5100S Exam 2

property loss

tangile & intangible property

tangible property

real estate, personal property

intangible property

patent, copyright

personnel loss

death, disability, retirement, of injury of employees

• loosing people!

liability loss

your responsibility for bodily injury, property damage, or financial loss to someone else

net income loss

reduction in come due to direct loss

2 types of property

1. real property

2. personal property

real property

• land and buildings

• all property permanently attached to buildings

• driveways, sidewalks, underground piping etc

• plumbing, wiring, HVAC

personal property

all property that is not real property

4 personal property classifications

1. contents

2. property in transit

3. property in the possession of others

4. floating property

contents

personal property kept at a business location, including the business’s own property and property belonging to others in tis care

property in transit

property being transported from one location to another

property in possession of others

property owned by the business, but temporarily held or used by someone else

floating property

property that regularly moves between different locations rather than staying in one place

3 financial consequences of property loss

• cost to replay or replace damaged property

• loss of business income while property is being repaired or replaces

• extra expenses to resume operations

5 things included in the commercial property coverage part

1. commercial property declarations

2. commercial property coverage form

3. cause of loss form

4. conditions

5. endorsements

BPP Coverage Form has 3 categories

• building

• your business personal property

• personal property of others

if a business leases(rents) their property,

on the property declarations page, the buying limit will show as 0 or will be blank

your business personal property must be located where?

must be located in the building or within 100 feet of the building

personal property of others must be

• in the insured’s care,csutody, and control AND

• located in the building or within 100 feet of the building

additional coverages

these coverages are included regardless of which of the property coverages are present

6 additional coverages

1. debris removal

2. preservation of property

3. fire department service charge

4. pollutant clean up and removal

5. increased cost of construction

6. electronic data

debris removal

covers cost of removing debris of covered property resulting from a covered cause of loss

debris removal coverage amount

pays up to 25 % of the direct loss for debris removal

preservation of property

when it is necessary to move covered property to protect it from a covered cause of loss, this provides coverage for that property while it is being moved or temporarily stored

time limit for preservation of property

30 days

fire department service charge

pays fire department service charges if they are required by local ordinance or assumed by contract or agreement prior to loss

• the fire department must be responding to a covered cause of loss

fire department service charge limit

$1000 for service at each premise

pollutant clean - up and removal

pays expenses to extract pollutants from land or water at the described premises

• pollutants must be the result of a covered cause of loss

pollutant clean and up and removal limit

10,000 in aggregate per location

increased cost of construction

if damaged by a covered cause of loss, this covered the increased costs to comply with ordinances or laws regulating the repair, rebuilding, or replacement of covered buildings.

increased cost of construction limit

5% of amount of insurance or 10,000, whichever is LESS

what is the condition for the coverage to apply for increased cost of construction

coverage only applies if the replacement cost optional coverage is skewed( as opposed to actual cash value)

electronic data limit

2,500 total in coverage regardless of the number of locations and occurrence

what must be true to receive any additional coverages?

Loss must be due to a covered cause of loss!!!

• except for electronic data maybe( not specifically mentioned)

coverage extensions terms

• in building or within 100 feet

• must have at least 80% coinsurance or a value reporting period symbol is shown on the declarations

• this is payable in addition to stated policy limits

7 coverage extensions

1. Newly acquired or constructed property

2. persona effects and property of others

3. valuable papers and records( other than electronic data)

4. property off premises

5. outdoor property

6. non- owned detached trailers

7. business personal property temporarily in portable storage units

coverage extensions

these are extensions to what we have

• payable in addition to stated policy limits

newly acquired or constructed property

provides coverage for new building being built or buildings you acquire or for property you acquire

newly acquired/constructed property BUILDING limit

250,000

newly acquired/constructed property YOUR BPP limit

100,000

newly acquired/ constructed property time limit

• 30 days after construction beings

• 30 days after acquisition

• when values are reported to insurer

• coverage expires at policy expiration

personal effects and property of others DOES NOT apply when loss or damage is from:

theft

personal effects and property of others

personal effects owned by insured, partners, members, managers, or employees

• aka property in your care, custody, and control

persona effects and property of others list

2,500 per location

valuable papers and records

covers the cost of blank materials and labor to replace/restore valuable record for which there is no duplicate

• does NOT apply to electronic data( we already have an addition for that)

valuable papers and records limit

2,500 per location

valuable papers and records must be caused by

covered cause of loss from basic/braod forms

property off premises

provides coverage for property while it is away from described premises

property off premises terms and conditions

Does NOT apply to property in a vehicle or in the care, custody, control of your sales persons

