Ins 23 - Commercial Insurance

Front 1

Commercial insurance

Back 1

Insurance that covers for-profit businesses or nonprofit organizations against the adverse financial effects of property and liability losses.

Front 2

Risk management

Back 2

The process of identifying and analyzing loss exposures, evaluating the feasibility of risk management techniques to address the loss exposures, selecting and implementing the best techniques, and monitoring results.

Front 3

Loss exposure

Back 3

Any condition or situation that presents a possibility of loss, whether or not loss actually occurs

Front 4

Property loss exposure

Back 4

The possibility that a person or an organization will sustain a financial loss as the result of the damaging, destruction, taking, or loss of use of property in which that person or organization has a financial interest.

Front 5

Liability loss exposure

Back 5

The possibility that a person or an organization will sustain a financial loss as the result of a claim being made against that person or organization by someone seeking monetary damages or some other legal remedy.

Front 6

Avoidance

Back 6

A risk management technique by which an organization avoids a loss exposure by choosing not to own a particular item or property or not to engage in a particular activity

Front 7

Loss control

Back 7

A risk management technique that prevents losses from occurring or reduces the size of losses that do occur.

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Retention

Back 8

A risk management technique by which an organization pays all or part of its own losses due to its loss exposures.

Front 9

Noninsurance transfer

Back 9

A risk management technique by which an organization obtains the promise of a second organization (other than an insurer) to pay for certain losses that would otherwise be the financial responsibility of the first organization.

Front 10

Line of business

Back 10

A general classification of insurance, such as commercial property, commercial general liability, commercial crime, or commercial auto

Front 11

Six steps of the risk management process:

Back 11

1. Identifying loss exposures
2. Analyzing loss exposures
3. Evaluating the various techniques for treating the loss exposures
4. Selecting the most effective technique or techniques
5. Implementing the selected techniques
6. Monitoring the program and making needed corrections or adjustments

Front 12

Step one of the risk management process

Back 12

Identifying loss exposures

Front 13

Step two of the risk management process

Back 13

Analyzing loss exposures

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Step three of the risk management process

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Evaluating the various techniques for treating the loss exposures

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Step four of the risk management process

Back 15

Selecting the most effective technique or techniques

Front 16

Step five of the risk management process:

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Implementing the selected techniques

Front 17

Step six of the risk management process:

Back 17

Monitoring the program and making needed corrections or adjustments

Front 18

Monoline policy

Back 18

Policy that covers only one line of business

Front 19

Package policy

Back 19

Policy that covers two or more lines of business

Front 20

Commercial package policy (CPP)

Back 20

Policy that covers two or more lines of business by combining ISO's commercial lines coverage parts.

Front 21

CPP

Back 21

Commercial Package Policy - a policy that covers two or more lines of business by combining ISO's commercial lines coverage parts

Front 22

Common Policy Declarations

Back 22

A required CPP component that provides basic information about the insurer, the policyholder, and the insurance provided (this is usually called just a "Dec")

Front 23

Commercial policy decs include what elements?

Back 23

Policy number; names of the insurance company and the producer; name, address, and business description of the named insured; effective date and expiration date of the policy; premium for each coverage part included int he policy; total premium

Front 24

Components of the ISO CPP (Commercial Package Policy):

Back 24

- Commercial Property (Dec, Coverage Form(s), Causes of Loss Form(s), Conditions Form)
- CGL (Dec, Coverage Form)
- Crime (Dec, Coverage Form)
- Equipment Breakdown Protection (Dec, Coverage Form)
- Inland Marine (Dec, Coverage Form(s), Conditions Form)
- Auto (Dec, Coverage Form)
- Farm (Dec, Coverage Form(s), Provisions Form)

Front 25

Common Policy Conditions

Back 25

A required CPP component that contains six conditions applicable to all coverage parts unless a coverage part states otherwise.

- Cancellation
- Changes
- Examination of your books and records
- Inspections and surveys
- Premiums
- Transfer of your rights and duties under this policy

Front 26

What are the 6 common policy conditions?

Back 26

1. Cancellation
2. Changes
3. Examination of your books and records
4. Inspections and surveys
5. Premiums
6. Transfer of your rights and duties under this policy

Front 27

Coverage part

Back 27

A CPP component in a line of insurance (such as commercial property or commercial general liability) that comprises the coverage part's declarations page, one or more coverage forms, applicable endorsements, and in some cases a general provisions form.

Front 28

CPP coverage parts

Back 28

(same as components)

- Commercial Property (including business income)
- Commercial Crime
- Equipment breakdown (boiler and machinery)
- Commercial Inland Marine
- Commercial General Liability
- Commercial Auto
- Farm

Front 29

Package Modification Factor

Back 29

A factor (such as 0.75) that is multiplied by the regular policy premium of any CPP that includes both property and liability coverages, resulting in a premium discount.

Front 30

What justifies the discount offered by an insurer's package modification factor?

Back 30

The greater efficiency of issuing a single package policy instead of several monoline policies for an insured.

Front 31

Commercial Property Insurance

Back 31

Insurance that covers loss to commercial property; more narrowly, a line of insurance that covers buildings and business personal property against loss caused by a wide range of perils.

Front 32

Commercial property insurance can be provided under any of the following 4 types of policies:

Back 32

- A businessowners policy (BOP)
- A commercial property coverage part
- A policy designed for "highly protected risks" (HPRs)
- Inland marine coverages, including output policies

Front 33

True or false: BOP policies are intended for larger, complex businesses.

Back 33

FALSE. Smaller, less-complex businesses.

Front 34

What kinds of businesses/organizations are HPR policies designed for?

Back 34

Those w/ superior loss protection characteristics (for example, fire-resistent, sprinklered buildings).

Front 35

Real property

Back 35

Land and whatever is growing or erected on or affixed to the land. Sometimes referred to as "immovable property." Few insurance policies use the term "real property" in describing covered property; most policies cover specified types of real property, such as buildings and structures.

Front 36

Personal property

Back 36

All property other than real property. Sometimes referred to as "movable property." Insurance policies often use the phrase "personal property" in describing covered property, for example 'business personal property." Insurance practitioners commonly refer to personal property usually situated in a building as "contents."

Front 37

Tangible property

Back 37

All property that can be touched and that has physical existence. It can be either real or personal property. Most property insurance policies cover only tangible property.

Front 38

Intangible property

Back 38

Property that cannot be touched because it has no physical existence. Examples of intangible property are patents, copyrights and trademarks. Most property insurance policies do not cover intangible property.

Front 39

The five documents of the commercial property coverage part:

Back 39

1. Commercial property declarations
2. One or more commercial property coverage forms
3. One or more causes-of-loss forms
4. Commercial Property Conditions
5. Any applicable endorsements

Front 40

Commercial property coverage part

Back 40

A CPP coverage component that provides a broad range of coverages to "middle-market" or larger firms to insure buildings and business personal property.

Front 41

Commercial property declarations page

Back 41

A required commercial property coverage part component that provides basic information about the policyholder and the insurance provided.

Front 42

Commercial property coverage form

Back 42

A commercial property coverage part component that can be any of several commercial property forms containing an insuring agreement and related provisions.

Front 43

Causes-of-loss forms

Back 43

A required component of the commercial property coverage part that specifies perils covered; choices include basic, broad, or special form.

Front 44

Commercial Property Conditions

Back 44

A required component of the commercial property coverage part that contains conditions applicable to all commercial property coverage forms unless a coverage form contains a contradictory condition.

Front 45

Building and Personal Property Coverage Form (BPP)

Back 45

A commercial property coverage form that can be used to cover buildings, "your business personal property," and personal property of others.

Front 46

The most commonly used commercial property coverage form:

Back 46

BPP

Front 47

BPP

Back 47

Building and Personal Property Coverage Form - a commercial property coverage form that can be used to coverage buildings, "your business personal property," and personal property of others.

Front 48

What are the 9 sections of the BPP coverage form?

Back 48

1. covered property
2. property not covered
3. additional coverages
4. coverage extensions
5. limits of insurance
6. deductible
7. loss conditions
8. additional conditions
9. optional coverages

Front 49

Building (as defined in the BPP)

Back 49

The building described in the policy; the building's completed additions; fixtures, including outdoor fixtures; permanently installed machinery and equipment; personal property owned by the insured and used to maintain or service the building or its premises.

Front 50

Property that can be covered by the BPP:

Back 50

1. Buildings
2. Business personal property of the insured
3. Personal property of others in the custody of the insured

Front 51

Your business personal property (As defined in the BPP)

Back 51

Personal property owned by the named insured and, in some cases, personal property owned by others (such as leased property and improvements and betterments).

Front 52

Improvements and betterments

Back 52

Alterations or additions made to the building at the expense of a tenant who does not own the building and who cannot legally remove them.

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Personal property of others

Back 53

A category of property that the BPP can cover and that includes personal property of others (such as the named insured's customers) while the property is in the named insured's custody.

Front 54

Property not covered under BPP (answer part 1)

Back 54

a. accounts, bills, currency, deeds, food stamps or other evidences of debt, money, notes or securities. Lottery tickets held for sale are not securities;
b. Animals, unless owned by others and boarded by youn, only as "stock' while inside of buildings;
c. automobiles held for sale;
d. bridges, roadways, walks, patios or other paved surfaces;
e. contraband, or property in the course of illegal transportation or trade;
f. the cost of excavations, grading, backfilling or filling;
g. foundations of buildings, structures, machinery or boilers if their foundations are below: 1) the lowest basement floor; or 2) the surface of the ground, if there is no basement

Front 55

Property not covered under BPP (answer part 2)

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h. Land (including land on which the property is located), water, growing crops or lawns;
i. personal property while airborne or waterborne;
j. bulkheads, pilings, piers, wharves or docks;
k. property that is covered under another coverage form of this or any other policy in which it is more specifically described, except for the excess of the amount due (whether you can collect on it or not) from that other insurance;
l. retaining walls that are not part of a building
m. underground pipes, flues or drains;
n. the cost to research, replace or resotres the information on valuable papers and records, including those which exist on electronic or magnetic media, except as provided in the Coverage Extensions;

Front 56

Property not covered under BPP (answer part 3)

Back 56

o. Vehicles or self-propelled machines (including aircraft or watercraft) that: (1) Are licensed for use on public roads; or (2) Are operated principally away from the described premises. This paragraph does not apply to (a) vehicles or self-propelled machines or autos you manufacture, process or warehouse; (b) vehicles or self-propelled machines, other than autos, you hold for sale; or (c) rowboats or canoes out of water at the described premises; (d) trailers, but only to the extent provided for in the Coverage Extension for Non-Owned Detached Trailers.
p. The following property while outside of buildings: (1) grain, hay, straw or other crops; (2) fences, radio or television antennas (including satellite dishes) and their lead-in wiring, masts or towers, signs (other than signs attached to buildings), trees, shrubs or plants (other than 'stock' of trees, shrubs or plants), all except as provided in the Coverage Extensions.

