AU 61 Flashcards

1
Q

Contents

A

Personal property that is usually contained in a building or other structure.

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2
Q

Commercial package policy (CPP)

A

Policy that covers two or more lines of business by combining ISO’s commercial lines coverage parts.

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3
Q

Business owners policy

A

A package policy that combines most of the property and liability coverage needed by small and medium size business.

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4
Q

Output policy

A

A policy that combines, in one form and associated endorsements, all or most of the commercial property coverages that the insured organization needs, and uses a flexible rating plan.

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5
Q

Predictive modeling

A

A process in which historical data based on behaviors and events are blended with multiple variables and used to construct models of anticipated future events.

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6
Q

Insurable interest

A

An interest in the subject of an insurance policy that is not unduly remote and that would cause the interested party to suffer financial loss if an insured event occurred.

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7
Q

Factual expectancy

A

A situation in which a party experiences an economic advantage if an insured event does not occur or, conversely, economic harm if the event does occur.

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8
Q

Fee simple estate

A

A full ownership interest in property with the unconditional right to dispose of it.

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9
Q

Joint tenancy

A

A concurrently owned and undivided interest in an estate that transfers to a surviving joint tenant upon the death of the other.

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10
Q

Life tenant (life estate)

A

A person entitled to exclusive possession of real property and to all income the land produces for the duration of that person’s or someone else’s life; terminates on the death of the life tenant and does not pass to his or her estate.

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11
Q

Remainder estate

A

The right granted an individual to hold an estate following the death of the life tenant.

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12
Q

Remainderman

A

The individual who acquires an estate following the death of a life tenant and who acquires a fee simple estate in the property.

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13
Q

Replacement cost

A

The cost to repair or replace property using new materials of like kind and quality with no deduction for depreciation.

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14
Q

Actual cash value (ACV)

A

Cost to replace property with new property of like kind and quality less depreciation.

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15
Q

Functional valuation method

A

A valuation method in which the insurer is required to pay no more than the cost to repair or replace the damaged or destroyed property with property that is its functional equivalent.

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16
Q

Insurance to value

A

Insurance written for an amount approximating the full value of the asset insured.

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17
Q

Coinsurance condition

A

A condition that requires the insured to carry insurance equal to at least a specified percentage of the actual cash value of the property insured.

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18
Q

Insurance-to-value provision

A

A provision in property insurance policies that encourages insureds to purchase an amount of insurance that is equal to, or close to, the value of the covered property.

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19
Q

Agreed Value optional coverage

A

Optional coverage that suspends the coinsurance condition if the insured carries the amount of insurance agreed to by the insurer and insured.

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20
Q

Blanket insurance

A

Insurance that covers either of the following with one limit of insurance: (1) one type of property in one or more separately rated buildings or (2) two or more types of property in one or more separately rated buildings.

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21
Q

Blanket limit

A

The max dollar amount the insurer will pay for two or more items or classes of property at one or more locations.

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22
Q

Inflation Guard optional coverage

A

Coverage for the effects of inflation that automatically increases the limit of insurance by the percentage of annual increase shown in the declarations.

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23
Q

Agreed Value method

A

A method of valuing property in which the insurer and the insured agree, at the time the policy is written, on the max amount that will be paid in the event of a total loss.

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24
Q

Market value

A

The price at which a particular piece of property could be sold on the open market by an unrelated buyer or seller.

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25
Q

Fire- resistive construction

A

A class of construction that has exterior walls, floors, and roofs of masonry or other fire-restive material with a fire-resistance rating of at least two hours.

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26
Q

Noncombustible construction

A

A class of construction in which the exterior walls, floor, and roof of a building are constructed of, and supported by, metal, gypsum, or other noncombustible materials.

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27
Q

Masonry noncombustible construction

A

Masonry construction or construction that includes exterior walls of fire-resistive construction with a fire-resistance rating of less than one hour.

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28
Q

Frame construction

A

A class of construction that has load-bearing components made of wood or other combustible materials such as brick or stone veneer.

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29
Q

Construction

A

The type of materials and design used to fabricate a building, which underwriters analyze when evaluating submissions for property insurance.

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30
Q

Occupancy

A

The type or character of use of the property in question.

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31
Q

Protection

A

Measures taken to prevent or reduce the damage done by fire.

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32
Q

Public fire protection

A

Fire protection equipment and services made available through governmental authority to all properties within a defined area.

