Study guide
2.1 Causes of Loss / Named-Peril vs. Open-Peril
Arkansas Property & Casualty Insurance State
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1 Standalone Coverage Map
Standalone Coverage Map
2 Introduction: Arkansas Property & Casualty Insurance Exam Overview
Arkansas Property & Casualty Exam Overview
3 National Portion: Insurance Fundamentals
1.1 Risk, Hazards, Perils, and the Law of Large Numbers 1.2 Insurable Interest, Indemnity, and Other Insurance Principles 1.3 Insurance Contract Law and Elements 1.4 Policy Structure: Declarations, Insuring Agreement, Conditions, Exclusions 1.5 Parties, Agents vs. Brokers, and Authority
4 National Portion: Property Insurance Concepts
2.1 Causes of Loss / Named-Peril vs. Open-Peril 2.2 Valuation: ACV, Replacement Cost, and Functional Value 2.3 Coinsurance and the Coinsurance Formula 2.4 Deductibles, Limits, and Loss Settlement 2.5 Common Property Policy Conditions and Clauses
5 National Portion: Dwelling Policies (DP)
3.1 Dwelling Policy Forms DP-1, DP-2, DP-3 3.2 Dwelling Coverages A-E and Other Coverages 3.3 Dwelling Perils, Conditions, and Endorsements 3.4 Mobile Home and Specialized Dwelling Coverage
6 National Portion: Homeowners Policies - Forms & Section I
4.1 Homeowners Forms HO-2 through HO-8 and Eligibility 4.2 Section I Coverages A-D and Additional Coverages 4.3 Section I Perils Insured Against and Exclusions 4.4 Replacement Cost vs. ACV and Loss Settlement in Homeowners
7 National Portion: Homeowners Policies - Section II & Endorsements
5.1 Section II Coverages E (Liability) and F (Medical Payments) 5.2 Homeowners Conditions and Duties After Loss 5.3 Common Homeowners Endorsements (scheduled property, water backup, ordinance or law)
8 National Portion: Personal Auto Policy - Liability & Injury
6.1 Personal Auto Policy Structure and Eligibility 6.2 Part A Liability and Supplementary Payments 6.3 Part B Medical Payments 6.4 Part C Uninsured/Underinsured Motorists
9 National Portion: Personal Auto Policy - Physical Damage & Duties
7.1 Part D: Coverage for Damage to Your Auto 7.2 Exclusions and Part E: Duties After an Accident 7.3 Part F: General Provisions, Endorsements, and No-Fault Concepts
10 National Portion: Liability Insurance Concepts
8.1 Negligence, Torts, and Legal Liability 8.2 Defenses, Damages, and Vicarious Liability 8.3 Occurrence vs. Claims-Made Triggers 8.4 Bodily Injury, Property Damage, and Personal/Advertising Injury
11 National Portion: Commercial Property Insurance
9.1 Commercial Package Policy Structure and Common Policy Conditions 9.2 Building and Personal Property Coverage Form (BPP) 9.3 Causes of Loss Forms (Basic, Broad, Special) 9.4 Business Income and Extra Expense 9.5 Commercial Property Endorsements and the BOP
12 National Portion: Commercial General Liability - Coverages
10.1 CGL Coverage A: Bodily Injury and Property Damage Liability 10.2 CGL Coverage B: Personal and Advertising Injury, Coverage C: Medical Payments 10.3 Who Is an Insured and Supplementary Payments
13 National Portion: Commercial General Liability - Limits, Triggers & Exclusions
11.1 CGL Limits of Insurance and Aggregates 11.2 Occurrence vs. Claims-Made CGL and Retroactive Dates 11.3 Key CGL Exclusions and Endorsements
14 National Portion: Commercial Auto Insurance
12.1 Business Auto Coverage Form and Covered Auto Symbols 12.2 Commercial Auto Liability and Physical Damage 12.3 Motor Carrier / Trucking and MCS-90 12.4 Garage Coverage Form and Garagekeepers 12.5 Commercial Auto Endorsements
15 National Portion: Workers Compensation
13.1 Workers Compensation Statutory Background and Benefits 13.2 Part One (Workers Comp) and Part Two (Employers Liability) 13.3 Premium Basis, Experience Modification, and Classification 13.4 Other States, USL&H, and Federal Acts 13.5 Workers Comp Exclusions and Endorsements
16 National Portion: Other Commercial Lines - BOP, Crime & Marine
14.1 Businessowners Policy (BOP) in Depth 14.2 Crime and Fidelity Coverage 14.3 Inland Marine and Nationwide Marine Definition 14.4 Ocean Marine Coverages (Hull, Cargo, Freight, P&I)
17 National Portion: Other Commercial Lines - Specialty & Professional
15.1 Farm and Agricultural Coverage 15.2 Commercial Umbrella and Excess Liability 15.3 Professional Liability and Errors & Omissions 15.4 Directors & Officers and Employment Practices Liability
18 National Portion: Other Commercial Lines - Surety, Flood & Specialty
