AINS 23

One of the airplanes in the Jake's Message Trailers fleet has a seized engine and is in a prolonged lay-up in a hangar, awaiting a replacement engine. The defective engine has been removed from the plane. Jake's wants to insure the plane for physical damage but would like to pay a low premium for this out-of-service aircraft. Which type of physical damage coverage should Jake's purchase for the aircraft?

"All-risks"--not in motion aircraft coverage

Jill, who is the named insured on an unendorsed Business Auto Coverage Form (BACF), hired Jimmy to assist in her business. Jill asked Jimmy to purchase some business supplies. While he was driving his own car, Jimmy's vehicle was hit by an uninsured motorist. Jimmy's medical expenses were $2,000, and the damage to his car was $4,000. Which one of the following correctly indicates how much Jill's auto insurer will pay Jimmy for his losses?

$0. An employee of the insured is not an insured if the covered auto is owned by the employee.

Martin's Dry Cleaners (MDC) is insured under a Business Income (and Extra Expense) Coverage Form with a $1 million Business Income limit of insurance for the dry cleaners location, subject to option (2) Business Income Other Than "Rental Value". None of the optional coverages of the Business Income (and Extra Expense) are in effect and no endorsements apply to MDC's Business Income (and Extra Expense) Coverage Form. The one year policy period shown in the declarations began on July 1, 20X1. On October 1, 20X1, access was denied to MDC for five weeks by civil authorities because of fire damage to a shop right next door to MDC. The resulting loss of business income that MDC sustained was $70,000, including a $5,000 loss for the first 72 hours following the time of action by civil authority. After the first 72 hours, MDC sustained $11,000 business income loss in week 1, $12,000 business income loss in week 2, $13,000 bu

$50,000 of Martins dry cleaners business income would be covered under the Business Income (and Extra Expense) Coverage Form. Coverage applies up to a maximum of four consecutive weeks after the time of the action.

Which one of the following is the maximum National Flood Insurance Program (NFIP) limit per building for commercial properties?

$500,000 is the maximum NFIP limit per building for commercial properties.

A bond that guarantees that investors will be paid both the interest due on municipal bonds and the principal when the bond matures is a

A credit enhancement financial guaranty bond guarantees that investors will receive the interest due on municipal bonds as well as the principal when the bond matures.

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

A striking together with violent impact.

Under the Commercial General Liability (CGL) Coverage Form, medical payments coverage applies to which one of the following?

A volunteer worker of the named insured.

Although buildings can be classified in many ways, the system used to classify buildings for purposes of rating commercial property insurance is based on their

Ability to resist fire.

Ajax Corporation (Ajax) is insured under a Business Auto Coverage Form (BACF) with a $300,000 liability limit. An Ajax employee is involved in an accident while using his own truck to move property belonging to Ajax. The employee's personal auto policy has a $500,000 liability limit. If $600,000 in damages is awarded because of the accident, Ajax's BACF insurer would pay

Ajax's BACF pays $100,000 over its employee's policy, as the automobile owner's insurance is primary and the non-owner's insurance is excess.

Agreed Value optional coverage is often elected by risk averse firms in order to

Alleviate the risk of not complying with the Coinsurance condition.

Which one of the following would be covered under the filed inland marine Valuable Papers and Records Coverage Form?

An architect's blueprints and plans

Which one of these is an example of an entity to whom the Coverage A Liquor Liability exclusion would not apply?

An insured not in the alcoholic-beverage business that becomes liable for injury resulting from serving alcoholic beverages

Aircraft liability coverage can be structured as a single limit, or separate limits may apply to

Bodily injury excluding passengers liability, passenger bodily injury liability, and property damage liability coverages.

Rachel's salon is insured under a commercial package policy that includes the Business Income (and Extra Expense) Coverage Form. Rachel's salon sustained an actual loss of business income at the described premises as a result of a fire damage and access to Rachel's salon was prohibited by civil authority. Rachel decided to rent a temporary location and rent substitute equipment while her shop was being repaired. However, while at the temporary location, Rachel's regular customers attended other salons and Rachel' income was below normal levels. Rachel returned to her salon once it was repaired and her business income returned to normal. Which one of the following insuring agreements would best apply to Rachel's claim under the Business Income (and Extra Expense) Coverage Form?

