Term
| Commercial Package Policy (CPP) |
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Definition
| A simplified, easy-to-read Commercial Package Policy introduced by ISO. Includes General Liability, Commercial Property, Commercial Inland Marine, Commercial Crime/Employee Dishonesty, Boiler and Machinery, Commercial Auto, Farm, Liquor Liability, Pollution Liability, Professional Liability and Employment-Related Practices Liability. Forms may be used in the package policy or may be used to issue monoline policies. |
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Term
| What are commercial package policies? |
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Definition
| They are policies that combine or "package" individual lines of insurance in a single contract. Such policies are generally thought to be advantageous to both the insured and insurer. |
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Term
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Definition
| " Any two or more of the following coverage parts: Commercial Property; Commercial General Liability; Commercial Crime/Employee Dishonesty; Commercial Inland Marine; Boiler and Machinery; Commercial Auto (includes Business Auto, Garage and Truckers insurance; and Farm (includes Property and Liability coverage). " is the correct response to: |
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Term
| What classes of risk are eligible for a CPP? |
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Definition
| All classes are, except those that are eligible for homeowner's insurance. |
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Term
| What is a Businessowners Policy (BP)? |
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Definition
| Conceptually similar to the homeowners program. Designed to meet the ordinary needs of certain classes of business. |
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Term
| Which areas of risk are eligible for a Businessowners Policy? |
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Definition
| " Under standard rules, seven, with limitations, they are: (1) Apartment houses and residential condominium association buildings are eligible including permitted incidental occupancies including offices, mercantile, certain wholesalers, processing and service occupancies so long as they do not exceed 25,000 square feet. Buildings occupied by a contractor where the contractor does not occupy more than 7,500 square feet or more than 15% of the total floor area are also eligible; (2) Offices and office condominium association buildings are eligible so long as the building is not over six stories high and it does not contain over 100,000 square feet of area. Office tenants who occupy not over 25,000 square feet in a single building are eligible. Occupancies must be principally for office purposes with the same incidental occupancies eligible as those listed in (1); (3) Mercantile, wholesaler, service or processing risk are eligible so long as the building or individual tenants do not occupy over 25,000 square feet of the area or exceed $3 million in gross sales at any insured location; (4) "Trade" (plumbers, painters, etc.) contractors whose work is primarily a single specialty are eligible if the building or tenant does not exceed 25,000 square feet of the area, or exceed $3,000,000 in gross sales. The manual for the BP program lists contractors eligible for coverage; general contractors and those performing more hazardous types of construction are not eligible. Additional eligibility requirements include: no more than $300,000 of annual payroll; no work over 3 stories, total subcontracted work cannot exceed 10%; no rental of equipment to others; unrelated sales cannot exceed 25% of annual gross sales; (5) "Limited-Cooking" (food preparation that does not emit enough smoke or grease vapors to require the installation of an exhaust system or dry-chemical a extinguishing system; normally this involves cooking done in microwaves, toasters, pizza ovens, infrared snack warmers and similar appliances) and fast-food restaurants are eligible if they meet numerous specific requirements pertaining to size, seating capacity, type of food and drinks served, methods of serving customers and methods of cooking. Fast-food restaurants are eligible if they do any of the above and are also eligible if they utilize grilling, enclosed broiling, deep-fat fryers, roasting and barbecuing; (6) Convenience food stores or eligible restaurants are eligible if they meet the following additional requirements: gasoline sales must be less than 75% of total annual gross sales; no auto service or repair operations; no car wash operations; no propane or kerosene tank filling operations; (7) Self-storage facilities are eligible providing they do not exceed two stories in height. Facilities that permit cold storage or storage of industrial materials, chemicals, pollutants and waste are ineligible. " is the correct response to: |
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Term
| What property perils are covered in the businessowners policy? |
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Definition
| Property coverage for the BP is written on an "open perils" basis, which is similar to the causes of loss - special form described in the commercial property section. Coverage can be endorsed to a named perils form, which covers essentially the same perils as the causes of loss - basic form for commercial property insurance including coverage for transportation perils |
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Term
| What are the additional coverages of the businessowners policy? |