16.1 Surety and Fidelity Bonds 16.2 National Flood Insurance Program (NFIP) 16.3 Cyber, Aviation, and Other Specialty Lines
19 National Portion: Insurance Regulation & Market Conduct
17.1 State Regulation, Licensing, and the McCarran-Ferguson Act 17.2 Rates, Forms, Solvency, and Guaranty Associations 17.3 Producer Authority, Fiduciary Duty, and Company Operations
20 National Portion: Ethics & Unfair Trade Practices
18.1 Unfair Trade Practices and Unfair Claims Settlement 18.2 Producer Ethics, Errors & Omissions Exposure, and Fiduciary Conduct 18.3 Privacy, Fraud, and Consumer Protection
21 Chapter 1: Arkansas P&C Insurance Regulation & Licensing
1.1 Arkansas Insurance Department 1.2 Arkansas P&C Producer Licensing Requirements 1.3 Arkansas Producer Responsibilities
22 Chapter 2: Arkansas Property Insurance
2.1 Arkansas Homeowners Insurance 2.2 Arkansas Commercial Property Insurance
23 Chapter 3: Arkansas Casualty & Auto Insurance
3.1 Arkansas Auto Insurance Requirements 3.2 Arkansas Liability Insurance 3.3 Arkansas Workers' Compensation Insurance
24 Chapter 4: Arkansas Ethics & Professional Conduct
4.1 Ethical Practices and Consumer Protection
2.1 Causes of Loss / Named-Peril vs. Open-Peril
Key Takeaways Explain This Topic AI
A peril is the cause of loss (fire, theft, windstorm); a hazard increases the chance or severity of a peril and is classified as physical, moral, or morale.
Named-peril forms cover ONLY the perils listed; the burden of proof is on the INSURED to show the loss came from a covered peril.
Open-peril (special form) covers all direct physical loss EXCEPT exclusions; the burden shifts to the INSURER to prove an exclusion applies.
ISO commercial property uses the Causes of Loss forms: Basic (CP 10 10), Broad (CP 10 20), and Special (CP 10 30).
Exclusions like flood, earth movement, ordinance or law, war, and wear-and-tear appear on virtually every property form.
Last updated: June 2026
Perils and Hazards
Property insurance turns on two terms candidates confuse constantly. A peril is the cause of a loss — fire, lightning, windstorm, theft, vandalism. A hazard is a condition that increases the likelihood or severity of a peril. Hazards do not themselves cause loss; they make a peril more probable.
Hazards fall into three exam-tested categories:
- Hazard Type Definition Example
- Physical A tangible condition of property Oily rags in a corner; icy steps
- Moral Dishonesty — an intent to cause or exaggerate loss Owner burns building for the insurance money
- Morale Carelessness or indifference because insurance exists Leaving a car unlocked with keys inside
Memory trick: moral = dishonesty , morale = carelessness (think low morale = lazy).
Named-Peril vs. Open-Peril Coverage
How a policy lists perils determines what is covered and who must prove the claim .
Named-peril (also called specified peril ) coverage insures only the perils explicitly listed in the form. If the peril is not named, there is no coverage. The burden of proof is on the insured to demonstrate the loss arose from a listed peril.
Open-peril coverage (the ISO term is special form ; older texts say all-risk ) insures all direct physical loss to covered property except losses caused by an excluded peril. Because everything is covered unless excluded, the burden of proof shifts to the insurer to prove that an exclusion applies.
Exam trap: Open-peril is broader, costs more, and reverses the burden of proof. It is NOT “unlimited” coverage — the exclusions are what define the gap.
ISO Causes of Loss Forms
On commercial property, the perils insured are not in the building form (CP 00 10) itself; they are attached through a separate Causes of Loss form. Know these three by name and edition style:
Basic Form — CP 10 10: named-peril. Covers fire, lightning, explosion, windstorm or hail, smoke, aircraft or vehicles, riot or civil commotion, vandalism, sprinkler leakage, sinkhole collapse, and volcanic action. Memory aid: WCSHAVVERS / “the basic eleven.”
Broad Form — CP 10 20: the Basic perils plus falling objects, weight of snow/ice/sleet, water damage (accidental discharge), and certain collapse causes.
Special Form — CP 10 30: open-peril — covers risks of direct physical loss except those excluded.
The Dwelling and Homeowners side mirrors this: DP-1 is basic named-peril, DP-2 is broad named-peril, and DP-3 is open-peril on the dwelling.