CIC COMMERCIAL PROPERTY 2022 ACTUAL
EXAM PAPER 2026 QUESTIONS WITH
ANSWERS GRADED A+
• period of restoration for business income.
Answer: begins 72 hours after direct loss but extra expenses coverage begins
immediately ends on the date when the property SHOULD be repaired or
ends ont he date whne the insureds operations resumate at a new permananet
location Expiration of date has no effect on the policy period of restoration
• methods used to avoid coinsurance.
Answer: 1. maximum period of indemnity 2. monthly limit of indemnity 3.
business income agreed vlaue (only suspends)
• 4 optional coverages.
Answer: 1. Agreed value 2. Replacement cost 3. inflation guard 4. extension
of RC to pp of others
• Explain replacement cost.
Answer: - without deduction for depreciation - claims are paid on acv until
repairs or replacements is complete and then difference is paid - does not
apply to pp of others, contents of residence or fine arts
• What is considered building for coverage.
Answer: 1. Completed additions 2. Fixtures including outdoor furniture 3.
Machinery and equipment (permanently installed) 4. Personal property used
to service the building or premises A. Fire extinguisher and other equipment
B. Outdoor furniture like park benches C. Floor coverings (large rugs) D.
Cooking appliances, refrigerators dishwashers washers dryers 5. If not
covered by other insurance (like additions to the building) (I don't
understand how this is possible considering builders risk)
• Vacancy provision - describe and apply.
Answer: 1. Tenant - does not contain enough BPP to conduct customary
, operations 2. owner - must be at least 31% leased and used by lessee to
conduct customary operations 3. Under construction or renovation are not
vacant 4. vacant for 60 consecutive days - theft, vandalism, sprinkler
leakage, glass breakage, and attempted theft are not covered perils 5. all
other causes of loss payment is reduced by 15%
• Business Income Coinsurance formula.
Answer: Amount required = (Net Income + Operating expense) x
Coinsurance Amount carried = Limit of insurance Carried/ Required =
Recovery *This is opposite of property coinsurance did/ should. For BI it is
should/did
• elements of the financial statement that impact business income loss.
Answer: Gross Sales - Cost of Goods Sold = Gross Profit Gross Profit -
Operating expenses = Net Profit
• Coverage C- increased cost of construction coverage (ordinance or law).
Answer: pays for increased cost of construction to follow ordinances or law
coverage applies if they are building back the building for similar occupancy
unless no longer permitted payment will not be made under coverage c if the
building is not repaired or replaced must have RC on the building in order to
have Coverage C (CLM rule) coinsurance does not apply If building
ordinance or law requires rebuilding at a different location Coverage C will
include the increased cost at the new location subject to the limit on the
endorsement
• Rain, snow sleet-personal property in the open-concurrent causation
exclusion.
Answer: no coverage for precipitation damage to perosnal property left in
the open exposed to the elemtents, predictable type of loss
• Optional Coverage - RC PP OF OTHERS.
Answer: - applies rc to property of others but limited to the lessor of amount
required by contract or RC
• Failure to submit reports (first report).
, Answer: Policy will not pay more than 75% of what it would otherwise have
paid
• 3 business income coverage options.
Answer: 1. Business income including "Rental Value" 2. business income
other than "Rental Value" - actually exclusionary- no "Rental value"
provided 3. Rental Value -Actually exclusionary- no business income, other
than "Rental value"
• seepige or leakage of water-concurrent causation exclusion.
Answer: no coverage for losses resulting from gradual or ongoing condition
of 14 days or more that usually would have been discovered and corrected
with proper maintencne of property (must be sudden and accidental)
• Define Extra Expense.
Answer: 1. Necessary above normal expenses due to loss 2. needed to
continue operations any location 3. reduce the suspension of operations
• special limits- limitations.
Answer: $2,500 for furs and jewelry pattern dies molds and forms & 250 for
stamps tickets and lottery tickets held for sale
• causes of loss-special form.
