Chapter 22 Surety Bonds EXAM QUESTIONS

Under Crime Insurance, losses will only be covered if they are discovered within:

1 year

Unlike property insurance policies, surety bonds:

3 party contracts

custodian

Any partners or officers, or any employee while having care and custody of property inside the premises, excluding any person while acting as a "watch-person" or "janitor"

Premises Burglary & Robbery Policy

Covers property other than money and securities.

Burglary Insurance

Covers the taking of property (other than money/securities) from inside a locked business premises after business hours by a person (other than an employee) who enters or exits the building illegally. This policy will cover the cover the items stolen as well as the damage from breaking in/ out.

Which of the following is FALSE?

Surety bonds and Insurance policies are both three party contracts

Which of the following policies include the theft of money?

TDD

TDD (Theft, Disappearance, & Destruction)

Theft of Money and Securities covers _______ but NOT employee theft

The Postal Service wants to guarantee that a contractor will be able to complete an addition to the post office according to the contract specifications. The contractor should purchase a:

a performance bond

Which will deter burglary losses?

a watchman

Employee Theft Insurance

covers any type of employee theft, including: theft of money and securities. AKA Fidelity Bond if sold by surety company

Robbery Insurance

covers the taking of property by one who does or threatens to do bodily harm

TDD Insurance

covers theft, destruction, and disappearance of money/securities UNLESS taken by employee. Only used in the Inside the Premises- Theft of Money and Securities policy

Theft of Money and Securities includes the following EXCEPT:

employee theft

Fidelity Bonds cover acts of:

employees

The insured (obligee) under a Fidelity Bond is the?

employer

In a bid bond, the contractor is the:

principal

"custodians" can be :

robbed but not burgled

Theft Insurance covers:

robbery and burglary

A bail bond will be "forfeited" if the principal:

skips town and doesn't appear on the trial date

A Performance Bond is an example of a ________ bond

surety

The indemnity agreement is designed to protect the:

surety

The party who agrees to pay the insured (obligee) for loss caused by employee embezzlement under a Fidelity bond is the:

surety

Under a bond, the party who pays the insured for default is the:

surety

The indemnity agreement allows:

the Surety to sue the Principal

Surety bond underwriters consider which of the following to be the most important issue when determining whether to issue a bond?

the applicant's moral character

An employer has just discovered that an employee has stolen $15,000. The employee's fidelity bond covers only $10,000 of the loss. Who has first claim against the employee?

the employer for the $5,000

Blanket Position is a type of:

fidelity bond

Under a crime policy, the insured who suffers a loss is required to:

file a proof of loss form

Vandalism is covered under which policy?

Building Personal Property (BPP)

Fidelity Bond

Employee Theft is also known as:

Crime Insurance is available with which policy?

Commercial Package Policy

The section of the Employee Theft form which specifies the amount of the coverage is the:

Declarations

Employee Dishonesty covers:

None of the above.

The surety agent's authority is controlled by the:

Power of attorney, power account, letter of authority from the Surety Company

Robbery or Safe Burglary of "Other Property"

The coverage form that covers money and securities due to robbery from a custodian, safe burglary, or unlawful taking inside the premises is ________________________ coverage

A commercial building was burglarized. In addition to damaging the building during the breakin, the burglars stole a computer, took cash and stock certificates, and vandalized the premises. The Inside the Premises - Robbery or Burglary of Other Property policy will pay for:

The damage plus the computer plus the stock certificates

Premises Burglary & Robbery Policy

Under Crime Insurance, Robbery or Burglary of "Other Property" is also known as:

Theft, Disappearance, & Destruction

Under Crime Insurance, TDD stands for:

Who can issue a bail bond?

a licensed surety agent

Which of the following may post a bail bond?

a licensed surety company

Bonds:

cannot exceed one year

A government official handling money may be required to have a public official bond guaranteeing that the public official won't steal money. Which of the following city officials would most likely have to post a public official bond?

city treasurer

To guarantee to the lender that a building contractor will complete the construction, the contractor should purchase which Surety Bond?

performance

To guarantee to the owner that a building contractor will complete the job, the contractor should purchase which Surety Bond?

performance

Which is true regarding a bond if there is a default on the underlying contract and the surety is obligated to pay the penal sum?

the principal is liable to the surety