FINA 4358 MODULE 2C ASSIGNMENT (FINA4358MODULE2CASSIGNMENT)

FINA 4358 MODULE 2C ASSIGNMENT Commercial Property Insurance Homework Questions 2c Module 2c The following questions pertain to the use of the Special Cause of Loss Form: 1. A PDI worker accidentally tossed an expensive piece of electronic equipment into the furnace at the manufacturing plant. Is this covered? Yes, friendly fire loss is covered under special cause form. 2. The guest residence in Clear Lake was severely damaged by fire. Actually, most of the damage was from smoke stains and smell and the firewater used by firemen to extinguish the blaze. Is all of this part of the fire claim? Yes, the fire peril covers heat and smoke damage as well as the water damage from putting out the fire. 3. 30 of the work station PC’s were damaged at the corporate offices by an electrical surge. Is this covered? The electrical surge should be covered unless it is an artificial electrical surge. 4. Significant damage occurred at the manufacturing plant when the steam boiler used to heat the building ruptured. Is this covered? No, it is not covered unless PDI does not own, lease, or operate the steam equipment. 5. The warehouse in San Francisco suffered serious damage when workers failed to close the cargo loading dock door and wind driven rain was blown into the building during a storm that night. This is not covered because the employee negligence caused the damage. The wind and rain did not physically break through. 6. The content s of the warehouse in Houston suffered severe damage when the sprinkler system accidentally discharged and it took 30 minutes to get the system turned off. Is this covered? Yes, it is covered under the sprinkler leakage. 7. The warehouse in Denver was damaged when a PDI employee carelessly backed a PDI truck into the side of the building. Is this covered? No, this is not cover according to the collapse peril 8. The guest residence in Argentina was damaged when a sinkhole developed on the property causing part of the building to collapse into it. Is this covered? Unless the sinkhole was caused by man-made underground activities, this should be covered. 9. The PDI office in Greece was damaged by a shock wave when a nearby volcano erupted. The damage was made worse by three consecutive shock waves occurring at 3 hour intervals after the first one hit. Would this be covered? As one event or four? Yes, it is, as one event within 168 hours 10. During heavy winds, a large tree fell into the side of the Office/Warehouse in Korea causing serious damage. Is this covered? If the property is close and the external property was damaged first, this would be covered. 11. Weight of snow caused the roof of the warehouse in Denver to collapse. Is this covered? Yes, this is covered. 12. It was recently discovered that an employee shower at the Office/Warehouse in San Francisco had been leaking for many months. This has caused extensive rotting of the flooring and walls as well as a major mold infestation. Is this covered? This does not cover the underwater damage peril. Rather, it will be covered under additional coverage fungus if the fungus is a result of covered loss. 13. Following a fire loss at the warehouse in Houston, it was discovered that extensive code upgrades would be required in order for the repair work to be approved by the City inspectors. This is costing an additional $55,000 in expense. Will this be covered? Yes, because the damage was caused by fire. 14. The office in San Francisco was damaged by a mild earthquake. Would this be covered? No, it isn’t covered because it was not caused by fire or explosion. 15. Several pressure vessels in the course of production at the plant in Houston were ruined and had to be scrapped because of a loss of electrical power caused by a fire at the local power station 5 miles away. Would this be covered? Yes, it is covered, because it was not a result of fire or explosion. 16. It was discovered that a trusted employee was stealing large sums of money from PDI by diverting products to fictitious buyers. Would this be covered? No, employee theft is not covered. 17. The warehouse in Houston received unauthorized instructions to ship several expensive blowout preventers to a company in Louisiana. Is his covered? No, this is also not covered because of unauthorized instructions. 18. It was discovered during an inventory at the Houston warehouse that a large number of generators were missing. Can PDI file an insurance claim for this? No, because it is an unexplained disappearance and it would not be covered. 19. A large number of lighting fixtures awaiting installation at the warehouse in Korea were stolen during the night. Is this covered? Those lighting fixtures have not been installed – so it’s not considered attached to the building hence not covered. 20. Explain to the CFO which property is covered only for “Specified causes of Loss” under the Special Form. Insured property is covered as long as causation for the loss is included. This includes friendly fire, theft with limitation, vehicle damage by the insured or without physical contact. 21. A large compressor at the manufacturing plant in Houston was completely destroyed when workers failed to keep it properly lubricated. Is this covered? This isn’t covered because of employee negligence. 22. Following heavy rains in the Woodlands, rising waters from local creeks and streams caused extensive damage to the ground floor of the PDI resort. Is this covered?