Front 57

The 5 additional BPP coverages:

Back 57

1. Debris removal
2. Preservation of property
3. Fire department service charge
4. Pollutant cleanup and removal
5. Increased cost of construction

Front 58

BPP debris removal expenses will be paid only if they are reported in writing within how many days?

Back 58

180 days

Front 59

Under the debris removal provision in the BPP, what is the most that will be paid for such debris removal?

Back 59

25 percen tof hte sum of the direct loss payment (this in addition to the deductible amount).

Front 60

An additional $10,000 limit per location is provided for the BPP debris removal coverage if:

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(1) the direct loss plus debris removal expense exceeds the limits of insurance or (2) the debris removal expense exceeds the 25 percent limitation of direct losses.

Front 61

T or F: You can increase the $10,000 additional limit for debris removal on the BPP by endorsement.

Back 61

TRUE. You CAN increase the $10,000 additional limit for debris removal on the BPP by endorsement.

Front 62

The fire department service charge (an additional coverage of the BPP) pays such charges up to how much if the charges are assumed by contract prior to loss or are required by local ordinance?

Back 62

Up to $1,000

Front 63

For examples of debris removal losses, see 2.14.

Back 63

For examples of debris removal losses, see 2.14.

Front 64

Pollutant cleanup and removal (a BPP additional coverage) requires that expenses be reported in writing within ______ days after the loss. An aggregate limit of ________ per location applies to all such expenses that occur during each separate twelve-month period.

Back 64

180 days; $10,000 per location.

Front 65

What is the amount of insurance for increased cost of construction (an additional coverage of the BPP)?

Back 65

5 percent of the amount of insurance or $10,000, whichever is less. This amount is paid in addition to the policy limit. (And, it applies only if the Replacement Cost option has been selected.)

Front 66

The protection provided by the coverage extensions section of the BPP coverage form applies only if _________ is shown in the declarations.

Back 66

at least 80 percent coinsurance or a value reporting period symbol

Front 67

T or F: BPP coverage extensions are paid in addition to policy limits.

Back 67

TRUE. They ARE paid in addition to policy limits.

Front 68

6 BPP coverage extensions

Back 68

1. Newly acquired or constructed property
2. Personal effects and property of others
3. Valuable papers and records - cost of research
4. Property off-premises
5. Outdoor property
6. Non-owned detached trailers

Front 69

Newly Acquired or Constructed Property coverage (a coverage extension of the BPP) terminates automatically at the earliest of the following three dates:

Back 69

1. On the expiration date of the policy
2. Thirty days after the acquisition of the new location or the start of construction of the new building
3. On the date the insured notifies the insurer of the new location or new building.

Front 70

Maximum limit for BPP's newly acquired or constructed property coverage extension: (separate limits for building and personal property)

Back 70

Building: $250,000 at each building
Personal Property: $100,000 at each building

Front 71

Maximum limit for BPP's personal effects and property of others coverage extension:

Back 71

$2,500 at each location

Front 72

Maximum limit for BPP's valuable papers and records - cost of research coverage extension

Back 72

$2,500 at each location (can be increased)

Front 73

Maximum limit for BPP's property off premises coverage extension

Back 73

$10,000

Front 74

Maximum limit for BPP's outdoor property coverage extension

Back 74

$1,000 per occurence but only $250 per tree, shrub or plant

Front 75

Maximum limit for BPP's non-owned detached trailers coverage extension

Back 75

$5,000 (can be increased)

Front 76

Abandonment condition

Back 76

A condition that prohibits the insured from abandoning damaged property to the insurer

Front 77

Appraisal condition

Back 77

A process that the insurer and the insured must follow for resolving disputes about the insured property's value or amount of loss. (Involves appraisers, possibly umpire (who is possibly appointed by a judge)).

Front 78

Proof of loss

Back 78

A statement of facts about a loss for which the insured is making a claim

Front 79

If the building where a loss occurs has been vacant for more than 60 consecutive days before the loss occurred, the insurer will not pay if the loss is caused by:

Back 79

(1) vandalism, (2) sprinkler leakage unless the sprinkler was protected against freezing, (3) breakage of building glass, (4) water damage, (5) theft, (6) attempted theft. iF any other covered peril causes the loss, loss payment will be reduced by 15 percent.

Front 80

If the BPP covers a building owner or general lessee, "building" means the entire building, and it is considered vacant unless at least ____ percent of its total square footage is (1) rented to a lessee or sub-lessee and used by that party to conduct its customary operations or (2) used by the building owner to conduct its customary operations. Buildings under construction or renovation are not considered to be vacant.

Back 80

31 percent.

Front 81

Actual cash value

Back 81

ACV. Cost to replace property w/ new property of like kind and quality minus depreciation.

Front 82

BPP valuation basis for property other than that specifically listed:

Back 82

ACV

Front 83

BPP valuation basis for building damage of $2,500 or less:

Back 83

Replacement cost except for awnings, floor coverings, appliances, and outdoor equipment or furniture

Front 84

BPP valuation basis for stock sold but not delivered

Back 84

Selling price less discounts nad unincurred costs

Front 85

BPP valuation basis for glass:

Back 85

Replacement cost for safety glazing if required by law

Front 86

BPP valuation basis for improvements and betterments replaced by the insured:

Back 86

ACV

Front 87

BPP valuation basis for improvements and betterments not replaced

Back 87

Percentage of cost based on remaining life of lease

Front 88

BPP valuation basis for valuable papers and records

Back 88

Cost of blank media plus cost of transaction or copying ($2,500 research cost as coverage extension)

Front 89

Coinsurance clause

Back 89

Clause that requires the insured to carry insurance equal to at least a specified percentage of the insured property's value

Front 90

Equation for coinsurance:

Back 90

Loss payment = ((Amount of insurance carried/amount of insurance required) x Loss) - Deductible

Front 91

In coinsurance, the amount of insurance required is:

Back 91

...the actual cash value of the property immediately before the loss occurred multiplied by the coinsurance percentage.

Front 92

BPP optional coverage: Agreed Value

Back 92

Coverage that suspends the coinsurance clause if the insured carries the amount of insurance that the insurer and insured agree to be the property's full value.

Equation:

Loss payment = ((Limit of insurance/agreed value) x loss) - Deductible

Front 93

BPP inflation guard optional coverage

Back 93

Coverage for the effects of inflation that automatically increases the limit of insurance by the percentage of annual increase shown in the declarations

Front 94

BPP optional coverage: Replacement cost

Back 94

Coverage for losses to most types of property on a replacement cost basis (with no deduction for depreciation or obsolescence) instead of on an actual cash value

Front 95

The BPP Replacement Cost option does not apply to:

Back 95

1) property of others, 2) contents of a residence, 3) manuscripts, or 4) works of art, antiques, or rare articles. (However, you can extend replacement cost to the personal property of others.)

Front 96

Functional replacement cost

Back 96

The cost of replacing damaged property w/ similar property that performs the same function but might not be identical to the damaged property

Front 97

Value reporting form

Back 97

Form that covers the fluctuating values of business personal property by providing insurance for the insured's maximum expected values and requiring the insured to periodically report property values to the insurer.

Front 98

With the value reporting form (BPP), what is the amount of the advance premium based on?

Back 98

It is based on 75% of the limit of insurance.

Front 99

Peak Season Limit of Insurance Endorsement

Back 99

Endorsement that covers the fluctuating value of business personal property by providing differing amounts of insurance for certain time periods during the policy period.

Front 100

Specific insurance

Back 100

Insurance that covers each building for a specific limit of insurance and perosnal property at each building for a specific limit of insurance. (as opposed to Blanket Insurance)

Front 101

Blanket insurance

Back 101

Insurance that covers either of the following with one limit of insurance: (1) two or more types of property (such as buildings and business personal property) or (2) one or more types of property at more than one location. (as opposed to Specific Insurance)

Front 102

T or F: Blanket insurance may involve an additional cost.

Back 102

TRUE. The minimum coinsurance clause for blanket insurance is 90%, but the rates are the same as for 80 percent coinsurance.

Front 103

The first insurance policies covering buildings in colonial American covered loss by ______ only.

Back 103

fire

Front 104

Causes of Loss - Basic Form

Back 104

Form that covers fire, lightning, explosion, windstorm, hail, smoke, aircraft, vehicles, riot, civil commotion, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action

Front 105

Causes of Loss - Basic Form consists of mainly two sections: A & B (describe)

Back 105

A, a listing of several covered causes of loss (also known as perils), which are subject to some definitions and limitations expressed within that listing.

B, a set of exclusions that furhter limit the application of the covered perils

Front 106

Causes of loss that both the Basic and Broad Form cover:

Back 106

Fire, lightning, explosion, windstorm or hail, smoke, aircraft or vehicles, riot or civil commotion, vandalism, sprinkler leakage, sinkhole collapse, volcanic action

Front 107

Causes of loss that the Basic Form does not cover but the Broad Form does:

Back 107

Falling objects; weight of snow, ice or sleet; water damage; collapse caused by certain perils (provided as an additional coverage)

Front 108

Covered smoke damage must be what?

Back 108

Sudden and accidental

Front 109

Explosion does not include:

Back 109

- The rupture of pressure relief valves
- The rupture of a building resulting from the expansion or swelling of its contents caused by water absorption

Front 110

Hostile fire

Back 110

Fire that is not in a place where fire is intended to be

Front 111

How many persons are needed for a riot?

Back 111

Three or more

Front 112

Exclusions to Commercial Property insurance:

Back 112

Ordinance or law; earth movement; governmental action; nuclear hazard; utility services; war and military action; water; other exclusions (artificially generated electric currents, rupture or bursting of water pipes unless caused by a covered cause of loss; leakage of water or steam from any part of an appliance or system containing water or steam; explosion of steam boilers, steam pipes, steam turbines, or steam engines owned by, leased to, or operated by the insured; mechanical breakdown; loss resulting from the neglect of the insured to use all reasonable means to save and preserve property at and after the time of loss.)

Front 113

Causes of Loss - Broad Form

Back 113

Form that covers basic form perils plus falling objects; weight of snow, ice, or sleet; water damage; and (as additional coverage) collapse caused by certain perils

Front 114

The water damage covered loss in commercial property insurance specifically excludes:

Back 114

1. The cost to repair anyd efect that caused the loss or damage.
2. Gradual damage that occurs over a period of fourteen days or more.
3. Discharge or leakage from an automatic sprinkler system. (The sprinkler leakage peril would cover such damage.)
4. Discharge or leakage from a sump, including overflow because of sump pump failure
5. Discharge or leakage from roof drains, gutters, downspouts, or similar fixtures or equipment

Front 115

Collapse

Back 115

An abrupt falling down or caving in of a building or part of a building that, as a result, can no longer be occupied for its intended purpose.

