What Do You Know About Commercial Property Insurance? Trivia Quiz

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| By Jamesjohns82
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Jamesjohns82
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Quizzes Created: 4 | Total Attempts: 1,187
| Attempts: 277
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  • 1/10 Questions

    After suffering a loss, one of the main reasons businesses may not re-open their doors, or re-open and then be forced to close is.....

    • No business income coverage
    • Management inadequacy
    • Loss of customers
    • They are arsonists and now in prison
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About This Quiz

What Do You Know About Commercial Property Insurance? If you have a property there are a lot of risks that you may face and taking an insurance policy may be the best way to cushion yourself from the losses either partially or completely. Do take this quiz and see if you know the methods to follow to insure your commercial property.

What Do You Know About Commercial Property Insurance? Trivia Quiz - Quiz

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  • 2. 

    In order to ensure a building at replacement cost on a CPP, you must be within 80% of the actual replacement cost?

    • True

    • False

    Correct Answer
    A. True
    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.

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  • 3. 

    In order to be eligible for coverage with Farm Bureau, any habitational risk must have hard wired smoke detectors.

    • True

    • False

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

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  • 4. 

    If an applicant wants only property coverage - you should quote this under a CPP rather than BOP.

    • True

    • False

    Correct Answer
    A. True
    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.

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  • 5. 

    One of the main differences in covering business income on a CPP rather than on a BOP is...

    • Fewer covered causes of loss

    • There is no difference

    • More covered causes of loss

    • You must add and enter a limit on the CPP where as the BOP is built in

    Correct Answer
    A. You must add and enter a limit on the CPP where as the BOP is built in
    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.

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  • 6. 

    In order to qualify for the CPP Enhancement coverage you must have Commercial Auto & Commercial Fire on the policy.

    • True

    • False

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

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  • 7. 

    In order for a restaurant that cooks with grease to be eligible for coverage with Farm Bureau which items below must be in place

    • Ansul Wet Fire Suppression System

    • Class K Fire Extinguisher

    • Hood and Duct Cleaning Service Contract

    • Located in a good neighborhood

    Correct Answer(s)
    A. Ansul Wet Fire Suppression System
    A. Class K Fire Extinguisher
    A. Hood and Duct Cleaning Service Contract
    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.

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  • 8. 

    In order to insure a building at Replacement Cost on a BOP, you must be within 80% of the actual replacement cost?

    • True

    • False

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

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  • 9. 

    You have a client that has a brand new building - they want to insure it at $50,000, which is what they purchased it for.  Your building valuation comes up at $500,000 to construct this building.  You are quoting a BOP so you are required to put $500,000 on the building in order to properly insure.  If you place $50,000 on the building and they suffer a $50,000 loss - based on coinsurance requirements, what amount would they be paid?

    • $0

    • $5,000

    • $25,000

    • $50,000

    Correct Answer
    A. $5,000
    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.

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  • 10. 

    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...

    • The protection class for the city in which the mailing address is listed

    • Protection class 10

    • Protection class 9

    • We do not write property located outside of city limits

    Correct Answer
    A. Protection class 9
    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.

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Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Jan 16, 2014
    Quiz Created by
    Jamesjohns82
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