CPCU 552 Ch. #10
A cargo ship carrying the US flag off the coast of Somalia is pursued by pirates in chase vessels. In order to avoid capture, the captain orders several cargo containers thrown overboard so the ship can quickly make it to international waters and US military protection. One of the ship's engines is overworked and sustains damage in the process. The apportionment of the cargo loss and engine damage to all parties with an interest in the voyage is known as: A) General average. B) Tramp shipping. C) Particular average. D) Maintenance and cure.
A
A helicopter is parked outside a hangar awaiting routine service on its engine. A mechanic removes the engine, and the engine is subsequently damaged while being moved inside the hangar. A hail storm then causes extensive damage to the helicopter's rotors. The helicopter's owner has "all-risks" not in motion hull coverage. Is the damage to the engine and rotors covered by the owner's hull coverage? A) Rotors and engine are both covered. B) The rotors are covered but the engine is not, because the engine was removed from the aircraft. C) The engine is covered but the rotors are not, because weather-related loss is excluded while the aircraft is not in motion. D) The engine is covered but the rotors are not, because the rotors are not part of the hull.
A
A marina provides a variety of services for owners of pleasure crafts, including storage, repair, fueling and boat rental. The main loss exposure covered by a marina operators liability policy is: A) Damage to boats in the marina operator's care, custody, or control B) Liability for voyage and time charters C) Pollution and contamination D) Damage to boats while under construction
A
A marine insurance policy that provide bailee coverage for vessels and cargo is known as a: A) Terminal operators liability policy. B) Charterers liability policy. C) Marina operators liability policy. D) Ship repairers liability policy.
A
A passenger on a cruise ship slips and falls on the deck after the ship's maintenance worker has finished mopping the floor. This is an example of which one of the following loss exposures faced by vessel owners and operators? A) Injury to other persons on board the vessel. B) Injury to crew members on board the vessel. C) Damage to cargo of others. D) Liability for pollution.
A
A pharmaceutical company rewards its top 5 salespeople with a three-day fishing expedition every year. This year's trip is on a 65-foot boat, contracted with captain and crew for a three-day voyage in June. Which one of the following marine coverages would protect the company against liability arising out of this voyage? A) Charterers liability policy B) Boat dealers policy C) Marine operators liability policy D) Protection and Indemnity policy
A
A vessel valued at $40 million is carrying cargo for 2 customers. One customer's cargo consists of $6 million of handheld electronic games. The other's consists of $4 million of designer shoes. During a storm, the crew throws overboard $1.5 million in cargo to prevent the vessel from sinking. What is the contribution to general average for the customer who owns the shoes? A) $120,000 B) $340,000 C) $600,000 D) $680,000
A
A waterfront facility that leases or rents dock space should consider insuring its exposure for liability for damage to boats in their care, custody, or control through a: A) Marina operators liability policy B) Boat dealers policy C) Terminal operators liability policy D) Marine builders risk policy
A
ABC Bed and Breakfast is located on the shores of a large lake. ABC owns a 50-foot long yacht. Each morning the owners of ABC offer its customers the chance for "Breakfast on the Lake", a buffet breakfast served on the yacht while it cruises the lake. Recently, there has been an increase in traffic on the lake with a corresponding increase in the # of collisions between boats. What clause within hull coverage protects a boat-owner in case of collision with another boat? A) Running down clause B) Collision clause C) Liability clause D) Boat-owner clause
A
ABC Bed and Breakfast is located on the shores of a large lake. ABC owns a 50-foot long yacht. Each morning the owners of ABC offer its customers the chance for "Breakfast on the Lake", a buffet breakfast served on the yacht while it cruises the lake. Since there is very little other traffic on the lake, the biggest concern that the owners of ABC have is injury to their guests while on the yacht. What is the best policy that ABC can buy to protect itself in this situation? A) Protection and indemnity B) Hull C) Charterer's Liability D) Marina Operators
A
Aircraft have a significant exposure to catastrophe losses. Of the many reasons for the catastrophic loss potential of aircraft, the most significant is: A) Physical properties of the aircraft B) Skill & training of the pilot C) Large degree to which aircraft are used for commercial purposes D) Lack of reinsurance capacity in aviation insurance markets
A
Aircraft hull coverage is usually subject to a deductible, but the amount of the deductible is typically higher for some purpose-of-use categories than others. Which one of the following purpose-of-use category would be expected to have the highest deductible? A) Commercial use B) Industrial aid C) Business or pleasure D) Non-owned aircraft
A
Aircraft hull insurance is designed to provide coverage for the interests of an aircraft owner and which one of the following third parties? A) A secured creditor B) Pilot & crew C) Passengers carried for a fee D) Federal Aviation Administration (FAA)
A
Although there are a large number of aviation insurance buyers, there are relatively fewer sellers. The largest market share of the domestic U.S. aviation insurance market is handled by: A) Multi-company aviation insurance pools. B) Lloyd's of London. C) Captive insurance companies owned by the individual airlines. D) Independent excess and surplus lines insurance companies.