Front 116

Causes of Loss - Special Form

Back 116

Form that covers "risks of direct physical loss," suject to the form's exclusions and limitations. (Traditionally known as "all risks" coverage)

Front 117

Exclusions and limitations to the Causes of Loss - Special Form

Back 117

- Wear and tear
- Rust, corrosion, fungus, decay, or deterioration
- Smog
- Settling, cracking, shrinking, or expansion
- Infestations and waste products of insects, birds, rodents, or other animals
- Damage to personal property by dampness or dryness of atmosphere, changes or extremes in temperatures, or marring or scratching
- Weather conditions that contribute to other excluded causes of loss
- Acts or decisions, including the failure to act or decide, of any person, group, organization, or governmental body
- Faulty or inadequate planning, zoning, surveying, siting, design, specifications, workmanship, repair, construction, renovation, remodeling, grading, compaction, materials or maintenance

Front 118

Loss to the following kinds of property is covered only if it is caused by "specified causes of loss"

Back 118

1. Valuable papers and records
2. Animals, and then only in the event of their death
3. Fragile articles if broken, such as glassware, statuary, marble, chinaware, and porcelain (but not including building glass, containers of property held for sale, and lenses)
4. Builders' machinery and equipment owned or held by the insured unless on or within 100 feet of the described premises

Front 119

Theft limits for Commercial Property Special Form Causes of Loss

Back 119

- $2,500 for furs and garments trimmed w/ fur
- $2,500 for jewelry, watches, and precious metals, but the limit does not apply to jewelry or watches valued at $100 or less per item
- $2,500 for patterns, dies, molds and forms
- $250 for stamps, tickets, and letters of credit

Front 120

Additional coverages for the Commercial Property form:

Back 120

- property in transit (up to $5,000)
- water damage, other liquids, powder or molten material damage coverage

Front 121

Builders Risk Coverage Form

Back 121

Form that covers buildings in the course of construction, including additions or alterations to existing buildings

Front 122

Property covered under the Builders Risk Coverage Form:

Back 122

- Foundations
- If not covered by other insurance, temporary structures built or assembled on site, such as scaffolding or concrete forms
- Property intended to become part of the building - such as lumber, uninstalled windows, doors, sinks, and furnaces - while located within 100 feet of the described premises

Front 123

Important info on causes of loss as they pertain to the Builders Risk form:

Back 123

Collapse During Construction (excluded by the Builders Risk form except by endorsement)

Theft of Building Materials (can be added by endorsement)

Front 124

Need for Adequate Insurance condition

Back 124

Essentially a 100 percent coinsurance clause for builders risk insurance; except that it requires 100 percent of ACV upon completion (as opposed to upon the date of loss)

Front 125

Formula for "Need for Adequate Insurance" condition:

Back 125

(builders risk policy)

Loss Payment = ((Limit of insurance / ACV of building on completion) x loss) - deductible

Front 126

Condominium Association Coverage Form

Back 126

Form that covers buildings and business personal property of condominium associations

Front 127

The Condominium Association Coverage From provides coverage for property in three categories:

Back 127

1. Building
2. Business personal property of the named insured (which is the association of unit owners)
3. Personal property of others

Front 128

The condominium building coverage applies to certain items - i.e., fixtures, improvements, alterations, appliances, including (but not limited to) those used for refrigerating, ventilating, cooking, dishwashing, laundering, or housekeeping) only if ____

Back 128

...only if the condo association agreement requires the association to insure them

Front 129

T or F: Business personal property of a condo unit owner is covered if the owner is the sole owner.

Back 129

FALSE. It is only covered if it is owned by the association or if it is indivisibly owned by all unit owners

Front 130

Condominium Commercial Unit-Owners Coverage Form

Back 130

Form that cover business personal property and building property exposures of commercial (nonresidential) condominium units.

Front 131

Loss assessment coverage

Back 131

Coverage for a commercial condominium unit-owner's share of any assessment made by the association against all unit-owners because of physical loss to condominium property caused by a covered cause of loss.

Front 132

Miscellaneous real property coverage

Back 132

Coverage for real property (such as a storage shed or garage building) that pertains only to the named insured's condominium unit or real property that the named insured has a duty to insure under the condominium association agreement

Front 133

Insurance for highly protected risks (HPR)

Back 133

Property insurance that covers large property risks with superior loss protection characteristics; has broader coverage than most commercial property policies and usually a lower premium rate.

Front 134

Ordinance or Law Coverage Endorsement

Back 134

Endorsement that covers three types of losses due to the enforcement of building ordinances or laws: (1) the value of undamaged property that must be demolished, (2) the cost to demolish the building's undamaged portion and remove its debris, and (3) the increased cost to rebuild the property

Front 135

Spoilage Coverage Endorsement

Back 135

Endorsement that covers damage to perishable stock due to power outages; on-premises breakdown; or contamination of the insured's refrigerating, cooling, or humidity control equipment (limit is $50,000)

Front 136

Manufacturers' Consequential Loss Assumption Endorsement

Back 136

Endorsement that covers reduction in value of undamaged property due to physical loss to other property

Front 137

Brands and Labels Endorsement

Back 137

Endorsement that permits the insured, when the insurer takes damaged merchandise as salvage, to stamp the word "salvage" on the merchandise or to remove its brands or labels before sale

Front 138

Maximum NFIP limit per building and per contents of a building:

Back 138

$500,000 each (per building; for contents of a building)

Front 139

Typical deductible for commercial flood coverage:

Back 139

$25,000 or more

Front 140

Commercial Lines Manual (CLM)

Back 140

An ISO publication that includes rules and rating procedures for nine major lines of commercial insurance.

Front 141

Loss costs

Back 141

The portion of the rate that covers projected claim payments and loss adjusting expenses.

Front 142

Other factors affecting commercial property premiums: (catchy little acronym)

Back 142

COPE:

Construction
Occupancy
Protection
Exposure

and,
Location

Front 143

Specific rating

Back 143

A rating approach that bases a building's property insurance rate on inspecting and evaluating that particular building

Front 144

Class rating

Back 144

A rating approach that uses rates reflecting the average probability of loss for businesses within large groups of similar risks; the predominant method used for rating commercial properties

Front 145

Business income insurance

Back 145

Insurance that covers the reduction in an organization's income when operations are interrupted by damage to property caused by a covered peril

Front 146

Net income

Back 146

Excess of revenues over expenses; revenues less expenses

Front 147

Profit

Back 147

Net income that results when revenues exceed expenses

Front 148

Net loss

Back 148

Net income that results when expenses exceed revenues

Front 149

Continuing expenses

Back 149

Expenses that continue to be incurred during a business interruption

Front 150

Noncontinuing expenses

Back 150

Expenses that cease during a business interruption

Front 151

Extra expenses

Back 151

Expenses that an organization only incurs if business is interrupted

Front 152

Business Income (and Extra Expense) Coverage form

Back 152

form that covers both business income and extra expense losses (even if the extra expenses do not reduce the business income loss).

Front 153

Business Income (without Extra Expense) Coverage form

Back 153

Form that covers business income loss but only covers extra expenses to the extent that they reduce the business income loss.

Front 154

Business income

Back 154

The sum of (1) net profit or loss that would have been earned or incurred if operations had not been suspended plus (2) normal operating expenses, including payroll, that continue during the suspension.

Front 155

Period of restoration

Back 155

The period during which business income loss is covered under the BIC forms; begins seventy-two hours after the physical loss occurs and ends when the property is (or should have been) restored to use with reasonable speed. (With regard to extra expense coverage, begins immediately after the physical loss occurs.)

Front 156

Extra expense coverage

Back 156

Coverage for extra expenses incurred by the named insured to avoid or minimize the suspension of operations; additional coverage of the business income and extra expenses coverage form.

Front 157

Expenses to reduce loss

Back 157

Coverage for necessary expenses incurred by the named insured to reduce business income loss; the expenses are covered only to the extent they actually reduce the business income loss

Front 158

Civil authority additional coverage

Back 158

Coverage for loss of business income that results when access to the insured's premises is prohibited by civil authority because of damage to property other than the insured's.

Front 159

Extended business income (EBI) additional coverage

Back 159

Coverage for business income losses that continue after the period of restoration ends; the coverage begins when the damaged property has been restored and ends when the insured's business returns to normal, subject to a maximum of thirty days

Front 160

Business income coverage on newly acquired locations is limited to:

Back 160

$100,000

Front 161

BIC

Back 161

Business Income insurance

Front 162

BIC exclusions in causes-of-loss forms

Back 162

Business income insurance does not apply if loss is caused by:

- Off-premises services interruption
- Finished stock
- Antennas
- Delay
- Loss of privilege
- Other consequential losses

Front 163

Additional condition imposed by the BIC:

Back 163

Resume operations, in whole or in part, as quickly as possible (if the insured intends to resume operations)

Front 164

Limitation - Electronic Media and Records (for BIC)

Back 164

Coverage for a BIC loss due solely to damage to or destruction of electronic media or records is limited to a maximum of sixty days from the initial date of loss. If other property is also damaged or destroyed, the covered loss is limited to a maximum of (1) sixty days or (2) the period required to restore the other property with reasonable speed and similar quality, whichever is longer.

Front 165

T or F: the coinsurance provision for BIC may be 50,60,70,80,90,100 or 125 percent.

Back 165

TRUE. However, the policy may also be written w/ no coinsurance.

Front 166

For BIC coinsurance purposes, the time covered is:

Back 166

the estimated net income and expense for one year starting with the policy inception or anniversary.

Front 167

Probable maximum loss (PML)

Back 167

The largest loss than an insurer is likely to sustain

Front 168

BIC Optional coverages:

Back 168

Maximum period of indemnity

Monthly limit of indemnity

Agreed value

Extended period of indemnity

Front 169

Maximum period of indemnity coverage option (for BIC)

Back 169

Option that deletes the coinsurance clause while limiting loss payment to the lesser of (1) the amount of loss sustained during the 120 days following the beginning of the period of restoration or (2) the policy limit.

Front 170

Monthly limit of indemnity coverage option (for BIC)

Back 170

Option that deletes the coinsurance clause while limiting the amount recoverable during any month of business interruption to a stipulated fraction (1/6, 1/4, or 1/3)

Front 171

Agreed value coverage option

Back 171

Option that suspends the coinsurance clause as long as the insured carries an amount of business income insurance that is equal to the value agreed on by the policyholder and the insurer.

Front 172

Extended period of indemnity coverage option (BIC)

Back 172

Option that extends the duration of EBI coverage for up to two years

Front 173

Extra expense coverage form

Back 173

Form that covers the same extra expenses incurred as does the Business Income (and Extra Expense) Coverage form, with the exception that this form limits maximum recovery based on the period of restoration.

Front 174

Dependent property exposures

Back 174

The possibility of incurring business income loss because of physical loss occurring on the premises of an organization that the insured depends on for materials, products, or sales.

Front 175

Contributing location

Back 175

furnishes materials or services to the insured

Front 176

Recipient location

Back 176

Purchases materials or services from the insured

Front 177

Manufacturing location

Back 177

Manufactures products for delivery to the insured's customers

Front 178

Leader location

Back 178

Attracts customers to the insured's location (a major dept. store at a shopping center, for example)

Front 179

Ordinary Payroll Limitation or Exclusion Endorsement

Back 179

Endorsement that limits coverage for ordinary payroll expenses to a specified number of days or excludes such expenses altogether; allows the insured to satisfy the coinsurance requirement with a lower amount of insurance, thus reducing the policy premium.

