CPCU 551 Flashcards
(157 cards)
1
Q
A policy that combines, in one form and associated endorsement, all or most of the commercial property coverages that the insured organization needs, and uses a flexible rating plan.
A
Output policy
2
Q
A package policy that combines most of the property and liability coverages needed by small and medium-size businesses.
A
Businessowners policy (BOP)
3
Q
Policy that covers two or more lines of business by combining ISO’s commercial lines coverage parts.
A
Commercial package policy (CPP)
4
Q
A fire that leaves its intended place, such as a spark that escapes a fireplace and sets the carpet on fire.
A
Hostile fire
5
Q
Property that has no physical form.
A
Intangible property
6
Q
All tangible or intangible property that is not real property.
A
Personal property
7
Q
Tangible property consisting of land, all structures permanently attached to the land, and whatever is growing on the land.
A
Real property (realty)
8
Q
A required component of the commercial property coverage part that contains conditions applicable to all commercial property coverage forms.
A
Commercial property conditions
9
Q
A required component of the commercial property coverage part that specifies perils covered.
A
Causes of loss form
10
Q
A commercial property coverage part component that can be any of several commercial property forms containing an insuring agreement and related provisions.
A
Commercial property coverage form
11
Q
A required commercial property coverage part component that provides basic information about the policyholder and the insurance provided.
A
Commercial property declarations page
12
Q
Factors that are applied to the regular policy premiums for certain coverage parts of a CPP that includes both property and liability coverages, resulting in premium discounts for those coverage parts.
A
Package modification factors
13
Q
Policy that covers only one line of business
A
Monoline policy
14
Q
Commercial package policy (CPP) coverage component that provides a broad range of coverages to ‘middle-market’ or larger firms to insure buildings and business personal property.
A
Commercial property coverage part
15
Q
A statement of facts about a loss for which the insured is making a claims.
A
Proof of loss
16
Q
Cost to replace property with new property of like and kind quality less depreciation.
A
Actual Cash Value (ACV)
17
Q
Optional coverage that suspends the coinsurance condition if the insured carries the amount of insurance agreed to by the insurer and the insured.
A
Agreed value optional coverage`
18
Q
Coverage for the effects of inflation that automatically increases the limit of insurance by the percentage of annual increase shown in the declarations.
A
Inflation Guard optional coverage
19
Q
Coverage for losses to most types of property on a replacement cost basis (with no deduction for depreciation or obsolescence) instead of on an actual cash value basis.
A
Replacement Cost optional coverage
20
Q
The process by which an insurer can, after it has paid a loss under the policy, recover the amount paid from any party (other than the insured) who caused the loss or is otherwise legally liable for the loss.
A
Subrogation
21
Q
A property outside the area owned or controlled by the insured that increases the probability of loss to the insured’s building and its contents.
A
External Exposure
22
Q
Insurance that covers each building for a specific limit of insurance and personal property at each building for a specific limit of insurance.
A
Specific insurance
23
Q
Insurance that covers either of the following with one limit of insurance; (1) one type of property in one or more seperatly rated buildings or (2) two or more types of property in one or more seperately rated buildings.
A
Blanket insurance
24
Q
Endorsement that covers the fluctuating values of business personal property by providing differing amounts of insurance for certain time periods during the policy period.
A
Peak Season Limit of Insurance Endorsement
25
A commercial property form that bases the insured's premium for business personal property on the values that the insured reports to the insurer periodically during the policy period.
Value Reporting Form
26
A real estate development consisting of a group of units, in which the air apace within the boundaries of each unit is owned by the unit owner, and all remaining real and personal property is owned jointly by all the unit owners.
Condominium
27
The portion of a condominium owned solely by a unit owner.
Condominium unit
28
An entity composed of the unit owners in a condominium to manage the condominium and to own the common elements.
Condominium association
29
Areas of a condominium that are jointly owned by all unit owners, including the land on which the buildings are located.
Common elements
30
A document that describes what each condominium unit owner has purchased and clarifies the rights and responsibilities of the unit owner and the association.
Condominium association agreement
31
A concept of condominium ownership in which the association has no ownership interest within the bare walls of each unit.
Bare-walls concept
32
A concept of condominium ownership in which the association is considered to be the owner of all property contained in the unit as sold to the original purchaser or replacements of such property if the replacements are of like kind and quality.