Answer: coverage for physucal loss unless excluded burden of proof is on
the insurer to show exclude/limited
• Maximum period of indemnity loss settlement.
Answer: coinsurance does not apply and loss is limited to less of limit of
insurance or 120 days following the beginning of the period of restoration.
This can be expensive.
• limitations for no coverage fo theft of building materials and supplies.
Answer: limitation does not apply if the building material are held for sale
by named insured unless insured by builders risk form
• Coverage B & C of Ordinance or law can be combined limit?.
Answer: true
, • additional coverage extensions- water damage other liquids powder or
molten material damage.
Answer: it will pay the cost of tearing out and replacing any part that needed
to be torn out to find the issue
• faulty, inadequate or defective- conditional exclusions.
Answer: no coverage for faulty inadequate or defective work and materia
• Elements to Trigger BI Coverage.
Answer: 1. actual loss of business income 2. Due to necessary suspension of
operations 3. during the period of restoration 4. cause by direct physical loss
to property 5. at the described premises 6. from a covered cause of loss
• Additional property not covered.
Answer: In additional to modifying your building property this endorsement
can modify your BPP. (Stone quarry has large amounts of rock and stone
(stock) this stock poses little risk for covered cause of loss so insured doesn't
want to ensure it. Ensured can you send me the address please this
endorsement to his policy so he doesn't have to value in the stock value in
his limit of insurance)
• What will be paid and for how long for business income.
Answer: NICE business income means net income that would have been
earned or incurred and continuing normal operating expenses incurred,
including payroll
• Electronic Data- Additional Coverages.
Answer: $2,500 AGGREGATE limit available for each policy year limit
applies regardless of the number of
occurrences/premises/locations/computer systems coverage applies to data
that has been detroyed/corrupted by one of the named causes of loss if a
covered cause of loss is added by endorsement, the additional cause of loss
will not apply to this additional coverage -perils for this coverage are virus,
harmful code or similar instructions introduced into or enacted on a
computer system (unless installed by a employee) IN ADDITION TO
EXAM PAPER 2026 QUESTIONS WITH
ANSWERS GRADED A+
• period of restoration for business income.
Answer: begins 72 hours after direct loss but extra expenses coverage begins
immediately ends on the date when the property SHOULD be repaired or
ends ont he date whne the insureds operations resumate at a new permananet
location Expiration of date has no effect on the policy period of restoration
• methods used to avoid coinsurance.
Answer: 1. maximum period of indemnity 2. monthly limit of indemnity 3.
business income agreed vlaue (only suspends)
• 4 optional coverages.
Answer: 1. Agreed value 2. Replacement cost 3. inflation guard 4. extension
of RC to pp of others
• Explain replacement cost.
Answer: - without deduction for depreciation - claims are paid on acv until
repairs or replacements is complete and then difference is paid - does not
apply to pp of others, contents of residence or fine arts
• What is considered building for coverage.
Answer: 1. Completed additions 2. Fixtures including outdoor furniture 3.
Machinery and equipment (permanently installed) 4. Personal property used
to service the building or premises A. Fire extinguisher and other equipment
B. Outdoor furniture like park benches C. Floor coverings (large rugs) D.
Cooking appliances, refrigerators dishwashers washers dryers 5. If not
covered by other insurance (like additions to the building) (I don't
understand how this is possible considering builders risk)
• Vacancy provision - describe and apply.
Answer: 1. Tenant - does not contain enough BPP to conduct customary
, operations 2. owner - must be at least 31% leased and used by lessee to
conduct customary operations 3. Under construction or renovation are not
vacant 4. vacant for 60 consecutive days - theft, vandalism, sprinkler
leakage, glass breakage, and attempted theft are not covered perils 5. all
other causes of loss payment is reduced by 15%
• Business Income Coinsurance formula.
Answer: Amount required = (Net Income + Operating expense) x
Coinsurance Amount carried = Limit of insurance Carried/ Required =
Recovery *This is opposite of property coinsurance did/ should. For BI it is
should/did
• elements of the financial statement that impact business income loss.
