Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law) flashcards

Agents must act with honesty, integrity, and in the best interest of their clients, providing full and accurate information about insurance products.

• Requires full disclosure of material facts, including exclusions.
• Prohibits misrepresentation and deceptive practices.
• Upholds the agent's fiduciary responsibility to the insured.

Memory trick: Ethics: Every agent's true compass.

Controlled business refers to insurance written on an agent's own interests or those of close family/employer. Florida law limits the amount of commission an agent can earn from such business.

• Insurance on agent's own life, property, or business.
• Also includes spouse, children, employer, or employee.
• Commissions from controlled business cannot exceed 50% of total commissions.
• Measured over a 12-month period.

Memory trick: Half your commissions, half of you, are controlled business.

Medicare Supplement (Medigap) policies are private health insurance plans designed to cover out-of-pocket costs (gaps) left by Original Medicare (Part A and Part B).

• Supplements Original Medicare, does not replace it.
• Covers deductibles, copayments, and coinsurance.
• Standardized by federal law (Plans A-N).
• Does NOT include prescription drug coverage (that's Part D).

Memory trick: Medigap fills the holes, but won't replace the whole.

A provision in an insurance policy that grants the insurer the right to pursue a third party responsible for an insured's loss, to recover the amount of the claim paid to the insured.

• Transfers the insured's right to sue to the insurer.
• Prevents the insured from collecting twice (from insurer and third party).
• Common in health, auto, and property insurance.
• Helps reduce insurance costs by recovering payouts.

Memory trick: Subrogation: The insurer stands in your shoes to get their money back from the one who broke the rules.

An individual health insurance policy type where the insurer guarantees renewal of the policy, but reserves the right to increase premiums on a class basis.

• Insurer cannot cancel or refuse to renew.
• Exceptions for nonpayment or misrepresentation.
• Premiums can be increased for an entire class of policyholders.
• Offers a strong level of security for the insured.

Memory trick: Renewing 'Guaranteed' means they can't say no, but the price might grow.

The Florida Financial Responsibility Law requires minimum auto liability limits of 10/20/10: $10,000 Bodily Injury per person, $20,000 Bodily Injury per accident, and $10,000 Property Damage per accident.

• Mandatory liability coverage.
• 10/20/10 split limits.
• Can be met by insurance, bond, or cash deposit.

Memory trick: Florida's 10/20/10 Rule for Auto

A Florida statute governing data security and breach notification requirements for entities handling personal information of Florida residents.

• Applies to personal information of Florida residents
• Mandates breach notification within 30 days
• Defines 'personal information' broadly

Memory trick: FIPA's Fast Fifteen for Florida Folks.

A Commercial Package Policy (CPP) allows businesses to combine multiple lines of insurance coverage (e.g., property, general liability, auto) into a single, customizable policy, offering flexibility for businesses with complex or diverse needs.

• Combines two or more lines of commercial insurance.
• Offers flexibility for tailoring coverage and endorsements.
• Suitable for larger businesses with varied exposures.

Memory trick: A 'Package' policy lets you pick and choose your 'Commercial' pieces, like a custom insurance puzzle for your 'Business'!

A component of cyber liability insurance that covers expenses associated with a data breach involving personal identifiable information (PII) or protected health information (PHI), including notification costs, credit monitoring, and forensic investigations.

• Covers costs related to data breaches.
• Includes notification, credit monitoring, and forensic expenses.
• Applies to PII and PHI.

Memory trick: Cyber Liability: Think 'PREVENT, RESPOND, RECOVER' from digital threats.

An Inland Marine insurance policy that covers the legal liability of a motor carrier for loss or damage to cargo belonging to others while it is being transported by the carrier's trucks.

• Covers carrier's legal liability.
• Applies to goods of others.
• Specific to motor truck transport.

Memory trick: Carrier's Burden: Responsible for Others' Goods

A type of Inland Marine insurance that covers mobile equipment and tools used by contractors, providing protection against physical damage or loss while on job sites, in transit, or in storage.

• Covers equipment that is constantly moving.
• Provides 'all-risk' coverage for covered perils.
• Essential for construction companies with valuable mobile assets.

Memory trick: When your 'Equipment' is a 'Floater', it's always on the move, so you need a 'Floater' policy to follow it!

An Inland Marine Floater for businesses provides broad, 'all-risk' coverage for specialized movable property, tools, equipment, or property of others in the insured's care, often covering items both on and off the main premises.

• Covers movable and specialized business property.
• Often provides 'all-risk' coverage.
• Extends coverage beyond fixed premises, filling BOP gaps.