Front 180

Power, Heat, and Refrigeration Deduction Endorsement

Back 180

Endorsement that eliminates power, heat, and refrigeration expenses from coverage and from the coinsurance calculation; allows insured to satisfy the coinsurance requirement with a lower limit of insurance.

Front 181

Ordinance or Law - Increased Period of Restoration Endorsement

Back 181

Endorsement that covers business income loss during the additional time required to comply with building ordinances or laws.

Front 182

Business Income Premium Adjustment Endorsement

Back 182

allows the insured to carry a limit of insurance set high enough to cover the highest anticipated fluctuation in business income values while paying premium based on the amount of insurance actually required

Front 183

Business Income Changes - Educational Institutions Endorsement

Back 183

Adapts the BIC policy to meet the needs of schools

Front 184

Utility Services - Time Element Endorsement

Back 184

Extends the BIC policy to cover loss of earnings resulting from off-premises interruptions of utilities and communications services

Front 185

Commercial crime insurance

Back 185

Insurance that covers (1) money and securities against numerous perils (not limited to crime perils) and (2) property other than money and securities against crime perils, such as employee theft, robbery, theft by outsiders, and extortion

Front 186

Discovery form

Back 186

Form that covers losses discovered during the policy period even though they may have occurred before the policy period

Front 187

Loss sustained form

Back 187

Form that covers losses actually sustained during the policy period and discovered no later than one year after policy expiration.

Front 188

Basic crime insuring agreements:

Back 188

1. Employee Theft
2. Forgery or Alteration
3. Inside the Premises - Theft of Money and Securities
4. Inside the Premises - Robbery or Safe Burglary of Other Property
5. Outside the Premises
6. Computer Fraud
7. Money Orders and Counterfeit Paper Currency

Front 189

What is basic crime insuring agreement #1?

Back 189

Employee theft

Front 190

What is basic crime insuring agreement #2?

Back 190

Forgery or alteration

Front 191

What is basic crime insuring agreement #3?

Back 191

Inside the premises - theft of money and securities

Front 192

What is basic crime insuring agreement #4?

Back 192

Inside the premises - robbery or safe burglary of other property

Front 193

What is basic crime insuring agreement #5?

Back 193

Outside the premises

Front 194

What is basic crime insuring agreement #6?

Back 194

Computer fraud

Front 195

What is basic crime insuring agreement #7?

Back 195

Money orders and counterfeit paper currency

Front 196

Employee theft coverage

Back 196

Coverage for theft of money, securities, or other property committed by an insured's employee

Front 197

Theft

Back 197

The unlawful taking of money, securities, or other property to the insured's deprivation

Front 198

T or F: temps and leased employees are considered to be "employees"

Back 198

FALSE.

Front 199

Money

Back 199

Currency, coins, bank notes in current use and having a face value; travelers checks, register checks, and money orders held for sale to the public

Front 200

Securities

Back 200

Negotiable and nonnegotiable instruments or contracts representing either "money" or other property. Examples of securities include stocks, bonds, tokens, tickets, stamps in current use (including unused value in a postage meter), and evidences of debt issued in connection w/ charge or credit cards other than cards issued by the insured

Front 201

Other property

Back 201

Defined as all tangible property, other than money and securities, that has intrinsic value and that the coverage form or policy does not otherwise exclude.

Front 202

Cancellation as to Any Employee condition (commercial crime form)

Back 202

- provides automatic cancellation of coverage with respect to any employee who has previously committed a dishonest act known to the insured
- gives the insurer the right to cancel coverage w/ respect to any employee by providing thirty days' advance notice to the insured.

Front 203

Forgery

Back 203

Signing the name of another person w/ intent to deceive

Front 204

Alteration

Back 204

Something done to a written instrument that changes its meaning or terms w/o the consent of all parties to the instrument.

Front 205

T or F: Forgery or alteration coverage applies worldwide.

Back 205

TRUE. it does apply worldwide.

Front 206

Theft, disappearance and destruction

Back 206

A combination of covered causes of loss in some crime insuring agreements that provides an extremely broad scope of coverage.

Front 207

Robbery

Back 207

The unlawful taking of property from the care and custody of a person by one who has caused or threatened to cause that person bodily harm; includes situations in which the thief commits an obviously unlawful act that is witnessed by the custodian of the stolen property (such as an observed 'smash and grab' theft from a shop window)

Front 208

Custodian

Back 208

The named insured, any of the named insured's partners or members, or the named insured's employee while having care and custody of the property inside the premises; excludes any person while acting as a watchperson or janitor.

Front 209

Safe burglary

Back 209

The unlawful taking of property from within a locked safe or vault by a person who unlawfully and forcibly enters the safe or vault; includes the unlawful taking of the entire safe or vault from inside the premises

Front 210

Messenger

Back 210

The named insured, a relative of the named insured, any of the named insured's partners or members, or any of the named insured's employees while having care and custody of property outside the insured premises.

Front 211

Computer fraud coverage

Back 211

Coverage for loss of covered property due to using a computer to fraudulently transfer covered property to the wrongdoer

Front 212

A typical firm may choose to carry only which of the seven crime coverages?

Back 212

1 (employee theft), 2 (forgery or alteration, 3 (inside the premises - theft of money and securities), 5 (outside the premises), 6 (computer fraud), fund transfer fraud endorsement

Front 213

Why do many firms omit commercial crime insurance agreement 4?

Back 213

Because they have comparable coverage in their special-form commercial property coverage.

Front 214

Why do many firms omit commercial crime insurance agreement 7?

Back 214

Many prefer to retain their exposure to money orders and counterfeit paper currency.

Front 215

General exclusions to commercial crime insurance:

Back 215

- Acts committed by you, your partners or your members
- Acts of employees, managers, directors, trustees or representatives
- Government action
- Indirect loss
- Legal expenses
- Nuclear
- War and similar actions

Front 216

Exclusions applicable only to employee theft:

Back 216

- Employee canceled under prior insurance
- Inventory shortages
- Trading
- Warehouse receipts

Front 217

Exclusions applicable to Inside the Premises and Outside the premises (3,4,5)

Back 217

Accounting or Arithmetical errors or omissions
Exchanges or purchases
Fire
Money operated devices
Motor vehicles or equipment and accessories
Transfer or surrender of property
Vandalism
Voluntary parting with title to or possession of property

Front 218

Extended period to discover loss

Back 218

A specified period following policy expiration providing coverage for loss first discovered during this period if the loss occurred before policy expiration

Front 219

Retroactive date endorsement

Back 219

Endorsement that modifies the discovery form by limiting coverage to losses the insured incurs because of acts committed or events occurring after the policy's retroactive date.

Front 220

Employee Theft - Name or Position Schedule Endorsement

Back 220

Covers employee theft by only those employees who are specifically identified by name or by position. This coverage is obviously more restricted than insuring agreement 1. It is sometimes used by smaller firms or those that feel that only a few employees pose an employee theft risk.

Front 221

Inside the Premises - Theft of Other Property Endorsement

Back 221

Covers theft of property other than money and securities inside the premises. This endorsement provides broader coverage than insuring agreement 4, which provides only robbery and safe burglary coverage.

Front 222

Inside the Premises - Robbery or Safe Burglary of Money and Securities Endorsement

Back 222

Covers loss of money and securities by robbery or safe burglary. This is more restrictive coverage than the "theft, disappearance or destruction" coverage provided by insuring agreement 3.

Front 223

Inside the Premises - Robbery or Burglary of Other Property Endorsement

Back 223

Covers loss of property other than money and securities by robbery of a watchperson or by burglary of the premises.

Front 224

Burglary

Back 224

The taking of property from inside a building by unlawful entry into or exit form the building; signs of forcible entry or exit must be visible

Front 225

Clients' Property

Back 225

Covers theft, committed by the insured's employees, of clients' property within clients' premises. A useful coverage for cleaning services and other firmst hat have employees who work within clients' premises.

Front 226

Funds Transfer Fraud

Back 226

Covers loss of money and securities by fraudulent electronic, telephonic, telefacsimile, telegraphic, cable, or teletype instructions from the insured's account at a financial institution

Front 227

Extortion - Commercial Entitites

Back 227

Covers loss due to surrender of money, securities, or other property as a result of (1) a threat of bodily harm to an employee, director, trustee, partner, member, manager, or proprietor; or (2) a threat to do damage to the insured's premises. (Similar coverage is also available for governmental organizations.)

Front 228

Financial institution bond

Back 228

A policy that covers the crime loss exposures of financial institutions such as banks, savings and loan institutions, and insurance companies.

Front 229

Equipment breakdown insurance

Back 229

Insurance that covers loss due to the accidental breakdown of almost any type of equipment that operates under pressure or that controls, transmits, or uses mechanical or electrical power.

Front 230

Breakdown

Back 230

A direct physical loss to covered equipment that necessitates its repair or replacement due to failure of pressure equipment, mechanical failure, or electrical failure

Front 231

Covered equipment (as it pertains to equipment breakdown insurance)

Back 231

Includes pressurized equipment, electrical or mechanical equipment, communication and computer equipment, and other specified equipment

Front 232

Ten insuring agreements of the ISO Equipment Breakdown Form

Back 232

- Property damage
- Expediting expenses
- Business income and extra expense
- Spoilage damage
- Utility interruption
- Newly acquired premises
- Ordinance or law
- Errors and omissions
- Brands and labels
- Contingent business income and extra expense

Front 233

T or F: covered property is broader than covered equipment.

Back 233

TRUE. Breakdown to covered equipment triggers coverage for damage to covered property.

Front 234

Expediting expenses coverage

Back 234

Coverage for the reasonable extra cost to make temporary repairs in order to speed up (expedite) permanent repairs or replacement of covered property.

Front 235

Errors and omissions (E&O) coverage

Back 235

Coverage for loss that would otherwise not be covered because of certain unintentional errors or omissions made in arranging the insurance, such as incorrectly describing an insured building's location

Front 236

Contingent business income and extra expense coverage

Back 236

Coverage for business income and extra expense loss due to equipment breakdown occurring at a location, shown in the declarations, that the insured does not own or operate

Front 237

$25,000 is the most that insurer will pay for direct damage due to breakdown caused by what five categories?

Back 237

1. Ammonia contamination
2. Hazardous substance
3. Consequential loss
4. Water damage
5. Data and Media

Front 238

Suspension condition

Back 238

Condition that allows the insurer to immediately suspend equipment breakdown insurance on an item of equipment that the insurer determines to be in a dangerous condition.

Front 239

MDV

Back 239

Multiple of daily value - a type of deductible sometimes used instead of a time deductible. It is expressed as a number (i.e., 3) times what the insured's average daily business income for the location where the loss occurred would have been during the period of restoration had no loss occurred. (Mentioned w/ equip. breakdown ins.)

