CIC COMMERCIAL
PROPERTY PRACTICE
EXAM 20 QUESTIONS
Question 1: Under the Common Policy Conditions, which responsibility belongs
speci�cally to the �rst Named Insured?
Choices:
1) Receiving any return premium from the insurer 2) Conducting all insurer safety inspections 3) Approving every claim payment to a mortgageholder 4) Determining which causes of loss apply after a claim
Correct Answer: Receiving any return premium from the insurer
Explanation: The �rst Named Insured is the party responsible for policy-wide administrative duties such as paying premiums and is the payee for any return premium. The insurer, not the �rst Named Insured, controls inspections and claim determinations.Page 1
Question 2: A building is worth $1,500,000 at the time of loss and is subject to an 80% coinsurance requirement. The insured carries a $900,000 limit, su�ers a $200,000 covered loss, and has a $10,000 deductible. What is the loss settlement?
Choices:
1) $140,000
2) $150,000
3) $160,000
4) $190,000
Correct Answer: $140,000
Explanation: The required amount is $1,500,000 x 80% = $1,200,000. The coinsurance ratio is $900,000 / $1,200,000 = 0.75. Applying that ratio to the $200,000 loss gives $150,000, and subtracting the $10,000 deductible produces a $140,000 settlement.Question 3: A manufacturer installs a large air-handling unit that is permanently a�xed to its building. Under an unendorsed Building And Personal Property Coverage Form, how is the unit most appropriately classi�ed?
Choices:
1) Building 2) Your Business Personal Property 3) Personal Property Of Others 4) Property Not Covered
Correct Answer: Building
Explanation: Building coverage includes permanently installed machinery and equipment.Because the air-handling unit is permanently a�xed to the building, it is classi�ed as Building rather than removable business personal property.Page 2
Question 4: A furniture store has sold a chair to a customer but has not yet
delivered it. The chair is in the store's delivery truck parked 80 feet from the described premises. How is the chair treated under the Building And Personal Property Coverage Form?
Choices:
1) Covered as Building 2) Covered as Your Business Personal Property 3) Covered as Personal Property Of Others 4) Property Not Covered because it is in a vehicle
Correct Answer: Covered as Personal Property Of Others
Explanation: Property sold but not delivered is property of others rather than the insured's inventory. Personal Property Of Others can be covered while in a vehicle within 100 feet of the described premises, so the chair is covered in that category.
Question 5: Which is a principal advantage of writing commercial property
insurance on a blanket basis?
Choices:
1) It automatically eliminates all coinsurance requirements 2) It allows one limit to respond where needed among covered property subject to the blanket 3) It allows di�erent causes of loss forms to apply independently to each item under the same blanket limit 4) It guarantees replacement cost valuation for all covered property Correct Answer: It allows one limit to respond where needed among covered property subject to the blanket Page 3