Memory trick: When your 'Specialized' gear 'Floats' around, a 'Floater' policy follows it, covering those 'Gaps' a BOP can't reach!

A standard exclusion in Ocean Marine policies that removes coverage for losses caused by war, strikes, riots, civil commotion, and similar perils. Separate war risk insurance is needed to cover these excluded events.

• Standard Ocean Marine exclusion.
• Excludes war, strikes, riots, civil commotion.
• Requires separate war risk insurance for coverage.

Memory trick: Sea Perils: Some Fights Are Excluded

A component of Cyber Liability insurance that covers legal defense costs, settlements, regulatory fines, and expenses for notifying affected individuals in the event of a data breach or privacy violation.

• Covers data breach response costs.
• Includes legal, regulatory, notification expenses.
• Crucial for businesses handling sensitive data.

Memory trick: Cyber Shield: Protects Data, Notifies, Recovers

A specialized Inland Marine policy that covers the legal liability of a freight forwarder for loss or damage to cargo in their care, custody, or control, as well as liability arising from errors or omissions in their professional services, such as documentation, customs clearance, or transportation arrangements.

• Covers cargo damage liability for freight forwarders.
• Includes Errors & Omissions for professional services.
• Addresses unique risks of arranging complex logistics.

Memory trick: Forwarder: 'CARGO' and 'CLERICAL' care.

Covers physical damage to the insured vessel itself, including its machinery and equipment, against perils of the sea.

• Protects the structure and machinery of the ship.
• Covers perils like collision, stranding, fire, and heavy weather.
• May include coverage for salvage and towing expenses.

Memory trick: Hull: The Heart of the Ship's Protection.

An Inland Marine policy that protects the owner of goods (the shipper) against loss or damage to their cargo during transit, offering broader coverage than what might be provided by a carrier's limited liability.

• Covers owner's interest in goods.
• Broader than carrier's liability.
• Suitable for high-value shipments.

Memory trick: Cargo's Journey: Who Owns the Risk?

A BOP is a package policy designed for small to medium-sized businesses, combining property and liability coverage into one convenient policy.

• Offers simplified property and liability coverage.
• Generally excludes auto, workers' compensation, and professional liability.
• Includes business income and extra expense coverage.

Memory trick: BOP: 'Boutique Operations Protection' for 'Property On Premises' and 'People On Premises'.

Cyber Liability insurance is essential for businesses to cover financial losses arising from data breaches, cyberattacks, and other technology-related risks not addressed by standard commercial policies.

• Fills gaps left by traditional property and liability policies.
• Covers first-party costs (e.g., forensics, notification) and third-party liabilities (e.g., lawsuits).
• Crucial for businesses handling sensitive data or relying on technology.

Memory trick: CPP covers 'physical', Cyber covers 'digital'.

Specific clauses or endorsements in Ocean Marine insurance that extend cargo coverage to include perils of war, strikes, riots, and civil commotions, which are typically excluded from standard policies.

• Addresses non-standard, political, and social unrest risks.
• Must be specifically added to a basic cargo policy.
• Crucial for shipments to volatile regions.

Memory trick: SR&CC: Safeguard Risky Cargo from Chaos.

Cargo Legal Liability in aviation insurance covers the air carrier's legal liability as a bailee for loss or damage to cargo entrusted to them for transportation.

• Covers the carrier's responsibility for goods being shipped.
• Applies to damage, destruction, or disappearance of cargo.
• Distinct from hull or passenger liability coverage.

Memory trick: When your 'Cargo' flies, and there's a 'Legal' issue with it, you need 'Cargo Legal Liability'!

This component of Cyber Liability insurance covers the insured's legal liability arising from network security failures (e.g., unauthorized access, system glitches, denial of service) and the failure to protect sensitive data, including costs for defense and damages.

• Covers liability for security breaches and privacy violations.
• Applies to both external attacks and internal system failures.
• Can include costs for defense, settlements, and judgments.

Memory trick: When your 'Network' security is the 'Liability', you need the right coverage to 'Protect' your data, even from your own glitches!

Business Income coverage replaces lost profits and continuing expenses during a business interruption, while Extra Expense covers costs incurred to minimize the interruption.

• Both are often combined in one coverage form.
• Business Income aims to restore financial position.
• Extra Expense aims to reduce downtime and its impact.

Memory trick: BI&EE: Income for Loss, Expense for Less Loss.

Covers physical damage to the insured aircraft itself, including damage while in flight, on the ground, or during taxiing.

• Similar to auto physical damage coverage for an aircraft.
• Can be 'all risks' or specified perils.
• Typically includes options for in-motion vs. not-in-motion damage.

Memory trick: Hull: Protect the 'Body' of the Bird.

