DC Commercial Insurance Flashcards

A DC business's commercial property policy is written on a 'replacement cost' basis. This means the insurer will pay:

Answer: The cost to repair or replace the property with like kind and quality without a deduction for depreciation

Replacement cost coverage pays the full cost to repair or replace damaged property with new materials, without subtracting depreciation.

In DC, an 'occurrence' under a commercial general liability policy is best defined as:

Answer: An accident, including continuous or repeated exposure to conditions, resulting in bodily injury or property damage

Under CGL policies, 'occurrence' means an accident or repeated exposure to harmful conditions that results in bodily injury or property damage during the policy period.

A DC retail store's commercial general liability policy has a $1,000,000 per-occurrence limit and a $2,000,000 general aggregate limit. The aggregate limit means:

Answer: The total amount payable for all covered claims during the policy period is $2,000,000

The general aggregate limit caps the total amount the insurer will pay for all covered losses during the entire policy period.

Which commercial coverage in DC protects movable property—such as equipment or goods in transit—that is not fixed at one location?

Answer: Inland marine insurance

Inland marine insurance covers property that moves, including equipment, tools, and goods in transit, which standard commercial property policies typically exclude.

A DC business purchases directors and officers (D&O) liability insurance primarily to protect against:

Answer: Claims alleging wrongful acts by corporate directors and officers in managing the company

D&O insurance protects the personal assets of corporate directors and officers against lawsuits alleging mismanagement, breach of fiduciary duty, or other wrongful acts.

Under DC commercial insurance law, an 'additional insured' endorsement added to a CGL policy:

Answer: Extends liability protection to a third party (such as a landlord or client) under certain conditions

An additional insured endorsement grants a specified third party coverage under the named insured's CGL policy, typically for liability arising from the named insured's work.