ExamFX Chapter 4: Quiz question

If an insured bakery is sued because its marketing states that the products of another bakery may not be safe, which coverage of a commercial general liability policy will defend the suit? A. Completed operations B. Personal and advertising injury liability C. Premises and operations D. Product liability

B

The insured with a claims made commercial general liability (CGL) policy may request in writing claim and occurrence information from the insurer at any time up to 60 days after the policy period ends. The insurer must provide the information A. As soon as practical. B. Within 45 days. C. Within 30 days. D. Within 60 days.

B

Under the commercial crime coverage inside the premises robbery or safe burglary of other property, what is the special per occurrence limit that applies to loss or damage to precious metals, precious and semiprecious stones, pearls, furs, manuscripts, drawings, or records? A. $1,000 B. $5,000 C. $10,000 D. $25,000

B

Which federal act provides benefits to injured civilians who are employed by the federal government? A. U.S. Longshore and Harbor Workers Compensation Act B. Federal Employees Compensation Act C. Federal Employers Liability Act (FELA) D. The Jones Act

B

Which of the following is a common exclusion found in Part D: Coverage for Damage to Your Auto of a PAP? A. Towing and labor B. Mechanical breakdown C. Glass breakage D. Riot or civil commotion

B

If an insured needs protection on property other than money and securities inside the premises from losses caused by breaking and entering after business hours, which of the following Crime Coverage forms should be purchased? A. Inside Premises - Robbery or Burglary of Other Property B. Robbery and Safe Burglary C. Extortion D. Theft, Disappearance and Destruction

A

The claims-made trigger is based on which of the following? A. The date the claim is first made B. The amount of the insured's deductible C. The place where the injury or damage occurs D. The date when injury or damage occurs

A

What type of coverage do umbrella policies provide? A. Excess coverage over an underlying or primary policy B. Property coverage for those who do not qualify for homeowners insurance C. Property coverage for the basic perils of fire, wind, and hall D. Primary coverage for risks that are difficult to insure

A

Which of the following special liability coverages will provide protection to managers of a corporation for claims arising from a wrongful act committed by the manager while in an official capacity? A. Directors and officers liability B. Employment practices liability C. Errors and omissions insurance D. Malpractice Insurance

A

Which of the following symbols is available to an insured with vehicles subject to no-fault coverage? A. Symbol 5 B. Symbol 6 C. Symbol 7 D. Symbol 9

A

Which would NOT be covered by the inside the premises-robbery or safe burglary of other property coverage? A. An employee is caught stealing cash from the register. B. Two men break a window during an attempted robbery C. Someone breaks in after business hours, pries open a wall vault and steals several valuable paintings. D. A store clerk is forced into the storage room and locked in while the intruder steals high-value merchandise.

A

Coverage for medical payments under a personal auto policy applies to expenses following a covered accident that are incurred and services rendered within what maximum time period? A. 90 days B. 3 years C. 5 years D. 1 year

B

Employment practices liability insurance (EPLI) would NOT cover claims arising from A. Discrimination. B. Deliberate law violation. C. Sexual harassment D. Wrongful termination.

B

All of the following statements concerning liability coverage are true EXCEPT A. Liability policies defend the insured against claims, real or alleged. B. The policyholder can sue the insurer whether or not all conditions and provisions of the policy have been met. C. The insurer cannot refuse to pay a claim even if the insured is bankrupt. D Liability policies normally include supplementary payment provisions.

B

B&B Market was sued when an employee detained a person he believed to be a shoplifter, but the person turned out to be the meter reader. Which coverage would apply to this suit? A. Crime coverage part B. Personal and advertising injury liability C. Bodily injury liability D. Property damage liability

B

Professional liability coverage protects the insured against legal liability resulting from A. Dishonest acts. B. The unprofessional conduct of an employee. C. Errors and omissions. D. Liability assumed under a contract.

C

The employee theft crime policy includes a coverage extension that applies to employees temporarily outside the coverage territory for up to A. 30 days. B. 60 days. C. 90 days. D. 120 days.

