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Flashcards in Commercial Package Policy (CH 7) Deck (26):
1

Commercial Package Policy (CPP)

Commercial insurance that combiners multiple commercial policies into one single policy with a discount, as a package.

2

When a CPP is issued, it includes the following components:

-Common Declarations page
-Interline endorsements
-At least two coverage parts (different insurance policies)
-Common policy conditions page

3

CPP: Common Policy Conditions

-Cancellation
-Policy Changes
-Audit by insurer
-Inspection by insurer
-Premium payment
-Transfer of rights

4

Commercial General Liability Policy

Liability coverage for the business, no deductible and can be written for almost any type of business.

Legal liability to others resulting from negligence on the part of the insured or activities the business could be held contingently liable for.

5

Two types of CGL policies

-Occurrence form
-Claims made form

6

Extended Reporting Period

extends the period for reporting claim of loss. Provided if the CGL policy is:
-cancelled or not renewed
-renewed with an advanced retroactive date
-renewed by an occurrence form

also called a claims tail

7

Basic extended reporting period

also called a "mini tail"
occurrence before the expiration date but not reported before that date, expiring policy will honor the claim if it is reported within the first 60 days beyond the expiration date

8

supplemental extended reporting period

"maxi-tail"
optional endorsement that can be added to the policy that is expiring, issued from the insurance company one is discontinuing coverage with. It extends the expiring policy for any negotiated length of time.
paid by one time premium that could be as much as 200% of the expiring premium, but must be purchased within the 60-day mini-tail time frame

9

CGL coverage for Accidents

A- bodily injury (BI) and property damage (PD) claims against the insured.
B- Personal and Advertising Injury Liability
C- Medical Payments to others. typical limit is $5,000 per person.

10

Coverage A: Defined Occurrences

-Premises Liability
-Operations Liability
-Completed Operations Liability
-Product Liability
Contractual Liability
-Independent Contractors
-Fire Legal Liability

11

Three Cause of Loss forms to choose:

-Basic
-Broad
-Special

12

Basic:

Riot
Explosion
Vandalism, vehicle, volcano

Fire
Lightning

Smoke
Hail
Aircraft
Wind

13

Broad

Weight of ice and snow
Water damage due to leaking plumbing
Falling objects
Freezing of pipes

14

Special

All-risk or open peril- includes Theft

15

Indirect Loss: Business Income

an endorsement designed to indemnify the loss of business caused by the disruption of normal operations at the insured location as a result of damage from a covered peril.

16

Indirect Loss: Extra Expense

endorsement that pays for all new expenses during the period of restoration to keep operating or to relocate so the operation can continue.

ex. Moving, new rent, advertising, etc.

17

Crime Insurance

special property insurance policy that may or may not be needed by a business.

Two main reasons: money and theft of contents.

18

Money:

Currency, coins, and bank notes in current use and having a face value

19

Securities:

Negotiable and non-negotiable instruments or contracts representing either money or other property, including tickets, stamps in current use, and evidences of debt in connection with credit or charge cards other than cards issued by the insured. Securities do not include money.

20

Property other than Money and Securities

Any tangible property other than money and securities that has intrinsic value

21

Commercial Inland Marine

"marine" refers to goods in transit. This coverage picks up where commercial property leaves off covering property after it is no longer within 100 feet of the insured premises.

22

The six Marine categories:

-Imports
-Exports
-Domestic shipments
-Instrumentalities or transportation or communication
-Personal Property floater risks
-Commercial property floater risks

23

Mechanical Breakdown

virtually any sudden and accidental breakdown of a scheduled object from causes other than normal wear and tear.

24

Expediting Expense

an automatic additional coverage for Boiler and Machinery which blanket insures up to $25,000 to expedite necessary repairs.
Also pays for the increased cost of loss and related expenses for Green updates up to 25% of the amount of loss with a $100,000 maximum.

25

Inspecting Condition

condition included in Equipment breakdown policy that allows the company to send out trained inspectors to inspect the scheduled machines in order to encourage preventative maintenance.

26

Farm Insurance

A commercial lines policy that is a combination or both Personal and Commercial coverages.