Ch. 12: Misc. Commercial Policies
Medical expenses of the Farm Liability Coverage Form provide coverage if the accident is reported within:
3 years
Aircraft All Risk coverage includes which of the following levels? A On the ground, taxiing, and in flight B On the ground and not in motion only C Taxiing and in flight only D Taxiing and on the ground and not in motion only
A
All of the following are true of Ocean Marine Insurance, except: A Policies are standardized B Coverage is voided if implied warranties are violated C General average refers to a partial loss where the loss is shared D Property coverage must be written to full value to avoid a penalty
A
Livestock is not eligible for coverage on which Farm policy? A Special Cause of Loss Form B Livestock Coverage Form C Broad Cause of Loss Form D Basic Cause of Loss Form
A
Property eligible to be insured under the Nationwide Marine Definition does not include: A Personal property at the insured residence B Instruments of transportation C Imports and Exports D Domestic shipments
A
The Equipment Dealer's Coverage Form covers which of the following? A The equipment dealer's stock, primarily consisting of mobile agriculture and construction equipment, such as forklifts B The office furniture and fixtures of equipment dealers C The equipment dealer's building and contents D The tools and equipment in the equipment dealer's repair shop
A
The Farm Liability Policy would not cover which of the following? A A neighbor who is accidentally hurt on the insured's farm makes a claim for medical payments 4 years after suffering injury B The insured's daughter sells tainted pecans in a farm stand at the end of the farm driveway C The insured is sued by a neighbor after falsely stating that the neighbor's livestock was diseased D While visiting the neighbor's farm, the insured's son accidentally starts a fire that burns down a shed
A
Under the Equipment Breakdown Protection Coverage Form, the __________________ condition will apply if the covered equipment is subject to a dangerous exposure. A Suspension B Cancellation C Period of restoration D Covered property
A
What type of policy can broaden coverage and increase the limits of the underlying insurance? A Umbrella B Contingent Liability C Legal Liability Coverage D Difference in Conditions
A
Which of the following coverage forms covers equipment during transportation, unloading and installation until control is given to the purchaser? A Installation Floater B Equipment Dealer's Coverage Form C Contractor's Equipment Floater D Electronic Data Processing Floater
A
Which of the following is covered under the Electronic Data Processing Floater? A Printers B Accounts and records C Laptops D Notebooks
A
Which of the following is not an Aviation Insurance Cause of Loss? A Ground taxi only B Ground only C All risk D Ground including taxi
A
Which of the following is not correct about the Crop/Hail policy? A The policy coverage begins at 12:01 a.m. on the day before the crop breaks through the ground B Crops are covered for fire, lightning, freezing, drought, insects, and disease C The payment of a loss reduces the total amount of available insurance D Failure to harvest a mature crop is not covered
A
Which of the following is not covered under the Valuable Papers and Records Floater? A Securities B Maps C Mortgages D Blueprints
A
Which of the following perils cannot be insured under a professional liability insurance policy? A Property Damage B Cyber risks C Discrimination D Fraud
A
Which source of liability would a trucker be liable for under a Motor Truck Cargo form? A Cargo damage from overturn B Exercise of Public Authority C Acts of God D Faulty packing by a shipper
A
Which statement is false regarding inland marine policies? A The Bailees' Customers Form covers the insured's property when he/she has property of others in his/her care, custody and control B The Contractor Equipment Floater is usually written on an open peril basis C The Accounts Receivable Coverage Form is a controlled form D The Installation Floater provides coverage while the property is in transit and during installation
A
According to the Nationwide Marine Definition, all of the following risks may be insured by inland marine insurance, except: A Imports and Exports B Commercial Buildings C Bridges or Tunnels D Domestic Shipments
B
All of the following underlying coverages must be purchased in order to qualify for the Umbrella and Excess Liability policy, except: A CGL B Workers' Compensation C Employer's Liability D Liquor Liability
B
Covered equipment under the Equipment Breakdown Protection Coverage Form, includes: A Equipment manufactured by the insured for sale B Electrical and mechanical equipment used in the utilization of energy C Insulating and refractory material D Catalysts
B
Of the following parties to a surety bond, which one is the principal? A the insurer B the insured C the underwriter D the employer
B
The Equipment Breakdown Protection Coverage Form does not provide which of the following types of coverage? A Errors and omissions B Earth movement damage C Property damage D Spoilage damage
B
