CIC CLASS - COMMERCIAL PROPERTY
EXAM QUESTIONS WITH CORRECT
ANSWERS
Possible Coverage Buy Back: Commercial Crime Coverage - Answer-Account, Bills,
currency, food stamps or other evidences of debt, money, notes or securities. Lottery
tickets held for sale are not securities
Property Not Covered
Possible Coverage Buy Back:
Additional Covered Property - Answer--Bridges, roadways, walls, patios or other paved
surfaces
-Excavations, grading, backfilling or filling
-Foundations of buildings, structures, machinery
-Retaining Walls
-Fences
Which are the categories of Covered Property under an unendorsed CPP? - Answer-
Building
Your Business Personal Property
Personal Property of others
5 Things that are Building - Answer--Completed additions
-Fixtures, including outdoor fixtures
-permanently installed machinery & equipment
-Personal property used to service the building/premises
-If NOT COVERED BY OTHER INSURANCE
7 Things that Are Business Personal Property - Answer-1. Furniture & Fixtures
2. Machinery & Equipment
3. Stock
4. All Other personal property owned & used in business
5. Labor, materials, services furnished by You on Personal Property of Others
6. Your use interest in TIBS...made part of a BDG You do not own & Cannot legally
remove
7. Leased Personal Property You have a contractual responsibility to insure
Property of Others - Answer-Entrusted to the Named Insured:
To work on
on consignment
,sold, but not delivered
leased to me
property of the Named Insured's employees kept at work
covers property for direct damage, not loss of use.
Leased Property - Answer--Insured as BPP if contractually required to insure
-Insured as Personal Prop of Others if responsible for damage only
-Insure at Agreed Value if Your lease has a $ amount that you must pay if (your copy
machine) is damaged
Hint: Use Leased Prop endorsement, show "ALL Leased Property" on the schedule
Blanket Coverage
Coinsurance is Required - Answer-Normally 90% or 100%
Applies to the Total Blanket Limit
Blanket Coverage
Rates - Answer--Either the highest 80% coinsurance rate of any type of property
applies, or an average rate may be used
-90% coinsurance requirement receives the 80% coininsurance credit, and a 100%
coinsurance requirement receives the 90% coinsurance credit
-Rates in effect for no more than 1 year
-A sworn statement of values must be filed with insurer annually
Specific Coverage - Answer-One Location
Specific amount of insurance applies to each type of property
Scheduled Coverage - Answer-Two or more locations
Still a specific amount of insurance(precise amount of insurance) applies to each type of
property at each separate location scheduled
Blanket Coverage - Answer-Two Options:
1) One Limit that applies to more than one type of property (building and your business
personal property) at the same location
2) One limit that applies to one or more types of property (just building, just business
personal property or building and business personal property combined) at two or more
locations
Blanket
Specific Categories - Answer-Can be written on specific categories of property, ie stock
only, improvements and betterments
, Advantages of Blanket - Answer-Can apply insurance where needed
Handles fluctuating values between locations or fire divisions
reporting forms are easier
Insured my have 100% ins to value at each location, yet only carry 90% for all locations
combined
Disadvantages of Blanket - Answer-90% to 100% coinsurance required
Underwriting restrictions
Statement of values required
Rates for 1 year only
Same Causes of Loss for all property
List all ownership interests with multiple locations
Endorsements that Address Changing/Fluctuating Values
Limitations on Loss Settlement - Blanket Insurance (Margin Clause) - Answer--Limits
the maximum amount payable for any items to the % shown in the Schedule x the latest
reported statement of values
-Applies to building & contents
-Severely restricts the "blanket concept"!