Single-entity concept (original specifications coverage)
33
A concept of condominium ownership that is similar to the single-entity concept except that the all-in concept includes improvements made by the unit owner, not just the original installations or replacements of like kind and quality.
All-in concept (additional installations coverage)
34
A form of real property ownership in which the real property is owned by a corporation whose shareholders are the tenants of the property.
Cooperative corporation
35
A real estate development in which each occupant has exclusive ownership of its own unit and the land that the structure occupies and a homeowners' association composed of all the unit owners jointly owns the surrounding land and structures.
Planned development unit (homeowners association)
36
Form that covers business personal property and building property exposures of commercial (nonresidential) condominium units.
Condominium commercial unit-owners coverage form
37
Coverage for a commercial condominium unit-owner's share of any assessment made by the association against all unit owners because of physical loss to condominium property caused by a covered cause of loss.
Loss assessment coverage
38
Coverage for real property (such as a storage shed or garage building) that pertains only to the named insured's condominium unit or real property that the named insured has a duty to insure according to the condominium association agreement.
Miscellaneous real property coverage
39
A commercial property policy form for covering buildings and business personal property on restricted terms.
Standard Property Policy (SPP)
40
A commercial property coverage form that provides legal liability coverage on buildings or personal property of others in the insured's care, custody, or control.
Legal Liability Coverage Form
41
A commercial property coverage form for insuring a tenant's financial losses resulting from the cancellation of the tenant's lease because of damage to the premise by a covered cause of loss.
Leasehold Interest Coverage Form
42
A program allowing private insurers to write flood insurance under the National Flood Insurance Program (NFIP)
Write Your Own (WYO)
43
Initial phase of community's participation in the National Flood insurance Program in which property owners in flood areas can purchase limited amounts of insurance at subsidized rates.
Emergency Program
44
Second phase of the National Flood Insurance Program in which the community agrees to adopt flood-control and land-use restrictions and in which property owners purchase higher amounts of flood insurance than under the emergency program.
Regular Program
45
The version of the National Flood Insurance Program (NFIP) Standard Flood Insurance Policy that is used for insuring commercial building and contents.
General Property Form
46
A version of the National Flood Insurance Program (NFIP) Standard Insurance Policy that is used for insuring residential condominium buildings, as well as contents that are owned either by the unit owners in common or by the condominium association solely.
Residential Condominium Building Association Policy (RCBAP)
47
An insurance-to-value provision in many property insurance policies providing that if the property is underinsured, the amount that an insurer will pay for a covered loss is reduced.
Coinsurance
48
National Flood Insurance Coverage that pays for compliance costs related to floodplain management for qualifying structures.
Increased Cost of Compliance (ICC)
49
Policy that covers on an 'all-risks' basis to fill gaps in the insured's commercial property coverage, especially gaps in flood and earthquake coverage.
Difference in Conditions (DIC) policy, or DIC insurance
50
A large property whose construction meets high standards of risk mitigation and control characteristics and whose management maintains best practices loss control and risk mitigation techniques for the specific occupancy.
Highly protected risk (HPR)
51
Two or more property policies arranged in levels of coverage; the policies in the second or higher levels provide coverage only when the loss exceeds the coverage afforded by the lower-level policies.
Layered Property Coverage
52
The dollar amount above which the reinsurer responds to losses.
Attachment point
53
Insurance that covers the reduction in an organization's income when operations are interrupted by damage to property caused by covered peril.
Business income insurance
54
The difference between revenues (such as money received for goods or services) and expenses (such as money paid for merchandise, rent, and insurance)
Net income
55
Net income that results when revenues exceed expenses.
Profit
56
Net income that results when expenses exceed revenues.
Net loss
57
Expenses that continue to be incurred during business interruption.
Continuing Expenses
58
Expenses that will not continue during a business interruption.
Non continuing expenses
59
Expenses, in addition to ordinary expenses, that an organization incurs to mitigate the effects of a business interruption.
Extra Expenses
60
The possibility of incurring business income loss because of physical loss occurring on the premises of an organization that the insured depends on for materials, products, or sales.
Dependent property exposure
61
The sum of the insured's estimated net income and operating expenses for the twelve months following policy inception, minus only those exposures listed in the business income worksheet.
