Arkansas Insurance Adjuster Practice Exam

Under which Causes of Loss form(s) would the mowers consumed by a sinkhole be covered in Alan's commercial property policy?

1. Basic, Broad, and Special Forms

2. They will only be covered by endorsement

3. Special Form only

4. Broad, and Special Forms only

The correct answer is: Basic, Broad, and Special Forms

The correct interpretation of the Causes of Loss forms in relation to mowers consumed by a sinkhole would affirm that under the Basic, Broad, and Special Forms, the damages caused by a sinkhole can indeed be covered. The Basic Form typically covers named perils, including some forms of damage from water, but may not explicitly cover sinkholes. However, the Broad and Special Forms provide more extensive coverage. The Broad Form extends coverage to additional perils, including sudden and accidental physical loss, which would encompass damage caused by a sinkhole. The Special Form, often referred to as "open perils," generally covers all risks of physical loss or damage, unless specifically excluded. Therefore, both Broad and Special Forms would cover the loss from the sinkhole. This comprehensive coverage across all three forms underscores the importance of reviewing policy details, as the protections afforded can vary. The other choices do not provide the same level of coverage across all forms as specified in the question, which is why they would not be applicable in this scenario.