Commercial General Insurance
Core concepts
Commercial lines test property, liability (public, products, employers'), business interruption, and motor fleet. Know sum insured, declaration-linked policies, coinsurance/average, and claims-made versus occurrence liability cover. Understand employers' liability (usually compulsory), public liability, and product liability. Grasp business interruption as covering lost profit plus increased cost of working following an insured peril.
Traps
Liability policies are often claims-made (cover triggered when the claim is made), unlike property (occurrence). Questions confuse public liability (third parties generally) with product liability (goods supplied). Watch for average in commercial property and the indemnity period in BI cover.
Rule of thumb
Business interruption sum insured should reflect gross profit over the maximum indemnity period, not just turnover. Underinsurance here is a classic exam trap.
Worked example
A fire halts production for 3 months. Insured gross profit £600,000/year; indemnity period 12 months; sum insured set at £300,000 (underinsured by half). A £90,000 loss is reduced by average: (300,000 ÷ 600,000) × 90,000 = £45,000.