Front 240

Joint or disputed loss agreement

Back 240

Condition that addresses claim situations in which the insured's equipment breakdown insurer and the insured's commercial property insurer disagree on which insurer covers a loss; each insurer pays half the loss to quickly indemnify the insured; insurers then resolve their differences.

Front 241

Marine insurance

Back 241

Insurance that, in the U.S., includes both ocean and inland marine coverage and in the rest of the world is limited to insurance for vessels and cargo.

Front 242

Nationwide Marine Definition

Back 242

A statement used mainly to determine whether a particular coverage is marine insurance (inland on ocean)

Front 243

What qualifies as Marine?

Back 243

That which is under the Nationwide Marine Definition:

A. Imports
B. Exports
C. Domestic shipments
D. Instrumentalities of transportation and communication (bridges, tunnels, piers, wharves, docks, pipelines, power and telephone lines, radio and television towers and communication equipment, and outdoor cranes and loading equipment)
E. Various types of property owned or used by individuals, such as jewelry, furs, musical instruments, silverware, coin collections and stamp collections
F. Various types of property pertaining to a business, a profession, or an occupation. Examples of such property include mobile equipment, builders risks, property in the custody of bailees, live animals, property at exhibitions, and electronic data processing equipment

Front 244

Inland marine insurance

Back 244

Insurance that covers many different classes of property that typically involve an element of transportation

Front 245

Common carriers

Back 245

Airlines, railroads, trucking companies, and other entities that furnish transportation services to the public.

Front 246

Contract carriers

Back 246

Carriers that furnish transportation services to shippers with whom they have contracts

Front 247

Private carriers

Back 247

Organizations that transport their own goods.

Front 248

Bill of lading

Back 248

The contract between the shipper and the carrier, which may limit the shipper's recovery for cargo loss

Front 249

Common carriers are not liable for loss caused by:

Back 249

- Acts of God (meaning natural phenomena such as floods, hurricanes, tornadoes, or earthquakes)
- Acts of public enemies (meaning war risks)
- Acts of public authority
- Neglect or fault on the part of the shipper
- Inherent vice in the cargo itself

Front 250

Straight bill of lading

Back 250

Fixes no limit on the amount of recovery

Front 251

Released value bill of lading

Back 251

Limits recovery to a specified amount

Front 252

F.O.B.

Back 252

"Free on Board" - indicates that the shipper (seller) is responsible for arranging to have the cargo delivered on board the vessel; used more loosely to indicate the point at which ownership and exposure to loss shift from the seller to the buyer

Front 253

Bailment

Back 253

The temporary possession by one party (the bailee) of personal property owned by another party (the bailor) for a specific purpose, such as cleaning or repair

Front 254

Bailee

Back 254

The part temporarily possessing the personal property in a bailment

Front 255

Bailor

Back 255

The owner of the personal property in a bailment

Front 256

Examples of movable equipment and Unusual property (eligible for inland marine insurance)

Back 256

Agricultural equipment, such as tractors and cultivators; mobile equipment used by contractors, such as cranes and backhoes; physicians' and surgeons' equipment; computer equipment; farm animals; fine arts; buildings under construction (builders risks); patterns, molds and dies; partially completed products while at another location for processing; property on exhibition; sales samples while in the custody of sales representatives; valuable papers and records; records of accounts receivable; theatrical property; signs; cameras; musical instruments

Front 257

Filed class

Back 257

The classes of inland marine business for which policy forms and/or rates must be filed w/ the state insurance dept.

Front 258

Nonfiled class

Back 258

The classes of inland marine business for which neither policy forms nor rates must be filed with the state insurance dept.

Front 259

Some examples of nonfiled inland marine coverages:

Back 259

Contractors equipment, builders risk, transit, motor truck cargo liability, difference in conditions, electronic data processing equipment, bailees, instrumentalities of transportation and communication

Front 260

Contractors equipment floater

Back 260

Policy that covers mobile equipment or tools while anywhere in the coverage territory. (Nonfiled)

Front 261

Builders risk policy

Back 261

Policy that covers a building in the course of construction, including building materials and supplies while on or away from the building site. (Nonfiled)

Front 262

Soft costs coverage

Back 262

Coverage for various incidental expenses that might result from a physical loss to a building project, such as additional interest, advertising expenses, or real estate taxes; can be added to a builders risk policy (Nonfiled)

Front 263

Installation floater

Back 263

Policy that covers a contractor's interest in building supplies or fixtures that the contractor has been hired to install. (Nonfiled)

Front 264

Trip transit policy

Back 264

Policy that covers a particular shipment of goods specified in the policy. (Nonfiled)

Front 265

Annual transit policy

Back 265

Policy that covers all shipments made or received by the insured throughout a one-year policy period. (Nonfiled)

Front 266

Motor truck cargo liability policy

Back 266

Policy that covers a trucker's liability for damage to cargo of others being transported by the trucker. (Nonfiled)

Front 267

Difference in conditions (DIC) policy

Back 267

Policy that covers on an "all-risks" basis to fill gaps in the insured's commercial property coverage, especially gaps in flood and earthquake coverage. (Nonfiled)

Front 268

Electronic data processing (EDP) equipment floater

Back 268

Policy that covers computer equipment, software, and electronic data

Front 269

Warehouse operators legal liability policy

Back 269

Policy that covers warehouse operators against liability for damage to the property of others being stored in operators' warehouses. (Nonfiled)

Front 270

Bailees' customers policy

Back 270

Policy that covers damage to customers' goods while in the possession of the insured, regardless of whether the insured is legally liable for the damage. (Nonfiled)

Front 271

Commercial Articles Coverage Form

Back 271

Form that covers photographic equipment and musical instruments used commercially by photographers, motion picture producers, professional musicians and others. (Filed)

Front 272

Camera and Musical Instrument Dealers Coverage Form

Back 272

Form that covers the stock in trade (inventory) of camera dealers or musical instrument dealers; also covers similar property of others in the insured's care, custody or control. (Filed)

Front 273

Equipment Dealers Coverage Form

Back 273

Form that covers the stock in trade of dealers that sell agricultural or construction equipment; also covers customers' equipment in the insured's care, custody, or control. (Filed)

Front 274

Physicians and Surgeons Equipment Coverage Form

Back 274

Form that covers the professional equipment, materials, supplies, and books of physicians, surgeons, and dentists; also covers the insured's office equipment and (if the insured is a tenant) improvements and betterments that the insured has made to the building. (Filed)

Front 275

Signs Coverage Form

Back 275

Form that covers neon, flourescent, automatic, or mechanical signs. (Filed)

Front 276

Theatrical Property Coverage Form

Back 276

Form that covers stage scenery, costumes, and similar property used in theatrical productions. (Filed)

Front 277

Film coverage form

Back 277

Form that covers exposed motion picture film and magnetic tapes or videotapes, including related soundtracks or sound records. (Filed)

Front 278

Floor Plan Coverage Form

Back 278

Form that covers merchandise being held for sale and that the dealer has financed under a floor plan. (Filed)

Front 279

Jewelers Block Coverage Form

Back 279

Form that covers the merchandise of retail jewelers, including similar property of others in the insured's care, custody, or control. (Filed)

Front 280

Mail Coverage Form

Back 280

Form that covers a financial institution against loss of securities and other negotiable instruments while in transit through specified types of mail. (Filed)

Front 281

Accounts Receivable Coverage Form

Back 281

Form that covers losses (including uncollectible accounts) due to destruction of the insured's records of accounts receivable. (Filed)

Front 282

Nonfiled jewerlers block policies are used to insure:

Back 282

1) Retailers w/ average inventories exceeding $250,000; 2) jewelery wholesalers; 3) jewelry manufacturers

Front 283

Valuable papers and records coverage form

Back 283

Form that covers valuable papers and records, such as an architect's blueprints and plans (Filed)

Front 284

Judgment rating

Back 284

Rating used by underwriters to rate one-of-a-kind risks

Front 285

Freight

Back 285

The compensation a carrier receives for transporting cargo

Front 286

Ocean marine insurance

Back 286

Insurance that covers vessels and their cargos, including various vessel-related liability exposures

Front 287

Voyage policy (cargo)

Back 287

Policy that covers cargo for a single trip specified in the policy; comparable to an inland marine trip transit policy.

Front 288

Open cargo policy

Back 288

Policy (ocean marine) that covers all goods shipped or received by the insured during the policy's term; comparable to an inland marine annual trip transit policy

Front 289

Typical valuation of an ocean shipment:

Back 289

Amount of invoice + Freight + 10%

Front 290

Warehouse to warehouse clause

Back 290

Clause in open cargo policies that covers the insured cargo during the ordinary course of transit (including land transit) from the time the cargo leaves the point of shipment until it is delivered to its final destination

Front 291

Sue and labor clause

Back 291

Clause that covers the cost of reasonable measures that the insured is required to take to protect property from damage at the time of loss.

Front 292

General average

Back 292

Partial loss that must, according to maritime law, be shared by all parties to a voyage (cargo owners and vessel owner).

Front 293

Particular average

Back 293

Partial loss that is borne by only one party to a voyage (such as a cargo owner)

Front 294

Hull insurance

Back 294

Insurance that covers physical damage to vessels, including their machinery and fuel but not their cargo

Front 295

Salvage (ocean marine)

Back 295

Refers to situations in which owners of cargo aboard a ship that falls in distress become liable to pay awards to those who put themselves at risk to rescue the ship

Front 296

Covered causes of loss for hull insurance:

Back 296

Perils of the seas, fire, lightning, earthquake, barratry, all other like perils.

Front 297

Perils of the seas

Back 297

Accidental causes of loss that are peculiar to the sea and other bodies of water

Front 298

Barratry

Back 298

Serious misconduct by the vessel's master or crew that is contrary to the owner's interest, such as fraudulent or criminal act that causes damage to the vessel.

Front 299

Collision liability clause

Back 299

Clause that covers the insured's liability for collision damage to other ships and their cargoes

Front 300

Time policy (ocean marine)

Back 300

Covers the insured vessel(s) for a specified period of time (usually a year)

Front 301

Protection and indemnity (P&I) insurance

Back 301

Insurance that covers shipowners against various liability claims due to operating the insured vessel.

i.e., - damage to bridges, piers, wharves, and other structures along waterways; injury to passengers, crew, and other persons on the ship; injury to persons on other ships; damage to cargo of others aboard the insured vessel

Front 302

Commercial general liability insurance

Back 302

Insurance that covers many of the common liability loss exposures faced by an organization, including its premises, operations, and products.

Front 303

Liability loss

Back 303

All costs to a person or an organization due to a legal claim or suit against that person or organization

Front 304

Legal liability

Back 304

A legally enforceable obligation of a person or an organization to pay a sum of money (called damages) to another person or organization.

Front 305

Civil law

Back 305

The branch of the law that provides a means to settle disputes between parties

Front 306

Criminal law

Back 306

The branch of the law that imposes penalties for wrongs against society

Front 307

Tort

Back 307

A civil wrong, other than a breach of contract, against another person

Front 308

Negligence

Back 308

A tort that occurs when a person exposes others to an unreasonable risk of harm because of failure to exercise the required degree of care.

