West Virginia Property and Casualty Licensing Practice Exam

Which part of the commercial package policy varies based on the lines of coverage?

1. Coverage part

2. Policy declarations

3. Exclusions section

4. General conditions

The correct answer is: Coverage part

The coverage part is the correct choice because it specifically refers to the components of a commercial package policy that provide different types of coverage, such as property, liability, or business interruption. Each coverage part is tailored to meet the specific risks associated with the particular line of business or coverage type, and thus can vary significantly from one policy to another. In contrast, policy declarations provide a summary of the policy terms and conditions and are generally standard across different lines of coverage within a specific policy framework. The exclusions section outlines what is not covered, which remains consistent across various types of coverage, while the general conditions establish the standard rules and procedures for the entire policy and do not differ based on the type of coverage provided. Therefore, the variability inherent in the coverage part is what makes it the distinguishing feature of a commercial package policy.