EXAM 2 QUIZZES

An insured keeps his truck in a garage. A deer gets trapped in the garage and, in an attempt to escape, climbs on top of the truck, breaking the windshield and causing several dents in the hood. The insured's Business Auto Coverage Form (BACF) provides physical damage coverage for specified causes of loss with a $100 deductible and collision with a $250 deductible. It will cost the insured $750 to replace the broken windshield and $1,200 to repair the dents. How much, if anything, will the business auto insurer pay for this loss?

$0

Acme Manufacturing Company is insured under two primary Commercial General Liability (CGL) policies. Policy A has an each-occurrence limit of $1,000,000 and Policy B has an each-occurrence limit of $2,000,000. Acme submitted a claim for $2,400,000 arising from a single occurrence for an incident that is covered by both policies. How much of the claim is payable under Policy B if the loss payment is based upon contribution by equal shares?

$1,400,000

Joe has a Business Auto Coverage Form with a $100,000 policy limit. In a claim that results in an $80,000 court award along with $50,000 for expenses due to defending the claim, what is the total amount that will be paid under Joe's Business Auto Coverage Form?

$130,000

UD Building Supply has a CGL policy with a Deductible Liability Insurance endorsement with a $5,000 per-claim deductible. One snowy Saturday, two customers fell in the parking lot and one slipped and fell inside the store. The claimants were awarded damages of $6,500, $3,500, and $9,000. How much will the insurer pay?

$5,500

Zelda has an automobile accident that is covered by a Business Auto Coverage Form. The accident results in a pollution expense due to gasoline spilling from the covered auto, as well as property damage and bodily injury to a third party. The cost for the bodily injury is $1,000 along with $2,000 property damage. The pollution clean-up cost is $5,000. Ignoring any deductible that may apply, how much will Zelda's insurer pay for these losses?

$8,000

Which one of the following is an example of injury or damage arising from an occurrence that would be covered by the products and completed operations liability portion of the Commercial General Liability (CGL) Coverage Form?

A defective gas range manufactured by the insured explodes causing injury.

The Workers Compensation and Employers Liability (WC&EL) Insurance Policy coverage applies differently to employees outside the United States. John has been assigned to work in Germany for an unspecified time period but is expected to be there for at least two years. Which one of the following is a true statement regarding the coverage for John under the WC&EL?

A foreign voluntary workers compensation endorsement would provide coverage equal to federal compensation benefits.

Under the Business Auto Coverage Form (BACF), collision is generally understood to mean

A striking together with violent impact.

Commercial general liability (CGL) policies are often issued with estimated premiums. When is the final premium determined?

After the policy has expired

To be covered under a workers compensation statute, an injury or disease (in most states) must meet which one of the following requirements?

Arise out of and in the course of the employment

For which one of the following reasons would an employer need to purchase the Maritime Coverage Endorsement on a Workers Compensation and Employers Liability Insurance Policy (WC&EL)?

Because the employer faces exposure to claims from its employees under the Jones Act

The Coverage A Pollution exclusion applies to all of the following, EXCEPT:

Bodily injury caused by smoke from a hostile fire

The purpose of the aggregate limit in the Commercial General Liability (CGL) Coverage Form is to

Cap the total amount of damages, other than defense costs, that the insurer will pay for the entire policy period.

Lance purchased an electric knife from Sharp Objects. When he first used the knife to carve a turkey, it malfunctioned resulting in injury to Lance. Sharp Objects' Commercial General Liability (CGL) Coverage Form will do which one of the following?

Cover any damages payable as a result of Lance's injuries subject to both the each occurrence limit and the products-completed operations aggregate limits

Which one of the following statements is true if the named insured is an individual under the Commercial General Liability (CGL) Coverage Form?

Coverage applies only to claims arising from the conduct of a business owned solely by the named insured.

The rental reimbursement endorsement to the Business Auto Coverage Form

Covers rental reimbursement expenses incurred past the policy expiration date.

Big Corporation leases automobiles for its employees to drive on business. In addition, a few employees use their own cars in performing their job duties. Which one of the following automobile loss exposures exists for Big Corporation?

Employers nonownership liability loss exposure

Becky, the owner of Becky's Muffin Shop, sees a teenage boy take a cookie from the counter and start to leave the store without paying for the cookie. Becky intends to injure him as punishment for his misdeed. She tackles the boy, pins his arms behind his back, and pushes his face to the floor until the police arrive. The boy suffers a cracked rib, dislocated shoulder, and broken nose. Which one of the following exclusions in the Commercial General Liability (CGL) Coverage Form applies to this occurrence?