Business Income and Extra Expense insuring agreements

Which one of the following is an example of the exclusion for Indirect Loss in the ISO Commercial Crime Coverage Form?

Business income loss

Which one of these is an example of a loss that would be covered under the Commercial Crime Coverage Form?

Compensatory damages arising directly from a loss covered by the policy would be covered under the Commercial Crime Coverage Form.

An environmental insurance policy that covers the loss exposures of a contractor performing environmental remediation services on contaminated sites is a(n)

Contractors pollution liability policy.

John Smith owns a bookstore that is covered under an unendorsed Commercial General Liability (CGL) Coverage Form. A customer falls in the store resulting in a covered lawsuit against Smith. Smith is asked to testify in court by the defense attorney; Smith incurs $500 in lost earnings for the one day trial. The supplementary payments section of Smith's CGL policy will

Cover the lost earnings up to $250.

A claim under an ISO Commercial Crime Coverage Form is subject to the Valuation—Settlement condition. Which one of the following is true regarding this Valuation—Settlement condition?

Damaged property is valued at replacement cost or the insurer can repair or replace the property.

The specified causes of loss coverage of the business auto policy includes coverage for which one of the following?

Derailment of a conveyance transporting the insured vehicle is one of the covered items under specified cause of loss coverage.

Directors and officers liability insurance is insurance that covers a corporation's directors and officers against liability for which one of the following?

Directors and officers liability insurance covers a corporation's directors and officers against liability for their wrongful acts that would be covered under the policy.

Which one of the following is a workers compensation rating plan that rewards the insured for successfully controlling its losses?

Experience rating is a workers compensation rating plan that rewards the insured for successfully controlling its losses.

Professional liability insurance is now available for more than just the technical professions. These occupations range from chemists to veterinarians, all of which entail liability for which one of the following?

Failure to use the degree of skill expected of a person in a particular field

James is in the process of forming his own brokerage company which will include several employees. James will be best protected by purchasing which one of the following to cover the crime loss exposures of his company?

Financial Institution Bond.

Fiduciary bonds are commonly required of a person who does which one of the following?

Holds property in trust for the benefit of others

Omega Holdings owns a building with an actual cash value of $200,000. The property is insured under a Building and Personal Property Coverage Form (BPP) with a building limit of $140,000, an 80 percent coinsurance clause, and a $1,000 deductible. The policy includes a Causes of Loss—Broad Form covering the building. The building suffers $80,000 in fire damage. Which one of the following amounts will Omega's insurer pay?

Incorrect. The insured should have carried 80% of $200,000 or $160,000. Instead the insured carried only $140,000. [($140,000/$160,000) x $80,000] - $1,000 = $69,000.

ABC, Inc., is a large, national retailer that sells a variety of consumer goods. ABC carries a Commercial Package Policy that includes Insurance Services Office's Commercial Crime Coverage Form (Loss Sustained) with the following insuring agreements: Employee Theft; Forgery or Alteration; Inside the Premises—Theft of Money and Securities; and Inside the Premises—Robbery or Safe Burglary of Other Property. The limit of insurance for each one of these insuring agreements is $100,000 and the deductible per occurrence for each one of these insuring agreements is $1,000. The policy year is 20X1. On June 5, 20X1, a thief entered ABC through an open window while the store was closed and stole $2,500 worth of electronic merchandise. The thief also broke into a safe causing $1,500 damage to the safe and stole $3,000 in cash from the safe. Under which insuring agreement would the damage to the safe be covered?

Inside the Premises—Theft of Money and Securities

Loss to property after it has been transferred or surrendered is an exclusion that applies under certain circumstances to which one of the following Commercial Crime insuring agreements?

Inside the Premises—Theft of Money and Securities

Which one of these exclusions applies only to the Employee Theft insuring agreement?