A
An insured has "all-risks" -- ground and flight coverage on an airplane that is damaged in a storm. What will the insurer pay for the covered damage? Cost to repair: $270,000 Limit of insurance: $250,000 Value of the craft: $225,00 Valuation basis: Actual cash value A) $225,000 B) $250,000 C) $260,000 D) $275,000
A
Hull insurance covers the interest of a: A) Bareboat charter B) Charter party C) Voyage charterer D) Time charterer
A
In maritime law, vessel owners or operators that transport the property of others to earn freight have a liability exposure for cargo loss during an ocean voyage. Which one of the following statements concerning a cargo carrier's liability is most accurate? A) A common carrier transporting cargo into or out of the U.S. is only liable for cargo losses if those losses result from the carrier's failure to have made its vessel seaworthy and suitable for carrying the cargo when the voyage began. B) A cargo vessel that transports the property of others as a common carrier is held to a strict liability standard with respect to damage to the cargo of others. C) A cargo vessel acting as a contract carrier is held to an absolute liability standard with respect for damage to the cargo of others. D) While cargo is being transported by a contract carrier, the carrier owes a duty of care to the cargo's owner equal to its own duty of care to itself, so contract carriers tend to rely heavily on first party insurance coverage to satisfy this duty of care.
A
John is a crew member on the Ann Marie, a cargo ship that operates all over the world out of Miami, FL. On a recent voyage to West Africa, John became very ill and had to be flown back to Miami to receive proper medical treatment. The Ann Marie's Protection and Indemnity (P&I) policy covered the costs of John's trip back to Miami. The P&I refers to such costs as: A) Repatriation expenses B) Return expenses C) Illness expenses D) Worker expenses
A
The owner of a docking facility has a bailee liability exposure for cargo that has been placed in their care, custody, and control. Which one of the following marine insurance policies is designed to cover that exposure? A) Terminal operators liability insurance B) Marina operators liability insurance C) Ship repairers liability insurance D) Dry-dock operators liability insurance
A
The traditional terminal operators liability policy is a marine insurance policy that is primarily designed to cover the: A) Bailment liability loss exposures. B) Protection and indemnity exposure for injury to non-employees. C) Damage caused by hurricanes, tsunamis, and other so-called Acts of God. D) Legal liability for environmental impairment from the accidental discharge of pollution.
A
Under passenger voluntary settlement (admitted liability) coverage, one of the conditions that must be met before the insurer can make a settlement offer to an injured passenger or a passenger's survivors is that the: A) Named insured must ask the insurer to offer the settlement. B) Insured must admit to liability for the claimed injury or death. C) Cause of the accident resulting in the claimed injury or death must not be pilot error. D) Insurer must determine that the insured is legally liable for the claimed injury or death.
A
Vessel owners typically purchase hull insurance as part of a package of marine insurance coverages. Which one of the following losses would normally be covered by hull insurance? A) A lifeboat on the ship is damaged by a lightning strike. B) A shipper's cargo container is struck by a wave and washed overboard. C) A crew member sustains BI during a pirate attack. D) After a general average is declared, one of the cargo shippers goes bankrupt and is unable to pay its share.
