Commercial Package Policy Flashcard

Front

What is the primary purpose of a Commercial Package Policy?

Back

To combine multiple coverages into one policy

Answer explanation

The primary purpose of a Commercial Package Policy is to combine multiple coverages into one policy, providing businesses with a comprehensive insurance solution that addresses various risks.

Front

Which of the following is NOT a coverage included in a Commercial Package Policy? Crime, Health insurance, Business personal property, Building

Back

Health insurance

Answer explanation

Health insurance is not included in a Commercial Package Policy, which typically covers areas like crime, business personal property, and buildings. Therefore, it is the correct choice for what is NOT covered.

Front

What does the 'Declarations' component of a Commercial Policy specify?

Back

Who, what, where, and how much

Answer explanation

The 'Declarations' component of a Commercial Policy specifies 'who, what, where, and how much,' detailing the insured parties, covered items, locations, and coverage limits.

Front

Which coverage form should be chosen for buildings under construction?

Back

Builders Risk

Answer explanation

The Builders Risk coverage form is specifically designed to protect buildings under construction, covering risks like fire and theft during the building process. Other options do not cater to this specific need.

Front

Which type of loss is covered under the 'Broad' Cause of Loss Form but not under the 'Basic' form?

Back

Falling objects

Answer explanation

The 'Broad' Cause of Loss Form covers additional risks, including falling objects, which are not included in the 'Basic' form. This makes falling objects the correct answer, as it represents a broader range of coverage.

Front

Abigail owns a restaurant that has to close temporarily due to a fire, resulting in lost profits. Which coverage form would pay for the lost income?

Back

Business Income

Answer explanation

The Business Income coverage form compensates for lost income due to interruptions like a fire, making it the correct choice for the restaurant's lost profits.

Front

Anika owns a retail store where inventory levels change frequently throughout the year. She wants to ensure her insurance coverage adjusts automatically based on the value of her inventory at any given time. Which endorsement should Anika consider?

Back

Value Reporting Form

Answer explanation

The Value Reporting Form adjusts coverage based on fluctuating inventory levels, allowing businesses to report their inventory values periodically to ensure adequate insurance coverage.

Front

After a severe thunderstorm, Benjamin's grocery store experiences a power outage, resulting in the loss of perishable goods. Which endorsement would cover this loss?

Back

Spoilage

Answer explanation

The Spoilage endorsement specifically covers losses due to the spoilage of perishable goods, such as those lost after a power outage. Other options do not address this type of loss.

Front

What is the distinction between Ocean Marine and Inland Marine coverage?

Back

Ocean Marine covers goods transported over water internationally; Inland Marine covers domestic transit

Answer explanation

Ocean Marine coverage is specifically for goods transported over water internationally, while Inland Marine coverage pertains to domestic transit of goods, making this the correct distinction.

Front

Kai owns a commercial building that was recently damaged by a fire. When rebuilding, the city requires him to follow updated building codes, which increases the cost of construction. Which coverage pays for these increased costs due to updated building codes?

Back

Ordinance or Law

Answer explanation

The Ordinance or Law coverage pays for increased costs to comply with updated building codes after a loss, making it the correct choice for this question.