C

The primary purpose of a surety bond is to A. Secure a line of credit of a contractor. B. Pay employer losses. C. Make sure obligations are fulfilled. D. Eliminate the possibility of loss.

C

Which of the following losses would be covered under the property damage liability coverage of a personal auto policy? A. The insured's vehicle is damaged when it collides with a deer. B. A passenger in the insured's vehicle is injured following an accident caused by the insured. C. The insured damages a rented garage when he failed to stop in time. D. A temporary substitute vehicle is damaged while the insured is driving it.

C

A customer was injured in a supermarket parking lot when a grocery cart collided with the customer's leg. Coverage for this claim would be provided under A. Completed operations. B. Contractual liability. C. Product liability. D. Premises and operations.

D

An employee is injured while visiting the employer's out-of-state site. How will the workers compensation benefits be determined? A. The legal system will determine which state's benefits apply to this particular loss. B. The state's benefits that pay the lowest amount will be selected by the insurance company. C. The employee may elect to receive benefits from both the home state and the state in which the injury occurred. D Benefits will be provided if the state was listed on the policy information page.

D

An insurance agency could purchase an errors and omission insurance policy which would provide protection in the event of any of the following events EXCEPT A. The agency negligently fails to offer an increased limit of coverage or benefit under a policy. B. The agency is sued by an insured for giving incorrect advice. C. The agency negligently fails to renew a policy causing a client to suffer a financial loss. D. The agency loses commission income from policies that were not issued by the insurer.

D

An insured has an auto liability policy with limits of 25/50/15. The insured is involved in an accident caused by her negligence and is held legally liable for bodily injuries of 3 persons in the other auto as follows: "A $15,000, "B" $30,000, and "C" $35,000. How much will her insurer pay in total for all injuries? A. $105,000 B. $25,000 C. $30,000 D. $50,000

D

Prior to state directed workers compensation statutes being enacted, employees had A. No right to sue their employers for their work-related injuries. B. Limited payments for their work-related injuries. C. Guaranteed protection for their work-related injuries. D. To sue an employer for the loss and prove that the employer was at fault.

D

Surety bonds are written for a definite limit called A. Indemnity limit. B. The limit of liability. C. Loss costs. D. The bond penalty.

D

The party to a surety or fidelity bond who promises to fulfill the obligation is the A. Custodian. B. Surety. C. Obligee. D. Principal.

D

When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays A. The amount specified in the policy under the additional coverage provisions. B. The amount in excess of the policy's limits of liability. C. A percentage of the loss as described on the declarations. D. The excess over the self-insured retention.

D

Which of the following personal auto coverages would pay for the insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss? A. Medical payments B. Comprehensive coverage C. Collision coverage: D. Liability coverage

D

Which of the following statements is true concerning a bonded contractor who defaults on a construction performance contract? A. The surety may cancel the bond and avoid paying any losses or expenses. B. The contractor will lose his license to operate in the state. C. The principal has no obligation to complete any remaining work or to pay for the expenses. D. The obligee may engage another contractor and then seek reimbursement from the surety.

D

Which of the following would be covered under the crime coverage inside the premises - theft of money and securities? A. Loss resulting from the surrendering of property in any exchange or purchase B. Dishonest acts of employees, directors, trustees or representatives C. Accounting or arithmetic errors or omissions D. Loss or damage to a locked safe, vault, or cash register

D

Which of the following would be covered under the crime coverage inside the premises-theft of money and securities? A. Loss resulting from the surrendering of property in any exchange or purchase B. Dishonest acts of employees, directors, trustees or representatives C. Accounting or arithmetic errors or omissions D. Loss or damage to a locked safe, vault, or cash register

D

Who is NOT considered an employee in a commercial general liability (CGL) policy? A. Leased worker B. Full-time worker C. Part-time worker D. Temporary worker

D

Workers compensation rating is developed by applying a rating bureau job classification rate to each A. $250 of payroll B. $500 of payroll. C. $1,000 of payroll D. $100 of payroll.