A
Which one of the following best describes one of the primary hazards of the "Business and Pleasure Purpose-of-Use Category" in classifying and rating aircraft loss exposures? A) Pilots with limited experience B) Unknown or unclear flight plans C) Lack of scheduled maintenance of the aircraft D) Smaller planes attempting to land at large airports
A
Which one of the following describes one of the primary hazards of the "Business and Pleasure Purpose-of-Use Category" in classifying and rating aircraft loss exposures? A) Pilots with limited experience B) Many aircraft owned by one person or organization C) High-value aircraft D) Use of large, commercial airports
A
Which one of the following is a liability loss exposure faced by vessel owners? A) Damage by pollution B) Damage to owner's vessel C) Damage to owner's cargo D) Loss of passage money
A
Which one of the following types of marine insurance would best address the insurance needs for a marina operator who deals primarily with customers boats held in the marina's care, custody, and control? A) Marina operators liability B) Ship repairers liability C) Charterers liability D) Terminal operators liability
A
While warming up in preparation for takeoff, an insured helicopter was struck by an airplane. The helicopter's rotors were rotating when the collision occurred. Damage to the helicopter would be covered under: A) "All risks" -- ground and flight hull coverage B) "All risks" -- not in motion hull coverage C) "All risks" -- not in flight hull coverage D) "All risks" -- in motion coverage
A
A plane crashes killing all passengers on board. The survivors of the passengers may be able to receive a scheduled amount of benefits from the insurer of the plane under which one of the following coverages? A) Medical payments B) Passenger voluntary settlement C) "All-risks" --- ground and flight D) Component parts schedule
B
Aircraft insurers generally use 7 purpose-of-use categories as part of their premium ratings. Which one of the following purpose-of-use categories tends to ave the highest insurance rates? A) Airlines B) Commercial use C) Business and pleasure D) Sales demonstration
B
Aviation insurance buyers are classified into a # of different sectors, which include general aviation, airlines, airports, manufacturing & distribution, and fixed base operators. In terms of numbers of potential buyers, the largest sector by far is the: A) Fixed base operators sector B) General aviation sector C) Airline sector D) Manufacturing & distribution sector
B
Aviation loss exposures from the business and pleasure purpose-of-use category commonly include which one of the following hazards? A) Large contested airports B) Marginally equipped aircraft C) Air taxi operators D) Banner towing
B
Collision Liability clause in a hull policy is also known as: A) P&I clause B) Running down clause C) Longshore clause D) Average clause
B
One form of marine insurance designed to protect voyage charterers is the charterers liability policy. Which one of the following loss exposures would be covered by a charterers liability policy? A) Cargo is lost after the vessel sinks as the result of negligence on the part of the vessel operators. B) The shipper fails to make berthing arrangements for off-loading the cargo at its port destination, as called for in the charter agreement, resulting in delays that lead to freight losses for the operators of the chartered vessel. C) A crew member is injured while fighting a fire in the engine room and as a result the vessel owner declares a general average. D) The caption of the vessel gets drunk and negligently runs over a sailboat at the harbor entrance, resulting in a loss of life of persons who were on board the sailboat when the incident occurred.
