Chapter 4

  1. Policy structure
    • 4 key components
    • 1. common policy declaration page
    • 2. common policy conditions page
    • 3. interline endorsements
    • 4. coverage parts
  2. Common policy declaration page
    conatin insured, inception and expiration date, premium
  3. Common policy condition page
    Cancellation, changes, examinations of books and records, premiums, transfer of rights and duties under this policy ( with written notice to insurer)
  4. Interline endorsement
    combine coverge in one coverage part of the policy to other coverage parts to prevent redundancy
  5. Cause of loss forms
    Basic Form
    include fire, lightning, windstorm, hail, aircraft, riot, vehicles, explosion, smoke, vandalism , sprinkler leakage, sinkhole collapse and volcanic action
  6. Causes of loss - Broad Form
    • includes basic causes of perils plus 3 additional ones
    • 1. falling objects
    • 2. weight of ice, snow, sleet
    • 3. water damage caused by accidental discharge
  7. Cause of loss - special form
    • for losses caused by risks of direct physical loss except as speciafically limited or excluded
    • $5000 limit on personal property coverage applies in tranist
  8. Cause of loss - earthquake form
    • only be used with another cause of loss form
    • for losses by earthquake or volcanic eruption occur during the period
  9. Debris removal
    additional coverage
    • pay the expense of debris removal
    • providing expenses are reported within 180 days
    • max of 25% of physical loss
    • if the limit of insurance exhausted, the policy pay additional $10,000 for debris removal
  10. Preservation of property
    - open peril coverage for max 30 days
  11. Fire Department Service Charge
    • additional amt of insurance
    • up to $1,000 for fire department service charge
    • No deductible
  12. Pollutant Clean up and Removal
    • up to $10,000 aggregate for each described location
    • must be reported the cause of loss within 180 days
  13. Increased cost of construction
    insurer will pay the increased costs
  14. Electronic data
    • 2,500 aggregate in any one policy year
    • for the cost to replace or restore electronic data
    • destroyed by a covered loss
  15. Coverage Extension
    if a coninsurance is 80% or higher, the insured may extend the insurance
  16. Newly Aquired or Constructed Property
    • cover new buildings to be constructed
    • limited to $250,000 at each building
    • insurer is notified within 30 days

    • cover newly acquired business personal property
    • limited to $100,000 at each building
    • insurer is notified within 30 days
  17. Personal effects and property of others
    • is covered up to 2,500 at each described premises
    • does not cover loss by theft of personal effects
  18. valuable paper and records
    • pay for loss by a covered peril to restore lost information on valuable papers where duplicates do not exist
    • 2,500 at each described premises
  19. porperty off premises
    • 10,000 of coverage for business personal property temporarily away from the premises
    • property in care of sale person is not covered
  20. outdoor property
    • extend a max amt of 1,000 to cover loss to outdoor fences, signs, plants and antennas
    • sublimit of $250 applies to any one tree
    • perils covered - fire, lightning , explosion, riot or civil commotion and aircraft
  21. Non-ownered detached trailers
    • apply to loss or damage to trailers insured not own but resopnsible for the loss
    • most insurer pay for loss - $5,000
    • not covered - attached to any motor vehicle or during hitching or unhitching
  22. Commercial builders risk coverage form
    • cover buildings under construction
    • including foundations and other materials that will become permanent and temporary structures if not insured elsewhere
    • terminates after 90 days of completion or 60 days after any structure is occupied
    • does not include land, trees and outside materials not attached to building
    • written on Completed Value Form
    • Reporting Form endorsement is available
    • written equivalent to 100% coinsurance
    • does not provide liability coverage
    • perils insured depend on Causes of Loss Form
    • No vacancy provision available
    • determines the value of covered building at ACV
  23. Condominium Association Coverage Form
    • insuring property in the name of a condominium association
    • includes buildings and fixtures that are part of a building if association agreement requires the association insure the property
    • the association coverage will be primary if the same coverage exist
  24. Condominium Commercial Unit-Owners Coverage Form
    • for commercial unit-owners instead of HO-6
    • Only the business personal property of unit-owner is insured
    • if double coverage with Condominium Association Form, Unit-owners form will be excess insurance
  25. Business income coverage form
    • covers the actual loss of business income during the restoration period
    • business income - pre-tax net profit
    • Period of restoration - starts 72 hrs after the time of loss and end earlier of the date when proprety should be repaired with resonable speed
    • specifies which causes of loss that loss of business is covered from
  26. Extra Expense Coverage Form ( Time Element Coverage )
    • extra expenses - necessary additional expenses that are incured during the period of restoration
    • monthly limit of indemnity may be added
    • 30 days or less - pay amt 40%
    • 30 days to 60 days - pay amt 80%
    • exceed 60 days - 100%
Card Set
Chapter 4
commercial property