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33
Q

Private fire protection

A

Measures taken by property owners to protect their assets from loss by fire.

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34
Q

External exposure

A

A loss exposure outside the area owned or controlled by the insured.

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35
Q

Fire resistance

A

The ability of a building or material to withstand the effects of or give protection from fire.

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36
Q

Fuel load (fire load)

A

The expected max amount of combustible material in a given area of a building, including both structural elements and contents, commonly expressed in terms of weight of combustibles per square foot.

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37
Q

Flame spread

A

The speed with which a gas fire consuming an interior construction material or finish material spreads, as determined in a test environment; one factor used to develop fire rating.

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38
Q

Load-bearing components

A

The parts of a building that carry the weight of the structure and its contents.

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39
Q

Specific rating

A

A rating method that bases a buildings property insurance rate on a physical inspection during which the structural features are identified and evaluated according to published standards.

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40
Q

Firestop

A

An element of construction inserted in a concealed space (wall or roof area) that prevents the passage of flame from one point to another; used to help contain fires and increase the chance of extinguishing the flames.

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41
Q

Mild construction

A

A sub classification of joisted masonry construction that uses heavy timber for columns, beams, supports, and ties. Has a minimum two hour fire resistance rating on bearing walls and has an absence of floor joists.

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42
Q

Modified fire-resistive construction

A

A class of construction that has exterior walls, floors, and roofs of masonry or other fire-resistive materials with a fire-resistance rating of one to two hours.

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43
Q

High-rise building

A

Any structure taller than seventy five feet (National Fire Protection Association definition), or a building taller than the tallest ladder available to the fire service.

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44
Q

Fire division

A

A section of a structure so well protected that fire cannot spread from that section to another, or vice versa.

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45
Q

Fire wall

A

A floor to roof wall made of noncombustible materials and having no open doors, windows, or other spaces through which fire can pass.

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46
Q

Parapet

A

A vertical extension of a fire wall that extends above a roofline.

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47
Q

Curtain Board

A

A partial fire wall that, when installed in conjunction with roof vents, helps contain hot smoke and gases and aids exterior venting to simplify fire suppression

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48
Q

Fire door

A

A door made of fire resistant material that can be closed to prevent the spread of fire.

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49
Q

Interior finish

A

Materials used to form the exposed interior surfaces of walls and ceilings; includes carpets, ceiling tiles, wallboard, insulating materials, and decorative materials.

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50
Q

Flashover

A

A stage in the development of a contained fire in which all exposed surfaces reach ignition temperature at approx the same time, causing fire to spread rapidly throughout the space.

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51
Q

Class rate

A

A type of insurance rate that applies to all insureds in the same rating category or rating class.

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52
Q

Specific rate

A

An insurance rate that is developed by ISO filed reps through a physical visit to a property and development of an individual advisory loss cost.

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53
Q

Risk control report

A

A record that contains account information gathered as a result of a physical inspection by an insurer’s risk control rep specifically at the request of an underwriter.

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54
Q

Building codes

A

Local ordinances or state statues that regulate the construction of buildings within a municipality, country or state.

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55
Q

Prescriptive codes

A

A building code that states in detail the size, type, and installation techniques for all structural and other building components.

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56
Q

Performance codes

A

A building code that establishes criteria that structural and other building components must meet.

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57
Q

Basic occupancy charge

A

A rating system factor that reflects the relative hazard of an occupancy for pricing purposes and is expressed as a percentage of the base rate (ranges from 10 to 1000 percent)

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58
Q

Combustibility

A

The ability of something to ignite and burn; a major determinant of the overall fire hazard

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59
Q

Susceptibility

A

The extent to which fire and its effects will cause damage to materials

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60
Q

Common hazards

A

Hazards existing in almost every class of business occupancy, usually referring specifically to (1) housekeeping, (2) hearing equipment, (3) electrical equipment, and (4) smoking

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61
Q

Special hazards of the class

A

A characteristic typical of all occupancies in a given class that can cause or aggravate a loss. An example is the hazard of cooking, common to the restaurant class

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62
Q

Special hazards of the risk

A

A condition that can cause loss but that is not typical of an occupancy. An example is the use of a welding torch in an auto repair shop.

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63
Q

Ignition source

A

Item, substance, process, or event capable of causing a fire or explosion, such as open flames, sparks, or static electricity.