Under Ocean Marine Coverage, breach of each of the following implied warranties will void the contract, except: A Seaworthiness B Express C Legality D No deviation in voyage
B
Which of the following is not a coverage under the Farm Property Coverage form? A Coverage G - Other Farm Structures B Coverage H - Bodily Injury and Property Damage Liability C Coverage E - Scheduled Farm Personal Property D Coverage C - Household Personal Property
B
Which of the following is not covered under the Installation Floater? A Elevators B Construction equipment C Carpeting D Electrical equipment
B
Which of the following is true regarding Trip Transit Forms? A They cover shipments only while aboard, or being loaded or unloaded from a vehicle B They are used to insure single shipments C They are used to insure only furniture or household goods D The conveying vehicle must be described and listed in the policy
B
Which of the following would be included under Scheduled Farm Personal Property? A Fences B Livestock C Trees D Chutes
B
Which statement is true of the Equipment Breakdown Protection Coverage Form? A Defects, erasures, errors, limitations or viruses in computer equipment are included in the definition of breakdown B It may be written as a coverage part of the Commercial Package Policy C Every policy automatically includes Business Income and Extra Expense Coverage D Explosion and damage during testing are covered
B
All of the following are considered implied warranties, except: A No Deviation in Voyage B Legality C General Average D Seaworthiness
C
All of the following are covered under the Basic Causes of Loss to the Farm Property Coverage Form, except: A Lightning loss to livestock B Earthquake loss to livestock C Electrocution of Livestock D Flood loss to livestock
C
All of the following are true of Ocean Marine Insurance, except: A Coverage is voided if implied warranties are violated B General average refers to a partial loss where the loss is shared C Policies are standardized D Property coverage must be written to full value to avoid a penalty
C
Farm property loss conditions include which of the following? A Collapse B Reasonable Repairs C Loss to pairs or sets D Debris removal
C
Hull insurance on an ocean marine policy covers the vessel for which of the following? A Liability B Seaworthiness C Physical damage D Cargo damage
C
The Annual Transit Form is designed for which of the following? A Businesses that desire coverage only on their shipments to others B Businesses that desire coverage only on shipments received from others C Protecting property being shipped to others or being received from others on multiple occasions throughout the year D Businesses that do not make regular shipments
C
Which of the following bonds is not a type of Fidelity Bond? A Name Schedule B Individual C Court D Blanket
C
Which of the following covers an employee in a position of private trust and protects an employer against loss caused by the employee's dishonesty. A Performance bond B License bond C Fidelity bond D Lender's bond
C
Which of the following is correct regarding coverage under the Farm Property Coverage Form? A Coverage B - Other Private Structures includes farm buildings and silos B The limit for Coverage G is the same as the limit of Coverage A C For coverage to apply, there must be a limit shown in the Declarations D Coverage G includes loss of use
C
Which of the following is not an exclusion under the Umbrella policy? A Professional services B Contractual liability C Personal injury D Product Recall
C
Which of the following perils is not covered by Crop/Hail insurance? A Drought B Lightning C Failure to harvest D Fire
C
Which peril is excluded on the Crop and Hail Insurance policy? A Freezing B Drought C Wildlife D Insects and disease
C
Which statement is false regarding the Farm Property Coverage Form? A Coverage F includes unscheduled farm personal property B Exclusions include earth movement and intentional loss C Losses from nuclear damage are covered D Coverage D provides coverage for loss of use
C
The Collision or Running Down Clause in Ocean Marine Insurance covers:
Collision damage to another vessel when the shipper is liable
A value limitation for a shipment is not included in which type of bill of lading? A Released B Cargo C Waiver D Straight
D
All of the following are considered implied warranties, except: A Legality B Seaworthiness C No Deviation in Voyage D General Average
D
Bonds are contracts that involve all of the following parties, except: A Principal B Obligee C Surety D Director
D
Ocean Marine Insurance may become void if which of the following happens? A The vessel is decommissioned while at sea B The Inchmaree Clause is violated C The vessel changes course for any reason D The vessel does not comply with safety regulations
D
Of the following parties to a surety bond, which one is the principal? A the insurer B the employer C the underwriter D the insured
D
The Controlled Inland Marine Coverage forms provide insurance for which of the following? A Installation floater B Transportation floater C Builders risk D Signs
D
The Equipment Breakdown Coverage does not cover which of the following? A Spoilage damage B Business income C Expediting expenses D Breakdown test
