Commercial Property Insurance Quiz

What is the advantage of a package policy compared to individual policies?

• Limited coverage

• Convenience of a single policy

• More expensive

• More gaps in coverage

What are the typical coverage forms included in a commercial package policy?

• Health insurance and life insurance

• Building and personal property coverage, business income and extra expense coverage, commercial crime coverage, inland marine coverage

• Travel insurance and pet insurance

• Home insurance and auto insurance

What are the two basic approaches to coverage in commercial property insurance?

• Named perils and broad form

• All risk and specific risk

• Named perils and all risk

• Broad form and specific perils

What is the purpose of statutory conditions in a property insurance policy?

• To limit the coverage provided

• To outline the minimum obligations of the insured and insurer according to statute law

• To exclude certain perils

• To provide additional coverage

What do endorsements do in a property insurance policy?

• Alter coverage or amend another part of the contract

• Provide additional coverage

• Cancel the policy

• Increase the premium

How is replacement cost different from actual cash value in property insurance?

• Replacement cost is used for stock, while actual cash value is used for buildings

• There is no difference between replacement cost and actual cash value

• Replacement cost is the standard in law, while actual cash value is not used in insurance

• Actual cash value is essentially new for old, while replacement cost is based on cost at the time of purchase

What is the purpose of coinsurance in property insurance?

• To encourage overvaluing of property

• To enforce the 'insurance to value' concept and prevent underinsuring of property

• To limit the coverage provided

• To provide additional coverage

What is the purpose of a peak season endorsement in property insurance?

• To limit the coverage provided during peak business seasons

• To reduce the premium during peak business seasons

• To provide coverage for losses during peak business seasons

• To exclude coverage during peak business seasons

What does business income insurance cover in the event of a direct physical damage loss to covered property?

• Loss of income and rents only

• Loss of income, rents, and extra expenses incurred during the period of restoration

• Loss of income and rents, but not extra expenses

• Loss of extra expenses only

What does extra expense coverage form in property insurance cover?

• Additional expenses to continue operating during the restoration period

• Spoilage coverage

• Loss of income and rents

• Business income loss