Unit 11 - Commercial Property Insurance Activities

commercial property policy elements

declarations, conditions, one or more, cause of loss, mandatory endorsements

commercial property declarations form

provides additional information about the premises to be insured and the specific property forms that will apply

commercial property coverage forms

-building and personal property

-builders risk

-condominium association

-condominium commercial unit owners

-business income with extra expense

-business income without extra expense

-extra expense

-Legal liability

conditions form

attached to every commercial property policy:

-control

-legal action

-other insurance

-policy period and coverage territory

-transfer of recovery rights

-concealment, misrepresentation, and fraud

-no benefit to bailee

-insurance under two or more coverages

-liberalization

control of property conditon

acts of neglect of a person beyond the insured's direction will not affect the insurance

legal action against us condition

gives insured 2 years from the date of direct physical loss to bring action against insurer

other insurance condition

pro rata - if policies are written on the same basis

excess - if the policies are not written on the same basis

building and personal property form

covers one or more: buildings, insured's business personal property, and personal property of others located at the business premises

building coverage inclusions

-completed additions

-fixtures, including outdoor fixtures

-permanently installed machinery and equipment

-personal property used to maintain or service the premises, such as fire extinguishers

-outdoor furniture, floor coverings, and certain appliances

-additions under construction, alterations, or repairs, material, equipment, supplies, within 100 feet

business personal property inclusions

-furniture

-fixtures

-machinery

-equipment

-stock

-value of labor, parts or services of others

-improvements and betterments

-leased personal property

personal property of others inclusions

property of others in the insured's care, custody, or control, regardless of whether the insured is legally liable or not

property not covered

money or similar, animals (unless for sale), autos for sale, bridges/roads/walks/patios, contraband, cost of excavations, foundations if below basement level/ground level, land/water/growing crops/lawns, retaining walls, bulkheads/pilings/piers/wharves/docks, specific prop. of another policy, underground pipes/flues/drains, vehicles/watercraft/aircraft, fenecs/antennas/unnattached signs/trees/shrubs/plants

preservation of property

pays for loss to property that was removed from the insured location to protect it from a peril insured against. (30 days)

fire department service charge

pays ups to $1000 for fire dep. with no deductible

pollutant and cleanup

covers the costs to extract pollutants form land or water at the insured's premises if caused by covered peril. $10,000 limit per policy period (180 days)

electronic data

pays to replace or restore electronic data that have been destroyed or corrupted by a covered peril. i.e. information, facts, or computer programs. ($2500 limit per year)

coverage extension requirement

80% or higher coinsurance, or purchased a reporting form

newly acquired or constructed coverage extension

covers newly acquired or constructed buildings at other locations for $250,000 each, and the property at each location for $100,000 for each location

personal effects and property of others extension

$2500 for personal effects of named insured, partners, and employees

valuable papers and records extension

$2500 to replace/restore info on paper/records

property off-premises extension

$10,000 for covered property away from premises:

-temporary location not owned

-storage at location leased

-at fair, trade show, or exhibition

outdoor property extension

max of $1000 for fences, antennas, satellite dishes, trees/plants/shurbs ($250 each plant)

nonowned detached trailers extension

$5,000 for a trailer unhitched on premises unless higher limit is shown

duties in the event of loss

prompt notice, notify police, protect, provide, inspect, proof of loss within 60 days

loss payment condition

insurance will give notice on how it intends to value the loss within 30 days. They will pay the loss within those same 30 days

valuation condition commercial

paid at acv, unless coinsurance is met and costs are $2500 or less. *Stock sold will be valued at its net selling price

vacancy condition commercial

if more than 60 days vacant, insurer will not cover vandalism, water damage, theft or attempted theft, glass breakage, or sprinkler leakage. other amounts that would be paid are reduced by 15%

mortgage holder condition

promises to pay losses to any mortgage or lien holders named. 10 days for nonpayment, 20 for other reasons, 10 for nonrenewal

builders risk coverage form

added to commercial property coverage and covers commercial, residential, or farm buildings under construction. Written for a year.

Fixtures/machinery/equipment/materials/supplies covered if they would become a permanent part or within 100 ft.

May be extended to cover materials and supplies of others in insured's care within 100 ft. up to $5,000

builders risk coverage termination

policy expires or is canceled, property is accepted by purchaser, interest ceases, construction is abandoned, 90 days after completion or 60 days after whole/partial occupancy

builders risk exclusions

land or water, lawns/trees/shrubs when outside, radio/television antennas when outside, signs not attached

completed value form

limit of insurance is set based on the completed value of project. Sometimes has a coinsurance clause

builders risk reporting form

smaller amount of insurance purchased that gradually increases as the value of the building increases. Form requires a report of value each month. ACV report every 30 days. 100% coinsurance required

condominium association coverage form

insures a condominium association against direct physical loss to buildings, business personal property, and personal property of others in care of while at premise

condominium commercial unit-owners coverage form

covers condominium's contents and is available for the owner of a commercial condominium

business income coverage form

pay for loss of income sustained due to a peril that forces insured to suspend operations during the period of restoration

suspension

slowdown or cessation of the insured's business activities

time element coverage

provides coverage over a period of time. Business income includes net income that would have been earned if the loss hadn't occurred, including payroll

extra expense coverage

reimburses the insured for expenses incurred to keep a business going after a loss

business income with extra expense coverage form

extra expense coverage that reimburses the insured for money spent to avoid or minimize a business shutdown.

business income without extra expense coverage form

replaces the extra expense coverage with an expenses to reduce loss coverage that covers expenses the insured incurs to reduce loss, up to the amount the loss is reduced

business income additional coverage

pays for loss of business income, even after operations are resumed. No more than 60 days after resuming

extended period of indemnity

gives the insured extended business income coverage for the number of days stated in the dec. rather than 60 days

maximum period of indemnity

limits reimbursement for extra expenses or loss of business to no more than the amount of loss incurred during the first 120 days following the direct loss

monthly limit of indemnity

allows the insured to establish the amount of reimbursement for loss of business income during each 30-day period. Insured selects a fraction that is multiplied by the limit of insurance to determine the max for each 30 days

coinsurance waived conditions for business income

when either the maximum period of indemnity or monthly limit of indemnity coverages re selected by the insured

agreed value

insured submits a business income report/worksheet every 12 months that shows financial data for 12 months prior to the submission as well as estimated data for the 12 months following.

business income from dependent properties - broad form

coverage for:

-insureds depending on another business as sole supplier and they suffer a loss at the contributing location

-insureds depending on business as primary buyer and they suffer a loss at the recipient location

-insureds may depend on a manufacturer to deliver products under a sales contract. If manufacturing location fails to, it is covered

-insureds may depend on another business to attract customers. If leader location fails to, it is covered

extra expense coverage form

provides no reimbursement for lost business income but concentrates on reimbursing the insured for extra expenses incurred to remain in operation. Time element coverage

30 days or less - 40%

31-60 days - 80%

over 60 days - 100%

legal liability coverage form

covers property of others only if insured is legally liable

causes of loss - basic form

fire, lightning, and internal explosions, WCHSAVVER and V&MM, fungus/wet rot/bacteria ($15,000 max), sinkhole collapse, sprinkler leakage

causes of loss - broad form

basic perils and BIG AFFECT

additional collapse coverage

any broad perils or breakage of glass, hidden decay, hidden insect/vermin damage, weight of people, weight of rain on roof, or use of defective material or methods in construction/remodeling/renovation while in progress

causes of loss-special form

open perils, excluding:

wear/tear

rust/corrosion/fungus/decay/deterioration/hidden defects

smog

pollutants

settling/cracking/shrinking/expansion