2.2 Arkansas Commercial Property Insurance

Commercial Coverage Forms

Building and Personal Property (BPP)

Business Income Coverage

Pays for:

• Lost net income during suspension
• Continuing normal operating expenses
• Extended period of restoration
• Extra expenses to continue operations

Coinsurance

Formula: $\text{Payment} = \frac{\text{Insurance Carried}}{\text{Insurance Required}} \times \text{Loss} - \text{Deductible}$

Insurance Required = Property Value × Coinsurance %

Exam Tip: Coinsurance penalizes under-insurance. Carry at least the required percentage (typically 80%, 90%, or 100%) to avoid becoming a co-insurer.

Exam Focus

For Arkansas Commercial Property Insurance, read each scenario as a business loss problem. Identify whether the question is about the building, business personal property, business income, extra expense, ordinance or law, equipment breakdown, or inland marine coverage. Commercial property questions often test valuation, limits, coinsurance, deductibles, causes of loss, and whether a special endorsement is needed. The state-law layer usually concerns filings, notices, claim handling, and fair treatment of policyholders rather than the basic definition of covered property.

Final Check

Before you leave this topic, write one sentence for the rule, one sentence for the exception, and one example of how the exam could test it in a customer scenario.