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64
Q

Friction

A

The heat and static electricity generated when two surfaces rub together.

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65
Q

Static electricity

A

An electrical charge that is generated when two surfaces rub together in a clear, dry, atmosphere

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66
Q

Spontaneous heating

A

An oxidation process in which the temperature of a material is increased without drawing heat from its surroundings.

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67
Q

Opportunity Cost

A

The difference between the maximum profit that an investor could have made from an alternative investment and the profit the investor has actually made from the investment.

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68
Q

Watch service system

A

A type of private fire detection system in which individuals are employed to patrol premises when a business is closed.

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69
Q

Watchclock system

A

A type of private fire detection system in which security personnel make regular rounds of a premises and record visits to each station along the patrol route by inserting a special key in a clock or by using magnetic key cards.

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70
Q

Merchant police system

A

A type of private detection system that uses guards who patrol a route and cover a number of properties and control burglary. robbery, and fire losses; the guards usually check only the exterior of the building after the business is closed.

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71
Q

Automatic detection system

A

A fire detection system that consists of mechanical or electronic detectors that sense the presence of smoke or fire and sound an alarm.

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72
Q

Local fire alarm system

A

A detection system, triggered by smoke or heat, that sounds a bell, siren, or another alert at the premises only.

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73
Q

Remote system (remote station system)

A

A type of automatic fire detection system in which a detector connects to the local police or fire station, which continuously monitors the system.

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74
Q

Central station system

A

A private detection service that monitors the systems of multiple businesses and/or residences and that calls appropriate authorities or dispatches its own personnel when an alarm is activated.

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75
Q

Proprietary alarm system

A

A type of alarm system that sends an alarm to a monitoring station located at the protected premises or another location of the property owner.

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76
Q

Private fire suppression system

A

A system that consists of equipment and personnel that the insured uses to suppress a fire before the municipal fire service arrives.

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77
Q

Portable fire extinguisher

A

A category of fire suppression equipment that permits employees to control a fire by using hand-held device while waiting for the fire service to arrive, or to extinguish small fires.

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78
Q

Standpipe and hose system

A

A category of fire suppression equipment that consists of water main with fire department hose connections inside a building; used in buildings with expansive floor areas and buildings more than four stories tall.

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79
Q

Automatic sprinkler system

A

Fire sprinkler systems with a series of interconnected valves and pipes with sprinkler heads. Each sprinkler head usually contains a heat-sensing element that responds individually to the heat generated by a fire.

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80
Q

Wet pipe sprinkler systems

A

Automatic fire sprinkler system with pipes that always contain water under pressure, which is released immediately when a sprinkler head opens.

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81
Q

Dry pipe sprinkler systems

A

Automatic fire sprinkler system with pipes that contain compressed air or another inert gas that holds a valve in the water line shut until an open sprinkler head releases the gas and allows water to flow through the previously dry pipe to another sprinkler head.

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82
Q

Deluge sprinkler system

A

A type of sprinkler system in which all the heads remain permanently open; when activated by a detection system, a deluge valve allows water into the system.

83
Q

Preprimed deluge system

A

An automatic fire sprinkler system that has water in the risers and horizontal pipes, with head openings plugged with rubber stoppers; when the deluge valve opens, water pressure pushes out the stoppers.

84
Q

Protection sprinkler system

A

An automatic fire sprinkler system with automatic and closed-type sprinkler heads connected to a piping system that contains air or nitrogen, with an additional fire detection system that serves the same area as the sprinklers.

85
Q

Water spray system (“fog” system)

A

An automatic fire sprinkler system that discharges droplets of water with a predetermined pattern, particle size, velocity, and density; commonly used to protect electrical equipment and tanks containing flammable liquid or gas.

86
Q

Air foam system

A

An automatic fire sprinkler system that discharges foam and high-expansion foam; often used to protect aircraft hangers and petrochemical storage areas.

87
Q

In-rack sprinkler system

A

An automatic fire sprinkler system in which sprinkler heads are installed in a high-rack configuration; sprinkler heads are installed on lines descending from branches above the racks.

88
Q

Early suppression fast response (ESFR) sprinkler system

A

An automatic fire sprinkler system that protects high-rack storage without in-rack sprinklers by discharging large and small drops of water at a much higher rate than standard sprinklers to protect smaller areas; large drops penetrate the fire plume, while small drops dissipate heat.

