Coverages and Exclusions: Where the Exam Lives
Homeowners and dwelling
An HO-3 covers the dwelling on an open-peril basis and personal property on a named-peril basis - a distinction tested constantly. Coverage A is the dwelling, B other structures, C personal property, D loss of use, E personal liability, F medical payments to others. HO-2 is named peril throughout; HO-5 is open peril on both; HO-8 is for older homes with functional replacement cost. Standard exclusions include earth movement, flood, neglect, intentional loss, ordinance or law, freezing while vacant, and collapse of covered property. Liability exclusions include business pursuits, intentional acts, and use of owned autos and certain watercraft.
Commercial property and liability
Commercial property forms use basic, broad, or special causes of loss. The CGL excludes expected or intended injury, contractual liability (outside the insured contract exception), liquor liability, workers comp and ERISA obligations, recall of products, aircraft/auto/watercraft, pollution, damage to the insured's own product or work, and professional services. The BOP bundles property and liability for eligible small businesses - retail, service, office, and apartment risks - but not for auto dealers, bars, or habitational risks over a stated height.
Auto and inland marine
Auto exclusions: intentional acts, racing, using a vehicle as a public livery, and vehicles with fewer than four wheels. Inland marine covers property in transit and floaters; crime forms cover employee dishonesty.
Worked example: a homeowner runs a home baking business; a customer becomes ill and sues. The HO liability section excludes business pursuits, so the claim is denied - the correct answer is a separate commercial policy.
Trap: “open peril” on the dwelling does not make Coverage C open peril.