:(any boiler or other fired vessel, refrigeration or AC & piping and its equip,

Machinery Objects: Any machine or apparatus that generates, transmits or uses mechanical or electrical energy.

Front 14

EQUIPMENT BREAKDOWN

OPTIONAL COVERAGE'S

Back 14

Production Machinery - coverage for any machine that processes, forms, cuts, shapes grinds, or conveys raw materials

Indirect Coverage- Business Interruption

-loss of profits

-gross earnings

-rental income

-extra expense

-service interruption

-ordinary payroll

Consequential / Spoilage Damage

Front 15

EARTHQUAKE SHOCK

Back 15

Coverage on occurrence basis

The Insurer agrees that when more than 1 EQ shock occurs with in 72 hours it is deemed to be a single occurrence. Some insurers extend this period to 168 hours

Front 16

INDIRECT DAMAGE FORMS

Consequential Loss Assumption Clause- Cold Storage

Back 16

Loss caused by directly or indirectly by changes in temperature, freezing, heating (is excluded under commercial property forms)

Coverage Provided for Loss of Stock due to Change in temperature

-loss destruction or damage to stock due to change in temperature resulting from damage caused by insured perils (against refrigeration or cooling apparatus or pipes - furnishing power ON the premises described

Coverage only responds when an Insured Peril DIRECTLY ATTACKS

-the refrigeration or cooling apparatus

-Its connection supplies

-Any apparatus furnishing power on the premises

Coverage is NOT provided for losses caused by Power Failure of the local utility company, same with Lightening which interrupts the power supply. Actual damage to the equipment providing the supply must be present for their coverage to apply to the stock.

Front 17

INDIRECT DAMAGE FORMS

Consequential Loss Assumption Clause

Provides Broader coverage

Back 17

Many Insures provide a single Consequential Loss Assumption Clause Form - which insured loss to stock due to "Changes in temperatures arising out of damage by the perils insured against to the heating, refrigeration or cooling apparatus.

Freezing & heating to stock in open shelves which is directly attributable to such damage is also insured under this clause

Front 18

INDIRECT FORMS

Bylaws Coverage

Back 18

Costs to Comply with Building By-laws Insurable

1- Increased Cost of Construction, building permit required, permits will not be issued unless project meets the current building codes

2. Loss of value to the undamaged portion- If the by-law prohibts the insured to rebuild then the insured must demolish building

3. Costs of Demo of the undamaged building & the costs to remove debris

Blanket Bylaws Extension- which combines all 3 extensions (1.increased cost of construction, 2. costs of demo of undamaged portion, 3. value of the undamaged portion)

The basis of settlement is on ACV it is important that the Replacement Cost Endorsement be purchased to eliminate the effects of depreciation

Front 19

List 3 instances in which insured property is NOT deemed to be at a TEMPORARY location

Back 19

1. When it is at any location Specified on the policy

2. In TRANSIT

3. Or any location OWNED,or CONTROLLED in whole or in part by the insured

Front 20

Outline OFF PREMISES COVERAGE provided under newly acquired location coverage extension

Back 20

It provides automatic coverage for up to 30 days for a building @ a newly acquired location within Canada or coverage to contents @ a newly acquired location that is owned, rented or controlled by the insured.

Front 21

Why use Property in TRANSIT coverage?

Back 21

Covers contents in the course of TRANSIT within Canada or the Continental United States of America until delivered

1. When coverage is purchased from the Insurer, overall costs of coverage are reduced and claims service is faster

2. Deductible may be higher than what the package is worth

Locked Vehicle warranty is commonly added, when the Insurer is providing coverage against the Peril of THEFT from an auto

Front 22

What types of EXPOSURES are insured by the property in TRANSIT coverage extension?

Back 22

Includes all means of transport, incoming & outgoing of goods, courier services, insureds own vehicles, air & rail

Front 23

SALES REPRESENTATIVE

Back 23

Contents whether in transit or otherwise within Canada or Continental USA

Max limit per any one representative

coverage includes:

1. At the home of the sales rep

2. Trade Show

3. In the sales reps auto or otherwise (locked vehicle warranty will most certainly apply)

Custody- means in the control or care of a thing by another

Front 24

MISCELLANEOUS ENDORSEMENT FORMS

Instalment Sales Contract Floater

Back 24

Provides needed protection for Manufacturers, wholesalers, retailers and other business selling Equipment and merchandise on the partial payment plan

Coverage is available to protect the single interst of the seller ONLY

Provided on Named Perils only, coverage is provided for Direct Damage only, from the time it leaves the vendors property, while in transit & while on the premises of the vendee. Coverage ceases when the property is fully paid for.

Front 25

MISCELLANEOUS ENDORSEMENT FORMS

Peak Season Endorsement

Back 25

Covers stock values that fluctuate seasonally

2 Advantages of this endorsement

-Saves premium dollars for the insured as they pay for coverage that are needed over an entire policy period

- The insured does not need to remember to contact the broker when changes in stock occur

Front 26

MISCELLANEOUS ENDORSEMENT FORMS

Replacement Cost Endorsement

Back 26

Replacement cost does include replacing or repairing old for new with like kind and quality of the damaged property that the insured had prior to the loss.

3 Obligations that must be met prior to receiving replacement cost are

1- Replacement must be effected with due diligence & dispatch

2. Replacement must be on the same or adjacent site

3. Payment may only be made on replacement cost after the replacement of the property has been effected

Front 27

MISCELLANEOUS ENDORSEMENT FORMS

Inflation Protection

Back 27

Increases the amount of the building insurance during the policy period to reflect the increased in building costs, no charge to the insured for interim increases in the building value

Front 28

MISCELLANEOUS ENDORSEMENT FORMS

Fire Department Charges

Back 28

Local Fire Dept charges are charged to the insured when the local fire department requires assistance from neighboring depts