89
Q

Gas extinguishing system

A

A type of fire suppression that uses gas extinguishing agents, typically halon, carbon dioxide, or environmentally friendly agents, to disrupt the chemical reaction in fire.

90
Q

Sprinkler system supervisory device

A

A sprinkler system monitoring device that can alert the insured or a central service of the valve status; devices can indicate valve position or condition, water flow, air, or gas pressure, and loss of electric or steam power.

91
Q

Fire brigade

A

A private or temporary organization of individuals equipped to fight fires; typically used in businesses that are located far from municipal fire services.

92
Q

Probable maximum loss (PML)

A

The largest loss that an insured is likely to sustain.

93
Q

Fire protection

A

Measure taken to protect lives and property from fire damage; consists of prevention, detection, and suppression

94
Q

Fire prevention

A

Measures taken to reduce the likelihood of fire.

95
Q

Fire detection

A

Measures and equipment used to detect fire and alert the fire service when a fire breaks out.

96
Q

Fire suppression

A

Measures and equipment used to contain and extinguish fire.

97
Q

Pre-fire planning surveys

A

A public fire protection service in which fire service personnel complete walk-through inspections and training runs of commercial property; fire personnel become familiar with locations of major buildings and equipment, fire hydrants, standpipes, and sprinkler system connections.

98
Q

Siamese connection

A

A sprinkler system connection that allows the fire department access to dry standpipes that supply water to hose stations and sprinkler systems; the connection is made through two pipes that extend from the building.

99
Q

Salvage team

A

Specialized fire service personnel who are trained to minimize property damage caused by water used to suppress fire.

100
Q

Arson squad

A

A team of specialists used by municipalities and provided with special equipment to vigorously investigate and detect arson for profit cases, which are then prosecuted; coordinates effort with police departments and district attorneys or other prosecutors.

101
Q

Public fire suppression

A

A section of the Fire suppression rating schedule (FSRS) that establishes a town class rating; it applies to all class-rated properties and schedule-rated properties that require a water flow of 3500 gallons per minute (gpm) or less for fire suppression.

102
Q

Individual Property Fire Suppression

A

A section of the Fire suppression rating schedule (FSRS) that develops a public protection classification; it applies to individual properties that require water flow of more than 3500 gallons per minute (gpm) for fire suppression.

103
Q

Fire service rating

A

A factor used to calculate the public protection classification for a municipality; considers the number, types, and geographic distribution of fire engine companies and equipment, as well as fire personnel training.

104
Q

Water supply rating

A

A factor used to calculate the public protection classifications for a municipality; considers the parts of the city protected by fire hydrants, maximum daily water consumption, ability of the water system to deliver the needed fire flow, and the condition of fire hydrants.

105
Q

Fire alarm rating

A

A factor used to calculate the public protection classification for a municipality; considers the adequacy of the telephone system, devices used to record calls that report fires, number of operators on duty to handle fire calls, fire radio communication facilities, and emergency power equipment.

106
Q

Loss severity

A

The amount of loss, typically measured in dollars, for a loss that has occurred.

107
Q

Credibility

A

The weight (from 0% to 100%) assigned to current rate making data in determining the need for a rate revision.

108
Q

Risk control

A

A conscious act or decision not to act that reduces the frequency and/or severity of losses or makes losses more predictable.

109
Q

Risk management

A

The process of making and implementing decisions that will minimize the adverse effects of accidental losses on an organization.

110
Q

Present value

A

The value today of money that will be received in the future.

111
Q

Discontinuing

A

The process of calculating the present value of a future amount.

112
Q

Spontaneous ignition (spontaneous combustion)

A

An oxidation process in which the temperature of a material is increased to ignition without drawing heat from its surroundings.

113
Q

Flash point

A

The lowest temp at which a combustible liquid releases vapors that can be ignited by a spark or flame.

114
Q

Plenum

A

A suspended ceiling in which the concealed spaces above the ceiling are used to bring air back to the heating or air conditioning system.

115
Q

Wildland/urban interface (WUI)

A

An area where residential and other structures are built along the edges of forests or brushy or grassy areas, exposing the inhabitants and their structures to combustion of wild land fuels.

116
Q

Geographic information system (GIS)

A

An electronic device that uses global positioning systems (GPS), cellular communications, and vehicle telematics to predict driver behaviors and other factors that contribute to property and casualty losses.

