09/27 Exam

An insured has extended her business income coverage part to a newly acquired location. The insured was able to take this action because her coinsurance percentage is at least

50%

An executive is accused of sexual harassment. What type of coverage would respond?

Employment practices liability

The purpose of purchasing an umbrella liability policy is to provide

Excess insurance over the primary liability policy.

Which of the following is NOT a type of hazard?

Exposure

If an agent follows the rules and terms of his agent contract, he is exercising his

Express authority

Who directs payment to fund a Subsequent Injury Fund?

Industrial Commision

Twenty-eight days have passed since Rex failed to pay his premium on a Personal Lines Property and Casualty Policy. Rex receives notice from his insurance company and pays his late premium the next day. What will happen to his coverage?

It will be renewed.

An insured was involved in an accident that was caused by a tire blowing out. The insured was severely injured and incurred medical expenses of $100,000. The insured brought a recovery action against the manufacturers of the auto and the tires. The court held that the tire was the cause of the accident. Who is required to pay for this loss?

Manufacturer of the tire

The individual named insured endorsement offers liability coverage to the sole proprietor of a business and his or her family members. Which coverage is also provided under the individual named insured endorsement of a commercial auto policy for owned passenger vehicles and nonowned autos?

Physical damage coverage.

All of the following are true regarding the federal Fair Credit Reporting Act EXCEPT

Reports may be sent to anyone who requests one.

What are the types of compensatory damages?

Special and general

In contrasting stock insurers with mutual insurers, which statement is true?

Stock insurers are owned by the shareholders and issue nonparticipating policies.

Which of the following is a federal act that covers crews of ships the same as railroad workers?

The Jones Act

When does the insurer's duty to defend a suit or claim end in a commercial general liability policy?

When loss payments equal the appicable limit of insurance.

In order to receive transportation expenses under the personal auto policy following damage to your auto caused by collision you must have

Collision coverage

Which coverage form insures the owner's personal property in condominiums?

Condominium unit-owners coverage form

Which of the following exposures is not covered under the garage liability coverage form?

Contractual liability

Which of the following types of bonds guarantees that the person who brings legal action against another will be able to pay court costs and any resulting damages in the event he or she loses the case?

Cost

Other than perils, the difference in the three DP forms is in coverage provided. Which of the following coverage options is covered by the DP-2 and D-P3 but not DP-1?

Coverage E - Additional Living Expense

Which of the following dwelling policies require insurance equal to at least 80% of the replacement value of the dwelling at the time of loss in order to provide replacement cost coverage?

DP-2 and DP-3

Who holds the power to renew a binder?

Director

An insured's diner suffered a fire loss. In addition to the damage caused by the fire, the floor covering had to be replaced because of the water damage. It took 4 weeks for the repair's to be completed. The insured was without income for that period of time. The insured's policy includes both direct and indirect loss coverage. What part of the loss would be paid as indirect loss?

The loss of income for the time the diner was closed.

All of the following are considered insured under the hired and nonowned auto liability endorsement added to a businessowners policy EXCEPT

The owner of a nonowned vehicle

What is an insured contract?

Those contracts that are automatically covered under the exposure of premises coverage in a general liability insurance contract

What is the purpose of the ordinance or law coverage endorsement?

To remove the exclusion of losses resulting from ordinances or laws.

The main difference between occurrence and claims-made liability policies is

Trigger