Front 309

Strict liability

Back 309

Liability that is imposed even though the defendant acted neither negligently nor with intent to cause harm; for example, liability for injury caused by wild animals or dangerously defective products.

Front 310

Contract

Back 310

A legally enforceable agreement between two or more parties in which each party makes some promise to the other.

Front 311

Breach of contract

Back 311

Failure to fulfill one's contractual promise.

Front 312

Hold harmless agreement

Back 312

A contractual provision that obligates one of the parties to assume the legal liability of another party

Front 313

Contractual liability

Back 313

Liability assumed through a hold harmless agreement

Front 314

Statute

Back 314

A law passed by a state or federal legislative body

Front 315

Premises liability exposure

Back 315

Exposure to liability for injury or damage due to the ownership, occupancy, or use of premises.

Front 316

Operations liability exposure

Back 316

Exposure to liability for injury or damage due to activities in addition to the ownership, occupancy, or use of premises; for example, a building contractor's liability exposure while constructing a house

Front 317

Products liability exposure

Back 317

Exposure to liability for injury or damage due to products sold or distributed by the exposed party

Front 318

Completed operations liability exposure

Back 318

Exposure to liability for injury or damage due to work completed by the exposed party

Front 319

CGL Coverage A

Back 319

Bodily Injury and Property Damage Liability

Front 320

CGL Coverage B

Back 320

Personal and Advertising Injury Liability

Front 321

CGL Coverage C

Back 321

Medical Payments

Front 322

Bodily injury (as defined in the CGL)

Back 322

Bodily injury, sickness, or disease sustained by a person, including death resulting form any of these at any time

Front 323

Property damage

Back 323

Physical injury to tangible property, including resulting loss of use of that property and loss of use of tangible property that is not physical injured.

Front 324

Occurrence

Back 324

An accident, including continuous or repeated exposure to substantially the same general harmful conditions

Front 325

Occurrence coverage trigger

Back 325

Bodily injury or property damage that occurs during the policy period; what triggers coverage under the "occurrence" version of the CGL coverage form.

Front 326

Insured contract

Back 326

A contract under which liability assumed by the insured is covered int he CGL; includes a lease of premises, a sidetrack agreement, an easement or license agreement, an obligation (as required by ordinance) to indemnify a municipality, an elevator maintenance agreement, or that part of any other contract pertaining to the insured's business under which the insured assumes the tort liability of another party. (Is excluded for coverage by Coverage A)

Front 327

CGL Coverage A (Bodily Injury & Property Damage Coverage) Exclusions

Back 327

Contractual liability (i.e., insured contract)
Expected or intended injury
Liquor liability
Workers Compensation and Employers Liability
Pollution
Aircraft, Auto, and Watercraft
Mobile Equipment
War
Damage to Property
Insureds Products and Work (Damage to Your Product; Damage to Your Work; Damage to Impaired property or property not physically injured; recall of products, works, or impaired property)
Personal and Advertising Injury
Fire Legal Liability Coverage

Front 328

Auto

Back 328

A land motor vehicle, trailer, or semitrailer designed for travel on public roads, including attached machinery or equipment, but excluding mobile equipment

Front 329

Loading or unloading

Back 329

The handling of property (1) after it is moved from the place where it is accepted for movement onto an aircraft, watercraft or auto; (2) while on any such vehicle; or (3) while being moved from such vehicle to the place wher eit is finally delivered. Does not include movement by means of a mechanical device (other than a hand truck) that is not attached to the vehicle

Front 330

Mobile equipment

Back 330

Various types of vehicles designed for use principally off public roads, such as bulldozers and cranes

Front 331

Fire legal liability coverage

Back 331

Coverage for fire damage to premises rented to or temporarily occupied by the named insured

Front 332

Personal and advertising injury (CGL Coverage B)

Back 332

Injury that is covered by Coverage B of the CGL. Includes injury resulting from numerous offenses such as false detention, malicious prosecution, wrongful eviction, slander, libel, use of another's advertising idea, and copyright infringement

Front 333

Trade dress

Back 333

The overall appearance and image of a product

Front 334

CGL Coverage C (Medical payments) does not apply to bodily injury to the following persons:

Back 334

- Any insured (other than a volunteer worker of the named insured)
- Anyone hired to do work for an insured or for a tenant of an insured
- A person injured on that part of the named insured's premises which the person normally occupies
- A person entitled to workers compensation benefits for the injury
- A person injured while taking part in athletics

Front 335

CGL: who is an insured?

Back 335

1. Named insured
2. Employees of the named insured
3. Other persons and organizations

Front 336

LLC

Back 336

limited liability company

Front 337

T or F: In a partnership, the spouses of members are also insureds (but only for liability claims arising out of the conduct of the business of the partnership or joint venture)

Back 337

TRUE.

Front 338

CGL: Who is an insured - other persons and organizations includes who?

Back 338

1. Real estate managers
2. Legal representatives
3. Mobile equipment operators
4. Newly acquired organizations

Front 339

CGL Limit flow chart:

Back 339

General Aggregate limit --> Personal & Advertising Injury OR Each Occurrence -->Damage to Premises Rented to You OR Medical Expense

Products-Completed Operations Aggregate Limit --> Each Occurrence

Front 340

General aggregate limit

Back 340

The most the insurer will pay during the policy period for the sum of (1) damages under Coverage A, except damages because of injury or damage included in the products-completed hazard, (2) damages under Coverage B, and (3) medical expenses under Coverage C

Front 341

Products-completed operations hazard

Back 341

All bodily injury and property damage occurring away from the named insured's premises and arising out of the named insured's product or work. The hazard does not include (1) products still in the named insured's physical possession or (2) work that has not been completed or abandoned

Front 342

Personal and advertising injury limit

Back 342

The most the insurer will pay for all personal and advertising injury to one person or organization

Front 343

Each occurrence limit

Back 343

The most the insurer will pay for all of the following arising out of a single occurrence: (1) damages for bodily injury and property damage under Coverage A and (2) medical expenses under Coverage C

Front 344

Damage to premises rented to you limit

Back 344

The most the insurer will pay for either (1) damage by a cause other than fire to any one premises rented to the named insured or (2) damage by fire to any one premises rented to the named insured or temporarily occupied by the named insured with the owner's permission

Front 345

Medical expense limit

Back 345

The most the insurer will pay for Coverage C medical expenses due to bodily injury to one person

Front 346

Contribution by equal shares

Back 346

Method of sharing loss when two or more policies apply; each insurer pays an equal amount until the claim is fully paid or until one insurer exhausts its limit; if so, the other insurer pays the remainder of the claim (up to its limit).

Front 347

Contribution by limits

Back 347

Method of sharing loss when two or more policies apply; each insurer pays that proportion of the claim that the insurer's limit bears to the total of all applicable insurance.

Front 348

T or F: The representations condition (CGL) places a heavy burden on the insurer to read the policy declarations and to be sure that the representations madein the negotiation of the policy are accurate

Back 348

FALSE. It is the named insured's burden

Front 349

Claims-made coverage trigger

Back 349

The event that triggers coverage under the claims-made CGL coverage form: the first making of a claim against the insured during the policy period

Front 350

Retroactive date

Back 350

The date on or after which bodily injury or property damage must occur (or a personal and advertising injury offense must be committed) in order to be covered.

Front 351

Extended reporting period (often referred to as a "tail")

Back 351

An additional period (also called a "tail") following the expiration of a claims-made policy. During this period the expired policy covers claims first made against the insured, provided the injury occurred after the retroactive date (if any) and before policy expiration.

Front 352

CGL Exclusion Endorsement:

Exclusion - Personal and Advertising Injury Endorsement

Back 352

Excludes Coverage B - Personal and Advertising Injury Liability

Front 353

CGL Exclusion Endorsement:

Exclusion - Employees and Volunteer Workers as Insureds

Back 353

modifies the WHo Is an Insured section of the policy to eliminate insured status for the named insured's employees and volunteer workers

Front 354

CGL Exclusion Endorsement:

Exclusion - Total Pollution Exclusion Endorsement

Back 354

eliminates coverage for any injury, damage, or cleanup costs resulting from the actual, alleged, or threatened discharge of pollutants

Front 355

CGL Exclusion Endorsement:

Exclusion - Designated Product Endorsement

Back 355

excludes liability arising out of specified products of the insured

Front 356

CGL - Boats Endorsement

Back 356

extends CGL coverage to any watercraft described in the endorsement and owned or used by or rented to the insured

Front 357

CGL - Deductible Liability Insurance Endorsement

Back 357

Enables the insured to apply deductibles to the bodily injury and property damage liability coverages, either separately or combined. The deductibles may be on eithe ra per-claim or a per-occurrence basis.

Front 358

CGL - Additional Insured-Vendors Endorsement

Back 358

Includes as an insured any person or organization (the vendor) specified in the endorsement

Front 359

Rate formula for CGL

Back 359

Rate x rate exposure = premium

Front 360

Premium base

Back 360

The unit in which the rate exposure is measured, such as gross sales or payroll

Front 361

Class code

Back 361

A numeric code representing the description int he rating classification table that best fits a particular organization's operations

Front 362

Certificate of insurance

Back 362

A brief description of insurance coverage prepared by an insurer or its agent, commonly used by policyholders to provide evidence of insurance

Front 363

Liquor liability coverage form

Back 363

Form that covers liquor liability of insureds in the business of manufacturing, distributing, selling , serving or furnishing alcoholic beverages

Front 364

Products/Completed Operations Liability Coverage Form

Back 364

Form that covers products and completed operations liability separately from the CGL coverage form

Front 365

Owners and Contractors Protective Liability COverage Form

Back 365

Form purchased by a contractor to protect a property owner against liability for bodily injury or property damage arising out of (1) the contractor's operations at the specified location or (2) acts or omissions of the property owner in connection with the general supervision of such operations.

Front 366

Railroad Protective Liability Coverage Form

Back 366

Form that covers a railroad against claims arising out of a contractor's work on or adjacent to a railroad property and that is purchased by the contractor.