B
One of the major providers of aviation insurance in the U.S. market is: A) Risk purchasing groups B) Pools C) Risk retention groups D) American Lloyds
B
The 2 most fundamental aviation loss exposures that should be considered by insurance underwriters are catastrophic third party liability and catastrophic: A) Third party property loss B) First party property loss C) First party bodily injury D) Pollution liability
B
The 4 major criteria considered by an aviation underwriter are: -Type of aircraft to be insured -Pilot -Geographic considerations -Purpose of use These criteria are referred to as: A) Underwriting guidelines B) Diversifying factors C) Risk Management objectives D) Pricing objectives
B
The covered aircraft definition includes the propulsion system and equipment installed on the aircraft. This includes coverage for the equipment in which one of the following circumstances? A) While being transported from the equipment manufacturer to the aircraft manufacturer B) While the equipment is temporarily removed from the insured aircraft C) While it is temporarily installed in a different aircraft, but only for 30 day D) While it is permanently installed in any ground motor vehicle used int he furtherance of aviation
B
The largest share of the domestic aviation insurance market in the U.S. is provided by: A) Private insurance companies B) Multi-company aviation pools C) The federal government D) State-run associations
B
The law of general average originated in ancient times as a manner for all parties to a marine voyage to share certain types of losses. Which one of the following losses would be most likely to fall into the general average loss category? A) A large wave strikes the side of a cargo vessel and damages three of the ship's lifeboats. B) A cargo vessel runs aground on a sandbar and the ship's engines are damaged in the process of freeing the vessel. C) A crew-member is washed overboard during a storm and the crew-member's family sues the shipowner. D) A cargo of bananas rots aboard a ship because bad weather delays the arrival of the ship into its destination port.
B
There are several forms of all-risks aircraft hull coverage. Which one of the following definitions would provide the insured with the broadest coverage? A) All-risks --- hangar coverage. B) All-risks --- ground and flight coverage. C) All-risks --- not in motion coverage. D) All-risks --- not in flight coverage.
B
What type of charter agrees to be responsible for actually operating and insuring a vessel? A) Voyage B) Bareboat C) Time D) Vessel
B
Which one of the following best describes the 3 major providers of aviation insurance in the U.S. ? A) Pools, American Lloyd's and Lloyd's correspondents B) Pools, individual insurers, and Lloyd's correspondents C) Pools, individual insurers, and risk retention groups D) Risk purchasing groups, individual insurers, and Lloyd's correspondents
B
Which one of the following events would normally trigger the automatic termination provisions of a marine policy and cancel the hull coverage on a cargo vessel? A) The ship is attacked by pirates while at sea. B) The ship is chartered by a 3rd party on a bareboat basis. C) The ship is diverted to a port of refuge to avoid a hurricane in its path. D) The ship sails through a war zone.
B
Which one of the following hull coverages would apply to an insured aircraft that collided with another aircraft during takeoff, but was still on the runway? A) "All-risks" --- not in motion. B) "All-risks" --- ground and flight. C) "All-risks" --- not in flight. D) "All-risks" --- not on ground.
B
Which one of the following is a diversifying factor that distinguishes the loss exposures of each individual aircraft and pilot? A) Catastrophic loss potential B) Geographic consideration C) Limited spread of risk D) Credibility of statistics
B
Which one of the following is ordinarily covered under a boat dealers policy? A) Vessels under construction B) Merchandise held for sale C) Wreck removal D) Watercraft for hire
B
Which one of the following perils is generally excluded under Hull insurance? A) Fire, lightning, and earthquake B) War and its aftereffects C) Perils of the sea D) Assailing thieves
B
XYZ repairs personal pleasure boats at its service facility on Lake Sinclair. XYZ often has to keep the boats in its shop for a few days and thus XYZ has a bailee liability exposure while the boats are in its care, custody, and control. Which one of the following marine insurance policies would best protect XYZ from its bailee liability exposure? A) Terminal operators liability insurance policy B) Marina operators liability insurance policy C) Marine builders risk insurance policy D) Boat dealers insurance policy
B
A cargo ship en route for South East Asia makes a stop along the west coast of Africa. Some of the crew members contract malaria and suffer very high fevers on the first day the boat is back in the high seas. The captain decides to make an impromptu stop in South Africa so the crew can get medical assistance. This unscheduled stop results in extra expenses of $12,000 due to the unplanned deviation for medical care. Which one of the following Protection & Indemnity (P&I) coverages will cover the shipowner's extra expenses? A) Quarantine expenses coverage B) Extra expenses coverage C) Putting-in expenses coverage D) Repatriation expenses coverage
C
A helicopter, parked in a hangar, is undergoing maintenance. The helicopter owner purchases an unendorsed aircraft policy with "all-risks" -- not in motion hull coverage. During certain maintenance tests, the rotors are turned on to ensure proper adjustments. While testing the rotors, the wind created by the rotors causes a vat of chemicals to spill, starting a hangar fire, during which the helicopter is partially destroyed. How would coverage apply under the policy? A) Policy would not provide coverage because destruction during maintenance is not considered a fortuitous event. B) Policy would provide coverage because fire is a covered peril. C) Policy would not provide coverage because a helicopter is considered in motion any time the rotors are rotating. D) Policy would provide coverage because rotors are turning, but the helicopter itself is not moving.