Coinsurance basis
62
A worksheet for calculating the amount of insurance necessary to comply with coinsurance condition of business income insurance forms, for reporting business income values to the insurer, or for providing underwriters with information they need to evaluate an organization's business income loss exposure.
Business income worksheet
63
The largest loss that an insured is likely to sustain.
Probable Maximum Loss (PML)
64
Endorsement that limits coverage for payroll expenses to a specified number of days or excludes expenses altogether, allowing the insured to satisfy coinsurance requirement with a lower amount of insurance.
Payroll limitation or exclusion endorsement
65
An endorsement that extends business income forms to cover payroll expenses for specified job classifications or employees regardless of whether such expenses are necessary to resume operations.
Discretionary Payroll Expense endorsement
66
Endorsement that eliminates power, heat, and refrigeration expenses from coverage and from the coinsurance calculation, allowing the insured to satisfy the coinsurance requirement with a lower limit of insurance.
Power, Heat and refrigeration deduction endorsement
67
An endorsement that modifies business income coverage forms to make them more appropriate for covering the business income loss exposures of schools.
Business Income Changes - Educational Institution endorsement
68
An endorsement that covers loss of business income or extra expense at the insured premises caused by the interruption of utility services to or from the insured premises.
Utility Services - Time Element endorsement
69
Endorsement that covers business income loss during the additional time required to comply with building ordinances or law.q
Ordinance or law - Increased Period of restoration endorsement
70
Insurance that covers many different classes of property that typically involve an element of transportation.
Inland Marine Insurance
71
Insurance that, in the US, includes both ocean and inland marine coverage and, in the rest of the world, is limited to insurance for vessels and cargo.
Marine Insurance
72
Statement of types of property that may be insured on inland marine and ocean marine insurance forms.
Nationwide Marine Definition
73
A policy designed to cover property that floats, or moves, from location to location `
Floater
74
A valuation basis that values covered property at its invoice value, including freight.
Invoice value
75
A method of valuing property in which the insurer and the insured agree, at the time the policy is written, on the maximum amount that will be paid in the event of a total loss.
Agreed Value Method
76
The person or organization shipping goods. often the seller of the goods.
Shipper
77
The person or organization that receives property being transported by a carrier.
Consignee
78
Airlines, railroads, or trucking companies that furnish transportation to any member of the public seeking their offered services.
Common carries
79
Carries that furnish transportation services to shippers with whom they have contracts
Contract carries
80
A natural and unavoidable catastrophe that interrupts the expected course of events.
Act of God
81
A quality of a condition within a particular type of property that tends to make the property destroy itself.
Inherent vice
82
A document acknoledging receipt of goods from the shipper, given by the carrier, which includes the terms of the contract of carriage for the goods.
Bill of lading
83
A travel contract in which transportation is temporarily hired for a specific trip.
Charter
84
Policy that covers all shipments made or received by the insured throughout a one-year policy period.
Annual transit policy
85
Policy that covers all shipments made or received by the insured during the policy's term; comparable to an inland marine annual trip transit policy, but without a set policy expiration date.
Open cargo policy
86
In ocean marine policies, the party named as the insured.
Assured
87
Partial loss that must, according to maritime law, be shared by all parties to a voyage (cargo owners and vessel owner).
General average
88
Clause that covers the cost of reasonable measures that the insured is required to take to protect property from damage at the time of loss.
Sue and labor clause
89
Clause in open cargo policies that covers the insured cargo during the ordinary course of transit (including land transit) form the time the cargo leaves the point of shipment until it is delivered to its final destination.
Warehouse-to-warehouse coverage
90
A warranty that excludes loss caused by war, privacy, virtually any lawful or unlawful taking of the vessel, a nuclear weapon, a min, or a torpedo.
Free of capture and seizure (FC&S) warrenty
91
A warranty that excludes loss caused by strikes, labor disturbances, riots, vandalism, sabotage, or malicious acts.
Strikes, riots, and civil commotion (SR&CC) warrenty
92
A clause that excludes coverage for loss caused by delay, such as loss of market, spoilage, and business interruption.
Delay clause
93
A clause that adds coverage to an ocean marine cargo policy for loss resulting from bursting , breakage of shafts, latent defects of vessels, or faults or errors in the navigation or management of the vessels
Inchmaree clause
94
An exceptive warranty that excludes particular average unless the loss is actually caused by the stranding, sinking, or burning of the vessel or its collision with another vessel.
