Property & Casualty Insurance Exam (National Portion)Property InsuranceEasy
Which of the following perils is typically covered under a Basic Cause of Loss form in a commercial property policy?
- AFalling objects
- BVolcanic eruption
- CSprinkler leakage
- DWeight of ice, snow, or sleet
Show answer & explanationAnswer & explanation
Correct answer: B. Volcanic eruption
The Basic Cause of Loss form typically covers fire, lightning, explosion, windstorm, hail, smoke, aircraft or vehicles, riot or civil commotion, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action (eruption, lava flow, ashfall). Falling objects and weight of ice/snow are usually covered under Broad or Special forms.
Why the other options are wrong
- A. Falling objects are typically covered under Broad or Special forms, not Basic.
- C. Sprinkler leakage, while often associated with water damage, is specifically listed as a covered peril under the Basic form.
- D. Weight of ice, snow, or sleet is generally covered under Broad or Special forms, not Basic.
Basic Cause of Loss Form (Commercial Property)
A named perils form that covers a limited list of perils for commercial property, offering the most restrictive coverage.
- Covers specific named perils only.
- Least expensive and most restrictive form.
- Includes fire, lightning, explosion, windstorm, hail, smoke, aircraft/vehicles, riot/civil commotion, vandalism, sprinkler leakage, sinkhole collapse, volcanic action.
Memory trick: Basic perils are like the 'ABC's of disaster' - the most common and fundamental risks.