Application Question 6-8: Etchley Clothing owns a red brick building that it occupies as a retail clothing store. Etchley is purchasing a commercial property policy from Radley Insurance Company with a Causes of Loss - Broad Form for this building. Etchley has selected a policy with a limit of $500,000 on the building on a replacement cost basis with a 90 percent coinsurance clause and a $1,000 deductible. Because Etchleys building is located fifteen miles from the nearest fire department and twenty miles from a police station, it has installed a sprinkler system and a burglar alarm.

1. In rating Etchleys commercial property policy, what factors will Radley consider?

2. How will the factors you identified affect the premium for this policy?