3 Ways to insurance BPP - Answer-Blanket
Value Reporting Form
Peak Season
CP Endorsements that Address Changing/Fluctuating Values
Peak Season - Answer--To increase coverage during predictable seasonal increases in
BPP Values
-Any # of periods within a policy term
-Specific dates
-Shows additional amount needed, not total limit
-May not be written on value reporting form or blanket
-Additional premium pro-rated
CP Endorsements that Address Changing/Fluctuating Values
EXAM QUESTIONS WITH CORRECT
ANSWERS
Possible Coverage Buy Back: Commercial Crime Coverage - Answer-Account, Bills,
currency, food stamps or other evidences of debt, money, notes or securities. Lottery
tickets held for sale are not securities
Property Not Covered
Possible Coverage Buy Back:
Additional Covered Property - Answer--Bridges, roadways, walls, patios or other paved
surfaces
-Excavations, grading, backfilling or filling
-Foundations of buildings, structures, machinery
-Retaining Walls
-Fences
Which are the categories of Covered Property under an unendorsed CPP? - Answer-
Building
Your Business Personal Property
Personal Property of others
5 Things that are Building - Answer--Completed additions
-Fixtures, including outdoor fixtures
-permanently installed machinery & equipment
-Personal property used to service the building/premises
-If NOT COVERED BY OTHER INSURANCE
7 Things that Are Business Personal Property - Answer-1. Furniture & Fixtures
2. Machinery & Equipment
3. Stock
4. All Other personal property owned & used in business
5. Labor, materials, services furnished by You on Personal Property of Others
6. Your use interest in TIBS...made part of a BDG You do not own & Cannot legally
remove
7. Leased Personal Property You have a contractual responsibility to insure
Property of Others - Answer-Entrusted to the Named Insured:
To work on
on consignment
,sold, but not delivered
leased to me
property of the Named Insured's employees kept at work
covers property for direct damage, not loss of use.
Leased Property - Answer--Insured as BPP if contractually required to insure
-Insured as Personal Prop of Others if responsible for damage only
-Insure at Agreed Value if Your lease has a $ amount that you must pay if (your copy
machine) is damaged
Hint: Use Leased Prop endorsement, show "ALL Leased Property" on the schedule
Blanket Coverage
Coinsurance is Required - Answer-Normally 90% or 100%
Applies to the Total Blanket Limit
Blanket Coverage
Rates - Answer--Either the highest 80% coinsurance rate of any type of property
applies, or an average rate may be used
-90% coinsurance requirement receives the 80% coininsurance credit, and a 100%
coinsurance requirement receives the 90% coinsurance credit
-Rates in effect for no more than 1 year
-A sworn statement of values must be filed with insurer annually
Specific Coverage - Answer-One Location
Specific amount of insurance applies to each type of property
Scheduled Coverage - Answer-Two or more locations
Still a specific amount of insurance(precise amount of insurance) applies to each type of
property at each separate location scheduled
Blanket Coverage - Answer-Two Options:
1) One Limit that applies to more than one type of property (building and your business
personal property) at the same location
2) One limit that applies to one or more types of property (just building, just business
personal property or building and business personal property combined) at two or more
locations
Blanket
Specific Categories - Answer-Can be written on specific categories of property, ie stock
only, improvements and betterments
, Advantages of Blanket - Answer-Can apply insurance where needed
Handles fluctuating values between locations or fire divisions
reporting forms are easier
Insured my have 100% ins to value at each location, yet only carry 90% for all locations
combined
Disadvantages of Blanket - Answer-90% to 100% coinsurance required
Underwriting restrictions
Statement of values required
Rates for 1 year only
Same Causes of Loss for all property
List all ownership interests with multiple locations
Endorsements that Address Changing/Fluctuating Values
Limitations on Loss Settlement - Blanket Insurance (Margin Clause) - Answer--Limits
the maximum amount payable for any items to the % shown in the Schedule x the latest
reported statement of values
-Applies to building & contents
-Severely restricts the "blanket concept"!
3 Ways to insurance BPP - Answer-Blanket
Value Reporting Form
Peak Season
CP Endorsements that Address Changing/Fluctuating Values
Peak Season - Answer--To increase coverage during predictable seasonal increases in
BPP Values
-Any # of periods within a policy term
-Specific dates
-Shows additional amount needed, not total limit
-May not be written on value reporting form or blanket
-Additional premium pro-rated
CP Endorsements that Address Changing/Fluctuating Values
