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FIL350 - Chapter 2
BPP Coverage Form
| Question | Answer |
|---|---|
| Definition of the "building" | Structure described in declarations, completed additions, fixtures, permanently installed machinery and equipment, personal property used to service/maintain the building, additions under construction and materials/supplies within 100' |
| Definition of "personal property" | Furniture & fixtures, machinery & equipment, stock, other personal property (PP) used in the business, labor/materials added to PP of others, use interest in improvements & betterments, leased PP with reqd ins. Also: must be used in business and w/in 100' |
| Trade fixtures | Fixtures and equipment that are attached during a tenant's occupancy, but with the intention that they will be removed upon termination of the lease |
| Improvements and betterments | Alterations/additions made by a tenant that become part of the building and cannot legally be removed |
| FLARE perils | Fire, Lightning, Aircraft or vehicles, Riot or civil commotion, Explosion |
| Name the additional coverages in the BPP | Debris removal, preservation of property, fire department service charge, pollutant cleanup, increased cost of construction, electronic data |
| Name the coverage extensions in the BPP | Newly acquired or constructed property, personal effects and property of others, valuable papers and records, property off premises, outdoor property, Non-owned detached trailers |
| Fixtures | Any personal property affixed to real property in such a way as to become part of the real property |
| Commercial bailment | The temporary possession by one party (the bailee) of personal property of another party (the bailor) for a specific purpose beneficial to both parties. |
| Agreed Value optional coverage | Optional coverage that suspends the Coinsurance condition if the insured carries the amount of insurance agreed to by the insurer and insured. the agreed value essentially becomes the "should" in the coinsurance penalty equation |
| Inflation Guard optional coverage | Coverages for the effects of inflation that automatically increases the limit of insurance by the percentage of annual increase shown in the declarations |
| Replacement Cost optional coverage | Coverage for losses to most types of property on a replacement cost basis (with no deduction for depreciation or obsolescence) instead of on actual cash value basis. options are available for the building, your business PP, and PP of others |
| What are the three major categories of "property not covered" in the BPP? | Real property (such as land, water, bridges), outdoor property (plants, fences, antennas), and other (money, electronic data, animals) |
| What is the limit for debris removal? | 25% of the direct loss plus an additional 10,000 if needed. while debris removal is subject to the policy limit, the additional $10,000 is not |
| Which additional coverages are NOT counted against the BPP policy limit? | fire dept service charge, pollutant cleanup, increased cost of construction, electronic data |
| What is the limit for any fire department service charge? | $1,000 |
| Which coverages have annual limits and not per occurrence limits? | pollutant cleanup and electronic data |
| What is the limit for electronic data coverage? | $2,500 (per year) |
| What is the limit of coverage for non-owned detached trailers? | $5,000 |
| What are the coverage limits on newly acquired property? | $250,000 for the building and $100,000 for personal property |
| Outside of ACV, what special valuation provisions exist in the BPP? | Small building losses at replacement cost, Sold stock at selling price, replacement cost for safety glazing of glass, pro rata cost for improvements & betterments |
| Bailee | A party that temporarily possesses the personal property of others and has a duty to return it to perform a service such as repair, clean, or dispose of it as agreed in return for a fee. |
| Bailor | The party that owns the personal property in a commercial bailment. |
| Preservation of Property additional coverage | The insurer provides insurance coverage for property that has been moved from the insured premises to protect it afterfrom damage by a covered peril. |
| Fire Department Service Charge additional coverage | Coverage for service charges that are required by local ordinance or assumed in contract from fire department to control or extinguish a fire. |
| Increased Cost of Construction | Additional coverage for increased construction costs due to ordinances or laws (typically upgraded building codes) that increases repair costs. BPP provides 5% of policy limit up to 10,000 |
| Newly Acquired or Constructed Property extension | Coverage extension for newly acquired or constructed buildings or business personal property. |
| Personal Effects and Property of Others extension | Coverage extension to insure personal effects (coats, jewelry) of the insured and personal property of others in the insured's care. |
| Valuable Papers and Records (Other Than Electronic Data) extension | Coverage extension to insure physical loss of valuable papers and records by a specified loss (not electronic data). Covers cost of researching or restoring information. |
| What is the major insuring agreement provided in the BPP coverage form? | Payment of losses for direct physical damage to covered property (caused by a covered cause of loss) |
| What are the four optional coverages available in the BPP coverage form? | agreed value, inflation guard, replacement cost coverage, extension of replacement cost to PP of others |
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FIL350
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