A type of liability insurance that protects fiduciaries of employee benefit plans (e.g., 401(k)s, health plans) against claims arising from alleged errors, omissions, or breaches of their fiduciary duties in the administration of these plans.

• Protects fiduciaries of employee benefit plans.
• Covers errors, omissions, or breaches of duty.
• Distinct from CGL, Professional Liability, and EPL.

Memory trick: Liabilities: 'GENERAL' for premises, 'PRO' for advice, 'FIDUCIARY' for funds.

A Spoilage Endorsement is an addition to a property or equipment breakdown policy that covers loss due to spoilage of perishable goods caused by mechanical breakdown, contamination, or, if specified, off-premises power failure.

• Covers perishable goods.
• Applies to spoilage from breakdown, contamination, or power failure.
• Crucial for businesses with refrigerated inventory.

Memory trick: When your fridge breaks and your food 'Spoils', an 'Endorsement' saves your inventory from turning into a loss!

Equipment Breakdown coverage (formerly Boiler and Machinery) insures against losses due to sudden and accidental breakdown of specified equipment, including mechanical, electrical, and pressure systems.

• Covers internal breakdown of machinery.
• Often includes business interruption and spoilage coverage.
• Excludes wear and tear, rust, and calibration errors.

Memory trick: When 'Equipment Breaks', it's 'Internal Damage' from 'Mechanical' or 'Electrical' stress.

A type of Aviation Hull coverage that protects the aircraft from physical damage while it is not airborne or operating under its own power, such as when parked in a hangar, tied down, or being towed.

• Covers aircraft when not flying.
• Includes hangar, tiedown, towing damage.
• Distinct from 'In-Motion' coverage.

Memory trick: Plane's Body: Fly or Parked, It's Covered

This clause adds back coverage for perils typically excluded from standard Ocean Marine policies, such as war, piracy, seizure, strikes, riots, and civil commotions, which can cause significant loss to vessels or cargo.

• Covers perils of war, including piracy and seizure.
• Often purchased as an add-on or separate policy.
• Addresses political and social unrest risks at sea.

Memory trick: When the seas get rough with 'War' and 'Pirates', standard policies won't save your 'Hull' or 'Cargo' unless you've got that special clause!

Commercial Package Policies can be extended via endorsements to cover business personal property, such as servers, located at third-party premises like data centers.

• Standard CPP property coverage is typically for on-premises.
• Endorsements are necessary for off-premises property coverage.
• Crucial for businesses using cloud services or external storage.

Memory trick: CPP Endorsement: Extending Your Walls.

An Ocean Marine insurance policy that provides coverage for direct physical damage to the insured vessel itself, including its machinery and equipment, against perils of the sea.

• Covers the vessel (hull, machinery).
• Protects against perils of the sea.
• Essential for vessel owners.

Memory trick: Sea's Shield: Hull, Cargo, P&I

Cyber Liability insurance protects businesses from financial losses and expenses resulting from data breaches, network security failures, and other cyber incidents, covering costs like investigation, notification, legal fees, and regulatory penalties.

• Covers first-party costs (e.g., forensic investigation, notification).
• Covers third-party costs (e.g., legal defense, regulatory fines).
• Essential for businesses handling sensitive data or relying on technology.

Memory trick: When your 'Cyber' world gets hacked, 'Liability' steps in to pay for the fallout, from 'Fines' to 'Reputation' repair!

An Open Cargo Policy is a type of marine insurance that provides continuous, blanket coverage for all of an insured's shipments, regardless of the mode of transportation (ocean, air, land) or carrier, until the goods reach their final destination.

• Provides continuous coverage for all shipments.
• Covers various modes of transportation (multi-modal).
• Offers broad 'all-risk' protection for goods in transit worldwide.

Memory trick: For 'Open' seas and skies, an 'Open Cargo' policy covers all your goods, no matter how they 'Transit'!

An endorsement to an Ocean Marine policy that provides coverage for losses or damages to cargo or vessels arising from acts of war, civil war, rebellion, insurrection, hostile acts, and governmental confiscation. These perils are typically excluded by default in standard policies.

• Covers war, hostile acts, and government confiscation.
• Added by endorsement, as it's excluded from standard policies.
• Distinct from SR&CC and FC&S clauses.

Memory trick: Ocean Marine: 'WAR' on the waves, not just 'WEATHER' woes.

A specialized property insurance policy that covers perils typically excluded from standard commercial property forms, such as flood, earthquake, and sometimes war.

• Fills coverage gaps in standard property policies.
• Often written on an 'all-risk' basis for specific excluded perils.
• Provides broad coverage where standard policies are restrictive.

