Commercial property questions test how the standard ISO forms fit together. These are the pieces to know.
The commercial package policy
Separate coverage parts, such as property, general liability, crime and inland marine, attach to one set of common forms; the Common Policy Declarations and Common Policy Conditions apply to every part (ISO IL DS 00 09; IL 00 17).
Building and Personal Property
Pays for direct physical loss to covered property from a covered cause of loss. Building includes completed additions, fixtures and permanently installed machinery and equipment. It values at actual cash value unless replacement cost is chosen (ISO CP 00 10).
Causes of loss
The special form covers direct physical loss unless excluded or limited; the basic and broad forms insure only listed perils. Mechanical breakdown is excluded, so equipment breakdown coverage is bought separately (ISO CP 10 30).
Business income and extra expense
Business income is net income plus continuing normal operating expenses, paid only when operations are suspended by direct physical loss at the described premises. The period of restoration starts 72 hours after the loss, and immediately for extra expense (ISO CP 00 30).
Businessowners Policy (BOP)
Packages property, with business income, and liability for smaller businesses. For most eligible risks the limits are 35,000 square feet and $6,000,000 in annual gross sales per location. Replacement cost is standard (ISO BP 00 03; ISO BOP Program overview).
Inland marine
Covers business property in transit and mobile equipment, such as contractors equipment, installation, valuable papers and motor truck cargo. Boat transportation belongs to ocean marine (CDI, Commercial Insurance Guide).
Practice property and casualty insurance questions for your state, with explanations and timed mock exams.