FPA/AC (free of particular average/American conditions) warranty
95
Partial loss that is borne by only one party to voyage (such as a cargo owner)
Particular average
96
A clause in open cargo policies that doubles the policy limit when, for reasons beyond the control of the assured, shipments accumulate at some point in transit.
Accumulation clause
97
Policy that covers a particular shipment of goods specified in the policy.
Trip transit policy
98
Form that covers a financial institution against loss of securities and other negotiable instruments while in transit through specified types mail.
Mail coverage form
99
Inland marine policy that provides broad coverage on parcel post shipments.
Parcel post policy
100
Policy that covers a trucker's liability for damage to cargo of others being transported by the trucker.
Motor truck cargo liability policy
101
A type of motor truck cargo policy that covers any type of organization (not just a trucking company) for damage to its own cargo while being transported on its own truck.
Owner's goods on owners' trucks policy
102
An endorsement that insurers must attach to motor truck cargo liability policies of interstate carries stating that the insurer will pay cargo claims for which the insured is liable, up to the limits required by the US department of transportation, even if such claims are not covered under the policy.
BMC 32 - An endorsement for Motor Common Carrier Policies of Insurance for Cargo Liability
103
A category of inland marine policies covering various types of equipment, wherever it may be located in the policy period.
Equipment Floaters
104
A policy that covers mobile equipment or tools while located anywhere in the coverage territory
Contractors equipment floater
105
The cost to replace covered equipment with the latest comparable state of the art equipment available; can be used as a valuation basis in an EDP floater
Upgraded value
106
Coverage, in an EDP equipment floater, for perils such as mechanical failure, electrical disturbance, and damage to electronic data when covered equipment breaks down.
Breakdown coverage
107
Policy that covers a contractor's interest in building supplies or fixtures that the contractor has been hired to install
Installation floater
108
The party temporarily possessing the personal property in a bailment.
Bailee
109
The owner of the personal property in a bailment.
Bailor
110
Policy that covers warehouse operators against liability for damage to the property of others being stored in operator's warehouses.
Warehouse operators legal liability policy
111
A policy that covers damage to customer's goods while in the possession of the insured, regardless of whether the insured is legally liable for damage.
Bailee's customers policy
112
A policy that covers the insured's patterns and dies while located at the premises of others and also while in transit to and from those premises
Pattern and die floater
113
A policy that covers the insured's goods while being worked on at a subcontractor's or processor's premises and while in transit and from those premises
Processing floater
114
A policy that covers the inventory and other property of any of the types of dealers that qualify for inland marine coverage (such as jewelers, equipment dealers, fine arts dealers, and furriers).
Dealers policy
115
A dealers policy, particularly one written for a jeweler or furrier.
Block Policy
116
Form that covers neon, fluorescent, automatic, or mechanical signs.
Signs Coverage Form
117
Insurance that covers the sums the insured is unable to collect when records of accounts receivables are destroyed by a covered cause of loss.
Accounts receivable insurance
118
Insurance that covers direct physical loss to valuable papers and records, such as architect's blueprints and plans.
Valuable papers and records insurance
119
A fired pressure vessel constructed of cast iron or steel in which water is heated to produce steam or hot water
Boiler
120
A closed container that is heated by the direct fire of burning fuel and can withstand internal pressure.
Fired pressure vessel
121
A closed vessel that can withstand internal pressure or vacuum but is not heated by the direct fire of burning fuel
Unfired pressure vessel
122
Expenses incurred to speed up the repair or replacement of covered property
Expediting expenses
123
Condition that allows the insurer to immediately suspend equipment breakdown insurance on an item of equipment that the insurer determines to be in dangerous condition.
Suspension condition
124
Condition that addresses claim situations in which the insured's equipment breakdown insurer and the insured's commercial property insurer disagree on which insurer covers a loss; each insurer pays half the loss to quickly indemnify the insured; insurers then resolve their differences.
Joint or Disputed Loss Agreement
125
A condition in equipment breakdown policies that provides that the insurer will perform required inspections of boilers and other equipment on the insured's behalf
Jurisdictional inspections condition
126
In general, the tendency for people with the greatest probability of loss to be the ones most likely to purchase insurance.
