Commercial Property Insurance

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Question 1
Free
Multiple Choice

Which of the following is (are) included in the common declarations page of a commercial package policy?
I)A description of the insured property
II)A listing of the causes-of-loss that are covered by the policy

Choose correct answer/s
A

I only

B

II only

C

both I and II

D

neither I nor II

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Question 2
Free
Multiple Choice

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

Choose correct answer/s
A

I only

B

II only

C

both I and II

D

neither I nor II

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Question 3
Free
Multiple Choice

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

Choose correct answer/s
A

the insured's stock and inventory when located inside the insured building

B

vehicles owned by the insured

C

aircraft and watercraft owned by the insured

D

a manufacturing building owned by a key customer or key supplier of the insured.

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Question 4
Free
Multiple Choice

Which of the following statements about the building and personal property coverage form is (are) true?
I)A limited amount of coverage is provided for pollutant cleanup and removal at the described premises if the release or discharge of the pollutant results from a covered cause of loss.
II)Fire department service charges are specifically excluded because they are a normal cost of doing business.

Choose correct answer/s
A

I only

B

II only

C

both I and II

D

neither I nor II

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Question 5
Free
Multiple Choice

All of the following are extensions of coverage under the building and personal property coverage form EXCEPT

Choose correct answer/s
A

newly acquired or constructed property.

B

valuable papers and records.

C

personal property temporarily off the premises.

D

currency and securities.

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Question 6
Multiple Choice

Which of the following statements about the provisions of the building and personal property coverage form is (are) true?
I)A separate deductible must be satisfied for each building damaged in the same occurrence.
II)Under the replacement cost option, there is no deduction for depreciation.

Choose correct answer/s
A
I only
B
II only
C
both I and II
D
neither I nor II
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Question 7
Multiple Choice

One of the additional coverages under the building and personal property coverage form is "increased cost of construction." The coverage is payable if

Choose correct answer/s
A
a skilled artisan is needed to duplicate the construction of the damaged property.
B
a labor strike or materials shortage increases construction costs.
C
an ordinance or building code increases the cost of construction.
D
the materials necessary to rebuild the damaged structure are more expensive than ordinary building materials.
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Question 8
Multiple Choice

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

Choose correct answer/s
A
It provides replacement cost coverage.
B
It increases insured values along with inflation.
C
It suspends the coinsurance clause.
D
It reduces the deductible to $50.
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Question 9
Multiple Choice

Which of the following perils is not included in the causes-of-loss basic form of the ISO commercial package policy?

Choose correct answer/s
A
fire
B
lightning
C
explosion
D
flood
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Question 10
Multiple Choice

Which of the following statements about the causes-of-loss special form of the ISO commercial package policy is (are) true?
I)The causes-of-loss special form provides open perils coverage and insures against direct physical loss.
II)The causes-of-loss special form excludes loss caused by earthquake.

Choose correct answer/s
A
I only
B
II only
C
both I and II
D
neither I nor II
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Question 11
Multiple Choice

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.

Choose correct answer/s
A
I only
B
II only
C
both I and II
D
neither I nor II
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Question 12
Multiple Choice

Which of the following types of forms is used to insure fluctuations in business personal property, such as inventory and finished goods?

Choose correct answer/s
A
accounts receivable coverage form
B
a value reporting form
C
difference in conditions insurance
D
business income insurance
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Question 13
Multiple Choice

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

Choose correct answer/s
A
Business income is defined as gross earnings before taxes.
B
Payroll is excluded unless it is specifically added.
C
The form covers loss of business income and extra expenses incurred during restoration.
D
The form can be used by a manufacturing operation only.
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Question 14
Multiple Choice

The building and personal property coverage form provides several optional coverages. Under one optional coverage, no deduction is taken for depreciation when settling a covered loss. This optional coverage is called

Choose correct answer/s
A
extra expense.
B
agreed value.
C
replacement cost.
D
inflation guard.
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Question 15
Multiple Choice

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.

Choose correct answer/s
A
I only
B
II only
C
both I and II
D
neither I nor II
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Question 16
Multiple Choice

XYZ, Inc. would suffer serious financial consequences if either of its two major customers were shut down and could not purchase XYZ products. Which of the following types of consequential loss protection would provide protection against this exposure?

Choose correct answer/s
A
leasehold interest
B
extra expense
C
marine insurance
D
business income from dependent properties
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Question 17
Multiple Choice

Which of the following forms is used to insure buildings that are under construction?

Choose correct answer/s
A
builders risk coverage form
B
floor plan coverage form
C
new construction coverage form
D
labor and materials coverage form
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Question 18
Multiple Choice

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.

Choose correct answer/s
A
I only
B
II only
C
both I and II
D
neither I nor II
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Question 19
Multiple Choice

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

Choose correct answer/s
A
Business income is defined as total sales that would have been made if the loss had not occurred.
B
Payroll is considered a continuing normal operating expense.
C
Business income insurance does not cover the physical damage caused by a peril which created the interruption in business.
D
The business income coverage form can be purchased with a coinsurance requirement.
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Question 20
Multiple Choice

Which of the following statements about the equipment breakdown protection coverage form is (are) true?
I)The covered cause of loss is a breakdown of covered equipment, including boilers, machinery, and electrical and mechanical equipment.
II)It provides coverage for the reasonable cost of expediting permanent repair or replacement of damaged property.

Choose correct answer/s
A
I only
B
II only
C
both I and II
D
neither I nor II
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