Final Exam Review Sheet - Illinois State University

DEPARTMENT OF FINANCE, INSURANCE & LAW
COLLEGE OF BUSINESS
ILLINOIS STATE UNIVERSITY
FIL 350 – Property Insurance
Final Exam Review Sheet
Chapter 1 – Introduction to Commercial Property Insurance
Risk management concepts
What are four types of loss exposures faced by business organizations?
What are the steps of the risk management process?
What are four categories of loss exposures for businesses?
Policy formats
What is the difference between multiline and monoline policies?
What are the benefits of a CPP when compared to buying many individual monoline coverages?
Common policy conditions
What are the six conditions included in the common policy conditions form?
Determine the actual cash value of a loss.
Determine the coinsurance penalty faced by policyholder that does not have adequate insurance to
value.
Other definitions
Loss exposure, avoidance, risk control, loss prevention, loss reduction, separation, commercial package
policy (CPP), multiline policy, monoline policy, standard form, non standard form
Chapter 2 – Building and Personal Property Coverage Form
What forms are required to be combined to provide property insurance coverage under a CPP?
What are the three major categories of property covered by BPP? What is considered part of the
building? What are the categories of personal property?
What are three major categories of property not covered?
What are the six additional coverages and six coverage extensions included in the BPP?
What optional coverages are described in the BPP coverage form?
What is the valuation basis for improvements and betterments?
Definitions
Declarations page, Fixture, bailee, FLARE perils

Chapter 3 – Causes of Loss Forms
What are the three available causes of loss forms? What differentiates these forms?
What perils are covered under the causes of loss – basic form?
What exclusions are listed in all causes of loss forms (see page 3.16)?
Definitions
Concurrent causation doctrine, voluntary parting, unauthorized instructions
Chapter 4 – Commercial Property Coverage Options
What are the advantages and disadvantages of blanket insurance over specific insurance?
How does the value reporting form affect the amount of coverage for a policyholder?
o How are the premium and coverage limits determined for the value reporting form?
o What penalties apply if a policyholder misses a report?
Define and recognize the potential use of each of the following endorsements:
o Manufacturers selling price, functional building or personal property valuation, peak season
limit of insurance, manufacturers consequential loss, brands and labels, ordinance or law
coverage endorsement, spoilage coverage
Chapter 5 – Condo forms and builders risk
What are common elements? What is the split of property between condo unit owners and
associations? How does this differ under the bare walls, single entity (original specs), and all-in
concepts?
How are the unit owners coverage and association coverage coordinated?
What are methods of covering builders’ risks?
List the additional coverages and extensions under the builders risk form.
Definitions
Highly protected risk, owner controlled insurance program (OCIP), standard property policy (SPP)
Chapter 6 – Flood, earthquake, and specialty forms
What are the objectives in National Flood Insurance Program?
What are the four coverages in the NFIP general property form?
What are the differences between NFIP and the ISO flood endorsement?
How
Definitions
Special flood hazard area (SFHA), ensuing losses, difference in conditions insurance, output policy

Chapter 7 – Business Income Insurance
How are business income losses calculated?
What are the five required elements that define coverage for business income losses?
How does a business determine the limit of insurance and coinsurance amount for business income?
What is the coinsurance basis for business income insurance? What are ways to reduce the
coinsurance basis? What are some approaches used to avoid coinsurance penalty under the
business income coverage form?
What are three categories of extra expenses incurred by businesses during a shutdown?
What are the additional coverages and extension included in business income coverage form?
Define and recognize the potential use of each of the following business income endorsements:
o Dependent property exposures
Definitions
Civil authority, expected maximum loss, period of restoration, extended business income, contributing
location, recipient location, leader location, manufacturing location
Chapter 8 – Inland Marine and Ocean Cargo
What are the major categories of loss exposures under marine insurance?
Which parties are involved in transportation loss exposures?
Identify the major forms of ocean marine insurance including hull insurance and P&I?
Define the common types of marine insurance such as annual transit vs. trip transit insurance, open
cargo, and motor truck insurance.
Chapter 9 – Commercial Crime Insurance
Differentiate burglary, safe burglary, and robbery.
What are the eight insuring agreements contained in the commercial crime coverage form? For
each agreement, what are the covered causes of loss, covered property, and extensions?
What are some additional insuring agreements available as endorsements to commercial crime
forms?
What are the exclusions that apply to all crime insuring agreements?
Differentiate the loss sustained and discovery versions of crime insurance policies.
Definitions
Termination as to any employee, loss sustained under prior insurance, extended period of discovery

Chapter 10 – Equipment Breakdown Insurance
What are the major types of equipment that are covered under equipment breakdown insurance?
What is the need for equipment breakdown insurance? What is the insuring agreement?
Define the ten available insuring agreements under the equipment breakdown coverage form?
Definitions
Fired pressure vessels
Chapter 11 – Businessowners Policies (BOP)
Who is the target audience for BOP?
What are some types of eligibility rules for BOP?
What lines of coverage are included in a BOP?
What are the similarities and major differences between the BOP and the BPP + BI?
Chapter 13 – Surety Bonds
What is a surety bond? What are the similarities and differences between surety bonds and
insurance?
What are the major categories of surety bonds? What are the various types of contract bonds?
Definitions
Principle, obligee, surety, bid bond, performance bond, payment bond, maintenance bond, license and
permit bonds, public official bonds, CT bonds, fiduciary bonds