C
A marina operator decides to expand operations and offer dry-dock boat storage in the off-seasons. The marina operator is concerned about additional loss exposure not covered in the Marina Operators Liability Policy. Does the marina operators need a Board Dealers Policy to provide coverage for the stored boats? A) Yes. Dry-dock storage is a bailee exposure not included in the Marina Operators Liability Policy. B) No. The Marina Operators Liability Policy includes Property & Indemnity coverage on any craft on the Insured's premises. C) No. The Marina Operators Liability Policy covers damage to boats in the care, custody, and control of the insured. D) Yes. The Marina Operators Liability Policy only covers property damages to boats moored in the marina.
C
A policy that covers the builder or owner (or both) of a vessel under construction against physical loss of or damage to the vessel and related property is: A) Marine general liability policy. B) Ship repairers liability policy. C) Marine builders risk policy. D) Marine hull liability policy.
C
A watercraft owner is concerned about coverage for his vessel, which is under construction. He is concerned that the boat may be damaged or he may be held liable for an accident during an trial trips taken by the shipbuilder. Which one of the following policies would provide the necessary coverage? A) Ship Repairers Lability Policy B) Protection and Indemnity (P&I) C) Marine Builders Risk Policy D) Marina Operators Liability Policy
C
For most vessels, the primary BI loss exposure originates from: A) Longshore workers B) Passengers C) Crew members D) Visitors
C
ABC Industries has contracted with the operators of the SS Muscadine to transport a shipment of its products to Jamaica. Although the Muscadine itself already has ocean marine insurance to protect it from liability losses, as the shipper ABC also faces some liability loss exposures related to this ocean voyage as well. Which one of these marine insurance policies is best suited to meet ABC's liability loss exposure that arises from this arrangement? A) Boat dealers insurance policy B) Terminal operators liability policy C) Charterers liability insurance policy D) Marina operators liability policy
C
ABC Shipping is transporting cargo of 10 different companies on its ship the Ocean Goer. The property of 8 of the companies is being carried below deck, but property of the other 2 companies is being carried on-deck. During the voyage, the Ocean Goer runs into a bad storm and starts taking on water. In order to lighten the ship and save it from sinking, the captain orders that the property of the 2 companies on-deck be thrown overboard. When the Ocean Goer gets to its destination, the 8 companies whose property was not thrown overboard must divide among themselves the cost of the property that was jettisoned and repay the owners of that property. This process is referred to as: A) Specific average. B) Below average. C) General average. D) Above average.
C
An insured owns a crop dusting plane to spray chemicals over farm fields. Because of the special hazard this risk poses, the insured will most likely be able to find aviation insurance through which one of the following providers? A) Individual insurers B) Aviation pools C) Lloyd's correspondents D) Airports
C
An organization that provides certain services, such as aircraft maintenance, flying instruction, and rental of hangar space to the aviation industry is: A) An airport facility manager B) A FAA correspondent C) A fixed base operator D) An aircraft service company
C
As a general rule, the legal liability of aircraft owners and operators is based on: A) Absolute liability for the safe operation of aircraft B) A strict liability standard C) Common law of torts D) Federal and international statutory laws
C
In addition to liability and physical damage coverage, aircraft insurance policies may include passenger voluntary settlement coverage. Which one of the following statements concerning passenger voluntary settlement coverage is most accurate? A) Passenger voluntary settlement coverage can lead to situations where the injured passenger may receive a claim settlement even when the named insured wishes to contest its legal liability for the damages. B) The limits of liability for passenger voluntary settlement coverage are typically very low and are intended to pay for first aid and emergency treatment only. C) An injured passenger that recovers under the passenger voluntary settlement coverage is required to release the insured from liability for all bodily injuries. D) Passenger voluntary settlement coverage is similar to medical payments insurance in private passenger auto insurance with minimum limits, coverage for all passengers, and no restrictions on further lawsuits.