Expected or intended injury exclusion

Injury arising out of which one of the following offenses could be covered under Coverage B of the Commercial General Liability policy?

False Arrest

Which one of the following expenses incurred by the insured without the consent of the insurer would be covered under a Commercial General Liability (CGL) Coverage Form?

First aid expenses incurred at the time of the occurrence

The products-completed operations hazard, as defined in the Commercial General Liability (CGL) Coverage Form, includes bodily injury and property damage under which one of the following circumstances?

It occurs away from premises owned or rented by the named insured and arises out of the named insured's product or work.

Which one of the following does employers liability cover?

Its liability for an employee's occupational injury or disease that is not covered by a workers compensation statute

Which one of the following is a sublimit subject to the each occurrence limit of a CGL policy?

Medical expense limit

A customer shopping at Clark's Food Market dropped a bottle of wine at the checkout counter. The bottle broke and cut the customer's leg. The customer required some minor medical attention and a few stitches. Which one of the following coverages under Clark's Commercial General Liability (CGL) coverage form would pay for the customer's expenses?

Medical payments coverage

Which one of the following statements is true regarding Coverage C—Medical Payments of the Commercial General Liability policy?

Medical payments coverage is a means of making prompt settlements.

Purchasing workers compensation insurance from a private insurer is one way employers demonstrate their ability to pay their financial obligations to injured workers. Which one of the following is another acceptable method of meeting this obligation?

Meeting state requirements to qualify as a self-insurer

Quality Limousine Service primarily provides transportation for weddings and funerals. Which one of the following commercial auto coverage forms would be appropriate for Quality Limousine?

Motor Carrier Coverage Form

Outdoor Sporting Goods Store has a Commercial General Liability (CGL) Coverage Form. While demonstrating the features of a small boat for a customer, an employee drops the anchor, injuring his foot. Does Outdoor Sporting Goods Store's CGL Coverage Form cover this loss?

No, because injuries to employees are excluded

Upon entering a restaurant, a customer grasped a handrail that broke off, causing the customer to fall and break his wrist. This is an example of which one of the following types of commercial general liability loss?

Premises and operations liability

Angela, a zookeeper, travels to another zoo at her employer's request in order to borrow a rare bird. During the return trip, Angela is exposed to a virus carried by the bird and becomes seriously ill. The illness leaves her with impaired balance and coordination, as well as an inability to concentrate. Which one of the following best describes how the workers compensation insurer for Angela's employer is likely to respond to a claim for Angela's illness?

Provide coverage because the majority of state statutes require coverage for occupational disease

The ISO Commercial Lines Manual organizes the Commercial General Liability (CGL) Coverage Form endorsements into categories that describe the purpose of the endorsements. One of those endorsement categories is the Employee Benefits Liability Coverage Form (CG 04 35), which is used to

Provide coverage for negligence in the administration of the named insured's employee benefits program.

Workers compensation benefits include which one of the following?

Rehabilitation benefits

The workers compensation policies for some monopolistic fund states do not include employers liability coverage. Which one of the following should an employer purchase to address this coverage gap?

Stopgap coverage

Which one of the following Business Auto Coverage Form (BACF) symbols requires that the insured notify the insurance company within 30 days of acquiring a new auto of the same type already insured for coverage to apply?

Symbol 7—Specifically Described Autos

Which one of the following symbols used in the Business Auto Coverage Form (BACF) is correctly described?

Symbol 9—Nonowned Autos Only

The Albert Corporation wishes to provide liability coverage for owned and nonowned autos, but not for hired autos. Under Albert's Business Auto Coverage Form, which symbol or symbols should be used for liability coverage?

Symbols 2 and 9

The Voluntary Compensation and Employers Liability Coverage Endorsement to a workers compensation policy is needed for which one of the following reasons?

The workers compensation laws of most states exempt some types of employment from statutory workers compensation benefits.

BBC Manufacturing (BBC) has an unendorsed Commercial General Liability (CGL) Coverage Form. BBC has expanded its sales outside the United States. Due to injuries from alleged defective products of BBC, lawsuits are brought in Europe, Mexico, Canada and Puerto Rico. Which one of the following statements describes the extent for which BBC's insurer will provide coverage or defense in these jurisdictions?

There is coverage and defense for Canada and Puerto Rico, since these are covered territories.

Before workers compensation statutes were enacted, which one of the following was the remedy for employees with work-related injuries?

They had to establish that the employer was at fault to recover damages.