Answer: Gross Sales - Cost of Goods Sold = Gross Profit Gross Profit -
Operating expenses = Net Profit
• Coverage C- increased cost of construction coverage (ordinance or law).
Answer: pays for increased cost of construction to follow ordinances or law
coverage applies if they are building back the building for similar occupancy
unless no longer permitted payment will not be made under coverage c if the
building is not repaired or replaced must have RC on the building in order to
have Coverage C (CLM rule) coinsurance does not apply If building
ordinance or law requires rebuilding at a different location Coverage C will
include the increased cost at the new location subject to the limit on the
endorsement
• Rain, snow sleet-personal property in the open-concurrent causation
exclusion.
Answer: no coverage for precipitation damage to perosnal property left in
the open exposed to the elemtents, predictable type of loss
• Optional Coverage - RC PP OF OTHERS.
Answer: - applies rc to property of others but limited to the lessor of amount
required by contract or RC
• Failure to submit reports (first report).
, Answer: Policy will not pay more than 75% of what it would otherwise have
paid
• 3 business income coverage options.
Answer: 1. Business income including "Rental Value" 2. business income
other than "Rental Value" - actually exclusionary- no "Rental value"
provided 3. Rental Value -Actually exclusionary- no business income, other
than "Rental value"
• seepige or leakage of water-concurrent causation exclusion.
Answer: no coverage for losses resulting from gradual or ongoing condition
of 14 days or more that usually would have been discovered and corrected
with proper maintencne of property (must be sudden and accidental)
• Define Extra Expense.
Answer: 1. Necessary above normal expenses due to loss 2. needed to
continue operations any location 3. reduce the suspension of operations
• special limits- limitations.
Answer: $2,500 for furs and jewelry pattern dies molds and forms & 250 for
stamps tickets and lottery tickets held for sale
• causes of loss-special form.
Answer: coverage for physucal loss unless excluded burden of proof is on
the insurer to show exclude/limited
• Maximum period of indemnity loss settlement.
Answer: coinsurance does not apply and loss is limited to less of limit of
insurance or 120 days following the beginning of the period of restoration.
This can be expensive.
• limitations for no coverage fo theft of building materials and supplies.
Answer: limitation does not apply if the building material are held for sale
by named insured unless insured by builders risk form
• Coverage B & C of Ordinance or law can be combined limit?.
Answer: true
, • additional coverage extensions- water damage other liquids powder or
molten material damage.
Answer: it will pay the cost of tearing out and replacing any part that needed
to be torn out to find the issue
• faulty, inadequate or defective- conditional exclusions.
Answer: no coverage for faulty inadequate or defective work and materia
• Elements to Trigger BI Coverage.
Answer: 1. actual loss of business income 2. Due to necessary suspension of
operations 3. during the period of restoration 4. cause by direct physical loss
to property 5. at the described premises 6. from a covered cause of loss
• Additional property not covered.
Answer: In additional to modifying your building property this endorsement
can modify your BPP. (Stone quarry has large amounts of rock and stone
(stock) this stock poses little risk for covered cause of loss so insured doesn't
want to ensure it. Ensured can you send me the address please this
endorsement to his policy so he doesn't have to value in the stock value in
his limit of insurance)
• What will be paid and for how long for business income.
Answer: NICE business income means net income that would have been
earned or incurred and continuing normal operating expenses incurred,
including payroll
• Electronic Data- Additional Coverages.
Answer: $2,500 AGGREGATE limit available for each policy year limit
applies regardless of the number of
occurrences/premises/locations/computer systems coverage applies to data
that has been detroyed/corrupted by one of the named causes of loss if a
covered cause of loss is added by endorsement, the additional cause of loss
will not apply to this additional coverage -perils for this coverage are virus,
harmful code or similar instructions introduced into or enacted on a
computer system (unless installed by a employee) IN ADDITION TO