Adverse Selection
127
A provision commonly included in BOP that addresses fluctuating personal property values by automatically increasing the amount of insurance.
Seasonal increase provision
128
Insurance offered by private insurers that covers crops against loss caused by hail and often other perils.
Crop hail insurance
129
Insurance offered by the federal government that covers unexpected crop production losses due to natural causes such as drought, excessive moisture, hail, windstorm, and flood.
Multiple Peril Crop Insurance (MPCI)
130
Insurance that covers loss of valuable animals by (1) death resulting from accident, injury, sickness, or disease or (2) theft, subject to exclusions.
Animal morality insurance
131
A specialized type of livestock coverage that covers animals while in the custody of a commercial feedlot operator
Feedlot insurance
132
A policy that covers the crime loss exposures of financial institutions such as banks, savings, and loan institutions, and insurance companies.
Financial institution bonds
133
A policy that enables a financial institution to cover loss of or damage to its costumers' property in the insured's safe-depository facilities and damage to the insured's premises.
Combination Safe Depository Policy
134
Insurance that protects a lending institution or mortgage servicing agency against losses arising out of the insured's failure to maintain insurance protecting mortgage property, as well as other exposures connected with servicing mortgages.
Mortgage impairment insurance
135
Insurance that protects a mortgage holder from loss if the borrower fails to repay the mortgage loan.
Mortgage guarantee insurance
136
Insurance that protects against loss resulting from defects in a title to real property.
Title insurance
137
A written contract that expresses one party's promise to answer for another party's failure to do something as promised.
Surety bond
138
The party to a surety bond whose obligation or performance the surety guarantees.
Principal
139
The party to a surety bond that receives the surety's guarantee that the principal will fulfill an obligation or perform as promised.
Obligee
140
The party (usually an insurer) to a surety bond that guarantees to the obligee that the principal will fulfill an obligation or perform as required by the underlying contract, permit, or law.
Surety
141
The obligation of one entity to answer for the debt, default, or miscarriage of performance of duties.
Suretyship
142
A surety bond guaranteeing the fulfillment of obligations under construction contracts or other types of contracts.
Contract bond
143
A contract bond guaranteeing that a contractor bidding on a construction or supply contract will enter into the contract and will provide a performance bond if the bid is accepted.
Bid bond
144
A contract bond guaranteeing that a contractor's work will be completed according to plans and specifications.
Performance bond
145
A contract bond guaranteeing that the project will be free of liens.
Payment bond
146
A contract guaranteeing the work will be free from defects in materials and workmanship for a specified period after the project is completed.
Maintenance bond
147
A contract bond guaranteeing a local government authority that a subdivision developer will complete the subdivision in accordance with approved proposals at the developer's expense.
Subdivision bond
148
A contract bond guaranteeing that a supplier will perform the designated supply contract according to specifications.
Supply contract bond
149
Surety bonds that provide payment to the obligee (the state, city, or other public entity) for loss or damage resulting from violations of the duties and obligations imposed on the licensee or permit holder.
License and permit bonds
150
A commercial surety bond guaranteeing that a public official will perform his or her duties faithfully and honestly.
Public official bond
151
A classification of surety bonds guaranteeing that a person or a organization will faithfully perform certain duties prescribed by law or by a court or will demonstrate financial responsibility for the benefit of another until the final outcome of a court's decision.
Court bonds
152
A judicial bond guaranteeing that, if the court decides against a plaintiff who has requested attachment of the defendants property. the defendant will be paid any damages that result form the property attached.
Attachment bond
153
A bond that guarantees that the insured will pat any damages and court costs if the court should decide in the claimant' favor.
Release of attachment bond
154
A judicial bond guaranteeing that a plaintiff who appeals an adverse decision to a higher court will pay all costs of the appeal
Appeal bond
155
A judicial bond guaranteeing that a defendant who appeals an adverse decision to higher court will pay the entire judgement, plus court costs and interests, should the higher court sustain the initial judgement for the plaintiff.
Defendant's appeal bond (supersedeas bond)
156
A court bond guaranteeing that a person appointed by a court to administer the property or interest of others will faithfully performs his or her duties.
Fiduciary bond
157
Any bond that does not fit well under the other primary categories of surety bonds formulated by the surety and Fidelity Association of America
Miscellaneous bonds
