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WebCe - Commercial Properties
Questions and Correct Answers/ Latest
Update / Already Graded
A tornado severely damages one of Major Manufacturing's plants.
As a result of the damage, Major Manufacturing is forced to curtail
its operations during the 6 months needed to complete repairs. The
resulting loss of income suffered by Major Manufacturing is referred
to as
Ans: a time element loss.
Which of the following describes a feature of standard commercial
property policies?
Ans: Several different forms must be combined to make up a policy.
The president of Handy Corner Grocery has just learned that its
accounting clerk has been embezzling money from the company for
the past 6 months. Handy has a standard commercial property
policy, a standard commercial general liability policy, and a workers
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compensation and employers liability policy. Which of these policies
covers this loss?
Ans: None of these policies cover the loss
An insurance company that specializes in coverage for religious
institutions publishes its own policy forms that provide broader
coverage than the ISO forms. This insurer's forms would not be
referred to as
Ans: standard forms.
Duffy's Tavern is currently insured under a commercial package
policy that includes only commercial property coverage and
commercial general liability coverage. Duffy would like to add
coverage for equipment breakdown. This can be done by
Ans: adding either a separate equipment breakdown policy or an
equipment breakdown coverage endorsement to Duffy's commercial
property policy.
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A small fire in the Dalton Hotel basement damaged the
computerized system that controls all elevators in the hotel. It will be
necessary-and costly-to completely reprogram the system to
replace the lost data. Dalton has a commercial property policy that
Ans: covers this loss because electronic data that is integrated with the
elevator system is not excluded.
A building owned by Mega Properties has been continuously vacant
for 6 months. In the seventh month, a lightning strike starts a fire
which destroys the building. Assuming that Mega's commercial
property policy is written on standard forms, how much would the
insurer reduce the loss payment because of the vacancy of the
building?
Ans: The insurer would discount the loss payment by 15 percent because
the building was vacant.
Ad Men Advertising Agency is located on the 25th floor of a high-rise
building, and the declarations of its commercial property policy list its
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location as "Suite 2500, 1271 Madison Avenue, New York, NY." Ad
Men's valuable laser printer is stolen from the building's outdoor
ground-floor loading dock when an employee leaves it unattended
while fetching his car. Ad Men's policy includes the special causes of
loss form. Ad Men's insurance
Ans: covers this loss because the property was within 100 feet of the
building.
Executive Dry Cleaning wants to have coverage for personal
property of its customers in its commercial property policy. What
must be done to activate this coverage under the standard building
and personal property coverage form?
Ans: A limit of insurance for personal property of others must be shown on
the policy declarations page.
Handy's Corner Grocery has a standard commercial property policy
covering its retail store. An explosion destroys $15,000 of grocery
WebCe - Commercial Properties
Questions and Correct Answers/ Latest
Update / Already Graded
A tornado severely damages one of Major Manufacturing's plants.
As a result of the damage, Major Manufacturing is forced to curtail
its operations during the 6 months needed to complete repairs. The
resulting loss of income suffered by Major Manufacturing is referred
to as
Ans: a time element loss.
Which of the following describes a feature of standard commercial
property policies?
Ans: Several different forms must be combined to make up a policy.
The president of Handy Corner Grocery has just learned that its
accounting clerk has been embezzling money from the company for
the past 6 months. Handy has a standard commercial property
policy, a standard commercial general liability policy, and a workers
,2 | Page
compensation and employers liability policy. Which of these policies
covers this loss?
Ans: None of these policies cover the loss
An insurance company that specializes in coverage for religious
institutions publishes its own policy forms that provide broader
coverage than the ISO forms. This insurer's forms would not be
referred to as
Ans: standard forms.
Duffy's Tavern is currently insured under a commercial package
policy that includes only commercial property coverage and
commercial general liability coverage. Duffy would like to add
coverage for equipment breakdown. This can be done by
Ans: adding either a separate equipment breakdown policy or an
equipment breakdown coverage endorsement to Duffy's commercial
property policy.
,3 | Page
A small fire in the Dalton Hotel basement damaged the
computerized system that controls all elevators in the hotel. It will be
necessary-and costly-to completely reprogram the system to
replace the lost data. Dalton has a commercial property policy that
Ans: covers this loss because electronic data that is integrated with the
elevator system is not excluded.
A building owned by Mega Properties has been continuously vacant
for 6 months. In the seventh month, a lightning strike starts a fire
which destroys the building. Assuming that Mega's commercial
property policy is written on standard forms, how much would the
insurer reduce the loss payment because of the vacancy of the
building?
Ans: The insurer would discount the loss payment by 15 percent because
the building was vacant.
Ad Men Advertising Agency is located on the 25th floor of a high-rise
building, and the declarations of its commercial property policy list its
, 4 | Page
location as "Suite 2500, 1271 Madison Avenue, New York, NY." Ad
Men's valuable laser printer is stolen from the building's outdoor
ground-floor loading dock when an employee leaves it unattended
while fetching his car. Ad Men's policy includes the special causes of
loss form. Ad Men's insurance
Ans: covers this loss because the property was within 100 feet of the
building.
Executive Dry Cleaning wants to have coverage for personal
property of its customers in its commercial property policy. What
must be done to activate this coverage under the standard building
and personal property coverage form?
Ans: A limit of insurance for personal property of others must be shown on
the policy declarations page.
Handy's Corner Grocery has a standard commercial property policy
covering its retail store. An explosion destroys $15,000 of grocery
