GA PROPERTY & CASUALTY INSURANCE TEST - COMMERCIAL PROPERTY

Commercial Lines Property

Buildings housing other than personal lines activities. (office buildings, churches, malls)

Commercial Lines Policy Structure

1. Declarations 2.Conditions 3. Cause of Loss Form - indicates how losses will be handled 4.Coverage Form - describes what is covered 5. Endorsements Broad, Basic & Special Forms, at least 1 must be included o All exclude earthquake losses, but can be added as an endorsement known as a commercial earthquake form o Builders Risk Form

Building & Personal Property Forms

-Coverage A Building(s) -Coverage B Business Personal Property -Coverage C Personal Property Belonging to Others -Additional Coverage - built in Note: doesn't cover liability

Coverage A- Building(s)

-Attached fixtures -Floor coverings -Machinery & equipment servicing building -Outdoor fixture -Outdoor patio furniture -Fire Extingushers

Coverage B- Business Personal Property

-Contents of Insured -Business Inventory -Leased equipment -Tenant's Improvements - Furniture

Coverage C- Personal Property Belonging to Others

-For businesses that lease property, ex: stores in the mall, no Coverage A (tenants) -When a store does not own the building, no coverage A, ex: Nordstroms -Owner of a commercial building but not occupying the building, lessors risk, coverage A only, ex: Phipps Plaza/Simon Group -Own & Occupy, coverage A, B & C, ex: Coca-Cola building in Atlanta, GA -Building + Ground = Premises -Coverage C includes employees property, inside or within 100 feet -Negligence is not a factor, legal liability does not have to be established.

Additional Coverage -Built-in

-adds $ to the settlement of a loss in EXCESS OF POLICY LIMITS.-Coverage is automatic-Indirect loss only -consequence of loss already covered-Removal Coverage (30 days) - move property to another location to protect from covered Peril.-Debris Removal Expenses - adds $1000-Fire Department Service Charges - pays up to $1000- Attached pedestrian bridges are covered *Property Not Covered • Land/Crops • Money & Securities • Bridges • Motor Vehicles

Building & Personal Property Coverage Extensions

-Add $ to settlement above and beyond policy limits-Not automatic, you must earn them by selecting Coinsurance limits of 80% or higher on Dec. sheet.- From Island of Misfit Property-doesn't fit into any other coverage'sCovers:- Newly Acquired or Constructed Property $25,000 building limit$100,000 personal property limitgood for 30 days -Personal Effects and Property of Others-Valuable Papers and Records, - $2,500 limit-Property Off Premises - $10,000 limit-Outdoor Property - $1000 limit, $250 limit one tree, plant or shrubs (coverage is triggered by FLARE perils)

Extra Expense Coverage Form

-almost identical to Business Income Coverage Form- coverage pays extra expenses actually incurred during the period of restoration following a Direct Physical Loss caused by a covered cause of loss or action of Civil Authority.

Basic Cause of Loss Form

FIRELIGHTNINGEXPLOSIONSWINDSTORMS OR HAILRIOT OR CIVIL COMMOTIONVANDALISMVOLCANIC ACTIONVEHICLES OR AIRCRAFTSMOKESPRINKLER LEAKAGESINKHOLE COLLAPSE - covers only damage caused by sinkhole, not land- NO THEFT COVERAGEnote: excludes Steam Boiler Explosions ("Boiler & Machinery Form" must be added to policy to cover this loss)

Broad Cause of Loss Form

-Includes all perils in BASIC form + 3 additions-PLUMBING-FALLING OBJECTS-WEIGHT OF SNOW, ICE AND SLEETplus Additional Coverage of Collapse- NO THEFT COVERAGEnote: excludes Steam Boiler Explosions ("Boiler & Machinery Form" must be added to policy to cover this loss)

Special Cause of Loss Form

- Best Form- Covers Theft (limits apply)-same limits as Home Owners Policy- FURS - $2500-JEWELRY, WATCHES, PRECIOUS STONES AND METALS - $2500-PATTERNS, DIES, MOLDS AND FORMS - $2500-STAMPS, TICKETS, AND LETTERS OF CREDIT - $250note: excludes Steam Boiler Explosions ("Boiler & Machinery Form" must be added to policy to cover this loss)

Variations in Writing Limits

o Specific - definite amount for definite type of coverage, 1 location only o Blanket - one amount for all coverage's, single or multiple locations, flexible o Schedule - option to show specific amounts for multiple locations

