Question

Etchley Clothing owns a red brick building that it occupies as a retail clothing store. Etchley is purchasing a commercial property policy from Radley Insurance Company with a Causes of Loss - Broad Form for this building. Etchley has selected a policy with a limit of $500,000 on the building on a replacement cost basis with a 90 percent coinsurance clause and a $1,000 deductible. Because Etchley’s building is located fifteen miles from the nearest fire department and twenty miles from a police station, it has installed a sprinkler system and a burglar alarm.

In rating Etchley’s commercial property policy, what factors will Radley consider?

How will the factors you identified affect the premium for this policy?

Answer 1

in о a it Answers Summarized the information provided the question Etchley Clothing ouons bed brick building that it Poimarily, the rating of a commercial property depends up on the analysis & evaluation of four factors namely Constouction, occupancy, protection and exposure. Often termed as COPE, helps in determining the premium for the policy. (1) construction. It includes the type of construction and the materials used in constructing the property. Red brick falls under category 2 as per insurance service office nooms and therefore it is classified as combustile. (17) Occupany: This means the purpose for which the property is likely to be used. A fetail clothing store will be more prone to fire therefore it will able an important factor affecting the premium for the policy. (98) Protection: This includes the protection measures to avoid damages from five. There may be public protection or be

are а a poivate protection: Sprinkler system @) part of private poolection and installation of such a system will allow the insurance holder to lower the premium. (iv) Exposuder- It means Gisk -lo property due to its location. Hazards may be natural hazards of man made hazards: Natural hazards include snorefall lighting etc., man-made hazards includes pollution., civil eingest etcos Above your mentioned factors considered by every underwriter to a commercial insudcince policy. These also plays a significant role in determining the premium of the policy. Please please kindly Up - vote. Thank you coe