Georgia Property & Casualty Practice Exam

Which peril is covered by the commercial property Broad Causes of Loss Form but not by the Basic Causes of Loss Form?

1. fire

2. collapse

3. smoke

4. vandalism

The correct answer is: collapse

The Broad Causes of Loss Form in commercial property insurance covers a wider range of perils compared to the Basic Causes of Loss Form. One significant peril included in the Broad Causes of Loss Form but not in the Basic Causes of Loss Form is collapse. This coverage encompasses various types of structural collapse, which could result from multiple issues such as weight of contents, deterioration, or hidden decay, among others. The Basic Causes of Loss Form generally includes fundamental perils like fire, smoke, and vandalism, which are more common risks associated with property damage. However, collapse is not considered a basic risk, and its inclusion in the Broad form allows for greater protection and acknowledgment of more complex issues that could critically impact property structures. Hence, recognizing this difference in coverage between the two forms is crucial for ensuring comprehensive property risk management.