117
Q

Straight through processing (STP)

A

Automated processing of the underwriting transaction from initial application through policy processing.

118
Q

Hurricane

A

A severe tropical storm with winds exceeding seventy- four miles per hour

119
Q

Tornado

A

A type of violent windstorm that consists of winds rotating at speeds of up to 300 miles per hour; a partial vacuum develops at the center of the storm (vortex)

120
Q

Building Code Effectiveness Grading Schedule (BCEGS)

A

A rating classification based on the quality of a community’s building codes and the level of their enforcement; ranges from 1 to 10.

121
Q

Catastrohpe model

A

A type of computer program that estimate losses from future potential catastrophic events.

122
Q

Hail

A

Small, rounded ice pellets that often from during thunderstorms.

123
Q

Wind speed

A

The measure of the motion of the air with respect to the surface of the earth covering a unit distance over a unit time.

124
Q

Beaufort scale

A

An internationally recognized classification of wind velocity that assigns names and number to eighteen categories of wind; also estimates the effects that winds will produce in each category.

125
Q

Saffir-Simposon scale

A

A rating measurement used by the National Weather Service that classifies hurricane-force winds into five categories on the basis of maximum sustained wind speed and storm surge of tidal waters.

126
Q

Riot and civil commotion

A

Any disruption of public order.

127
Q

Vandalism

A

Willful and malicious damage to or destruction of property.

128
Q

Explosion

A

Any violent expansion of gases into the atmosphere

129
Q

Combustion explosion

A

A type of violent gas explosion that occurs when a flammable cloud (consisting of dust, vapor, or mist) reaches an ignition source.

130
Q

Deflagration

A

A combustion classification in which an explosion proceeds at velocity slower than the speed of sound.

131
Q

Detonation

A

A combustion classification in which an explosion proceeds at a rate greater than the speed of sound =; a shock wave is produced.

132
Q

Pressure explosion

A

A type of violent gas expansion that occurs when a pressure vessel (such as a water heater or boiler) cannot contain it internal pressure and bursts.

133
Q

Sinkhole

A

A cause of land subsidence that results when a subsurface geological structure gradually dissolves to a point where the cavity collapses and that generally occurs in certain parts of the country where underground rivers and streams have carved channels out of solid limestone bedrock.

134
Q

Mine subsidence

A

A cause of loss involving the sinking of ground surface when underground open spaces, resulting from the extraction of coal or other minerals, are gradually filled in by rock and earth from above.

135
Q

Earthquake focus

A

The point on an earthquake fault line where the movement of the plates begins

136
Q

Epicenter

A

The point of the earth’s surface directly above the earthquake focus.

137
Q

Modified Mercalli Intensity scale

A

A twelve-level set of descriptions of earthquake’s effects at a specified location, near or far from the earthquake’s epicenter

138
Q

Volcanic action

A

A cause of loss involving lava flow, ash, dust, particulate matter, airborne volcanic blast, or airborne shock waves resulting from a volcanic eruption.

139
Q

Volcanic eruption

A

A discharge from a vent in the earth’s crust.

140
Q

Sprinkler leakage

A

Accidental leakage or discharge of water or other substance from an automatic sprinkler system.

141
Q

Water damage

A

A type of loss that occurs when water steam accidentally escapes from pipes that are not part of a sprinkler system or from any appliance that uses water.

142
Q

Business Income insurance

A

Insurance that covers the reduction in an organization’s income when operations are interrupted by damage to property caused by a covered peril.

143
Q

Net income

A

The difference between revenues (such as money received for goods or services) and expenses (such as money paid for merchandise, rent, and insurance).

144
Q

Profit

A

Net income that results when revenues exceed expenses.

145
Q

Net loss

A

Net income that results when expenses exceed revenues.

146
Q

Continuing Expenses

A

Expenses that continue to be incurred during a business interruption.

147
Q

Non continuing expenses

A

Expenses that will not continue during a business interruption.

148
Q

Extra expenses

A

Expenses, in addition to ordinary expenses, that an organization incurs to mitigate the effects of a business interruption.

149
Q

Time element loss (indirect loss)

A

A loss that arises as a result of damage to property, other than the direct loss to the property.

150
Q

Period of restoration

A

The period during which business income loss is covered under the BIC forms; it begins seventy-two hours after the physical loss occurs and ends when the property is (or should have been) restored to use with reasonable speed. (With regards to extra expense coverage, it begins immediately after the physical loss occurs).