Memory trick: DIC: The 'Gap Filler' for Property Perils.

Ocean Marine insurance covers perils associated with transportation by sea, including damage to the vessel (hull), cargo, and potential loss of freight revenue.

• Covers perils of the sea.
• Includes Hull, Cargo, Freight, and Protection & Indemnity (P&I) coverages.
• Often includes General Average provisions.

Memory trick: If it's 'Ocean' and 'Marine', it's 'Across the Sea' for 'Cargo' and 'Ship'.

An Inland Marine insurance policy designed to provide broad coverage for mobile machinery, tools, and equipment used by contractors and other businesses, protecting against physical loss or damage while on a job site, in transit, or stored.

• Covers mobile business equipment and tools.
• Provides coverage regardless of location.
• Suitable for construction, landscaping, welding, etc.

Memory trick: Inland Floaters: 'MOVING' assets need 'MOBILE' protection.

The Business Liability Coverage section of a Businessowners Policy (BOP) provides protection against claims for bodily injury and property damage to third parties resulting from the business's operations, products, or premises.

• Covers third-party bodily injury and property damage.
• Includes premises liability (e.g., slip and fall).
• Covers legal defense costs.

Memory trick: When a customer falls, the 'Business Liability' part of your BOP catches the 'Legal' bill!

A component of Aviation insurance that covers the legal liability of an airline or air cargo carrier for loss or damage to cargo belonging to others while in the carrier's care, custody, or control during air transit.

• Covers carrier's legal liability for cargo.
• Applies to loss or damage of goods in transit.
• Distinct from hull or passenger liability.

Memory trick: Aviation Liability: Think 'PEOPLE, PLANES, PACKAGES'.

A principle in maritime law where all parties in a sea venture (ship and cargo owners) proportionally share losses resulting from a voluntary sacrifice made to save the whole from an impending common peril.

• Requires a common peril and a voluntary sacrifice.
• Loss is shared by all parties at risk.
• Applies to ship and all cargo, regardless of whose cargo was sacrificed.

Memory trick: General Average: All Aboard, All Share.

A type of Ocean Marine Cargo insurance that provides continuous, automatic coverage for all shipments made by an insured over a specified period, typically one year. It eliminates the need to arrange individual coverage for each shipment.

• Provides continuous coverage for all shipments.
• Ideal for frequent shippers.
• Covers various modes of transport (ocean, air, land).

Memory trick: Ocean Cargo: 'OPEN' for all, 'SPECIFIC' for one.

A standard Businessowners Policy (BOP) excludes coverage for claims arising from errors, omissions, or negligence in the rendering of professional services. This type of coverage requires a separate Professional Liability (Errors & Omissions) policy.

• BOP excludes professional services.
• Applies to architects, doctors, lawyers, consultants.
• Requires separate Professional Liability (E&O) policy.

Memory trick: BOP: 'NOT' for your professional 'MISTAKES'.

Inland Marine insurance covers property that is movable or is in transit, as well as unique property and instrumentalities of transportation and communication, such as bridges and tunnels.

• Covers goods in transit by land or air.
• Can cover specialized equipment or property not at a fixed location.
• Often provides 'all-risk' coverage for covered property.

Memory trick: Movable goods need protection, 'Inland' for land, 'Marine' for water, but both mean things are on the move!

Coverage in a Homeowners policy that protects the insured's personal belongings, both on and off the premises, against covered perils.

• Typically 50-70% of Coverage A (Dwelling)
• Named perils coverage (HO-3 for contents)
• Subject to special limits for certain types of property or perils

Memory trick: Coverage C: Your stuff, named perils, and some tricky limits.

A clause in property insurance requiring the policyholder to maintain a certain percentage of coverage relative to the property's value, or face a penalty in the event of a partial loss.

• Encourages adequate coverage amounts
• Calculated: (Amount Carried / Amount Required) x Loss
• Applies to partial losses when coverage is insufficient

Memory trick: Coinsurance: Carried vs. Required, then multiply by the Loss.

A separate, often percentage-based, deductible that applies to damage caused by a hurricane, typically in coastal states like Florida.

• Percentage of dwelling coverage limit
• Applies specifically to hurricane damage
• Separate from 'all-other-perils' deductible

Memory trick: Hurricane deductible is a percentage, all others are fixed.

Specific monetary limits within a Homeowners policy that cap the amount paid for certain categories of personal property, especially for losses due to theft.

• Applies to specific types of property (e.g., jewelry, firearms, cash)
• Often lower than the overall personal property limit
• Can be increased with endorsements (e.g., scheduled personal property)

Memory trick: HO-3 limits: Small amounts for big valuables, especially if stolen.

