Commercial general liability, business owners policies, and commercial property coverage concepts tested on insurance licensing exams.
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- What is the primary purpose of Commercial General Liability (CGL) insurance?
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To protect a business from claims of bodily injury, property damage, and advertising injury caused by the business's operations.- Which of these is typically excluded from CGL coverage: intentional acts by the insured, expected injuries, or employee injuries?
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All three are typically excluded from CGL coverage.- What does a Business Owners Policy (BOP) combine?
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General liability, commercial property, and business interruption coverage in one package.- In commercial property insurance, what is the difference between a named-peril and an all-risk policy?
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Named-peril covers only specific perils listed in the policy; all-risk covers all perils except those specifically excluded.- Define actual cash value (ACV) in property insurance.
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The replacement cost of property minus depreciation for wear and tear.- Define replacement cost value (RCV) in property insurance.
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The cost to replace damaged or destroyed property with new property of like kind and quality, without deduction for depreciation.- What is a deductible in an insurance policy?
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The amount of loss the insured must pay out of pocket before the insurer begins to pay.- What is a sublimit in an insurance policy?
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A lower maximum benefit amount that applies to a specific coverage or type of loss within a policy.- What is coinsurance in property insurance?
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A requirement that the insured carry insurance equal to a specified percentage of the property value to receive full coverage; failure to do so reduces the claim payment proportionally.- What does an Additional Insured endorsement do?
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It extends CGL coverage to a party named in the endorsement, protecting them as if they were the named insured.- What is subrogation in insurance?
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The insurer's right to recover from a third party the amount paid to the insured for a loss caused by that third party.- What is a Waiver of Subrogation endorsement?
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An agreement where the insurer waives its right to recover from a third party, typically required by contractual partners.- What is business interruption coverage?
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Coverage that reimburses lost income and continuing operating expenses if a business is forced to shut down due to a covered peril.- What is equipment breakdown coverage?
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Protection against the cost of repairing or replacing machinery and equipment that breaks down or malfunctions.- What is medical payments coverage under CGL?
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Coverage that pays reasonable medical expenses for injuries to third parties at the insured's premises, regardless of liability.
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