Ch. 10 practice questions

Which of the following would not be eligible for coverage under the Business Auto Coverage Form?

An employee injured using the employee's personal auto in insured's business -Although the Non-owned Autos Only coverage covers the insured for the use of employee's cars in the insured's business, it does not cover injuries to the employee (these would be covered under a Workers' Compensation policy).

Which type of Commercial Auto policy would be best suited for a company whose employees used their own vehicles to make sales calls?

Business Auto Coverage Form -The BAP covers owned, leased, hired, rented, or borrowed private passenger autos, trucks, trailers, and semitrailers that are owned or used by the insured. This includes autos owned by employees while being used in the business.

Which of the following claims would be excluded under the Business Auto Policy?

Damage to property in the insured's care, custody, or control -Damage to property in the insured's care, custody, or control is excluded under the BAP.

All of the following are loss conditions of the BAP, except:

Examination of Your Books and Records -The Examination of Your Books and Records condition is a Common Policy Condition of the CPP.

Which section of the BAP provides coverage for autos in the care, custody and control of the insured?

This coverage is not provided under the Business Auto Coverage Form -Coverage for loss or damage to a customer's vehicle in the insured's care is excluded under the BAP. It is found in Section III of the Garage Coverage Form.

A mandatory deductible of what amount applies to completed operations claims under Section II of the Garage Coverage Form?

$100 -Completed operations claims under Section II - Liability Coverage of the Garage Coverage Form are subject to a mandatory deductible in the amount of $100.

What is the maximum the Supplementary Payments coverage of a BAP will pay for the cost of bail bonds?

$2,000 -In addition to the limit of liability, supplementary payments include claims expenses incurred by the insurer, up to $2,000 for the cost of bail bonds required because of an accident, reasonable expenses incurred by the insured at insurer's request, including up to $250 per day for an insured's actual loss of earnings, costs taxed against an insured in a lawsuit defended by the insurer, and post-judgment interest.

Which Business Auto Symbol provides the broadest coverage?

1 -Symbol 1 includes any auto, whether owned or not by the insured if it is used in the insured's business. The other choices refer only to owned autos only (2 and 3) or non-owned autos only (9).

Which of the following is not included in the definition of mobile equipment?

3/4 ton pickup driven occasionally on public roads -Mobile equipment includes land vehicles used mainly off public roads including those with attached machinery or equipment.

Which coverage is not available under the Garage Coverage Form?

Advertising liability -Other provided coverages include premises liability and auto liability.

ACV is generally used for which of the following types of claims?

Auto Physical Damage -Of the choices, Auto Physical Damage Coverage will pay the lesser of the actual cash value or the cost of repairing the damage with property of like kind and quality.

The Garage Coverage Form may be written for all of the following, except:

Car rental agency -A car rental agency would not be eligible under this form, which is intended for businesses that sell, service, or store automobiles.

Which source of liability would a trucker be liable for under a Motor Carrier Coverage Form?

Cargo damage from overturn -The Motor Carrier Coverage Form provides Trailer Interchange Coverage which protects against physical damage such as comprehensive and/or collision coverage.

Which of the following is not automatically included in a Garage Coverage Form?

Contractual Liability -The Garage Coverage Form provides liability coverage for Premises and Operations, Products, and Completed Operations Liability, but not for Contractual Liability.

Which type of Commercial Auto policy would be best suited for a parking garage business?

Garage Coverage Form -The Garage Coverage Form is designed to provide coverage for businesses engaged in the sale, service, parking, or storage of automobiles. Eligible businesses include automobile vehicle dealerships, sales agencies, repair shops, service stations, storage garages, and public parking places.

What is the name for insurance covering the amount an insured is legally obligated to pay for loss to a customer's vehicle in the insured's care?

Garagekeepers coverage -Garagekeepers coverage pays for loss or damage to a customer's vehicle and equipment while in the insured's care for servicing, repair, parking, or storing.

Under the Motor Carrier Coverage Form, Trailer Interchange Coverage would cover which of the following losses?

Joe's company is legally liable for physical damage sustained by a non-owned trailer -Trailer Interchange Coverage is physical damage coverage for non-owned trailers and their equipment if they sustain a loss and the insured is legally responsible for the damage.

Which of the following is true of the Towing coverage provided under Section III of the BAP?

Labor must be performed at the place of disablement -The policy automatically pays for the costs of towing and labor incurred each time a covered private passenger type auto is disabled. Labor must be performed at the place of disablement.

The deregulation of the trucking industry was accomplished through which 1980 regulation?

Motor Carrier Act -This regulation requires certain vehicles carry minimum liability limits ranging from $750,000 to $5,000,000, depending on the type of merchandise transported.

Which of the business auto coverage forms provides insurance for a contract carrier that transports its own goods in addition to the goods owned by others?

Motor Carrier Coverage Form -The Motor Carrier Coverage Form provides coverage for contract carriers for the transportation of goods, for hire, that are owned by others and transporting their own property.

Section II (Liability) of the Garage Coverage Form covers which of the following?

Property damage for which the insured is legally responsible -Section II covers property damage liability for which the insured is legally responsible.

Choose the false statement regarding commercial auto coverage.

Section II of the Garage Coverage Form - does not provide completed operations coverage -Section II of the Garage Coverage Form provides bodily injury and property damage liability coverage for losses resulting from garage operations. In addition, the form includes coverage for Premises and Operations Liability, Products Liability, and Completed Operations Liability.

All of the following regarding Commercial Auto coverage are true, except:

Section II of the Garage Coverage Form does not include completed operations coverage -The Garage Coverage Form - Section II does cover completed operations.

Which section of the Garage Coverage Form provides physical damage coverage for the insured's covered autos?

Section IV -Section IV of the garage coverage form provides physical damage coverage for covered autos the named insured owns, hires, rents, leases, or borrows in the same fashion the business auto coverage form provides coverage.

Which section of the BAP provides auto medical payments coverage?

This coverage is available by endorsement only -Commercial auto policies do not automatically provide medical payments coverage, which must be added by endorsement.

Which of the following would be needed by trucking company that hires independent truckers who may hold the insured liable for their accidents?

Trailer Interchange Coverage -The Trailer Interchange Coverage is physical damage coverage for non-owned trailers and equipment if there is a loss and the insured is liable.

A firm that transports goods of others, rather than its own goods, would purchase a:

Truckers Coverage Form -A Truckers Coverage Form is designed for common and contract carriers hauling the goods of others.

Physical damage coverage under a Business Auto Coverage Form includes all of the following, except:

Uninsured Motorist Coverage -The three types of physical damage coverage under the BAP are collision, comprehensive, and specified perils. Uninsured Motorist is a separate coverage added by endorsement.

When an employee is injured in an auto accident while on company business, he/she would be covered under:

Workers' Compensation Insurance -Workers' Compensation is the exclusive remedy for on-the-job injuries.