Property and Casualty Insurance Practice Exam

Which coverage form lasts for a period of one year?

1. General Liability Form

2. Builders Risk Coverage Form

3. Property Damage Form

4. Business Income Coverage Form

The correct answer is: Builders Risk Coverage Form

The Builders Risk Coverage Form is specifically designed to provide insurance for properties under construction or renovation. This coverage typically lasts for a period of one year, aligning with standard construction timelines or the duration of significant renovations. The policy can be renewed if the construction project goes beyond the initial one-year timeline. This form specifically insures against risks such as damage from fire, theft, vandalism, and certain types of water damage, which are common concerns at construction sites. In contrast, other coverage forms might have different durations or conditions. For instance, General Liability policies usually cover a continuous period, often issued on a "claims-made" basis or annual basis that can be renewed but not specifically limited to one year without the need for renewal. Property Damage coverage may be part of broader policies and is not bound to a one-year renewal structure directly. Business Income Coverage supports income loss but may not have a defined term like the Builders Risk Coverage, depending on how the policy is structured. Therefore, the nature of the Builders Risk Coverage Form distinctly emphasizes its one-year period tied to construction projects, making it the correct choice in this context.