CIC Commercial Property Exam Prep Latest

CIC Commercial Property Exam Prep Latest Update 2024 Questions and Verified Correct Answers Guaranteed Success

4 optional coverages - CORRECT ANSWER: 1. Agreed value

• Replacement cost
• inflation guard
• extension of RC to pp of others

7 coverage extensions - CORRECT ANSWER: 1. newly acquired or constructed

property

• personal effects and property of others
• valuable papers and records
• property off-premises
• outdoor property
• non-owned detached trailers
• BPP temporarily stored in portable storage units

Additional coverage's found in the BI Coverage forms - CORRECT ANSWER: 1. Civil

authority - damage to a premises within 1 mile that prevents access to property

• Alterations and New buildings
• Extended business income

Business Income Coinsurance formula - CORRECT ANSWER: Amount required = (Net

Income + Operating expense) x Coinsurance

Amount carried = Limit of insurance

Carried/ Required = Recovery

*This is opposite of property coinsurance did/ should. For BI it is should/did

coinsurance formula - CORRECT ANSWER: did/should x loss

Define Extra Expense - CORRECT ANSWER: 1. Necessary above normal expenses

due to loss

• needed to continue operations any location
• reduce the suspension of operations

Define period of restoration - CORRECT ANSWER: 1. begins with covered property

loss with a 72 hour deductible that only applies to business income and not extra expense

• Ends when property should be repaired or relocated
• Policy expiration will not limit the period
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Describe increased cost of construction - green endorsement - CORRECT ANSWER:

includes additional cost to repair or replace with green materials

• coinsurance does not apply
• a limit must be selected for green upgrades
• a percentage must be selected (10%, 20%) and the most the policy will pay is the

amount paid for the loss plus deductible times the % selected

Determine how losses are settled under Agreed value - CORRECT ANSWER: 1) No

coinsurance 2) Requires Business Income Reporting worksheets every 12 months

elements of the financial statement that impact business income loss - CORRECT

ANSWER: Gross Sales - Cost of Goods Sold = Gross Profit

Gross Profit - Operating expenses = Net Profit

Elements to Trigger BI Coverage - CORRECT ANSWER: 1. actual loss of business

income

• Due to necessary suspension of operations
• during the period of restoration
• cause by direct physical loss to property
• at the described premises
• from a covered cause of loss

Endorsement that modify valuation provision (6) - CORRECT ANSWER: 1.

Manufacturers selling price (finished stock)

• market value - stock
• manufactures consequential loss assumption
• Functional personal property valuation
• functional building valuation
• increased cost of loss and related expenses for green updates

Endorsements used to modify coverage extensions (6) - CORRECT ANSWER: 1.

newly acquired or constructed property - increased limit

• higher limits
• specified bpp temporarily away from premises
• additional covered property
• radio or television antennas
• trees, shrubs, plants

Explain replacement cost - CORRECT ANSWER: - without deduction for depreciation

• claims are paid on acv until repairs or replacements is complete and then difference is

paid

• does not apply to pp of others, contents of residence or fine arts

List and describe the optional coverages available to avoid the coinsurance penalty - CORRECT ANSWER: 1. Maximum period of indemnity

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