Inventory Shortages applies only to the Employee Theft insuring agreement.

Which one of the following statements is correct with respect to the Newly Acquired or Constructed Property extension of coverage of the Building and Personal Property Coverage Form (BPP)?

It covers newly acquired buildings, provided the purpose of the newly acquired building is similar to the use of the building described in the declarations.

Which one of the following best describes the Ordinance or Law Coverage endorsement to the Building and Personal Property Coverage Form's Coverage B?

It covers the cost to demolish the undamaged portion of a building and remove its debris when demolition is required by the building code.

Which one of the following best describes the bailees' customers policy?

It is purchased by bailees to cover damage to customers' goods while in the possession of the bailee, regardless of whether the bailee is legally liable for the damage.

Which one of the following statements is correct with respect to crop-hail insurance?

It may also cover harvested crops against named perils while being transported to the first place of storage.

Which one of the following statements about the appraisal condition in Section IV of the Business Auto Coverage Form (BACF) is true?

It may lead to a binding settlement, even if the appraisers for the named insured and the insurer cannot agree.

Which one of the following best describes the effect of the Voluntary Compensation and Employers Liability Endorsement?

It obligates the insurer to pay an amount equal to the compensation benefits that would be payable if exempt employees were subject to the workers compensation law.

Which one of the following is correct with respect to the Increased Cost of Construction additional coverage of the Building and Personal Property Coverage Form (BPP)?

It provides a small amount of insurance to cover the increased cost to comply with ordinances or laws regulating the repair, rebuilding, or replacement of covered buildings.

Which one of the following statements is correct with respect to the Insurance Under Two or More Coverages condition of the Commercial Property Conditions Form?

It states that the total payment under all applicable coverage parts is limited to the actual amount of the loss.

Under which one of the following conditions of an insured's ISO Equipment Breakdown Protection Coverage Form and its commercial property insurance coverage does each insurer pay half of certain losses to quickly indemnify the insured, with the insurers then resolving their differences among themselves?

Joint or Disputed Loss Agreement

CD Services (CDS) provides e-commerce services to entities that are too small to maintain an e-commerce program of their own. CDS relies exclusively on personal computers to perform its activities. A fire destroys the building in which it operates, including all of the electronic data. CDS has an Insurance Services Office (ISO) Business Income (and Extra Expense) Coverage Form. Which one of the following explains how CDS's business income policy will apply to the loss from the interruption of computer operations?

Limited to $2,500 for loss of income and extra expense due to the Interruption of Computer Operations additional coverage

The Computer Store (TCS) brought a claim under the Employee Theft insuring agreement of its ISO Commercial Crime Coverage Form. TCS's claim is based on an inventory shortage. To overcome the inventory shortages policy exclusion, TCS must demonstrate that the

Loss can be established wholly apart from inventory computations.

A multinational enterprise may purchase admitted coverages and combine them with difference in conditions (DIC) and differences in limits (DIL) coverages written to wrap around the admitted coverages, thereby accomplishing which one of the following?

Maintaining uniform coverage for all the insured's locations

Mary works as a volunteer at a local library. The library is covered by an unendorsed commercial general liability policy. Which one of the following best describes Mary's status under the policy if she is named in a lawsuit by a visitor that was injured in the library?

Mary would qualify as an insured.

Workers compensation statutes require employers to demonstrate financial ability to pay any claims that might arise. Possible methods for meeting this obligation include which one of the following?

Obtain coverage from an assigned risk plan

The type of activities conducted inside a building, some of which are riskier than others, is referred to as the

Occupancy refers to the type of activity conducted inside the building. Some occupancies are riskier than others.

Which one of the following statements is correct with respect to Property Not Covered under the Building and Personal Property Coverage Form (BPP)?

Only contraband or property in the course of illegal transportation or trade is totally uninsurable by endorsement or in other policies.

Under the Building and Personal Property Coverage Form (BPP), which one of the following extensions covers loss only by fire, lightning, explosion, riot or civil commotion, and aircraft?

