Exam 25: Commercial Property Insurance

A navigation error caused a cargo ship to run aground on a reef. The ship, valued at $1.5 million, was carrying $1.5 million in grain and $1.5 in electronic devices. The ship sustained a $150,000 physical damage loss. If this loss is a "particular average" loss, how will the loss be settled?

What is the effect of the optional agreed value provision in the building and personal property coverage form?

All of the following statements about business income insurance are true EXCEPT

Which of the following statements about the businessowners policy is (are) true? I.It is designed to meet the insurance needs of large manufacturing firms. II.It is a package policy designed to meet the basic property and liability needs of an insured in a single contract.

Renee is risk manager of XYZ Company. She purchased a Commercial Package Policy for her company and added one optional coverage. This option suspends the coinsurance clause and substitutes a new agreement covering any loss in the same proportion that the limit of insurance purchased bears to a value specified in the declarations. This provision is known as

Which of the following statements about ocean marine insurance is true?

If the optional replacement cost coverage provision is not selected, how are losses settled under the building and personal property (BPP) coverage form?

Rick is risk manager of Herald News, a daily newspaper in a competitive market. Rick wants to make sure that if Herald's printing facility is damaged or destroyed, the paper will continue to be published. What type of insurance can Rick purchase to cover the added cost of continuing to print the paper after a physical damage loss has occurred?

One type of commercial property insurance excludes perils that are covered by the basic coverages. Some businesses buy this coverage to fill coverage gaps, including flood and earthquake, and to cover property in other countries. This type of insurance is called

Which ocean marine coverage provides comprehensive liability insurance for property damage caused by the ship to piers and docks, damage to the ship's cargo, and injury to the passengers or crew?

Which of the following statements is (are) true concerning the value reporting form? I.Failure to report accurately suspends coverage. II.If the insured underreports the property values at a location, and a loss occurs at that location, recovery is limited to the proportion that the last value reported bears to the value that should have been reported.

Which of the following statements about the business income coverage form is true?

All of the following are considered to be instrumentalities of transportation and communication for purposes of inland marine insurance EXCEPT

Which of the following items is (are) contained in the common policy conditions page of the commercial package policy? I.A description of the property that is insured. II.A provision describing the insurer's right to audit the insured's books and records

Which of the following statements about the extra expense coverage form is (are) true? I.It provides coverage for the increased cost that must be paid to continue operations during a period of restoration. II.It provides coverage for lost business income if a key customer or key supplier experiences a loss.

Which of the following is covered under the building and personal property coverage form?

There are a number of implied warranties in ocean marine insurance. One implied warranty is that the vessel is properly constructed and maintained, and that it is properly equipped for the voyage to be undertaken. This implied warranty is the warranty of

Which of the following statements about the condominium commercial-unit owners coverage form is (are) true? I.It provides coverage for the unit owner's proportionate financial interest in the condominium building. II.It provides coverage for the business personal property of the unit owner.

CompuFix services desktop and laptop computers. The owner of CompuFix is concerned that computers that are left with the business to be repaired may be damaged or destroyed. To address this risk, CompuFix should purchase

John is risk manager of Alpha-2-Omega Company. John wants coverage for "direct physical loss" ("open perils" coverage) under the business and personal property (BPP) coverage form. Which causes-of-loss form should he select?