C
In marine liability, a vessel owner who fails to pack enough food, water, and medical supplies for a month-long trip fails to provide his crew with: A) Warranty of seaworthiness. B) Freight. C) Maintenance and cure. D) Protection and indemnity.
C
In the U.S., aviation insurance is often provided through aviation insurance pools. Which one of the following statements concerning the membership of aviation insurance pools is most accurate? A) Aviation insurance pool embers tend to be international reinsurance providers who can spread the risk throughout world markets B) Membership int he pools is limited to licensed pilots and airport employees C) The members of the insurance pools tend to be for the most part commercial insurance companies D) Pool membership is limited to major airlines and larger air freight shipment corporations
C
In the event of loss to an insured vessel, the sue and labor clause of a hull insurance policy requires the assured to: A) Sue those parties responsible for causing the damage. B) Arrange the labor for damage repairs. C) Take reasonable measures to protect the vessel from further damage. D) Contact the insurance adjuster to determine fault within 24 hours.
C
Insurance coverage for offshore oil & gas facilities is: A) Typically written with a single specialized insurer providing the full limits of necessary coverage. B) Readily available form most commercial property and casualty insurers. C) Usually obtained on a subscription basis. D) Available in the regular marine insurance market.
C
Insurance for off-shore drilling facilities is usually handled by several insurers. Such an arrangement is known as: A) Shared basis. B) Protected basis. C) Subscription basis. D) Multiple basis.
C
One way the energy market is different from the regular marine insurance market is that: A) The energy market is less specialized than the regular marine insurance market. B) The energy market usually requires lower limits of insurance. C) The energy market usually insures offshore oil and gas facilities on a subscription basis. D) Energy providers do not utilize insurance brokers to handle their transactions.
C
The Oil Pollution Act of 1990 (OPA) greatly increased the potential liability of shipowners for pollution damage. Which one of the following statements concerning a shipowner's liability for pollution damage is most correct? A) The OPA imposes aggregate limits of liability for pollution damage of $10,000,000 per incident, which is the typical maximum aggregate limit for a maritime insurance policy. B) The liability loss exposure imposed by the OPA is limited to cleanup and remediation costs, although there may be additional loss exposures for BI or PD as a result of local laws or ordinances. C) Even though the OPA is a federal law, the limits of liability in the OPA do not supersede the laws of individual states, and shipowners may face potentially unlimited liability losses for spills in some U.S. waters. D) The additional liability imposed by OPA can create a high severity loss exposure, but a ship owner has a large number of common law defenses which greatly weaken the liability loss exposure in practice.
C
The largest share of the U.S. domestic aviation insurance market is handled by: A) Self-insurance funds B) Individual insurers C) Aviation pools D) Lloyd's correspondents
C
The main providers of protection and indemnity insurance (P&I) for vessels used in international trade are: A) Property-casualty insurers. B) Domestic insurance companies. C) P&I clubs. D) Municipal risk pools.
