What Do You Know About Commercial Property Insurance? Trivia Quiz

Explanation
If an applicant wants to pick and choose their coverage - CPP is the way to go. Remember - a BOP is a packaged policy consisting of liability AND property, no choice on one or the other.

Explanation
In order to qualify for the CPP Enhancement Endorsement, an applicant must have General Liability & Commercial Fire on the policy.

Explanation
If a business is located outside city limits, but within 5 miles of the responding fire department, the public protection class for the property will be Protection class 9. This means that the property is considered to have a good level of fire protection due to its proximity to the fire department. The protection class is based on factors such as the availability of fire hydrants, water supply, and the fire department's response capabilities. In this case, even though the business is not located within the city limits, it still falls within the 5-mile radius of the fire department, which qualifies it for Protection class 9.

Explanation
The CPP system defaults the coinsurance requirement to 80% - so as long as you are within 80% of the true replacement cost, no coinsurance penalty will be assessed.

Explanation
No business income coverage refers to the lack of insurance coverage that compensates businesses for lost income in the event of a closure or interruption caused by a covered loss, such as a fire or natural disaster. Without this coverage, businesses may struggle to recover financially after a loss, leading to their inability to re-open or their eventual closure. This lack of financial support can make it difficult for businesses to cover expenses and maintain operations, ultimately leading to their demise.

Explanation
In a CPP (Commercial Package Policy), the coverage for business income requires the addition and entry of a limit. This means that the policyholder needs to specify the amount of coverage they want for their business income. On the other hand, in a BOP (Business Owners Policy), the coverage for business income is already built into the policy, and there is no need to add or enter a separate limit. Therefore, the main difference between covering business income on a CPP and a BOP is that the CPP requires the policyholder to add and enter a limit, while the BOP already includes the coverage.

Explanation
In order to meet coinsurance requirements, you must insure the building to 100% value on the BOP.

Explanation
On a BOP - the coinsurance requirement is 100% - so you have to place $500,000 on the building. To determine the coinsurance penalty assessed (for not insuring to value) you would utilize the following formula - Did/Should x Loss -- $50,000 (Did)/$500,000 (Should) x $50,000 (loss) Loss Amount Paid = $5,000 Did = The amount the insured DID have the building insured for Should = The amount the insured SHOULD have had the building insured for This is why it is very important to ensure to value - and explanation of this to the client can help.

Explanation
To be eligible for coverage with Farm Bureau, a restaurant that cooks with grease must have an Ansul Wet Fire Suppression System, a Class K Fire Extinguisher, and a Hood and Duct Cleaning Service Contract. These items are necessary for ensuring fire safety in a restaurant that uses grease for cooking. The Ansul Wet Fire Suppression System is designed specifically to extinguish fires caused by cooking oils and greases. The Class K Fire Extinguisher is also specifically designed for use in kitchens and can effectively extinguish fires caused by cooking oils and greases. The Hood and Duct Cleaning Service Contract ensures that the ventilation system is regularly cleaned, reducing the risk of grease buildup and potential fire hazards.

Explanation
Any dwelling, apartment, or the likes must be equipped with hard wired smoke detectors. This assists in life safety.