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CPCU 551 FULL QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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CPCU 551 FULL QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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CPCU 551 FULL QUESTIONS ANDANSWERS WITH SOLUTIONS 2024
Commercial Package Policy (CPP) 1-1 - ANSWER Policy that covers two or more lines of business by
combining ISO's commercial lines coverage parts
Businessowners Policy (BOP) 1-2 - ANSWER A package policy that combines most of the property and
liability coverages needed by small and medium-sized businesses
Output Policy 1-3 - ANSWER A policy that combines, in one form and associated endorsements, all or
most of the commercial property coverages that the insured organization needs, and uses a flexible
rating plan
Commercial Property Conditions 1-4 - ANSWER A required component of the commercial property
coverage part that contains conditions applicable to all commercial property coverage forms
Policy Condition 1-5 - ANSWER Any provision that qualifies an otherwise enforceable promise made in
the policy
Actual Cash Value (ACV) 1-6 - ANSWER Cost to replace property with new property of like kind and
quality less depreciation
Replacement Cost 1-7 - ANSWER Cost to repair or replace property using new materials of like kind and
quality with no deduction for depreciation
Fixture 2-1 - ANSWER Any personal property affixed to real property in such a way as to become part of
the real property
Trade Fixtures 2-2 - ANSWER Fixtures and equipment that may be attached to a building during a
tenant's occupancy, with the intention that they be removed when the tenant leaves
Improvements and Betterments 2-3 - ANSWER Alterations or additions made to the building at the
expense of the insured who does not own the building and who cannot legally remove them
,Commercial Bailment 2-4 - ANSWER The temporary possession by one party (the bailee) of personal
property of another party (the bailor) for a specific purpose beneficial to both parties
Agreed Value Optional Coverage 2-5 - ANSWER Optional coverage that suspends the Coinsurance
condition if the insured carries the amount of insurance agreed to by the insurer and the insured
Inflation Guard Optional Coverage 2-6 - ANSWER Coverage for the effects of inflation that automatically
increases the limit of insurance by the percentage of annual increase shown in the declarations
Replacement Cost Optional Coverage 2-7 - ANSWER Coverage for losses to most types of property on a
replacement cost basis (with no deduction for depreciation or obsolescence) instead of an actual cash
value basis
Causes of Loss - Basic Form 3-1 - ANSWER Form that covers Fire, Lightning, Explosion, Windstorm, Hail,
Smoke, Aircraft, Vehicles, Riot, Civil Commotion, Vandalism, Sprinkler Leakage, Sinkhole Collapse, and
Volcanic Action
Causes of Loss - Broad Form 3-2 - ANSWER 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
Manufacturer's Selling Price (Finished ""Stock"" Only) Endorsement 4-1 - ANSWER A commercial
property endorsement that values finished stock manufactured by the insured at selling price, less any
discounts and expenses that the insured would have otherwise had.
Functional Building Valuation Endorsement 4-2 - ANSWER A commercial property endorsement that
provides modified replacement cost coverage on buildings; may be appropriate when insuring a building
with a replacement cost far in excess of its market value
Specific Insurance 4-3 - ANSWER Insurance that covers each building for a specific limit of insurance and
personal property at each building for a specific limit of insurance
Blanket Insurance 4-4 - ANSWER Insurance that covers either of the following with one limit of
insurance:
, 1) one type of property in one or more separately rated buildings, or
2) two or more types of property in one or more separately rated buildings"
Peak Season Limit of Insurance Endorsement 4-5 - ANSWER Endorsement that covers the fluctuating
values of business in personal property by providing differing amounts of insurance for certain time
periods during the policy period
Value Reporting Form 4-6 - ANSWER A commercial property form that bases the insured's premium for
business personal property on the values that the insured reports to the insurer periodically during the
policy period
Ordinance or Law Coverage Endorsement 4-7 - ANSWER Endorsement that covers three types of losses
resulting from the enforcement of building ordinances or laws:
1) the value of the undamaged portion of a building that must be demolished
2) the cost to demolish the building's undamaged portion and remove its debris
3) the increase cost to rebuild the property
Utility Services - Direct Damage Endorsement 4-8 - ANSWER A commercial property endorsement that
covers damage to covered property caused by the interruption of utility services (water, communications
, or power) to the insured premises.
Spoilage Coverage Endorsement 4-9 - ANSWER Endorsement that covers damage to perishable stock due
to power outages; on-premises breakdown; or contamination of the insured's refrigeration, cooling, or
humidity control equipment
Radioactive Contamination Endorsement 4-10 - ANSWER A commercial property endorsement for
organizations that have a radioactive contamination exposure on their premises, other than a nuclear
reactor or fuel for a nuclear reactor; covers physical loss to covered property caused by sudden and
accidental radioactive contamination
Condominium 5-1 - ANSWER A real estate development consisting of a group of units, in which the air
space within the boundaries of each unit is owned by the unit owner, and all remaining real and personal
property is owned jointly by all the unit owners.
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