C
The terrorist attacks of Sept. 11, 2001, when commercial airplanes were hijacked, demonstrate which one of the following characteristics of aviation loss exposures? A) Geographic considerations B) Limited spread of risk C) Catastrophic loss potential D) Pilot experience and ability
C
There are a number of specialty marine insurance policies associated with the building, sale, storage and operation of marine vessels. Which one of the following marine insurance policies is designed to provide property coverage for pleasure craft held for sale? A) Marina operators liability insurance B) Marine builders risk insurance C) Boat dealers insurance D) Garagekeepers liability insurance
C
Which one of the following losses would be the most likely to be paid under a marine protection and indemnity insurance policy? A) The portion of a general average loss assigned to the shipowner B) Damage to another vessel caused by an at-fault collision C) Expenses incurred to return an injured crew member to his sign-on port D) Losses to cargo following seizure of the vessel by pirates
C
XYZ Terminal provides facilities for up to 10 ships at a time to be loaded/unloaded, serviced, etc. What is the term given to the temporary possession of a ship by XYZ terminal? A) Ownership B) Custody C) Docking D) Bailment
D
A boat marina is in the business of repairing small commercial vessels. After the repairs have been made, the vessels are usually taken on a trial run. Which one of the following marine policies would be best for the marina? A) Boat dealers policy B) Marine builders risk policy C) Terminal operators liability policy D) Ship repairers liability policy
D
A typical aircraft insurance policy extends its liability provisions to cover non-owned aircraft while used as substitutes for an insured aircraft. However, this provision does not apply to aircraft: A) Needed as a substitute due to total destruction. B) Needed as a substitute because of breakdown. C) Acquired after the beginning of the policy period. D) Hull (physical damage) insurance.
D
ABC Ship-makers builds commercial fishing boats for customers along the Atlantic Seaboard. ABC has just completed construction of a 73-foot shrimp trawler, and the contract calls for ABC to deliver the trawler to the customer in Galveston, which is 1500 miles away. Which one of the following marine insurance policies would be most appropriate to protect ABC from potential losses during the delivery voyage? A) Charterers liability insurance policy B) Protection and indemnity insurance policy C) Ship repairers liability insurance policy D) Marine builders risk insurance policy
D
Aircraft hull insurance is designed to protect the owner or secured creditor against loss from direct physical damage to the insured aircraft and is generally written: A) On a named perils basis that limits the insurer's liability to collision with the ground and specific weather-related perils. B) With low limits and high deductibles so as to encourage loss control by the aircraft owner. C) On a difference-in-conditions (DIC) basis that excludes most causes except for Acts of God. D) On an "all risks" basis but for the exclusions that are specified in the policy language.
D
An insured purchases a sailing vessel and plans to start a new business taking passengers on short voyages. The insured knows that the biggest loss exposure this new business faces is liability for injury to the boats passengers. Which one of the following types of insurance would best cover this loss exposure? A) Terminal operators liability insurance B) Hull insurance C) Marina operators liability insurance D) Protection and indemnity insurance
D
Aviation accounts that do not fall into homogenous classes or are special risks, such as homebuilt aircraft, are most likely to purchase their aviation insurance from: A) Pools B) Individual insurers C) Fixed base operators D) Lloyd's syndicates
D
Corporate-owned aircraft used in the transportation of corporate executives and associates would be classified as: A) Airline B) Commercial use C) Special use D) Industrial aid
D
In addition to aircraft owners and operators, there are a wide variety of diverse customers in the aviation insurance market. Which one of the following statements concerning aviation insurance buyers is most accurate? A) Major airlines tend to buy the bulk of their aviation insurance through Lloyd's of London. B) Aircraft repair & maintenance services generally purchase garagekeeper liability insurance to provide courage for their repair-related aviation liability exposures. C) Low limits products liability insurance for the aviation manufacturing & distribution buyer segment is readily available from a large number of U.S. commercial insurers. D) Airports generally purchase a specialized type of general liability insurance called airport liability insurance.
D
In the event of a covered loss under a marine hull insurance policy, the insurer may also pay sue and labor costs. Which one of the following statements best describes the sue and labor clause of a hull insurance policy? A) The insured must take reasonable and necessary steps to investigate the claim to establish the insurer's legal liability to pay for the losses. B) The ship owner must obtain standby war risk binder coverage on the hull from the U.S. gov't when commercial coverage is suspended. C) The insured must cooperate fully with the insurer's attorneys to defend against any lawsuit covered by the policy. D) The insured must take reasonable measures to protect the vessel from further harm or damage following a loss.
