Section 3E

Question 0

CPP

Answer 0

Must have at least 2 parts: property and liability.

Question 1

CPP

Answer 1

Commercial Package Policy

Question 2

Business clients may purchase any of the following commercial coverages as a mono line coverage or as a part of a CPP:

Answer 2

Commercial General Liability
Commercial Property
Equipment Breakdown Protection
Farm Coverages
Commercial Crime
Commercial Inland Marine
Commercial Auto

Question 3

Four key components of a CPP

Answer 3

Common dec page
Interline endorsements (as needed)
One or more coverage parts
Common policy conditions

Question 4

Common Policy Declarations Page:

Answer 4

Names of the parties,
The policy period,
A description of the insured's business, 
a schedule of coverage parts and
the premiums charged for each, and 
The total policy premium

Question 5

Interlink Endorsements:

Answer 5

Eliminates duplicate language and minimizes number of endorsements

Question 6

One of more coverage parts:

Answer 6

Each part has its own separate Dec page

Question 7

Common Policy Conditions:

Answer 7

6 conditions are…

1. Cancellation ( first named insured notified 10 days advance notice, pro-rate or short rate cnx),
2. Policy Changes ( must be mutual between insured and insurer; terms changed by endorsement),
3. Insurer examines books and records and audit during policy period and up to 3 years after expiration—initial premium is deposit),
4. Insurer makes inspections and surveys to establish insurability and determine proper premium charges at renewal,
5. First named insured is responsible for paying all premiums
6. Transfer of rights prohibited without permission of insurer,except at insured’s death

Question 8

CPP property coverage part consists of

Answer 8

The dec page, property conditions form,one or more coverage forms, one or more causes of loss forms, and any applicable endorsements added.

Question 9

CPP based on the

Answer 9

SFP policy

Question 10

Each coverage must be listed on the

Answer 10

Declarations page and a premium paid

Question 11

Commercial Building and Personal Property form

Answer 11

Most frequently used form…..

Question 12

On the CPP, each coverage must be listed

Answer 12

On the declarations page and a premium paid

Question 13

Commercial Building and Personal Property Coverage Form

There is no automatic coverage for

Answer 13

Business personal property (contents) unless it is listed on the dec and an additional premium is paid.

There is also no stacking on a Commercial Building and Personal Property Coverage Form.

Question 14

Commercial Building and Personal Property form

Cov A covers…

Answer 14

Buildings with permanently installed equipment like a/c, built-in appliances, and personal property used to maintain or service the bldg such as fire extinguishers
(pay a premium, declare a limit)

Question 15

Commercial Building and Personal Property form

Cov B covers…

Answer 15

Business Personal Property (Contents)

Includes stock, equipment, merchandise, office furniture, etc)

(Pay a premium, declare a limit)
Must appear on dec page to be covered!!!

Question 16

Commercial Building and Personal Property form

Cov C covers…

Answer 16

Personal Property of Others left in the care, custody, and control of the insured.

(Pay a premium, declare a limit)

Question 17

Commercial Building and Personal Property form

Three coverages don’t stack. They are chosen individually if wanted. They are…

Answer 17

Cov A-Buildings
Cov B-Business Personal Property
Cov C- Personal Property of Others

Question 18

Commercial Building and Personal Property form

Additional Coverages are…

Answer 18

Debris Removal -25% of total payment made for the loss

Removal of Business Personal Property- 10 days (DP-1 is 5 days, DP-2 and DP-3 are 30 days)

Fire Dept Service Charge-up to $1,000

Cost of Extracting Pollutants-up to $10,000

Question 19

Commercial Building and Personal Property form

The co- insurance can be as low as 50% or as high as 100%. The higher the co insurance percentage you choose,

Answer 19

The lower your rates will be.

Question 20

If you choose 80% co- insurance or higher, you get

Answer 20

Five extensions of coverages at no extra charge

Question 21

With 80% co-insurance,the five extensions of coverages at no extra cost are…

Answer 21

1. Newly Acquired Property
   25% of Cov A= max $250,000
   10% of Cov B= max $100,000
   (Up to 30 days)
2. Personal Property of Others
   If B was purchased, this is covered up to
   maximum of $2,500
3. Valuable Papers and Records
   Up to $2,500 to research, replace, restore
   lost info on docs
4. Business Personal Property (other than
   stock) while temporarily off the premises
   Max $10,000 ( excludes personal prop in
   motor veh, c/c/c of salesperson, or at a
   fair/exhibition
5. Outdoor Property
   Fences, antennas, signs not attached to
   building, trees/shrubs/plants
   (Max $1,000 but not more than $250 per one
   tree, shrub or plant)

Question 22

Commercial Building and Personal Property form

Answer 22

Standard Deductible-$250 per occurrence regardless of # of buildings

Claims paid ACV

Inflation Guard Endorsement may be added

May cover on a blanket or specific property basis

Can use reporting forms (Inurance Cov will fluctuate or this is also used due to large changes in inventory)

Question 23

Builders Risk Form

Answer 23

Designed for buildings under construction

Based on completed value basis (average)

Claims paid ACV

Automatically terminates when builder’s interest in the property ceases,the property is sold, or 90 days after construction is completed

Covers direct losses, indirect losses aka time-element losses aren’t covered unless the peril causing the direct loss is covered first

Question 24

Consequential Loss

Answer 24

Aka indirect loss or time element losses. The amount of loss directly linked to the time it takes to repair or rebuild the damaged property Examples from DP and HO were rental value and loss of use (additional living expense)

Question 25

Business Income Coverage Form (Business Interruption) may be added to CPP

Answer 25

Applies to losses and expenses related to an interruption of normal business operations Losses incurred during period of restoration are covered Pays net profit or loss before taxes plus continuing operating expenses (business income) No deductible Contingent business interruption insurance is available as an optional coverage

Question 26

Period of restoration

Answer 26

Begins on date that the direct physical loss occurred and it ends on the date that the damaged property should be repaired, rebuilt, or replaced by the insurance company

Question 27

Contingent Business Interruption

Answer 27

Business income from dependent properties available as optional coverage This protect's an insured's business interruption due to loss or damage to property that the insured does not own, operate or control.

Question 28

Extra Expense Coverage Form

Answer 28

May be added to CPP or combined with business income coverage form. It covers actual and necessary extra expenses sustained due to direct physical loss (basically extra expenses you incurred over and above your normal business expenses.) It doesn't over loss of business income.

Question 29

Commercial Building and Personal Property form, Builders risk form, business income form, and extra expense form must have a

Answer 29

Cause of Loss Form attached.

Question 30

Cause of Loss forms

Answer 30

Basic Cause of Loss, Broad Cause of Loss, and Special Cause of Loss

Question 31

Basic Cause of Loss

Answer 31

Named perils Fire, lightning, WHARVVES, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action Lowest premium charge

Question 32

Broad Cause of Loss

Answer 32

More named perils It covers... Fire, lightning, WHARVVES, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action + four additional perils: Glass breakage ($100 per pane and $500 per occurrence), falling objects, weight of ice/snow/sleet, and water damage other than flood.

Question 33

Special Cause of Loss

Answer 33

All-risk to building and business personal property Theft is covered ($2,500 limit on furs, jewelry, watches and precious stones) If it is not excluded, it is covered

Question 34

Earthquake Form

Answer 34

May be added to the Cause of Loss form if purchased. 2 more perils added: earthquake and volcanic eruption Deductible is percentage of the policy limit