Property Insurance Flashcards

Under DC law, which entity has the authority to license surplus lines insurers operating in the District?

Answer: DC Department of Insurance, Securities and Banking (DISB)

DISB licenses and regulates surplus lines insurers operating in Washington DC.

Under a DC commercial property policy, the 'coinsurance clause' requires the insured to maintain coverage equal to what percentage of property value to avoid a penalty?

Answer: 80%

Most commercial property policies use an 80% coinsurance requirement, meaning the insured must carry coverage equal to at least 80% of the property's value.

What type of DC property insurance policy covers the building, business personal property, and business income in a single contract?

Answer: Business Owner's Policy (BOP)

A Business Owner's Policy (BOP) bundles building, business personal property, and business income coverage in a single policy designed for small to mid-sized businesses.

Which endorsement adds earthquake coverage to a DC commercial property policy?

Answer: Earthquake endorsement

An earthquake endorsement can be added to a commercial property policy to cover losses from seismic events, which are excluded in the standard form.

Under a DC commercial property policy, 'actual cash value' (ACV) is best described as:

Answer: Replacement cost minus physical depreciation

ACV equals the replacement cost of the property minus depreciation due to age, wear, and obsolescence.

Business income coverage (also called business interruption insurance) is triggered by which of the following?

Answer: A covered direct physical loss to the insured property that suspends operations

Business income coverage activates only when a covered physical loss to the insured's property causes a suspension or interruption of business operations.