| Author |
Message |
J.P. Theriot (Jpt)
| | Posted on Saturday, April 29, 2000 - 11:02 pm: | |
Jim,
Thanks. "I can see clearly now".
Jp |
J.P. Theriot (Jpt)
| | Posted on Friday, April 28, 2000 - 8:46 pm: | |
Jim,
Reference to question #8 in the commercial property questions.
Are you refering to CP 0030 (6/95) when answering this question, and if so where are you finding the 72 hours exclusion??
Thanks
Jp |
Jim Flynt (Jim)
| | Posted on Friday, April 28, 2000 - 3:05 pm: | |
COMMERCIAL PROPERTY COVERAGE QUESTION AND ANSWERS
Here are the correct answers to Tuesday's commercial property coverage questions. The questions have been restated for ease of reading. The test and answers are Reproduced from "Resources" with permission of The National Alliance for Insurance Education and Research.
________________________________________________________________________________________________________________
1. A building vacant for three months, suffers a fire loss. The full amount of the loss (minus the deductible) will be paid.
A. True
B. False
Answer: FALSE. The vacancy provision in the Building Personal Property Form - CP 00 10 06 95 - states that while most losses caused by water damage, theft, glass breakage, etc., will not be covered at all, other loss payments from other perils, such as fire, will be reduced by 15%.
2. A manufacturing facility suffers a covered loss. Among the damaged property were six cases of glass cleaner. This property would be considered:
A. Building Personal Property
B. Building
Answer: B. The glass cleaner would be considered part of the building since it is used to service and/or maintain it.
3. The fire department service charge coverage (BPP Form) is:
A. Included in the limits of the policy
B. Additional coverage
Answer: B. The fire department service charge coverage of $1,000 is additional coverage.
4. Two construction firms are engaged in a bid war. One contractor dumps an entire truckload of waste materials into the parking lot of the other firm. IS the damage to the parking lot covered?
A. Yes
B. No
Answer: B. NO. There would not be any coverage under the Building and Personal Property Form, although civil restitution would most likely be sought. A parking lot is defined as "property not covered," and in addition, damage was caused by a pollutant.
5. Equipment on a contractor's floater is subject to a coinsurance clause.
A. True
B. False
Answer: TRUE. Contractors equipment is based on a 80, 90, or 100% coinsurance basis. The insured values will be based on the ACV of the equipment.
6. Blueprints are covered under the Builders Risk Form.
A. True
B. False
Answer: FALSE. Although blueprints are vital in the construction phase of a building, they are not covered under the typical inland marine builders risk coverage form. Check your policy for the definition of covered property.
7. Your insured, the Recall Manufacturing Company, acquires one of the local strip mall buildings im Workingtown, USA. Their commercial property form will automatically cover this building for up to $250,000.
A. True
B. False
Answer: B. FALSE. There would be no coverage for this strip mall. Since this is a new location, the only way coverage would be valid is if the acquired buildings were to serve a similar use to the manufacturer's own building, or if these buildings were used as warehouses; and then only for 30 days.
8. Business Income coverage is subject to a deductible.
A. True
B. False
Answer: A. TRUE. Although not a monetary deductible, the insured must wait 72 hours before the coverage can become activated. (Thus business income losses within the first 72 hours become self insured retentions). |
Jim Flynt (Jim)
| | Posted on Tuesday, April 25, 2000 - 11:41 pm: | |
Most people have questions regarding commercial property, but individuals with knowledge and experience may also have most of the answers. Whether you are an expert or a novice in the commercial property area, try the following questions and see how many you can get right. Assume that the insureds have an ISO Commercial Package Policy (CPP) - 1995 edition - without any special endorsements, a typical contractor's equipment floater, and an inland marine builder's risk form.
QUESTIONS
1. A building, vacant for three months, suffers a fire loss. The full amount of the loss (minus the deductible) will be paid.
A. TRUE
B. FALSE
2. A manufacturing facility suffers a covered loss. Among the damaged property were six cases of glass cleaner. This property would be considered:
A. Building Personal Property
B. Building
3. The fire department service charge coverage (BPP Form) is:
A. Included in the limits of the policy
B. Additional coverage
4. Two construction firms are engaged in a bid war. One contractor dumps an entire truckload of waste materials into the parking lot of the other firm. Is the damage to the parking lot covered?
A. YES
B. NO
5. Equipment on a contractor's floater is subject to a coinsurance clause.
A. TRUE
B. FALSE
6. Blueprints are covered under the Builders Risk form.
A. TRUE
B. FALSE
7. Your insured, the Recall Manufacturing Company acquires one of the local strip mall buildings in Workingtown, USA. Their commercial property form will automatically cover the building for up to $250,000.
A. TRUE
B. FALSE
8. Business Income coverage is subject to a deductible.
A. TRUE
B. FALSE
The above commercial property policy test is Reproduced from Resources Magazine with permission of The National Alliance for Insurance Education & Research.
I will post the correct answers with explanation on Friday. This is a challenging test which all of you who handle commercial claims should attempt. Keep a record of your answers to compare with the answer key.
By the way, I do not have all of the answers to every policy question, but I do know generally where to go find them. Thanks to many of you who have emailed your suggestions for future questions and also to those who have let me bounce answers and ideas off of you before posting with egg on my face. I want you to know, that many times I am consulting the FC&S Bulletins for their guidance with these questions and answers as well as some very experienced property and general adjusters out there much smarter than I. My personal Thanks and deep gratitude to everyone here and those out in the trenches who share my desire for knowledge and personal development. |
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