CPCU 551 Flashcards – Module 7

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[h] CPCU 551 – Module 7

[q] Maximum Period of Indemnity

[a] An optional coverage under the Business Income Coverage Form that negates the Coinsurance condition.  The coverage limits the loss payment to the lesser of the:

(1) Amount of loss sustained during the 120 days following the start of restoration,

(2) Policy limit.

[q] Monthly Limit of lndemnity

[a] An optional coverage under the Business Income Coverage Form that limits the amount recoverable during any month of business interruption.  This coverage also negates the coinsurance condition.

[q] Business Income Agreed Value

[a] An optional coverage under the Business Income Coverage Form that suspends the Coinsurance condition.  The insured must carry insurance equal to the value agreed upon by the insured and the insurer.

[q] No Coinsurance option

[a] A seldom used option under the Business Income Coverage Form due to the increased premium rate.  This option may be appropriate for insureds with a very small estimated maximum loss.

[q] Extended Period of Indemnity

[a] An optional coverage under the Business Income Coverage Form that extends the duration of the Extended Business Income additional coverage to include business income losses continuing for more than 60 days after the property is restored.

[q] Extra Expense Coverage Form

[a] A coverage form that only covers extra expenses, and does not cover business income losses.

[q] Limits on Loss Payment condition

[a] A condition of the Extra Expense Coverage Form that limits payment of damages to stipulated percentages of the overall limit of insurance for set periods of time.

[q] Payroll Limitation or Exclusion endorsement

[a] An endorsement that limits coverage for payroll expenses to a specified number of days or excludes payroll expenses altogether.

[q] Discretionary Payroll Expense endorsement

[a] An endorsement that covers payroll expenses for specified job classifications, regardless of whether the expenses are necessary to resume operations.

[q] Power, Heat, and Refrigeration Deduction endorsement

[a] An endorsement that eliminates power, heat, and refrigeration expenses from coverage, thereby allowing an insured to satisfy the coinsurance requirement with a lower insurance limit.

[q] Business Income From Dependent Properties – Broad Form endorsement

[a] An endorsement that covers losses resulting from damage to dependent property not owned or controlled by the insured.  Under this form of the endorsement, the same limit of insurance is applied to the dependent property as the limit applied to the owned property.

[q] Business Income From Dependent Properties – Limited Form endorsement

[a] An endorsement that covers losses resulting from damage to dependent property not owned or controlled by the insured.  Under this form of the endorsement, a separate limit of insurance is applied to the dependent property and the owned property.

[q] Extra Expense From Dependent Properties endorsement

[a] An endorsement that covers losses resulting from damage to dependent property not owned or controlled by the insured.  Under this form of the endorsement, extra expenses resulting from physical damage to dependent properties are covered.

[q] Business Income Changes – Educational Institutions endorsement

[a] An endorsement that modifies the Business Income Coverage Form to make it more appropriate for covering the business income loss exposures of schools.

[q] Utility Services – Time Element endorsement

[a] An endorsement that covers loss of business income caused by the interruption of utility services to or from the insured premises.

[q] Categories of supply properties

[a] Categories:

Water supply.

Wastewater removal.

Communication supply.

Power supply.

[q] Ordinance or Law – Increased Period of  Restoration endorsement

[a] An endorsement that covers business income losses resulting from the enforcement of building laws or ordinances.  Extends coverage to encompass the increased period of suspension of operations brought about by the enforcement of building laws.

[q] Food Contamination endorsement

[a] An endorsement, generally designed for restaurants and grocery stores, that covers losses if a governmental authority orders the insured to close.

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