• UNLESS at fair, trade show, or exhibition

property off premises limit

10,000 limit

outdoor property

covered outdoor fences, radio, television antennas, satellite dishes, and trees/plants. shrubs

outdoor property limit

• 1,000

• but not more than 250 for any tree/plant/shrub

outdoor property coverage is one provides if caused by these losses:

• fire

• lightning

• explosion

• riot or civil commotion

• aircraft

does NOT include windstorm ,hurricane, or earthquake!!

non- owned detached trailers

extends your business personal property to include trailers( but not their contents) in care,custody, and control of insured

non owned detached trailer coverage extension does NOT apply to

trailers while attached to motor vehicle or that become detached from a motor vehicle during hitching/un hitching

non- owned detached trailer limit

5000

non- owned detached trailers only apply IF

you have a contractual responsibility to pay for loss to trailer

business personal property temporarily in portable storage units

provides coverage for your BPP while temporarily stored in a portable storage unit or trailer

business personal property temporarily in portable storage units terms and conditions

must be stored within 100 feet of the location

business personal property temporarily in portable storage units time limit

coverage ends 90 days after property is placed in the unit

business personal property temporarily in portable storage units limit

10,000

explosion does NOT include

rupture or bursting of pressure - relief devices or building contents

terms and conditions for windstorm or hail

damage to the exterior of the building must occur in order for there to be coverage for interior damage and/or property inside the building

terms and conditions for smoke

damage must be “sudden and accidental”(not over time)

smoke: no coverage

for damage resulting from agricultural smudging or industrial operations

terms and conditions for aircraft and vehicles

• no coverage if vehicle is owned by insured

• no coverage for the vehicle, aircraft itself

riot

a violent public disturbance by 3 or more persons

vandalism terms and conditions

no coverage for theft, except for the building damage c used by burglars when breaking in or exiting

vandalism damage must be

“willful and malicious”

sinkhole collapse does NOT include

the cost of filling the sinkhole

volcanic action does NOT cover

earthquake damage that often accompanies volcanic eruptions

all eruptions within what period are considered one occurrence?

168 hour

3 covered perils in broad( but NOT basic)

1. falling objects

2. weight of snow, ice, or sleet

3. water damage

falling object exclusion

mo coverage for personal property outside the building

weight of snow, ice, or sleet

no coverage for personal property outside or damage to lawns, trees, shrubs and plants

water damage exclusion

no coverage for water damage due to flooding, rainfall, sewer backup etc

water damage is meant to cover

damage resulting from accidental leakage of water or stream from plumbing or appliance

concurrent causation doctrine

if 2 or more perils contribute to a loss concurrently, and one of the causes of loss is covered, then the entire loss is covered by the policy.

anti concurrent cassation langage applies to how many perils?

8

• for these, there is NO coverage regardless of whether they are concurrent with a covered cause of loss

fungus additional. coverage is included in which form?

all 3

how much coverage does the fungus additional coverage provide

15,000 in aggregate coverage during the police period

fungus coverage will be applies if it results from a covered cause of loss other than

fire or lightning

collapse additional. coverage is included in which forms

broad and special only

• NOT basic

what is the property in transit special form additional coverage limit

5,000

• for property in a vehicle operated and owned/ leased by an insured

what additional coverages are included in only special form?

1. property in transit

2. water damage, other liquids, powder, or molten material damage

water damage. other liquids, powder, or molten material damage

covers cost to tear out and replace part of a building in order to repair appliance/system//pipe in which water/liquid is escaping from

limits apply separately to

each occurrence

specific limits

separate the individual limits by location and type

blanket limits can be applied in several different ways

1. by location

2. by coverage category

3. in total

the insurer is not obligated to pay losses

less than the deductible

how many times per occurence is the deductible applied

once

the deductible is subtracted from what?

the loss

• NOT the limit of insurance

when can the losses not be combined in applying the deductible?

when specific limits of insurance apply

when is coinsurance applied?

prior to the deductible

abandonment

prohibits the insured from abandoning damaged property to the insurer for disposal

• repair/ disposal is responsibility of insured

appraisal

established a method to resolve disputes about the amount of loss

appraisal is NOT for what?

disputes about coverage

in the event of a loss or damage, the issued must

submit signed, sworn proof of loss within 60 days of insurer request

recovered property

if the insurer has paid a loss, and property is later recovered, the other party must be notified

• typically involves stolen property