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AINS 103_ Chapter 2 WIOTH 100- SURE ANSWERS.
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AINS 103_ Chapter 2 WIOTH 100- SURE ANSWERS.
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10/5/24, 9:02 AMEUNICE
AINS 103: Chapter 2 WITH 100% SURE ANSWERS
Terms in this set (68)
Commercial property declarations, one or more commercial property coverage
Commercial property coverage
forms, one or more causes of loss forms, commercial property conditions form, and
components:
any applicable endorsements.
The declaration page contains information such as a description of the property
Commercial property declarations:
insured, the kinds and amounts of coverage provided, and any optional coverages.
Contain descriptions of the specific coverages being provided to the business.
Commercial property coverage forms: Typically, one coverage form insures the insured's buildings and/or personal
property, and another coverage form insures business income and/or extra expense.
What are the three types of causes of loss Basic, Broad, Special. These allow the insured to select, or the underwriter to offer, a
forms and what do they allow the insured range of covered perils.
to select?
Contains conditions applicable to all coverage forms included in a commercial
Commercial property conditions form:
property coverage part unless a coverage form contains a condition to the contrary.
What does the commercial property Each obligation of the insured. This also includes various provisions, and rules to
coverage conditions list? which the insurer must adhere to.
(Y/N) Leah is a claims rep for a commercial Yes.
client who has experiences a property loss.
The client wants to know whether they have
to hold up their end of the insuring
agreement if their policy covers the loss.
How should Leah respond?
What can the Insurance Services, Inc. (ISO) Damage to a business's physical structures, the property inside, and other items that
Building and Personal Property Coverage it owns.
Form, also known as the BPP, cover?
The Basic and Broad forms are nearly identical. They use the named perils approach,
The BBP's Basic and Broad Forms: which means they explicitly state the policy's covered causes of loss, which can
include: fire, lightning, explosion, windstorm or hail, smoke, and sprinkler leakage.
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What perils are covered by the Broad form Falling objects, weight of ice, snow or sleet, and water damage, so it is slightly more
that are not covered under the Basic form? expensive.
Insures on an open peril basis, which means that it covers anything that the policy
The Special Form: doesn't specifically list as being excluded. This allows for broader coverage, so it is
preferred by most businesses.
(Y/N) Lite Incorporated insures its building Yes.
under a commercial property policy that
includes the Causes of Loss-Broad Form. A
windstorm came into town and damages
the company's roof. Would the loss be
covered under the policy?
How does the BPP supplement its core Through additional coverage, coverage extensions, and optional coverages detailed
coverages? in the policy.
Amy owns an IT business and insures her Replacement cost + extension of a replacement cost to personal property of others
building and personal property under a optional coverage.
BPP coverage form. She leases all of her
equipment, and according to the lease
agreement, she is responsible for the
replacement cost of the leased equipment
in the event that it's damaged. How can
Amy ensure that her insurance coverage
meets the obligations of her lease
agreement?
(BPP Optional Coverages) The Agreed Suspends the requirement that the insured carry a certain percentage of insurance
Value Coverage: relative to the value of the covered party.
(BPP Optional Coverages) The Inflation Annually increases the limit of insurance by the percentage of annual increase shown
Guard options: in the declarations to account for inflation.
Allows for coverage to most types of property on a replacement cost, rather than
(BPP Optional Coverages) The
actual cash value. This option can be extended to cover the personal property of
Replacement Cost options:
others valued at replacement cost.
Protect additional types of property, such as newly acquired or constructed
BPP Coverage Extensions:
property, various types of storage units, trailers, and outdoor property.
At least 80% coinsurance or a value reporting period symbol is shown in the
BPP Coverage Extensions apply only if: declarations. 80% coinsurance means that the insured has agreed to purchase
coverage that is at least 80% of the insured property's value.
What does the Business Income (and extra Both business income and extra expense losses, even if the extra expenses do not
expense) coverage form cover? reduce the business income loss.
The cost of moving to a temporary location, increased rent at the temporary
Examples of extra expenses might include:
location, rental of substitute equipment, and the cost of substitute services.
What does the Business Income (without Business income loss, but only extra expenses that reduce the business income loss.
extra expense) coverage form cover?
Jake owns a business with multiple A blanket business.
locations. His business income coverage's
(BIC's) limit applies to all buildings at each
of his multiple business locations. On what
basis was the limit of insurance for Jake's
BIC written?
What is the purpose of the Coinsurance To encourage the insured to carry insurance to a stipulated percentage of the
condition? business income value at risk.
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