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?
- 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?
- All three are typically excluded from CGL coverage.
- What does a Business Owners Policy (BOP) combine?
- 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?
- 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.
- The replacement cost of property minus depreciation for wear and tear.
- Define replacement cost value (RCV) in property insurance.
- 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?
- 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?
- A lower maximum benefit amount that applies to a specific coverage or type of loss within a policy.
- What is coinsurance in property insurance?
- 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?
- 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?
- 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?
- An agreement where the insurer waives its right to recover from a third party, typically required by contractual partners.
- What is business interruption coverage?
- 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?
- Protection against the cost of repairing or replacing machinery and equipment that breaks down or malfunctions.
- What is medical payments coverage under CGL?
- Coverage that pays reasonable medical expenses for injuries to third parties at the insured's premises, regardless of liability.