151
Q

Actual loss sustained

A

A valuation method in business income policies designed to make the insured whole by demonstrating the actual amount of loss that occurs during the period of restoration.

152
Q

Business income worksheet

A

A worksheet for calculating the amount of insurance necessary to comply with the coinsurance condition of business income insurance forms, for reporting business income values to the insurer, or for providing underwriters with information they need to evaluate an organizations business income loss exposure.

153
Q

Disaster recovery plan

A

A plan for backup procedures, emergency response, and post-disaster recovery to ensure that critical resources are available to facilitate the continuity of operations in an emergency situation.

154
Q

Pre-loss planning phase

A

The disaster recovery plan phase in which the insured prepares for loss before any loss event occurs.

155
Q

Emergency phase

A

The disaster recovery plan phase in which the insured initiates a pre-loss plan

156
Q

Recovery phase

A

A disaster recovery plan phase in which the insured restores a business from loss after a loss event occurs

157
Q

Coinsurance basis

A

The sum of the insured’s estimated net income and operating expenses for the twelve months following policy inception, minus only those expenses listed in the business income worksheet.

158
Q

Ordinary payroll

A

The entire payroll expense (including employee benefits, FICA payments, union dues paid by the employer, and workers compensation premiums) for all employees of the insured except officers, executives, department managers, and employees under contract.

159
Q

Exposure unit

A

A fundamental measure of the loss exposure assumed by an insurer.

160
Q

Coinsurance

A

An insurance to value provision in many property insurance policies providing that if the property is under insured, the amount that an insurer will pay for a covered loss is reduced.

161
Q

Moral hazard

A

A condition that increases the likelihood that a person will intentionally cause or exaggerate a loss.

162
Q

Maximum period of indemnity

A

Option that deletes the coinsurance clause while limiting loss payment to the lessor of (1) the amount of loss sustained during the 120 days following the beginning of the period of restoration or (2) the policy limit.

163
Q

Monthly limit of indemnity

A

Option that deletes the coinsurance clause while limiting the amount recoverable during any month of the business interruption to a stipulated fraction (1/6,1/4, or 1/3) of the insurance amount.

164
Q

Business income agreed value coverage option

A

Option that suspends the coinsurance clause as long as the insured carries an amount of business income insurance that is equal to the value agreed on by the policyholder and the insurer.

165
Q

Business Income (and Extra Expense) Coverage form

A

Form that covers both business income and extra expense losses (even if the extra expenses do not reduce the business income loss).

166
Q

Extra Expense Coverage Form

A

Form that covers extra expenses incurred by the named insured to avoid or minimize the suspension of operations resulting from direct damage caused by a covered cause of loss.

167
Q

Dependent property exposure

A

The possibility of incurring business income loss because of physical loss incurring on the premises of an organization that the insured depends on for materials, products, or sales.

168
Q

Leader location

A

A large business that attracts customers who then visit smaller businesses in the area.

169
Q

Contributing location

A

A key supplier that provides raw materials, supplies, or services needed for another’s business

170
Q

Recipient location

A

A business that buys all or a large part of an insured’s products or services.

171
Q

Payroll limitation or Exclusion Endorsement

A

Endorsement that limits coverage for payroll expenses to a specified number of days or excludes such expenses altogether, allowing the insured to satisfy te coinsurance requirement with a lower amount of insurance.

172
Q

Business income premium adjustment endorsement

A

An endorsement that bases the final policy premium earned by the insurer on the actual exposure as reported by the insured at twelve month intervals.

173
Q

Consequential loss

A

Damage property that did not result from direct action of a covered cause of loss.

174
Q

Ordinance or Law- Increased period of restoration endorsement

A

Endorsement that covers business income loss during the additional time required to comply with building ordinances or laws.

175
Q

Utility service- time element endorsement

A

An endorsement that covers loss of business income or extra expense at the insured premises caused by the interruption of utility services to or from the insured premises.

176
Q

Simple combination policies

A

Includes two or more standard coverage in the more convenient package format. No package discount. Max flexibility for the underwriter.

177
Q

Minimum requirement combination policy

A

Certain coverages are combined and the insured must purchase the min required coverages. Minimizes adverse selection.