D
The Farm Liability Insurance policy covers each of the following, except: A Coverage I - Personal and Advertising Injury B Coverage J - Medical Payments C Coverage H - Bodily Injury and Property Damage D Coverage K - Non-farming Liability
D
The Mobile Agricultural Machinery and Equipment Coverage Form does not include coverage for: A Farm tractors B Hay balers C Combines and cotton pickers that are specifically described with a limit of insurance for each D Irrigation equipment
D
The Nationwide Marine Definition includes all of the following classes of property, except: A Personal Property Floaters B Instrumentalities of Transportation C Imports D Umbrella
D
The implied warranty of seaworthiness is understood to mean which of the following? A The ship must have undergone a comprehensive inspection by the insurer B The ship has a full complement of emergency navigation equipment C The crewmembers are all certified D The ship must be seaworthy and have a competent crew
D
Which of the equipment is covered under the Equipment Breakdown Protection Coverage Form? A Equipment manufactured by the insured for sale B Catalysts C Insulating and refractory material D Electrical and mechanical equipment used in the utilization of energy
D
Which of the following is an element of fiduciary responsibility? A Liability protection B Contractual responsibility C Clean credit history D Duty of loyalty
D
Which of the following is not true of the Multi-Peril Crop Insurance? A Cereal grains are a covered crop B Tobacco is a covered crop C Adverse weather conditions is a covered peril D The residual market provides this coverage at the state level
D
Which statement is true regarding the Accounts Receivable coverage form? A It does not cover the cost of reconstructing lost records B It does not cover collection fees C It covers only the cost of reproducing the insured's accounts receivables records that are destroyed by an insured peril D It covers the insured's uncollectibles from customers due to a direct physical loss of the insured's business records
D
T/F: Both transit coverage forms can be written on an open or named peril basis.
True
An entity who owns a fleet of trucks and hauls its own goods should purchase:
a motor truck cargo owners form
Covered property is the insured's personal property or the property of others in the insured's care, custody, or control. Property must be in transit when shipped by any type of carrier or vehicle, or in any land vehicle owned or operated by the insured. Coverage applies while covered property is in the custody of the carrier for hire until it's either delivered to its destination or returned to the insured.
annual transit coverage form
Provides coverage for personal property of others while it's in the temporary care, custody, or control of the insured for storage, repair, servicing, or safekeeping
bailee's customer form
Which bond guarantees the contractor will proceed with the contract?
bid
The uniform document that common carriers are required to issue to the shipper of the goods being transported, is called a:
bill of lading
Covers buildings and structures during the course of construction and includes machinery, equipment, supplies, and fixtures that will become part of the building
builders risk floater
Covers physical damage losses to merchandise while in transit
cargo insurance
Provides coverage against catastrophic losses, extends liability limits, and provides more comprehensive coverage than that contained in underlying primary insurance
commercial umbrella insurance
Protects the directors and officers of a corporation or other legal entity for wrongful acts committed while acting in their capacity as directors and officers for the organization
directors and officers liability
Insures computers, component parts, printers and faxes, and systems used exclusively in the insured's computer operations, and data stored on software, tapes, discs, drums, or cells
electronic data processing coverage
Provides businesses with liability coverage against claims made by employees, former employees, and potential employees alleging their legal rights were violated
employment practices liability insurance
Covers property consisting principally of mobile agricultural and construction equipment, including property of others in the insured's care, custody, and control such as harvesters, tractors, and bulldozers
equipment dealers form
Written for professionals who provide services, such as insurance agents, adjusters, real estate agents, architects, accountants, attorneys, surveyors, and appraisers, whose negligent acts may result in financial harm to a third party
errors and omissions (E&O) insurance
Extends the limits of liability for the same covered losses of another policy
excess liability insurance
Covers an employer from direct loss due to fraudulent and dishonest acts by their employees
fidelity bond
Provides coverage when the prepayment of freight is lost due to a partial loss to cargo or a voyage that isn't completed
freight insurance
Ocean marine Hull Coverage and Cargo Coverage are written on which basis?
