Property and Casualty Insurance Practice Exam

Who is responsible for making changes to a CPP policy according to the changes and premium conditions?

1. Any insured party listed on the policy

2. The first named insured only

3. The insurance company

4. Any licensed agent

The correct answer is: The first named insured only

The first named insured holds a special status on a Commercial Package Policy (CPP) and is primarily responsible for making changes to the policy according to its terms and conditions. This designation typically reflects the individual or entity that has the predominant interest in the insurance and is often the point of communication between the insured parties and the insurer. Furthermore, the CPP is designed to provide flexible coverage tailored to the specific needs of the insured, and the first named insured's authority includes managing endorsements, changes, and adjustments related to coverage and premiums. This role is significant as the first named insured generally has authority over the entire policy, which comprises multiple coverage parts. Other parties listed on the policy may have interests, but they do not have the same level of responsibility as the first named insured. While agents and the insurance company play critical roles in facilitating changes and managing the policy, they do not possess the authority to make amendments without the explicit consent or direction of the first named insured.