Front 367

Doctrine of "respondeat superior"

Back 367

"Let the employer answer"

Front 368

Employers nonownership liability

Back 368

An employer's liability for its employees' operation of their autos int he employer's business

Front 369

Auto no-fault law

Back 369

State statutes that require motorists to purchase (or require insurers to make available) insurance that provides minimum first-party benefits to injured persons regardless of fault

Front 370

Uninsured motorists law

Back 370

State statutes that require auto insurers to offer uninsured motorists coverage to all insured motorists who are their policyholders

Front 371

Business Auto Coverage Form

Back 371

Form that covers automobile loss exposures for all types of organizations other than auto dealers and motor carriers

Front 372

Coverage symbol

Back 372

Numeric symbols used in a commercial auto policy to indicate which autos are covered for particular coverages

Front 373

Business Auto Coverage Form: Symbol 1

Back 373

Any Auto

Front 374

Business Auto Coverage Form: Symbol 2

Back 374

Owned Autos Only

Front 375

Business Auto Coverage Form: Symbol 3

Back 375

Owned Private Passenger Autos Only

Front 376

Business Auto Coverage Form: Symbol 4

Back 376

Owned Autos Other Than Private Passenger Autos

Front 377

Business Auto Coverage Form: Symbol 5

Back 377

Owned Autos Subject to No-Fault

Front 378

Business Auto Coverage Form: Symbol 6

Back 378

Owned Autos SUbject to a Compulsory Uninsured Motorists Law

Front 379

Business Auto Coverage Form: Symbol 7

Back 379

Specifically Described Autos

Front 380

Business Auto Coverage Form: Symbol 8

Back 380

Hired Autos Only

Front 381

Business Auto Coverage Form: Symbol 9

Back 381

Nonowned Autos Only

Front 382

Business Auto Coverage Form: Symbols 1 - 9 (all)

Back 382

1. Any Auto
2. Owned Autos Only
3. Owned Private Passenger Autos Only
4. Owned Autos Other Than Private Passenger Autos Only
5. Owned Autos Subject to No-Fault
6. Owned Autos Subject to a Compulsory Uninsured Motorists Law
7. Specifically Described Autos
8. Hired Autos Only
9. Nonowned Autos Only

Front 383

Commercial Auto Coverage Agreement - the insurer expresses three distinct duties:

Back 383

1. A duty to pay damages
2. A duty to pay "covered pollution cost or expense"
3. A duty to defend the insured

Front 384

Commercial Auto - who is an insured?

Back 384

The named insured is an insured for any covered auto. Anyone other than the named insured is an insured whiel using w/ the named insured's permission a covered auto owned, hired or borrowed by the named insured. (some restrictions)

Front 385

Business Auto Liability Coverage Exclusions

Back 385

Expected or intended injury
Contractual liability
Workers compensation
Employee indemnification and employers liability
Fellow employee
Care, custody or control
Handling of property
Movement of property by mechanical device
Operations
Completed operations
Pollution
War
Racing

Front 386

Severability of interests clause

Back 386

w/ business auto, the coverage afforded applies separately to each insured who is seeking coverage or against whom a claim or 'suit' is brought.

Front 387

Business auto limit

Back 387

The single limit is a maximum amount the insurer will pay for all claims arising form a single accident regardless of the number of vehicles, the number of drivers, or the number of claimants involved

Front 388

Collision coverage

Back 388

Coverage for direct and accidental loss or damage to a covered auto caused by collision w/ another object or by overturn

Front 389

Comprehensive coverage

Back 389

Coverage for direct and accidental loss or damage to a covered auto by any peril except collision or a peril specifically excluded

Front 390

Specified causes of loss coverage (comm. auto)

Back 390

coverage for several named perils instead of all perils except those specifically excluded. Includes fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, mischief, or vandalism. It also insures loss resulting from the sinking, burning, collision or derailment of a conveyance transporting the insured vehicle

Front 391

Towing and labor coverage

Back 391

Coverage for necessary towing and labor costs due to the disablement of a covered private passenger auto; coverage requires that the labor must be performed at the place of disablement.

Front 392

Transportation expenses

Back 392

Coverage extension for substitute transportation costs incurred when a private passenger type auto has been stolen; applies only if the auto is insured for comprehensive or specified causes of loss.

Front 393

Loss of use expenses

Back 393

Coverage extension that pays loss of use of a rental auto when an insured becomes contractually obligated to make such payments (up to $20 a day to a max of $600)

Front 394

Comm. auto exclusions

Back 394

The insurer will not pay for loss to the following:

1. Tapes, records, discs, or similar devices
2. Radar detectors and similar devices
3. Any equipment, whether permanently installed or not, that receives or transmits audio, visual, or data signals and that is not designed solely for the reproduction of sound
4. Any accessories used w/ the equipment described in item 3 above

or for the following causes:
wear and tear
freezing
mechanical or electrical failure
road damage to tires

unless they result from covered causes

Front 395

Limit of insurance for comm. auto

Back 395

Smaller of:

1. ACV of property at time of loss
2. The cost of repairing or replacing the property w/ other property of like kind or quality

Front 396

T or F: Deductible for comm. auto applies to each covered auto involved in an incident

Back 396

TRUE. If two covered autos collide, both deductibles apply.

Front 397

Auto medical payments coverage

Back 397

Coverage for medical expenses incurred by occupants of a covered auto, regardless of whether the auto's driver was at fault in the accident

Front 398

Personal injury protection (PIP) coverage

Back 398

Coverage for medical expense, income loss, and other benefits stipulated in an auto no-fault plan

Front 399

Benefits provided by a typical PIP endorsement:

Back 399

1. Medical and rehabilition expenses
2. Income loss benefit
3. Substitute services benefit
4. Death benefits to survivors

Front 400

Garage Coverage Form

Back 400

Form that covers the automobile and general liability loss exposures of auto dealers

Front 401

Garage Coverage symbols

Back 401

21-29 correspond to business auto 1-9

30 is used for providing garagekeepers coverage on customers' autos left w/ the named insured for service, repair, storage or safekeeping

31 covers dealers' autos and autos held for sale by nondealers or trailer dealers

Front 402

T or F: Garage liability coverage is NOT restricted to liability arising out of "garage operations."

Back 402

FALSE. It does carry this restriction.

Front 403

Garage Coverage - Broad Form Products Coverage eliminates the exclusion of property damage to the named insured's products. What deductible is it subject to?

Back 403

$250

Front 404

Garage liability coverage provides completed operations insurance subject to a _____ deductible

Back 404

$100

Front 405

Garagekeepers insurance

Back 405

Insurance that covers the insured's liability for damage by a covered cause of loss to autos left in the insured's care whiel the insured is attending, servicing, repairing, parking, or storing the autos

Front 406

Garagekeepers direct excess option

Back 406

Option that modifies garagekeepers coverage to include coverage in situations when the insured is not legally liable for loss to a customer's auto; this additional coverage applies in excess of what customers can collect under their own insurance.

Front 407

Garagekeepers direct primary option

Back 407

Option that modifies garagekeepers coverage so that it will pay all covered losses on a primary basis, regardless of whether the insured is legally liable and regardless of whether customers can recover under their own insurance.

Front 408

Motor Carrier Coverage Form

Back 408

Form that covers businesses that use autos to transport property of others or, in some cases, their own property.

Front 409

Owner-operators

Back 409

Individuals who lease themselves and their trucks to motor carriers to transport property for the motor carrier

Front 410

Bobtail and deadhead coverage

Back 410

Coverage for an owner-operator's use of his or her truck while not under lease to a motor carrier (and therefore not covered under the motor carrier's auto policy)

Front 411

Trailer interchange agreement

Back 411

A contract under which two motor carriers agree to swap trailers

Front 412

Trailer interchange coverage

Back 412

Coverage for a motor carrier's liability for damage to trailers in its possession under a written trailer interchange agreement.

Front 413

Zone rated vehicles

Back 413

Trucks in the medium and larger size class that are operated beyond a 200-mile radius of the principal garaging location and that are subject to zone rating, which considers the territories in which insured vehicles operate.

Front 414

Businessowners policy (BOP)

Back 414

A package policy that combines, in a simplified manner, most of the property and liability coverages needed by small and medium-sized businesses such as stores, offices, and apartment buildings

Front 415

General eligibility for BOPs

Back 415

Usually an eligible building must be occupied principally for retail, wholesale, service, or processing purposes and contain not more than a certain maximum total floor area, such as 15,000 or 25,000 square feet; sometimes, as with contractors, there is a payroll limit (i.e., not exceeding $300,000). General contractors are usually not eligible.

i.e., mainstreet businesses, apartment buildings, office buildings, contractors, restaurants

Front 416

Ineligible for BOP programs:

Back 416

-auto businesses
- bars, grills, and large restaurants
- manufacturing firms
- one or two-family dwellings other than multiple-unit garden apt. complexes
- places of amusement
- financial institutions

Front 417

Business Pursuits Endorsement

Back 417

Extends HO liability coverage to cover bodily injury and property damage liability arising out of the insured's business activities. However, coverage does not apply to a business owned or controlled by the insured

Front 418

Home Business Insurance Coverage Endorsement

Back 418

Includes Property & liability coverages normally found in a commercial insurance policy. In general, the home-based businesses insured w/ this endorsement are smaller than those usually insured under a BOP.

Front 419

T or F: Most insurers only offer 2 versions of the BOP form: named-perils and special form

Back 419

TRUE.

Front 420

T or F: ACV is the standard valuation provision w/ BOPs

Back 420

FALSE. Replacement cost is.

Front 421

T or F: BOPs are characteristically written w/o coinsurance provisions

Back 421

TRUE. in 1995, however, ISO introduced an insurance-to-value provision (use of which is becoming more widespread)

Front 422

Seasonal increase provision

Back 422

A provision commonly included in BOPs to address fluctuating personal property values (if insured carries insurance equal to 100% of its avg. monthly personal property value for 12 months preceding the loss, business personal property limit will automatically increase by 25 percent

Front 423

T or F: Business Income and Extra Expense Coverage are automatically included in the BOP

Back 423

TRUE.

Front 424

Farmowners policy

Back 424

A package policy designed to cover residential property (such as a farm family's house and belongings); property used in farming (such as mobile equipment, livestock, and barns); and personal and farm liability exposures.

Front 425

ISO Farm form coverages

Back 425

A - Dwellings
B - Other Private Structures Appurtenant to Dwellings
C - Household Personal Property
D - Loss of Use
E - Scheduled Farm Personal Property
F - Unscheduled Farm Personal Property

Front 426

T or F: Unscheduled Farm Personal Property is not subject to 80 percent coinsurance

Back 426

FALSE. It IS subject to 80% coinsurance

Front 427

Basic farm causes of loss

Back 427

Theft, collision, earhtquake, flood

Front 428

Broad causes of loss

Back 428

all basic causes plus death of livestock (from electrocution, drowning, accidental shooting, attacks by dogs or wild animals, and accidents in loading or unloading)

Front 429

Crop hail insurance

Back 429

Insurance offered by private insurers that covers crops against loss caused by hail and often other perils

Front 430

Multiple Peril Crop Insurance (MPCI)

Back 430

Insurance offered by the federal government that covers unexpected crop production losses due to natural causes such as drought, excessive moisture, hail, windstorm, and flood

Front 431

Farm inland marine coverage forms:

Back 431

- Mobile agricultural machinery and equipment coverage form
- livestock coverage form

Front 432

Animal mortality insurance

Back 432

Insurance that covers loss of valuable animals by (1) death resulting from accident, injury, sickness, or disease or (2) theft, subject to exclusions

Front 433

Workers compensation and employers liability insurance

Back 433

Insurance that provides (1) coverage for benefits an employer is obligated to pay under workers compensation laws and (2) coverage for employee injury claims made against the employer that are not covered by workers compensation laws

Front 434

T or F: to be eligible for workers comp, an injury or disease must (in most states) arise out of and in the course of employment.

Back 434

TRUE.