full valued basis
A partial loss sustained voluntarily, but done so to save a vessel or cargo from a total loss. An example of a general average loss is jettisoning part of the cargo (throwing it overboard) to prevent a vessel from sinking. When a general average loss occurs, the owners of the vessel and all cargo share proportionally in the loss.
general average
In bonding, the surety is also known as the:
guarantor
Covers physical damage to the vessel
hull insurance
Covers direct damage caused by the bursting of boilers, breaking of propeller shafts, or loss due to faults or errors in navigation by the crew. When this clause is added to the policy, it broadens the types of losses that are covered for the hull.
inchmaree clause
All voyages must be made legally and for a legal purpose. Any loss that occurs as the result of an illegal purpose will not be covered
legality
Protection and Indemnity (P&I) Insurance is similar to which of the following coverages? A Medical payments B Uninsured motorist C Physical damage D Liability
liability
Provides legal liability coverage for businesses in the business of selling, serving, distributing, manufacturing, and furnishing alcoholic beverages based on common law and statutory liability
liquor liability insurance
Written to protect medical professionals whose negligent acts or omissions may injure or harm patients
medical malpractice insurance
The ship must sail the course that was filed with the insurer at the time the policy was underwritten. Exceptions that don't void coverage in the event a loss include a deviation in voyage to avoid bad weather, make necessary repairs, save a human life, or obtain medical care.
no deviation in voyage
In Surety bonding, the party to whom the surety is answerable is the:
obligee
The party paid by the Surety if the Principal fails to perform (because this is the party harmed by the principal's dereliction of duty). If the Principal fails to perform as agreed, the (Surety) must perform in lieu of the Principal because of the requirements of Suretyship. Suretyship is the assumption of liability for the obligations of another; in other words, a guarantee. The Surety has a legal right of action against the Principal in the event of default until the amount of the loss is recovered. The defaulting Principal MUST repay the Surety.
obligee
The party that ultimately receives payment if the party owing the duty fails to perform
obligee
A partial loss sustained by a specific vessel or cargo. The loss is NOT shared by anyone other than the party with insurable or financial interest in the loss.
particular average
Ocean marine hull insurance covers a vessel for:
physical damage
The party owing the duty, performance, or honesty and is usually the party purchasing and insured under the bond
principal (obligor)
The party owing the duty, performance, or honesty and is usually the party purchasing the bond. The Principal is also called the Obligor and is usually the insurance agent's client or insured.
principal (obligor)
Liability insurance purchased by ship owners for virtually all types of maritime liability pertaining to the use of a vessel
protection and indemnity insurance
The vessel must be seaworthy at the time insurance goes into effect and upon the insurer's subsequent inspections. The vessel must always be in the command of a qualified and experienced captain and crew. The vessel must comply with safety and operational requirements
seaworthiness
A form of cost-sharing that applies when the policy drops down to act as primary coverage because the underlying primary policy doesn't cover a loss
self-insured retention
The party guaranteeing the duty, performance, or honesty of the Principal and issuing the bond (usually an insurance company)
surety (guarantor)
The party guaranteeing the duty, performance, or honesty of the Principal. The Surety issues the bond, is also called the Guarantor, and is usually an insurance company.
surety (guranator)
A guarantee of performance that specific obligations will be fulfilled
surety bond
This form is used by those who do not make regular shipments, but wish to insure a single shipment. Covered property is the property described in the Declarations and that isn't otherwise excluded. Coverage applies while covered property is in the custody of the carrier for hire or in any vehicle owned or operated by the insured while in transit.
trip transit coverage form
A person wishing to insure a single shipment would be best served by which form?
trip transit form
Liability insurance that is required to be in place that insures the same risk that is insured by an excess or umbrella policy and will respond to a loss before the excess or umbrella insurance responds
underlying insurance