178
Q

Indivisible Combination policy

A

provides a broad range of coverages on an all-or-nothing basis for a single indivisible premium. Permit little coverage selection by policyholder, further reducing adverse selection.

179
Q

Nonstandard combination policies

A

Usually manuscript contracts written to the insured’s and underwriters specifications. Max flexibility by eliminating min coverage

180
Q

Secured loan

A

gives the lender the right to take the property pledged to secure the loan if the borrower defaults

181
Q

Selling Price Method

A

For stock that has been sold but not yet delivered, less any discounts or incurred expenses

182
Q

American Appraisal Associates or Marshall & Swift/Boeckh

A

Typical valuation appraisal companies to make property value estimates.

183
Q

Amount subject

A

Almost always the value of all insured property exposed within a single fire division. “Within four walls”

184
Q

Normal Loss Expectancy

A

Loss expected under normal operating conditions with all fire protection services working.

185
Q

Max Foreseeable Loss

A

Estimate of the financial cost of the loss that would occur if all protection measures were to fail and no effective fire department response occurred.

186
Q

Columns

A

Create large open spaces that many occupencies require but demand massive materials that are not easy to conceal. Interior load bearing components

187
Q

Load-bearing partitioned walls

A

Divide the inside space into compartments or rooms and spread the load over a large quantity of light materials

188
Q

Beams

A

Substantial components made of wood, steel, or concrete that are laid horizontally and fastened securely to vertical load bearing components (spread load horizontally)

189
Q

Combustibility of contents

A
C-1 Noncombustible 
C-2 limited combustibility 
C-3 Combustible
C-4 Free Burning 
C-5 Rapid Burning or Flash Burning
190
Q

Susceptibility of Contents

A
S-1 Minimal damage
S-2 Slight damage
S-3 Moderate damage
S-4 Heavy damage
S-5 Extreme loss (total possible loss)
191
Q

Habitational Occupancy

A

Supervised residential environments, buildings that contain units for shelter and sleeping accommodations. Cooking hazard is special hazard of the class. Leading cause of fires

192
Q

Office Occupancy

A

Buildings that are at least partially dedicated to professional or service-type transaction. Including storage of records and accounts. Relatively low hazard, Faulty or malfunctioning wiring and electrical and lightening equipment is main ignition source. Cooking a leading cause of fires, but only small damage to overall property

193
Q

Institutional Occupancy

A

Includes schools, churches, hospitals, and property owned by gov’t. Cooking is leading cause of fire. Malfunctioning electrical equipment and wiring two other common sources.

194
Q

Mercantile Occupancy

A

Buildings which are accessible to the public and used for display and sales of merchandise. Primary ignition source faulty or malfunctioning wiring. Cooking and incendiary fires also contribute significantly to the frequency of fires.

195
Q

Service Industry

A

Businesses that perform an activity or a service for the consumer, rather than create or sell a product. Faulty or inadequate wiring systems and malfunctioning equipment and machinery main ignition source.

196
Q

Manufacturing occupancy

A

Inherent hazards due to the flammable and combustible materials used during process.

197
Q

Portable Fire Extinguisher classes

A

Class A- wood, cloth, paper, rubber, many plastics
Class B- Flammable liquids, gases, greases
Class C- Energized electrical wiring or equipment
Class D- Combustible materials, such as magnesium, titanium, zircronium,
Class K- Fats and oils used in commercial kitchen cooking appliances

198
Q

Preaction system

A

Combines elements of both a wet and dry pipe system. Used when accidental discharge could cause serious damage.

199
Q

Conduction

A

Transfer of heat from one mass to another by physical contact. enables fire to pass through solid objects like walls and break out suddenly on other side. Conduct heat more efficiently than gas.

200
Q

Convection

A

Mass movement of heat within a fluid (liquid or gas) caused by the expansion of heated material. Explains the rapid spread of fire in high-rack storage configurations and in elevator shafts.

201
Q

Hurricane Damage

A

Wind, Wind-driven rain, storm surge, flooding

202
Q

Wind Storm

A

Over 45 mph winds

203
Q

National Flood Insurance Program

A

Zone A - high risk areas flooding is likely
Zone B and X - Moderate flood areas with a flood every 100 to 500 years
Zone C and X - Minimal flood potential, generally above 500 year flood level
Zone V - High risk coastal area, 26 percent chance of flood during 30 year mortgage
Zone D - Undetermined risk areas