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Definition
| " Additional coverages included in the businessowners policy are the same as those found in the commercial property coverage forms: (1) Debris removal - 25% of the loss, subject to the policy limit, plus an additional $10,000; (2) Preservation of property - 30 days at a temporary location; (3) Fire department service charge - $1,000; (4) Collapse - subject to policy conditions; (5) Extended business income - 30 days which can be increased by endorsement; (6) Pollutant clean up and removal - $10,000; (7) Civil authority - business income and extra expense caused by action of a civil authority that prohibits access to the described premises due to a loss by a covered peril at a premises other than the described premises. Coverage is subject to a 72-hour waiting period and ends after 3 consecutive weeks; (8) Money orders and counterfeit paper currency - $1,000; (9) Forgery or alteration - $2,500; (10) Increased cost of construction - $10,000 to cover increased cost of repairing damaged property to comply with ordinance or law changes; (11) Business income from dependent properties - $5,000; and (12) Glass expenses - cost to board up or install temporary plates and to remove obstructions. " |
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Term
| What are the optional coverages of the businessowners policy? |
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Definition
| " The Businessowners property forms offer the following optional coverages: (1) Employee dishonesty blanket coverage subject to a limit of $5,000, $10,000, $25,000, $50,000 for $100,000 per occurrence; (2) Accounts receivable - increased limits; (3) Valuable papers and records - increased limits;(4) Forgery and alteration - increased limits; (5) Outdoor signs "all risk" coverage is available for any selected limit on exterior sign; (6) Mechanical breakdown replacement costs coverage may be provided for boilers and air-conditioning units; and (7) Money and Securities - insures against theft, disappearance or destruction of money and securities. Separate coverage limits are applicable to both on and off premises losses. " is the correct response to: |
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Term
| How does the liability coverage in a BP differ than in a commercial general liability policy? |
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Definition
| Generally the coverage is parallel however, coverage is per occurrence with no a claims-made option. |
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Term
| What liability limits are offered in the BP? |
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Definition
| True or False: The Businessowners Liability coverage is subject to several different liability limits: (1) Liability and medical expenses limits of $300,000, $500,000, $1,000,000 or $2,000,000 may be purchased. Coverage applies per occurrence for bodily injury, property damage and medical expenses. Coverage applies per person for personal injury and advertising injury. A medical expenses limit of $5,000 per person applies; (2) A general aggregate limit, equal to twice the liability and medical expenses per occurrence limit applies to all businessowners liability and medical expense coverage except liability arising out of the products/completed operations hazard or fire legal liability; (3) Products and completed operations liability is subject to its own aggregate limit, equal to two times the liability and medical expenses limit; (4) Fire legal liability can be purchased with a per occurrence limit of $50,000, $100,000, $250,000, $500,000 or $1,000,000. While the fire legal liability coverage is not subject to an aggregate limit, it is subject to the liability and medical expenses per occurrence limit; and (5) Coverage can also be extended to provide coverage for risks of direct physical loss. While it is not subject to any aggregate limit, it is subject to the liability and medical expenses per occurrence limit. |
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Term
| What liability limits are offered in the BP? |
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Definition
| " The Businessowners Liability coverage is subject to several different liability limits: (1) Liability and medical expenses limits of $300,000, $500,000, $1,000,000 or $2,000,000 may be purchased. Coverage applies per occurrence for bodily injury, property damage and medical expenses. Coverage applies per person for personal injury and advertising injury. A medical expenses limit of $5,000 per person applies; (2) A general aggregate limit, equal to twice the liability and medical expenses per occurrence limit applies to all businessowners liability and medical expense coverage except liability arising out of the products/completed operations hazard or fire legal liability; (3) Products and completed operations liability is subject to its own aggregate limit, equal to two times the liability and medical expenses limit; (4) Fire legal liability can be purchased with a per occurrence limit of $50,000, $100,000, $250,000, $500,000 or $1,000,000. While the fire legal liability coverage is not subject to an aggregate limit, it is subject to the liability and medical expenses per occurrence limit; and (5) Coverage can also be extended to provide coverage for risks of direct physical loss. While it is not subject to any aggregate limit, it is subject to the liability and medical expenses per occurrence limit. " is the correct response to: |
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