List 4 factors to be assessed in any physical risk?
Construction
Occupancy
Protection
Exposure
Define construction
It usually includes a description of the types of material used in the walls and the roof of the applicants building. It may include the size of the building, it’s age, the number of stories, and the type of heating system and fuel
Define occupancy
It refers to the use of the property by its occupants. It includes the number of occupants, if there are more than one, along with a description of the operations of each, the space each occupies, that hazards associated with each occupancy, and any measures taken to reduce those hazards
Define protection
It includes both public and private protection. Public fire protection is described in terms of the Town grade assigned to each municipality by the fire under writers survey. Private protection includes sprinklers or other extinguishing systems, fire brigades, and fire alarm systems
Define exposure
Exposure refers to the chance that the applicant will suffer a loss as a result of proximity to one or more other risks or potential causes of loss to that african. Other risks may be in seperate buildings near the one the applicant occupies, or they may be fellow occupants of the building the applicant occupies.
Define hazard
1) a risk or probability that the event insured against might occur
2) a condition that engenders or increases the chance of a loss
Define common hazard
A hazard that is generally found in most occupancies. Heating, lighting, and housekeeping are examples of hazards common to most occupancies
Define special hazards
Forcing hazards - risks common to the certain types of businesses that are not covered in an ordinary policy. For example, woodworking plants and paint shops
List four reasons problems facing a commercial business are often heightened
- Commercial businesses are often larger than dwellings
- They often have more than one occupant
- The occupants activities are usually varied and more dangerous than those of a dwelling
- The exposure commercial businesses face from surrounding buildings tends to be less predictable and more severe than is true for dwellings
List 6 things that should be reviewed about the construction for a commercial business
- Building age or location - commercial buildings can be affected by age and that raises the same concerns for the underwriter about such matters as a condition of the wiring, the structural members, and the roof. Commercial buildings may not be located in retail area such as shopping malls but unless frequented areas with only other commercial buildings nearby with little traffic outside of normal working hours. Such, they may be more susceptible to break-ins and vandalism.
- Municipal by laws the building may not meet current zoning requirements but instead have been grandfathered granted an exemption as an already existing structure from the more strident requirements that would apply to new structures as they are built
- Construction- open spaces are common in commercial buildings and may heighten the potential for a fire to spread, among with the severity of the likelihood of loss
- Construction material-the differences in construction among commercial risks have further reaching effects on the likelihood and amounts of loss.
- Heat source-heating and electricity are often generated by boilers and related machinery.
- Power loss contingency- a commercial manufacturing operation will need constant power in order to run the business.
Occupancy - commercial List eight areas and Underwriters should look into to better understand the operation of a business
- Real business- a true retailer sells things to customers but does not manufacture them on the same premises where they are sold
- Hours of operation- the more hours a business is open to the public or an operation, the greater the risk that something may happen to cause a loss.
- Storage arrangements - all businesses require some kind of storage, even for nothing more than stationary supplies. It is worth investigating how much storage space is needed and what items are being stored on the premises. Is space is inadequate and boxes are piled too high, a fire hazard is created. Doorways and isles might be blocked, impairing the efforts for firefighters.
- Housekeeping and maintenance - housekeeping and maintenance become special concerns if anything is happening on the premises that could cause a loss if the area is not kept clean
- Customers - the underwriter needs to determine how much customer traffic there is in and out of the business. If the business has no walk-in customers, or if it is delivery only, then the becomes a different risk from one that serves only walking customers.
- Seasonal operating times - some businesses are seasonal by nature. Summer seasonal depending on where they’re located. If it were located in cottage country, the business might be open only during the summer months and the premises unoccupied during the winter.
7 special hazards - in addition to such special hazards as storage, the underwriter will be generally concerned about any activity that requires some kind of handling or movement
- Flammable liquids - flammable liquids are an exposure than an underwriter should look for in any commercial occupancy. If it is strictly a retail operation, this may not be a problem
Define automatic sprinkler
A device to protect property from damage by fire in which water is piped to devices called sprinkler heads that melt with heat and release water to extinguish a fire
List four things an underwriter should look for under protection for commercial properties
- Fire protection- commercial risks are more likely than personal risks to have automatic sprinkler protection, though many commercial risks still do not have it. The underwriters first priority for the business, then, will be to establish whether this risk has a sprinkler protection
- Fire alarms- there are two types of fire alarm to Underwriters should be concerned with. The first comprises the alarm built into the sprinkler system. Most sprinkler systems have only local alarms. These sound when the heat from the fire causes one of the sprinkler heads to discharge water in the area it is protecting. And some systems, the alarm circuit is extended to a Central station or the local fire hall.
