Question 1

CompuFix services desktop and laptop computers. The owner of CompuFix is concerned that computers that are left with the business to be repaired may be damaged or destroyed. To address this risk, CompuFix should purchase

Accepted Answer

Coverage for property held by bailees specifically covers property that is in the care, custody, or control of the business but belongs to someone else. This would provide coverage for the computers left with CompuFix for repair, protecting the business against damage or destruction of the property while it is in their possession.

Question 2

Which of the following statements about the ISO businessowners policy is true?

Accepted Answer

The ISO businessowners policy includes business income and extra expense coverage as an additional coverage, offering protection against loss of income and extra expenses incurred to keep a business operational after a covered loss.

Question 3

The business income and extra expense coverage form covers loss of business income and continuing normal operating expenses. How is business income (revenue) defined?

Accepted Answer

The answer of The business income and extra expense coverage...

Question 4

John is risk manager of Alpha-2-Omega Company. John wants coverage for "direct physical loss" ("open perils" coverage) under the business and personal property (BPP) coverage form. Which causes-of-loss form should he select?

Accepted Answer

The special form causes-of-loss form provides the broadest coverage for "direct physical loss" under the BPP coverage form. It covers all risks except those specifically excluded in the policy. This is the most comprehensive and preferred coverage form for businesses with physical assets.

Question 5

Which ocean marine coverage provides comprehensive liability insurance for property damage caused by the ship to piers and docks, damage to the ship's cargo, and injury to the passengers or crew?

Accepted Answer

Protection and indemnity insurance, also known as P&I insurance, provides comprehensive liability coverage for property damage caused by the ship to piers and docks, damage to the ship's cargo, and injury to the passengers or crew. It also provides coverage for pollution and environmental damage.

Question 6

If the optional replacement cost coverage provision is not selected, how are losses settled under the building and personal property (BPP) coverage form?

Accepted Answer

If the optional replacement cost coverage provision is not selected, losses under the BPP coverage form are settled on actual cash value basis, which takes into account depreciation and the current market value of the property at the time of the loss.

Question 7

Which of the following statements concerning terrorism insurance is (are) true?
I. Terrorism insurance covers direct physical damage to the insured's property resulting from an act of terrorism.
II. Terrorism insurance and be added through an endorsement to the commercial property insurance policy or purchased as a separate, stand-alone policy.

Accepted Answer

Statement I is true as terrorism insurance covers direct physical damage to the insured's property resulting from an act of terrorism. Statement II is also true as terrorism insurance can be added through an endorsement to the commercial property insurance policy or purchased as a separate, stand-alone policy. Therefore, both statements I and II are true.

Quiz 25: Commercial Property Insurance