CIC Commercial Multi-Line actual exam with 100% correct answers(latest update)

Describe how inland marine insurance started -evolved from ocean marine -filled gap in coverage as good transitioned from ocean marine -cover goods in transit over land Does inland marine also apply to instruments of transportation and communication? Yes, ex. Bridges, tunnels, piers, cell towers, pipelines. What is the basic exclusion applicable to inland marine? Property in a fixed location is not eligible for marine insurance Lost 4 types of floaters -jewelry -fine arts -guns -wine List characteristics of filed or controlled forms -Relative uniformity of exposures -Tend to be specialty coverages -Inflexible terms/conditions -Outcome of filed or conrtrolled forms is.... rates are filed and coverage forms are filed List characteristics of Non-Filed or Unfiled forms -Exposures not uniform -Exposures too unique or diverse to assume insurer can write not on a case by case basis -More flexibility on terms and conditions -Ex. Contractors equip, transportation, builders risk Describe bailment relationship One person accepts personal property from another for a particular purpose. Bailor is the owner of property. Bailee is the party that accepts the property of others List the three types of bailment Gratuitos bailment for benefit of bailor Gratuitous bailment for benefit of bailee Bailment for mutual benefit What is the standard of care for gratuitous bailement for benefit of bailor? Low standard of care What is the standard of care for gratuiotous bailement for benefit of bailee? High standard of care. What is the standard of care for mutual benefit of bailor and bailee? Reasonable duty of care What drives the need for coverage of bailment exposure? CGL excludes property in care custody or control Many policies contain a no benefit to bailee condition Explain the difference in coverage triggers for Bailees written on a legal liability basis vs direct damage basis Insured must be legally liable for damage to bailor's property to trigger covrage for legal liability. Direct damage, insured does not have to be legally liable. Also both types include the value of bailee's investment in labor and materials List some types of property not covered under Bailee's - aircraft or water craft -Contraband -Furs -Jewelry -Money and securities -Vehicles -Waterborne property How would you describe the covered causes of loss for Bailees? -Open perils policy -List of exclusions to clarify coverage -Exclusions include- -theft of property left overnioght in or on a vehicle, unless inside a locked buidling and there are signs of forced entry -Misdelivery -Voluntary parting -Damage caused by processing What is the coverage territory for bailee's? USA, and its territories or possessions, Canada and Puerto rico List options for payment for Bailees -Pay value of lost or damaged property -pay the cost to repair -Rebuilt repair or replace with like kind or quality List some unique challenges for covering BR -changing/increasing exposures -insurable interest can value as project develops -property to be covered not at jobsite -projects in course of construction are more susceptible to loss What can BR be written to cover? -New construction -Additions -Renovations List those who can be NI's on a BR -Project owners -GC's -Architects/engineers -Mortgagee and other lenders -Suppliers -Construction manager List advantages to having all insurable interests under 1 policy for BR -greater efficiency including avoidance of litigation -Fewer coverage disputes -All parties entitled to copy of policy -All insured parties have direct policy rights -Will usually limit any subro efforts by an insurer List disadvantages of having all insurable interests in one policy for BR -claim payment may be made to all insureds -misrepresentation, concealemnet or fraud by any insured may void covrerage unless there is a provision to protect innocent insureds List some exposures to loss for BR -Building or structure- =Materials and supplies at the jobsite -Materials and suppplies at temp storage locations -Temp structures -Materials/supplies of others in CCC -Property in transit -Debri removal -Soft costs -BI Describe the completed value basis for BR -premium will be adjusted when project is completed to reflect actual completed value of project -most common way to write a single location project Describe the reporting form basis for BR -initial premium charge is a deposit -Values can be reported in 2 ways.Either estimated value of all projects or progress value -usually used for homebuilders is scaffolding covered as part of the BR policy? Yes, and usually the values are not sufficient. List examples of property not covered under the BR policy -Contraband -Land -Water -Aircraft -Landscaping materials -Existing property being renovated -roadways and walkways List coverage extensions for BR -Debri removal -Emegency removal -Limited fungus List tier 1 exclusions for BR -Earth movement -Flood -Ordinance or Law -Sewer, septic tank, Sump, or drain backup List tier 2 exclusions for BR -E&O -Freezing -Materials and workmanship -Mechanical breakdown Describe hot testing vs cold testing -hot testing is performance testing -Cold testing is just turning on equipment List when coverage begins and ends for BR -begins when NI becomes responsible for property Ends -policy expires or cancelled -Property accepted by purchaser -Insurable interest ceases -project is abandoned with no intention of completion -90 days after completion Limits of insurance on a BR policy should reflect what? -cost of labor and materials -contractor overhead and profit -any covered temp structures or building List some examples of soft costs -professional fees -design fees -permit fees -financing -real estate taxes -advertising