An endorsement or separate policy that provides 'all-risk' coverage for specific, high-value personal property, often at an appraised value, overriding standard homeowners policy sublimits and exclusions.

• Provides broader coverage (open perils) than standard HO-3.
• Covers items at their appraised value, avoiding sublimits.
• Commonly used for jewelry, furs, art, coin/stamp collections, and musical instruments.

Memory trick: Special items need a 'schedule' to keep them truly valued and secure.

Coverage for personal belongings when they are temporarily located away from the insured dwelling under a Homeowners 3 policy.

• Limited to 10% of Coverage C or $1,000, whichever is greater.
• Applies worldwide.
• Covers property at other residences, storage units, etc.

Memory trick: Ten percent's the rule, when your stuff's not at home's school.

An endorsement added to a homeowners policy to provide broader coverage and higher limits for specific valuable items, usually on an 'all-risk' basis.

• Covers specific high-value items
• Often 'all-risk' coverage (open perils)
• Overrides standard policy sub-limits for those items

Memory trick: Endorsements add or modify, making the policy fit like a custom glove.

The DP-3 Special Form is a dwelling policy that provides open perils coverage for the dwelling and other structures, and named perils coverage for personal property.

• Broadest coverage for dwelling/other structures (open perils)
• Named perils coverage for personal property
• Suitable for owner-occupied dwellings, including duplexes

Memory trick: Dwelling Policies: Basic, Broad, Special, each level adds more protection.

Fixtures, alterations, installations, or additions made by a tenant to a leased building that become part of the building and are covered as Business Personal Property under a Commercial Property Policy.

• Covered under Business Personal Property (Coverage B) of the BPP form.
• Must be made or acquired by the tenant.
• Cannot be legally removed by the tenant at the end of the lease.

Memory trick: Tenant's touch, business property much, not the building, but their claim's clutch.

A standard exclusion in property insurance policies that removes coverage for increased costs of repair or reconstruction due to the enforcement of building codes or ordinances.

• Excludes costs for code upgrades during rebuild
• Only pays for 'like kind and quality' of original structure
• Can be added back via an Ordinance or Law endorsement

Memory trick: Exclusions limit what's covered; Ordinance or Law means no code upgrade costs.

Insurance that covers physical damage to a building and materials during its construction.

• Covers the structure, materials, and equipment on-site.
• Coverage typically ends when construction is complete or building is occupied.
• Can be written for the owner or the contractor.

Memory trick: For new builds, Builders Risk yields the shield.

Coverage in a Dwelling Policy that reimburses the insured for lost rental income when a covered loss makes the rental property uninhabitable.

• Covers lost rent due to covered perils
• Reimburses for the period of untenantability
• Subject to policy limits

Memory trick: A is Dwelling, B is Other, C is Personal, D is Rent.

A commercial property form that covers the buildings, common elements, and sometimes built-in fixtures within individual units of a condominium.

• Covers common property (roofs, walls, lobbies)
• May cover 'fixtures, improvements, and alterations' within units
• Distinguished from individual unit owner (HO-6) policies

Memory trick: Association covers the 'shell and shared,' owner covers 'inside and personal.'

Covers damage to another person's property caused by the insured's vehicle in an accident for which the insured is legally responsible.

• Covers third-party property damage.
• Does not cover damage to the insured's own vehicle.
• Is a mandatory coverage in many states.

Memory trick: PAP covers your car and what it harms.

A Contract Bond guarantees the fulfillment of obligations under a contract, commonly used in construction to assure project completion and payment to subcontractors.

• Includes Performance Bonds (guarantee work completion).
• Includes Payment Bonds (guarantee payment to subs/suppliers).
• Required for many public works projects.

Memory trick: Surety bonds are 'C.J.F.L.' - 'Contract, Judicial, Fidelity, License'.

Insurance that protects professionals and companies from claims of negligence, errors, or omissions in the performance of their professional services.

• Covers financial losses due to professional mistakes.
• Includes defense costs, even if the claim is baseless.
• Different from General Liability, which covers bodily injury/property damage.

Memory trick: E&O defends your professional 'oops'.

An Umbrella policy provides excess liability coverage. A Self-Insured Retention (SIR) is a deductible-like amount the insured pays only when the Umbrella acts as primary coverage for a loss *not* covered by any underlying policy.

• Provides broad coverage over primary policies.
• Acts as primary for some uncovered losses (then SIR applies).
• SIR does NOT apply when underlying policy limits are exhausted by a covered claim.

Memory trick: Umbrella's 'SIR' is for 'S.I.N.' - 'Self-Insured, Not' covered by underlying.