Term
| What is the basic difference between the Named Perils Form and Broad Form policies? |
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Definition
| The Named Perils Form insures against 8 specific named perils only, whereas the Broad Forms insure against all losses unless specifically excluded in the policy. |
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Term
| Identify five insurance coverages provided by the Broad Form policy which are not provided by the Named Perils Form. |
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Definition
1.) Vehicle impact damage to Insured's buildings, even when caused by Insureds or their employees.
2.) All sources of smoke damage; excluding agricultural smudging.
3.) Water damage due to freezing or rupture of water lines.
4.) Theft.
5.) Collapse, excluding damage from earthquakes. |
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Term
| Identify 5 factors used by Insurers in establishing the base rate to be charged for insurung commercial property. |
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Definition
1.) Construction
2.) Protection
- Public protection
- Private protection
3.) Occupancy
4.) Location
5.) Claims History |
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Term
| Identify specific types of property that can be insured under the definition of "building", "stock" & "equipment". |
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Definition
1.) Building;
- Perimeter fencing
- Pole sign
- Yard lights
2.) Stock;
- Merchandise usual to business
- Packing materials
- Advertising materials
3.) Equipment;
- Office furniture
- Office equipment
- Tools
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Term
| Identify the types of losses the Co-Insurance Clause applies to. |
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Definition
| The Co-Insurance Clause applies partial losses only. |
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Term
| Summarize the solution devised by Insured's to discourage people from deliberately under-insuring. |
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Definition
| The Co-Insurance Clause was designed to apply a penalty for all partial losses when Insureds purchased less insurance specified by the insurer, usually no less than 80% of the ACV of the property insured. |
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Term
| State the formula for the calculation of the settlement amount on policies containing the Co-Insurance Clause. |
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Definition
Did/ Should x Loss = Settlment
* Did = Amount of Insurance Purchased
* Should = Percentage of insurance required (usually 80% of ACV) x ACV
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Term
| Explain the coverages provided for Debris Removal. |
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Definition
| If the limits of insurance have not bee fully used to pay for damage insured by the policy, the Insurer agrees to allow Insureds to use any remaining amounts to pay for debris removal. |
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Term
| Summaraize the provisions for the "Reinstatement Clause". |
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Definition
| Insureds will have as much insurance on property after an insured loss as they had immediately prior to it. |
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Term
| The Insurer agrees not to exercise the "Subrogation Clause" in some cases. Explain. |
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Definition
| The Insurer agrees to to excercise Subrogation against any party having an insurable interest in the property insured. |
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Term
| Identify 3 obligations placed on Insureds by the "Property Protection Systems" clause. |
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Definition
1.) When there is an interruption, flaw or defect in a protection system.
2.) When there is a cancellation or non-renewal of a monitoring/ maintenance contract.
3.) If there is suspension of police service to respond to premises. |
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Term
| Summarize the provisions of the "Locked Vehicle Warranty". |
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Definition
| The insurer will pay losses resulting from theft of property from a vehicle in transit under "Property in Transit", when the property has been stored in an enclosed compartment and proof of forced entry can be shown. |
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Term
| Identify the evidence required before the Insurer will make payment under the following policies; |
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Definition
1.) Burglary - will only be paid when there is evidence that force was used to take insured property.
2.) Robbery Insurance will be paid when;
- Actual or threatened force is used to take insured property from a person having control over it.
- Insured property is taken froma custodian whos is killed or rendered unconscious.
- The custodian has witnessed the taking of insured property by a person not authorized to have it.
3.) Theft - only proof required is that the insured property was taken without Insured's consent. |
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Term
| Identify two key coverages by a Boiler and Machinery policy. |
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Definition
1.) Loss/Damage from explosion of boilers/ pressure vessels operating in excess of 15 lbs/square inch.
2.) Electrical or mechanical breakdown of objects such as boilers/ pressure vessels, misc electrical apparatus, compressors and pumps.
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Term
| Identify 3 differnt types of property items insured by the Builder's Risk - Braod Form (IBC 4042). |
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Definition
1.) Temporary buildings
2.) Forms
3.) Hoardings and scaffolding |
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Term
| Identify four charachteristics common to Business Interruption policies; |
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Definition
1.) A contract of indemnity.
2.) Insureas same perils as Property Policy.
3.) Coverage not limited to Policy Period; start on the first day of loss and can continue for up to 12 months.
4.) Pays expenses when those expenses will reduce the amount of loss. |
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Term
| State the the basic difference between the Earnings Form and the Profits Form. |
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Definition
| The Earnings Form provides coverage only until the property has been rebuild, repaired or replaced, while the Profits Form continues until income has been restored to pre-loss levels. |
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Term
| State the purpose of Extra Expense insurance and provide at least 3 examples of extra costs insured by this policy. |
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Definition
Extra Expense insurance is designed for to cover extra costs incurred by doctors, insurance brokers, travel agents etc, that need their business to be back up and running in a very short amount of time. Coverages are provided only for those expenses that are over and above expenses normally incurred, as if the loss had not occurred and can include;
- rent of temporary premises
- rent of temporary equipment
- installation of telephones
- pay for overtime
- pay bonuses for quick service
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