D
Owners and operators of commercial watercraft are exposed to marine loss exposures. For a cargo ship, the most significant BI liability loss exposure would be its liability for: A) Injury to social guests B) Injury to persons not on board the vessel C) Injury to longshore workers D) Injury to crew members
D
The 3 types of aircraft hull coverage are "all-risks" -- ground & flight coverage, "all-risks" -- not in motion coverage, and: A) "All-risks" -- at an airport coverage. B) "All-risks" -- while being serviced coverage. C) "All-risks" -- when out of service coverage. D) "All-risks" -- not in flight coverage.
D
The law that gives the members of a ship's crew the right to sue their employers for damages for injuries that arise out of the employer's negligence is: A) The Death on the High Seas Act. B) The Longshore and Harbor Workers Compensation Act. C) General Maritime Law. D) The Merchant Marine Act of 1920.
D
The most significant BI liability loss exposure for most vessels is usually for injury or death of: A) Visitors B) Longshore workers C) Passengers D) Crew members
D
Various marine insurance coverages are available to insure facilities used in the exploration, development, and production of oil and natural gas at offshore locations. Which one of the following statements concerning the coverages available for these facilities is most accurate? A) These policies typically feature a combination of high deductibles and low limits of liability so as to encourage loss control efforts by the owners and operators of the drilling rigs. B) These marine policies typically limit coverage to property and to legal expenses so as to avoid the significant liability exposure associated with worker injuries and pollution. C) Coverage for removal of wreckage is typically excluded from this type of coverage because offshore drilling rigs can be easily moved from danger areas. D) The limits of insurance for this type of coverage are often so high that they cannot be covered by a single insurer and must be apportioned by subscription to a consortium of insurers.
D
What is the most significant reason for the catastrophic loss potential of aircrafts? A) The lack of pilot experience B) The limited purpose of use C) The location of airports D) The physical properties of the aircraft
D
Which of the following is the largest sector in aviation insurance buyers? A) Fixed base operators B) Airlines C) Aviation manufacturing and distribution D) General aviation
D
Which one of the 7 general purpose-of-use categories used to classify and rate aircraft loss exposures provides the most credible statistics for us in predicting future loss experience? A) Industrial aid B) Commercial use C) Business and pleasure D) Airline
D
Which one of the following is a peril generally covered under basic hull insurance forms? A) Piracy B) War C) Riot D) Assailing thieves
D
Which one of the following policies covers the builder or owner (or both) of a vessel under construction against physical loss of or damage to the vessel and related property during the entire course of the vessel's construction? A) Boat dealers policies B) Ship repairers liability C) Charterers liability D) Marine builders risk
D
Which one of the following property damage-type coverages under a Protection and Indemnity policy covers only cargo of other vessels due to the insured's negligence? A) Damage to other vessels not caused by collision. B) Wreck removal expense. C) Damage to property other than vessels. D) Damage to cargo of others.
D
Which one of the following represents the 3 types of hull coverage available for aircraft? A) "All risks" -- ground coverage; "all risks" -- not in motion coverage; and "all risks" -- not in flight coverage. B) "All risks" -- ground and flight coverage; "all risks" -- in motion coverage; and "all risks" -- not in flight coverage. C) "All risks" -- ground and flight coverage; "all risks" -- not in motion coverage; and "all risks" -- in flight coverage. D) "All risks" -- ground and flight coverage; "all risks" -- not in motion coverage; and "all risks" -- not in flight coverage.
D
Which one of the following statements is true regarding aviation loss exposures? A) The exposures are generally characterized as high frequency, low severity. B) There is a relatively large spread of risk. C) Because of similarity among aircraft, exposures are easily categorized. D) There is significant potential for catastrophic loss.
D
Which one of the following types of insurance provides coverage to non-commercial aviation accounts and pays a specified sum to passengers who suffer death, dismemberment, or loss of sigh in an aircraft accident? A) Aviation liability coverage. B) No-fault aviation liability coverage. C) Aviation medical payments coverage. D) Passenger voluntary settlement coverage.
D
Which type of "all-risks" aircraft full coverage provides the broadest coverage? A) "All-risks" --- not in flight coverage. B) "All-risks" --- component parts coverage. C) "All-risks" --- not in motion coverage. D) "All-risks" --- ground and flight coverage.
D