CIC Commercial Property Exam
Question: What are the endorsements used to modify
coverage extensions?
CORRECT ANSWER : 1. newly acquired or constructed
property - increased limit 2. higher limits 3. specified bpp temporarily away from premises 4. additional covered property 5. radio or television antennas 6. trees, shrubs, plants
Question: What is replacement cost?
CORRECT ANSWER : - without deduction for depreciation
- claims are paid on acv until repairs or replacements is
complete and then difference is paid - does not apply to pp of others, contents of residence or fine arts
Question: What is Optional Coverage - RC PP OF OTHERS?
CORRECT ANSWER : - applies rc to property of others but
limited to the lessor of amount required by contract or RC
Question: What are the Loss Payment options?
CORRECT ANSWER : 1. Pay the value 2. Pay the cost to
repair or replace 3. take the property at an agreed or appraised value 4. repair, rebuild or replace with like kind and quality
Question: What is the Vacancy provision?
CORRECT ANSWER : 1. Tenant - does not contain enough
BPP to conduct customary operations 2. owner - must be at least 31% leased and used by lessee to conduct customary operations 3. Under construction or renovation are not vacant
- vacant for 60 consecutive days - theft, vandalism, sprinkler
leakage, glass breakage, and attempted theft are not covered perils 5. all other causes of loss payment is reduced by 15%
Question: What are the endorsements that modify valuation
provision?
CORRECT ANSWER : 1. Manufacturers selling price
(finished stock) 2. market value - stock 3. manufactures consequential loss assumption 4. Functional personal property valuation 5. functional building valuation 6. increased cost of loss and related expenses for green updates
Question: What is increased cost of construction - green
endorsement?
CORRECT ANSWER : includes additional cost to repair or
replace with green materials - coinsurance does not apply - a limit must be selected for green upgrades - a percentage must be selected (10%, 20%) and the most the policy will pay is the amount paid for the loss plus deductible times the % selected
Question: What is the coinsurance formula?
CORRECT ANSWER : did/should x loss
Question: What are the elements of the financial statement
that impact business income loss?
CORRECT ANSWER : Gross Sales - Cost of Goods Sold =
Gross Profit Gross Profit - Operating expenses = Net Profit
Question: What will be paid and for how long for business
income?
CORRECT ANSWER : NICE business income means net
income that would have been earned or incurred and
continuing normal operating expenses incurred, including payroll
Question: What are the elements to trigger BI Coverage?
CORRECT ANSWER : 1. actual loss of business income 2.
Due to necessary suspension of operations 3. during the period of restoration 4. cause by direct physical loss to property 5. at the described premises 6. from a covered cause of loss
Question: What is the period of restoration?
CORRECT ANSWER : 1. begins with covered property loss
with a 72 hour deductible that only applies to business income and not extra expense 2. Ends when property should be repaired or relocated 3. Policy expiration will not limit the period
Question: What is Extra Expense?
CORRECT ANSWER : 1. Necessary above normal expenses
due to loss 2. needed to continue operations any location 3.reduce the suspension of operations