Specific

definite amount for definite type of coverage, 1 location only

Blanket

one amount for all coverage's, single or multiple locations, flexible

Schedule

option to show specific amounts for multiple locations

Builder's Risk Form

o Covers building materials under construction, renovation o Typically construction contractors carry this coverage o Start construction and values grow to completed value basis o Insurable interest during construction, contractors for losses for building materials during construction & renovation o Covered Property: Materials & Supplies Foundations Scaffolding & Cribbing o Property not covered: Land & Water Outside trees Outside antennae & signs o Coverage ends when: The builder's interest in the property ceases The property is accepted by the purchaser The builder abandons the construction with no attempts to complete 90 days after construction is completed or occupied for its intended use note: does not cover Indirect Loss

Consequential Losses Form - Indirect Losses

- Serves the purpose of covering losses that result from physical destruction a. Business Income Form 1.Loss of business income - for time frame of shutdown due to total loss (time frame specified by agent), good for ongoing expenses such as debt, taxes, payroll 2. Extra expense - used to avoid shutdown costs, such as banks, hospitals, insurance agencies; limit chosen with help of agent 3. Civil Authority - for losses near the insured's location and forces shutdown, up to 3 weeks after a 72 hour waiting period

Business Income from Dependent Properties

-Another type of consequential loss form ---Covers the insured's loss of income when Direct Loss occurs at a property that the insured depends on *Also known as Contingent Business Interruption *The dependent location(s) must have a direct loss or physical destruction loss • Contributing Location • Recipient Location • Manufacturing Location • Leader Location

Contributing Location

Shoe distributor has the direct loss causing income loss for the shoe store

Manufacturing Location

Shoe manufacturer has a direct loss causing income loss the manufacturer sales person

Recipient Location

Shoe store has a direct loss causing income loss to the shoe distributor -opposite of Contributing Location

Leader Location

A smaller store near a large store, Wal-Mart, depends on Wal-Mart to attract traffic to the smaller store, Wal-Mart has a direct loss

Value Reporting Form

-Allows insured to tract fluctuating inventory values - To avoid problems with under-insurance - Provides the insured a routing for reporting inventory values - Only works if there is timely and accurate reporting

Coinsurance

-Partial losses-Objective is to pay 100%

Difference in Conditions (DIC Form)

- Allows the insurance company to write in coverage that is normally excluded in commercial policies, ex: flood insurance - Used manuscript coverage specific to the needs of commercial insureds - Done most for "big" insureds to maintain relationships

Loss of business income

- for time frame of shutdown due to total loss (time frame specified by agent), good for ongoing expenses such as debt, taxes, payroll -covers loss of actual time business shut down.

Extra expense

-used to avoid shut down when there is a physical destruction loss. -used to avoid shutdown costs, such as banks, hospitals, insurance agencies; limit chosen with help of agent -covers loss of actual time business shut down.

Civil Authority

-for losses near the insured's location and forces shutdown, up to 3 weeks after a 72 hour waiting period - don't show $ limit only shows time-frame of loss income.

Commercial Property Policy - RENTERS

-declarations page-conditions-Coverage B and C Formsnote: will not have Coverage A, because Renters don't own building.

Commercial Property Policy - OWNERS THAT DO NOT OCCUPY BUILDING

-declarations page-conditions-Coverage Anote: will not have Cov. B or C forms

Lessors Risk

Owners of commercial building but do not occupy building.

Commercial Property Policy - OWNERS THAT DO OCCUPY BUILDING

-declarations page-conditions-Coverage A, B and C Forms

Premises

Building + Grounds

Coverage B and C

- Coverage lost when Loss occurs inside of Building- Covers Content Loss 100ft. from premises

Exposers-Property in Transit

-Coverage B & C no longer apply-Must have "Cargo Coverage" to cover damaged property in transit.

Cargo Coverage

- Is not covered by Coverage B & C - Covers damaged property while in transit- is a form of Inland Marine Insurance

Cargo Coverage (INLAND MARINE) Forms

1. Owners Form - owner transport property while using own vehicles2. Truckers Form - Common Care (Trucking Comp.) transports property that belongs to customers, ie. MayFlower.* Legal Liability Form only pays if Trucker is Liable For Loss.3.Trip Transit Coverage Form - Purchased by customer and covers loss of property regardless of who's at fault.

Cargo Coverage Forms - A, B & C

These forms will not tell you what exposure is covered. Must add additional form - CAUSE OF LOSS FORM

Cause of Loss Form

Additional form added to Commercial Property Policy to know what exposures are covered. Must choose one;1. Commercial Basic2. Commercial Broad3. Commercial Special

Coverage Form + Cause of Loss Form

Two forms that make up a "Complete Commercial Policy