- Fire extinguishers- all commercial occupancy should have portable fire extinguishers. The underwriter should determine what kind and how many
- Human element- the best fire protection equipment may not prevent a loss if people involved in the business are poorly trained, unskilled, careless, or indifferent. Therefore, the underwriter will determine how prepared employees are for a fire or other emergency situation.
List the four stages of fire
- Incipitent - invisible products of combustion are produced. No visible smoke or flame or any significant heat is present
- Smoldering - the quantity of combustion particles has increased to the point where they are visible as smoke
- Flame - actual fire now exist. Significant heat is still not present but follows almost instantaneously
- Heat - large amounts of heat, flame, smoke and toxic gases are produced. This stage develops very quickly
List two things underwriter should be concerned with under exposure for commercial properties
- Proximity to other risks - the business my operate from its own building or be located in a plaza with other commercial operations on either side of it. The threat to the business in a plaza is greater if the unit next door is occupied by a welding shop then it is occupied by a real estate office.
- ; Natural hazards - for a business in cottage country, it is located in a forested area where it could be at risk in the event of a forest fire, whether a year-round operation or a seasonal operation, it is located on a floodplain?
List six things an underwriter should be concerned with for a single family home under construction
- Size of the dwelling - this may be a significant for underwriting the applicant. And unusually large house may encourage a closer look at the applicants finances. But the size of the dwelling can also be relevant to the physical risk.
- Type of construction - standard construction is the most familiar, brick or brick veneer or wood frame walls with wood joist roof decks. What would be odd or unusual are homes built with a new or emerging type of construction or homes made out of unusual materials.
- Type of heating - their high hazard kinds of heating and other forms of heating for which the loss experience has yet to develop, such as outdoor furnaces.
- Age of dwelling - the older the dwelling the dryer are more flammable any wood used in its construction is likely to be. And the older a dwelling is, the greater the possibility of faulty or older, high risk wiring or other construction flaws that are corrected in newer homes are less prevalent in them.
- under construction or renovation - the risk of a fire or other insured loss is greater for a dwelling under construction or undergoing renovations than one that is not
- Concealed spaces - an older home specially, changes in room layout or design may have resulted in and concealed spaces, perhaps closets that were cut off from their homes or installed walls that cut off part of a room or passageway.
What is nine things in underwriter should consider will overlooking occupancy in a single family dwelling
- Number of people in dwelling - the more the people, the greater the amount of activity that could lead to a fire or another insured loss.
- Number of kitchens - the number of kitchens will indicate the number of families the dwelling is designed to accommodate, thus allowing an instructive comparison with the actual number of families in the dwelling.
- Long or short-term lease - the longer the term of the least, the more stable is the tenant that is likely to occupy the dwelling and the more likely that tenant is to display some care or sense of responsibility for the accommodations
- Tenant insurance
- Owner visits - the more often an owner visits, the more likely the owner is to notice any behavior of the tenant or problems with the dwelling itself that could arise to loss
- Home business - home businesses in the property associated with them are normally not covered under homeowners policies, and even where coverage is available, such operations might increase the hazards at the dwelling.
- Condition of the dwelling
- Vacant or unoccupied - I lost maybe more likely in a dwelling that is vacant or an occupied. The losses also likely to be more severe than if the occupants were to mitigate it or call for help
- Common or special hazards - a wide range of occupancies engaged in a wide range of activities that pose their own characteristic risk of loss.
Three things in underwriter should consider under protection of a single family dwelling
- Protected location
- Sprinklers
- Fire alarms
Four things an underwriter should consider under exposure for single-family dwellings
- Detached or not
- Location
- If it was built on a floodplain
- Sewer backup
