WebCe - Commercial Properties Actual Exam
Questions And Answers |Latest 2026 | Guaranteed Pass.
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Major Manufacturing produces lawn mowers. Major's first plant
manufactures the engines used in the lawn mowers, which are then
shipped to Major's second plant. The second plant manufactures the
housing, handles, and all the other component parts and assembles the
lawn mowers. These two plants are said to be
interdependent locations.
Interdependent locations are facilities of the insured that rely on products or
services from another of the insured's facilities to function normally. A lawn
mower could not function normally without an engine or a housing.
The business income forms can be modified to provide coverage with a
business income limit high enough to preclude a coinsurance penalty or
underinsurance but to allow the insured to pay only for the amount of
insurance actually needed using a year-end premium adjustment based on
actual business income results. This can be accomplished with the CP 15
20 endorsement, which carries the label
business income premium adjustment endorsement.
The business income premium adjustment endorsement requires a provisional
premium up front, and the premium is adjusted at year end on the basis of
actual business income results.
Dr. Feelgood has a commercial property policy with the extra expense
coverage form. After a fire damages Dr. Feelgood's office, he rents a
temporary location so that he can continue to see patients while his
original office is repaired. Which of the following costs incurred during the
period of restoration will Dr. Feelgood be able to recover?
The expenses of moving to and from the temporary office location
,Better Goods has a commercial property policy with the business income
and extra expense coverage form and a utility services time element
endorsement covering power supply property. When the electric
company's equipment breaks down during a heat wave, one of Better
Good's stores is without power for 5 days, causing a loss of income. Does
Better Goods have coverage for this loss?
No. Coverage under the utility services time element endorsement applies only
to loss from a covered cause, and equipment breakdown is not a covered cause
of loss.
Qwerty Company is the exclusive distributor of Overwood typewriters, a
combination keyboard/printer device that utilizes Font Balls. All Overwood
typewriters are manufactured in Overwood's sole manufacturing plant,
using Font Balls manufactured by Font Ball Company, which also has a
single plant. In addition to covering business income losses arising out of
damage to its own premises, Qwerty adds an endorsement to protect itself
against a business interruption at either Overwood or Font Ball factories.
In this scenario, the Font Ball Company plant is a
secondary contributing location.
GenCon Construction has a commercial property policy with the extra
expense coverage form and an extra expense limit of $50,000. A fire
damages the office, and it costs GenCon $100,000 in excess of normal
operating costs to equip and operate a temporary location while the office
is being repaired. Will GenCon incur a coinsurance penalty on this extra
expense loss?
No. The extra expense coverage form does not have a coinsurance provision.
Computer crashes had never been a problem before. But when a computer
virus caused its system to crash, Heartbreak Hotel had to pay for
additional help to check all guest rooms and manually review reservation
records in order to tell which rooms were occupied or reserved and which
, were available. As a result, Heartbreak sustained a $5,000 extra expense
loss. Heartbreak's standard extra expense coverage form will
cover this loss for up to $2,500 or the limit indicated in the declarations,
whichever is higher.
A tornado severely damages one of Major Manufacturing's plants. As a
result of the damage, Major Manufacturing is forced to curtail its
operations during the 6 months needed to complete repairs. The resulting
loss of income suffered by Major Manufacturing is referred to as
a time element loss.
Which of the following describes a feature of standard commercial
property policies?
Several different forms must be combined to make up a policy.
The president of Handy Corner Grocery has just learned that its
accounting clerk has been embezzling money from the company for the
past 6 months. Handy has a standard commercial property policy, a
standard commercial general liability policy, and a workers compensation
and employers liability policy. Which of these policies covers this loss?
None of these policies cover the loss
An insurance company that specializes in coverage for religious
institutions publishes its own policy forms that provide broader coverage
than the ISO forms. This insurer's forms would not be referred to as
standard forms.
Duffy's Tavern is currently insured under a commercial package policy
that includes only commercial property coverage and commercial general
liability coverage. Duffy would like to add coverage for equipment
breakdown. This can be done by
Questions And Answers |Latest 2026 | Guaranteed Pass.
