Commercial Lines Coverages
Commercial property and time element
Commercial property forms (CP series) are built from a coverage part plus a causes of loss form: basic (named perils), broad (named perils, wider), or special (open peril). Commercial policies commonly impose coinsurance - the same (carried ÷ required) × loss formula, with required usually 80% or 90% of value. Alternatives are agreed value (no coinsurance penalty) and blanket coverage across locations. Watch reporting forms, which apply a premium adjustment rather than a penalty.
Business income and extra expense replace lost net income plus continuing expenses during the period of restoration, beginning 72 hours after the direct damage for most forms. Extra expense pays costs to continue operations and does not reduce the business income limit. Civil authority, dependent property, and equipment breakdown are common extensions.
Commercial general liability (occurrence form). Coverage A bodily injury/property damage, Coverage B personal and advertising injury, Coverage C medical payments. Key limits: general aggregate, products-completed operations aggregate, each occurrence, damage to premises rented to you, and medical expense. The insured contract, your work, your product, and impaired property exclusions generate most exam questions; additional insured endorsements are narrower than the named insured's protection.
Commercial auto relies on covered-auto symbols - 1 any auto, 7 specifically described autos, 8 hired autos, 9 nonowned autos - and the symbol controls the answer. Workers compensation has Part One (statutory benefits, no dollar limit) and Part Two (employers liability, with limits). Also know inland marine, crime, professional liability/E&O, and umbrella/excess, which sits over underlying limits and drops down for gaps.
Worked example: a business earning $100,000 net income monthly with $70,000 in continuing expenses needs $170,000 per month of restoration - a 12-month limit near $2,000,000, not just the building value.