Insurance Coverage Quiz on Terrorism and Property

Important Information Regarding Terrorism Coverage

• This notice does not form part of the policy, nor does it grant coverage or change policy terms.
• "We" refers to the insurer, and "you" refers to the policyholder.
• Policyholders have the right to purchase terrorism insurance coverage subject to policy provisions.
• A federal program within the Department of the Treasury shares terrorism loss risk with the insurance industry.
• The definition of a certified act of terrorism has changed, no longer requiring a foreign interest.
• The federal government will pay 85% of insured terrorism losses exceeding the insurer's retention.
• This percentage decreases annually to 80%.
• Terrorism coverage is capped at $100 billion in any calendar year.

Change in Definition of Certified Act of Terrorism

• Originally, an act of terrorism had to cause at least $5 million in losses and involve foreign individuals or entities.
• The 2007 amendment removed the foreign interest requirement.
• Now includes actions by US citizens against US government, if deemed a "certified act of terrorism" by the federal government.

Disclosure of Federal Participation in Payment of Terrorism Losses

• The Treasury Department will share the costs of terrorism losses.
• In 2015, the federal share was 85%, decreasing annually by one percentage point until it reaches 80%.

Limitations on Payment of Terrorism Losses

• If aggregate insured losses exceed $100 billion in a calendar year, the federal government will not pay for losses exceeding this limit.
• Insured losses up to $100 billion will be subject to proration.

Service of Suit Endorsement

• The insurer designates a specific officer as its legal representative for service of process in any action, suit or proceeding.
• The designated person is the General Counsel for the insurer.
• The insurer will abide by the court's decision, or decision on an appeal to a higher court, in the event of a suit.

Auto Dealers' Amendatory Endorsement

• This endorsement modifies insurance for auto dealers.
• Includes coverage for various losses at the described premises.

Loss Prevention Expense

• Additional coverage for expenses for protecting property from loss or damage due to a Covered Cause of Loss.
• The most we will pay under this coverage is $5,000 per occurrence.

Mobile Communication Property

• Coverage for mobile communication property located over 100 feet from the described premises.
• The most we will pay under this coverage is $10,000 per occurrence.

Preparation of Loss Fees

• Covers reasonable and necessary expenses incurred by you to determine the extent of covered loss of damage to covered property, due to a Covered Cause of Loss.
• The maximum amount payable for expenses is $25,000.

Reward Payment

• Coverage for reimbursement of rewards paid up to $25,000 for information leading to the arrest and conviction of a person.
• Does not cover claims relating to the return of the stolen property.

Coverage Extensions

• Covers property not located at the described premises.
• Includes coverage for additional, specifically listed items, and accounts receivable.

Outdoor Property

• Covers outdoor property located within 100 feet of the insured property
• Includes outdoor spas, fences, retaining walls, etc.
• Damage from certain causes of loss are covered.

Accounts Receivable

• Covers outstanding amounts owed to you by customers.
• Covers interest charges on any related loans that are outstanding.
• Covers collection expenses if required by loss or damage.
• Other reasonable expenses are covered as long as they result from direct physical damage.

Appurtenant Buildings

• Covers buildings that are appurtenant to a primary insured building.
• Includes buildings separated by a space or connected by utility lines.

Electronic Data Processing Equipment and Media

• Covers "computers", "electronic data" and media, including property of others.
• Covers damage or loss caused by a covered cause of loss.
• Costs to repair or replace damaged/lost property, or restore data to media, are covered.
• Maximum coverage is subject to the applicable limit of insurance.

Employee Tools

• Covers losses and damage to employee tools used in a business.
• Coverage limit is $500,000 per occurrence, unless a higher limit is shown in the schedule.

Fine Arts

• Covers direct physical damage to fine art items.
• Value is based on fair market value of the specific items at the time of the damage or loss, with an upper limit of the stated limit of insurance
• Applies to art in your care and custody.

Tents

• Covers any tents affixed to the property.
• Maximum coverage per occurrence is $15,000.

Government Confiscation

• Covers direct physical damage to Covered property caused by government confiscation.
• Maximum coverage is $100,000.

Green Standards

• Pays for professional services if required by regulation.
• Repairs or replacements done to comply with regulations are covered.

Leasehold Interest

• Pays for loss of "net leasehold interest".
• Does not cover losses more than 60 days prior to the loss or damage.

Loss Prevention Expense

• Covers reasonable and necessary expenses incurred to protect covered property from covered loss.
• The most we will pay is $5,000 per occurrence.

Flood

• Specific flood coverage is excluded.
• See separate flood insurance policy for this coverage.

Mobile Communication Property

• This covers losses to property more than 100 feet from described premises.
• The maximum is $10,000 per occurrence.

Preparation of Loss Fees

• Covers reasonable and necessary expenses incurred to determine the extent of a loss/damage.
• Maximum is $25,000 per occurrence.

Reward Payment

• This covers any reward associated with a covered cause of loss, up to $25,000.

Property Off-Premises

• Applies for losses to covered property away from the described premises.
• Covers property in storage at a rented location.
• Does not cover items held for sale or display, property from an exhibition, fair, or trade show.
• Does not cover property in the care, custody or control of your salespersons.

Outdoor Property

• Applies for losses to covered items outside building(s) but within 100'.
• Covers outdoor property from multiple causes of loss.
• Maximum coverage is $25,000 per occurrence.

Water Damage

• Covers water backup, overflow of plumbing, heating and air conditioning systems, and surface water accumulation or rapid accumulation of water.
• Maximum coverage per occurrence is $10,000.

Ordinance Or Law Coverage

• Covers damage to property from compliance with ordinances or laws regarding property
• This coverage only covers the physical damage, not the additional costs.

Pollutant Clean-Up and Removal

• Pays for the clean up cost of pollutants from covered causes of loss.
• The most we will pay is $100,000 for each described premises.

Increased Cost of Construction

• Covers additional costs for repairs attributable to applicable ordinances or laws.
• Does not cover any costs to make improvements unrelated to damage.

Additional Coverage- Collapse

• Applies when building collapses, or parts of it collapse.
• Does not cover property collapsing if not from a Covered Cause of Loss.

Additional Coverage- False Pretense - Stock

• Covers for loss(es) related to dishonest acts by individuals or entities, or false pretenses.
• Maximum coverage is $250,000.

Property in Transit

• Covers losses to covered property while in transit.
• Excludes coverage to property that is leased by another party.
• Applies only to tangible property.
• Maximum per occurrence is $10,000.

Cyber Attack

• Covers property loss from cyberattacks.

Product Recall

• Covers costs, damage or loss associated with recalling products, including contamination or loss of usability.

Business Income

• Pays for loss of income due to a covered cause of loss.

Extra Expense

• Covers extra costs you incur to continue or resume business.

Alterations and New Buildings

• Covers loss of income from covered loss related to new buildings, additions, or structural modifications to insured property.

Extended Business Income

• Covers further losses of income after the restoration period.