D

A liability policy that provides coverage for a claim for injury or damage if the claim is first reported or filed against the insured during the policy period is called A. Claims-made form. B. Bodily injury/property damage form. C. Occurrence form. D. Premises coverage.

A

A passenger in a friend's car is injured while getting into the car. Which of the following statements would apply if both the passenger and the driver had medical payments coverage under a personal auto policy? A. The driver's policy would be primary. B. The driver's policy will act in excess of the passenger's policy. C. The passenger's policy would be primary. D. Both policies will share equally in the loss.

A

A professional liability policy will provide coverage for loss in all of the following cases, except, when the insured doctor was shown to be A. Criminally negligent. B. Incompetent C. Negligent D. Improperly trained.

A

A professional who wants coverage for all liability exposures should purchase what form of liability insurance? A. Commercial general and professional B. Directors and officers C. Fiduciary and employment practices D. Employee benefits

A

Which of the following statements would be correct if an insured failed to maintain the underlying limits as required by a personal umbrella policy? A. The insured would have to pay the self-insured retention limit B. The insured would be responsible for the amount required as underlying limits in the event of a claim. C. would have no effect on the umbrella policy. D. The policy will be cancelled.

B

Which of the following would be considered an insured under a business auto coverage form? A. A partner of the named insured for any covered auto owned by that person or a member of his or her household B. Anyone while using, with permission, a covered auto owned by the named insured C. The owner or anyone else from whom the named insured hires or borrows a covered auto D. Anyone using a covered auto while working in a business of selling, servicing, repairing, or parking autos if it is not the named insured's business

B

Which professional liability form provides coverage for liability arising out of errors or mistakes made in rendering medical services? A. Errors and omissions B. Physicians, surgeons and dentists malpractice C. Druggist D Directors and officers

B

With respect to commercial auto policies, the Garage Coverage Form provides liability protection for all of the following EXCEPT A. The insured's business products and work performed. B. The insured's business income losses due to personal injury. C. The insured's business premises. D. The insured's business autos

B

All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT A. Premiums on appeal bonds in any suit the insurer defends. B. Up to $250 for bail bonds required because of a covered accident C. Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered. accident. D. Up to $200 a day for loss of earnings due to attendance at hearings or trials.

C

All of the following are true statements regarding the supplementary payments of a commercial general liability policy EXCEPT A. They pay pre-judgment and post-judgment interest. B. They pay all reasonable costs incurred by the insured in helping to investigate or defend a claim. C. They pay defense costs even after the aggregate limit has been reached D. They pay all expenses incurred by the insured

C

All of the following situations would be covered under a professional liability policy EXCEPT A. An accountant's error that inflated a bid and caused a client to lose a major account. B. Negligence of an architect who designed an unsafe building. C. The failure of an attorney to properly defend a client due to his personal dislike of the client. D. Failure of a doctor to render the quality of care that is customary in the medical field.

C

Crunchy Flakes Cereal Company shipped some of its product in faulty containers that caused spoilage This resulted in some consumers becoming ill. If the company is sued for this event, it would be an example of a A. Personal Injury claim B. Contractual liability claim. C. Product liability claim. D. Premises and operations claim.

C

Most insurance policies exclude losses by A. Burglary. B. Robbery. C. Mysterious disappearance. D. Theft

C

Which of the following statements is true regarding the premium computation for workers compensation insurance? A. The insured pays a guaranteed premium based on an estimated value of the annual income received. B. The premium is set at the beginning of the policy period and will not change. C. A premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis. D. The premium basis for workers compensation insurance varies by the type of Industry in which the insured is involved.

C

Workers Compensation will pay under which of the following condition? A. Only when the employee is engaging in a negligent act B. Only when the employee is at fault C. Paid without consideration of fault or negligence on the part of either the employee or employer D. Only when the employer is engaging in a negligent act

C