Instant Pdf Download
Major Manufacturing produces lawn mowers. Major's first plant
manufactures the engines used in the lawn mowers, which are then
shipped to Major's second plant. The second plant manufactures the
housing, handles, and all the other component parts and assembles the
lawn mowers. These two plants are said to be
interdependent locations.
Interdependent locations are facilities of the insured that rely on products or
services from another of the insured's facilities to function normally. A lawn
mower could not function normally without an engine or a housing.
The business income forms can be modified to provide coverage with a
business income limit high enough to preclude a coinsurance penalty or
underinsurance but to allow the insured to pay only for the amount of
insurance actually needed using a year-end premium adjustment based on
actual business income results. This can be accomplished with the CP 15
20 endorsement, which carries the label
business income premium adjustment endorsement.
The business income premium adjustment endorsement requires a provisional
premium up front, and the premium is adjusted at year end on the basis of
actual business income results.
Dr. Feelgood has a commercial property policy with the extra expense
coverage form. After a fire damages Dr. Feelgood's office, he rents a
temporary location so that he can continue to see patients while his
original office is repaired. Which of the following costs incurred during the
period of restoration will Dr. Feelgood be able to recover?
The expenses of moving to and from the temporary office location
,Better Goods has a commercial property policy with the business income
and extra expense coverage form and a utility services time element
endorsement covering power supply property. When the electric
company's equipment breaks down during a heat wave, one of Better
Good's stores is without power for 5 days, causing a loss of income. Does
Better Goods have coverage for this loss?
No. Coverage under the utility services time element endorsement applies only
to loss from a covered cause, and equipment breakdown is not a covered cause
of loss.
Qwerty Company is the exclusive distributor of Overwood typewriters, a
combination keyboard/printer device that utilizes Font Balls. All Overwood
typewriters are manufactured in Overwood's sole manufacturing plant,
using Font Balls manufactured by Font Ball Company, which also has a
single plant. In addition to covering business income losses arising out of
damage to its own premises, Qwerty adds an endorsement to protect itself
against a business interruption at either Overwood or Font Ball factories.
In this scenario, the Font Ball Company plant is a
secondary contributing location.
GenCon Construction has a commercial property policy with the extra
expense coverage form and an extra expense limit of $50,000. A fire
damages the office, and it costs GenCon $100,000 in excess of normal
operating costs to equip and operate a temporary location while the office
is being repaired. Will GenCon incur a coinsurance penalty on this extra
expense loss?
No. The extra expense coverage form does not have a coinsurance provision.
Computer crashes had never been a problem before. But when a computer
virus caused its system to crash, Heartbreak Hotel had to pay for
additional help to check all guest rooms and manually review reservation
records in order to tell which rooms were occupied or reserved and which
, were available. As a result, Heartbreak sustained a $5,000 extra expense
loss. Heartbreak's standard extra expense coverage form will
cover this loss for up to $2,500 or the limit indicated in the declarations,
whichever is higher.
A tornado severely damages one of Major Manufacturing's plants. As a
result of the damage, Major Manufacturing is forced to curtail its
operations during the 6 months needed to complete repairs. The resulting
loss of income suffered by Major Manufacturing is referred to as
a time element loss.
Which of the following describes a feature of standard commercial
property policies?
Several different forms must be combined to make up a policy.
The president of Handy Corner Grocery has just learned that its
accounting clerk has been embezzling money from the company for the
past 6 months. Handy has a standard commercial property policy, a
standard commercial general liability policy, and a workers compensation
and employers liability policy. Which of these policies covers this loss?
None of these policies cover the loss
An insurance company that specializes in coverage for religious
institutions publishes its own policy forms that provide broader coverage
than the ISO forms. This insurer's forms would not be referred to as
standard forms.
Duffy's Tavern is currently insured under a commercial package policy
that includes only commercial property coverage and commercial general
liability coverage. Duffy would like to add coverage for equipment
breakdown. This can be done by
