Property & Casualty Insurance Flashcards
6 cards from real BCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Property & Casualty Insurance flashcards as text
What is 'business interruption' insurance designed to compensate?
Answer: Loss of gross profit and additional expenses following insured physical damage
Business interruption insurance compensates for loss of gross profit (revenue less variable costs) and increased cost of working following an insured physical damage event that interrupts the business.
In marine cargo insurance, what does 'Institute Cargo Clauses (A)' provide?
Answer: All risks coverage subject to exclusions
Institute Cargo Clauses (A) provide the broadest 'all risks' coverage for marine cargo, covering all risks of loss or damage except those specifically excluded, such as inherent vice and delay.
What is 'product liability insurance' designed to protect against?
Answer: Legal liability for injury or damage caused by defective products sold or supplied
Product liability insurance protects manufacturers, distributors, and retailers against legal liability for bodily injury or property damage caused by defective products they have sold or supplied.
What does 'subrogation waiver' mean in an insurance policy context?
Answer: The insurer agrees not to pursue recovery against a specified third party after paying a claim
A subrogation waiver means the insurer agrees to waive its right of subrogation against a specified third party, often used in construction contracts to prevent one contractor's insurer from suing another.
What is 'consequential loss' in property insurance?
Answer: Financial losses that are a consequence of physical damage, such as lost profits
Consequential loss refers to indirect financial losses that follow from physical damage — such as lost profits, ongoing expenses during repair, or loss of rental income — as distinct from the direct physical damage itself.
In property insurance, what does 'reinstatement value' mean?
Answer: The cost to rebuild or replace the property with new equivalent at current prices
Reinstatement value is the cost to rebuild or replace the damaged property with new equivalent at current construction or market prices, without deduction for depreciation.