Front 435

4 workers compensation benefits:

Back 435

- Medical benefits
- Disability income benefits
- Rehabilitation benefits
- Death benefits

Front 436

Temporary partial disability

Back 436

A disability that prevents an injured worker from performing some job duties for a definite time period.

Front 437

Temporary total disability

Back 437

A disability that prevents an injured worker from performing any job duties for a specific period but that ultimately allows the worker to resume all job duties.

Front 438

Permanent partial disability

Back 438

A disability due to an irreversible injury that allows an injured worker to resume some job duties

Front 439

Permanent total disability

Back 439

A disability that prevents an injured worker from ever being able to perform any job duties

Front 440

second-injury fund

Back 440

should additional injury occur to an already impaired worker that results in a total or near total impairment, the applicable fund will pay a portion of the claim.

Front 441

Employee

Back 441

A person hired to perform services for another under the direction and control of the other party, called the employer

Front 442

Independent contractor

Back 442

A person (or organization) hired to perform services without being subject to the hirer's direction and control regarding work details

Front 443

PEO

Back 443

Professional employer organization (leases employees)

Front 444

Determination of application of workers compensation laws depends on a few typical considerations:

Back 444

1. Place and nature of employment
2. The place where the employee was hired
3. The employee's place of residence
4. The state in which the employer is domiciled

Front 445

United States Longshore and Harbor Workers' Compensation Act (LHWCA)

Back 445

A federal statue that eliminates the right of maritime workers (other than crew members of vessels) to sue their employers; requires such employers to provide injured or ill workers w/ benefits like those provided by state workers compensation statutes for work-related injury or illness

Front 446

Jones Act

Back 446

A federal statue that permits injured members of a vessel's crew (or survivors of a deceased crew member) to sue their employer for damages due to the employer's negligence

Front 447

Competitive state fund

Back 447

A facility, owned and operated by a state government, that provides workers compensation insurance and that also permits private insurers to sell workers compensation insurance (i.e., to compete w/ the state fund) in that state

Front 448

Monopolistic state fund, or exclusive state fund

Back 448

A facility, owned and operated by a state government, that provides workers compensation insurance and that does not permit any other insurers to sell workers compensation insurance in that state

Front 449

Employers' mutual insurance company

Back 449

A mutual insurer established by a state's legislature to write workers compensation insurance for any qualified employer in the state

Front 450

Aggregate excess insurance

Back 450

Insurance that covers losses only after the insured has retained a stated amount of aggregate loss during the policy period

Front 451

Specific excess insurance

Back 451

Insurance that covers loss due to a single occurrence only for the amount that exceeds the policy retention

Front 452

Workers Compensation and Employers Liability Insurance Policy (WC & EL policy)

Back 452

Policy used in most states to provide workers compensation and employers liability insurance

Front 453

WC & EL policy: Item 3A

Back 453

states where WC applies

Front 454

WC & EL policy: Item 3B

Back 454

Employers liability w/ split limits:

- bodily injury by accident (each accident)
- Bodily injury by disease (policy limit)
- bodily injury by disease (each employee)

Front 455

WC & EL policy: Item 3C

Back 455

all states part 3 applies to

Front 456

trigger for EL bodily injury by accident:

Back 456

policy in effect when the injury occurs is the policy that applies

Front 457

trigger for bodily injury by disease in EL:

Back 457

the policy that is in effect on the employee's last day of last exposure to the conditions causing or aggravating the injury is the policy that applies

Front 458

Other states insurance

Back 458

Insurance that automatically extends coverage to the insured's operations in any state listed in Item 3C of the WC & EL info page

Front 459

Stopgap coverage

Back 459

Coverage for employers liability that private insurers provide to employers operating in a monopolistic fund state that does not include such insurance in its workers compensation policies

Front 460

Voluntary Compensation and Employers Liability Endorsement

Back 460

Endorsement that amends the WC & EL policy to cover employees who are not subject to a workers compensation statute

Front 461

United States Longshore and Harbor Workers' Compensation Act Endorsement

Back 461

Endorsement that amends the WC & EL policy to cover the insured's obligations under the LHWCA.

Front 462

WC premium base:

Back 462

based on the manual rate for the applicable classification per $100 of payroll for the year

Front 463

Experience rating plan

Back 463

Rating plan that increases or reduces the premium for a future period based on the insured's own loss experience for a period in the recent past

Front 464

Experience modification

Back 464

A rate multiplier derived from the experience rating computation.

Front 465

Retrospective rating

Back 465

A rating plan that increases or reduces an insured's premium for a policy period based on the insured's own losses during the same period.

Front 466

Expense constant

Back 466

A flat charge to cover administrative expenses, such as policy issuance and record keeping, that are common to WC & EL

Front 467

Large deductible plan

Back 467

A plan that allows insureds to self-insure most of their workers compensation claims w/o establishing a qualifying self-insurance plan; WC & EL policy w/ deductibles in the $50,000 to $250,000 range

Front 468

Maximum possible loss (MPL)

Back 468

The largest loss that could be sustained in a particular occurrence or by a particular property

Front 469

Excess liability policy

Back 469

Policy that covers liability claims in excess of the limits of an underlying policy or a stated retention amount

Front 470

Umbrella liability policy

Back 470

Policy that provides excess coverage over several primary policies (typically CGL, auto, and employers liability) and that may also provide drop-down coverage

Front 471

Drop-down coverage

Back 471

Coverage provided by many umbrella liability policies for (1) claims not covered at all by the underlying policies and (2) claims that are not covered by an underlying policy only because the underlying policy's aggregate limits have been depleted.

Front 472

Self-insured retention (SIR)

Back 472

An amount that is deducted from claims that are payable under an umbrella liability policy and that are not covered at all by any primary policy

Front 473

Maintenance of underlying insurance condition

Back 473

A condition that obligate sthe insured of an umbrella liability policy to maintain all required underlying coverages in full force and effect during the policy period

Front 474

Professional liability insurance

Back 474

Insurance that covers persons engaged in various occupations against liability due to their rendering or failing to render professional services, exclusive of the exposures covered under their CGL policies; describes various other types of insurance such as directors and officers liability, employment practices liability, and fiduciary liability

Front 475

Directors and officers (D&O) liability insurance

Back 475

Insurance that covers a corporation's directors and officers against liability for their "wrongful acts" that would not be covered under a CGL or auto policy; also covers the sums that the insured corporation is required or permitted by law to pay to the directors and officers as indemnification.

Front 476

D&O deductibles

Back 476

often flat deductible amount & specified percentage of participation (i.e., $10,000 + 5% of remaining)

Front 477

Entity coverage

Back 477

Coverage extension of D&O liability policies for claims made directly against a corporation (the "entity") for wrongful acts

Front 478

Employment practices liability (EPL) insurance

Back 478

Insurance that covers an organization, its directors and officers, and its employees against claims alleging damages because of wrongful employment practices such as sexual harassment, wrongful termination, and unlawful discrimination

Front 479

Employee benefits liability insurance

Back 479

Insurance that covers an employer against liability claims alleging improper advice or other errors or omissions committed while administering the employer's employee benefit plans.

Front 480

Fiduciary liability insurance

Back 480

Insurance that covers the fiduciaries of an employee benefit plan against liability claims alleging breach of their fiduciary duties involving discretionary judgment.

Front 481

Aircraft insurance

Back 481

Insurance that covers liability due to the insured's ownership, maintenance, or use of aircraft; physical damage to aircraft owned or used by the insured; and other aircraft loss exposures

Front 482

Airline

Back 482

Int'l, national and regional air carriers

Front 483

Business and pleasure aircraft

Back 483

Individually owned aircraft used for owner's personal purposes w/ no charge made or direct profit derived from the aircraft's use

Front 484

Industrial aid aircraft

Back 484

corporate-owned aircraft that are (1) used for transporting employees, associates, and executives and (2) flown by full-time professional pilots

Front 485

Commercial use aircraft

Back 485

Charter operators, air taxi operators, and other profit-seeking operators

Front 486

Special use aircraft

Back 486

Crop dusting, banner towing, law enforcement, pipeline patrol, hunting, etc.

Front 487

Aircraft liability limits

Back 487

- Bodily injury excluding passengers
(each person)
(each occurrence)
- Passenger bodily injury
(each person)
(each occurrence)
- Property damage (each occurrence)

Front 488

Resource Conservation and Recovery Act (RCRA, or Superfund) of 1976

Back 488

required that owners and operators of hazardous and waste materials/businesses demonstrate financial responsibility to clean up environmental damage and compensate victims for bodily injury and property damage resulting from release of contaminants.

Front 489

First party onsite cleanup coverage

Back 489

Covers the expense to clean up pollution on the insured's own premises

Front 490

Third-party environmental liability coverage

Back 490

Covers claims for bodily injury and property damage occurring both onsite or offsite caused by pollution origination fromt he insured's premises, the release of contaminants during transportation, or pollution emanating from nonowned disposal sites.

Front 491

Cleanup cost cap coverage (also called remediation stop-loss)

Back 491

protects the insured against cost overruns in performing remediation of a contaminated site.

Front 492

Contractors pollution liability coverage

Back 492

Insures contractors against liability for bodily injury and property damage arising out of remediation operations, environmental cleanup, and transportation of hazardous materials

Front 493

Environmental professional liability coverage

Back 493

Provides professional liability insurance for engineers, lawyers, consultants, laboratories, and others providing advice or services involving pollution.

Front 494

Surety bond

Back 494

A written contract that expresses one party's promise to answer for another party's failure to do something as promised

Front 495

Surety

Back 495

The party (usually an insurer) to a surety bond that guarantees to the obligee that the principal will fulfill an obligation or perform as promised

Front 496

Obligee

Back 496

The party to a surety bond that receives the surety's guarantee that the principal will fulfill an obligation or perform as promised

Front 497

Principal

Back 497

The part to a surety bond whose obligation or performance the surety guarantees.

Front 498

Contract bond

Back 498

A surety bond guaranteeing the fulfillment of obligations under construction contracts or other types of contracts

Front 499

Bid bond

Back 499

A contract bond guaranteeing that a contractor bidding on a construction or supply contract will actually enter into the contract at the price bid

Front 500

Performance bond

Back 500

A contract bond guaranteeing that a contractor's work will be completed according to the contract

Front 501

Payment bond

Back 501

A contract bond guaranteeing that a contractor will pay when due all of the labor and material bills arising out of the work that the contractor is obligated to perform.

Front 502

Maintenance bond

Back 502

A contract bond guaranteeing a contractor will correct defects in workmanship or replace defective materials for a specified period after project completion.

Front 503

License bond

Back 503

A commercial surety bond guaranteeing that a licensee (such as a licensed plumber) will pay damages resulting form the licensee's violations of the udties and obligations imposed on the licensee

Front 504

Permit bond

Back 504

A commercial surety bond guaranteeing that a permit holder (such as a liquor store) will pay damages resulting form the permit holder's violations of the duties and obligations imposed onthe license holder

Front 505

Public official bond

Back 505

A commercial surety bond guaranteeing that a public official will perform his or her duties faithfully and honestly.