Outdoor Property

Most insurers that offer businessowner-type policies for contractors rate the liability coverage for eligible contractors separately from the property coverages by applying a separate liability rate to the insured's

Payroll, receipts, or number of full- and part-time employees.

Commercial auto liability premium tables list premiums for private passenger autos by rating territory and by

Policy limit.

Package modification factors for the Commercial Package Policy (CPP) often

Provide a premium discount for the insured.

The Auto Medical Payments Coverage endorsement to the business auto policy provides coverage for

Reasonable and necessary medical and funeral expenses incurred by a person injured while occupying a covered auto.

A filed jewelers block coverage form is designed to meet the needs of

Small retail jewelers.

Which one of the following statements is true regarding insurance coverage for foreign operations?

Small to mid-sized businesses in the United States frequently must concern themselves with loss exposures that exist outside of the usual coverage territory in standard U.S. coverage forms.

Which one of the following is an exclusion unique to the Causes of Loss—Special Form?

Smog is specifically excluded from the Causes of Loss—Special Form.

Which one of the following can be added to a builders risk policy to cover various incidental expenses that might result from a physical loss to a building project, such as additional interest, advertising expenses, or real estate taxes?

Soft costs coverage covers these expenses.

Which one of the following describes property that can be covered under the filed inland marine Theatrical Property Coverage Form?

Stage scenery, costumes, and other similar personal property, including property of others in the insured's care, that insured has used or intends to use in a production stated in the declarations

The most widely used financial institution bond is

Standard Form No. 24 is the most widely use

A clause included in ocean marine cargo insurance that covers the cost of reasonable measures that the insured is required to take to protect property from damage at the time of loss is referred to as the

Sue and labor clause.

In the ISO Business Income Coverage forms (BIC), which one of the following is defined as the slowdown or cessation of business activities or, in the case of rental value coverage, means that a part of the premises is rendered untenantable (unfit for occupancy)?

Suspension is defined as the slowdown or cessation of business activities or, in the case of rental value coverage, means that a part of the premises is rendered untenantable (unfit for occupancy) in the ISO BIC.

Which one of the following symbols in the Business Auto Coverage Form (BACF) indicates personal injury protection (PIP) coverage is provided for those autos that are required by law to have it?

Symbol 5—Owned Autos Subject to No-Fault

Which one of the following coverage symbols in the ISO Business Auto Coverage Form requires that the insured notify the insurer within 30 days of newly acquired autos in order for those autos to have coverage under the policy?

Symbol 7—Specifically Described Autos requires that the insured notify the insurer within 30 days of newly acquired autos in order for those autos to have coverage under the policy.

Sue is injured at work, and her job responsibilities are curtailed for 30 days, after which time she is fully recovered. Sue has which one of the following types of workers compensation disabilities?

Temporary partial disability

ABC, Inc., is a large, national retailer that sells a variety of consumer goods. ABC carries a Commercial Package Policy that includes Insurance Services Office's Commercial Crime Coverage Form (Loss Sustained) with the following insuring agreements: Employee Theft; Forgery or Alteration; Inside the Premises—Theft of Money and Securities; and Inside the Premises—Robbery or Safe Burglary of Other Property. The limit of insurance for each one of these insuring agreements is $100,000 and the deductible per occurrence for each one of these insuring agreements is $1,000. The policy year is 20X1. On June 5, 20X1, a thief entered ABC through an open window while the store was closed and stole $2,500 worth of electronic merchandise. The thief also broke into a safe causing $1,500 damage to the safe and stole $3,000 in cash from the safe. Under which insuring agreement would the theft of electronic merchandise be covered?

The $2,500 theft of electronic merchandise is not covered under the Inside the Premises—Theft of Money and Securities insuring agreement, because the stolen property does not qualify as money or securities. This theft is also not covered under the Inside the Premises—Robbery and Safe Burglary of Other Property, because the cause of loss does not meet the policy definition of robbery or burglary.

Which one of the following statements is correct with respect to coinsurance used with commercial property policies?

The 80 percent coinsurance rate is reduced when a policy requires a higher coinsurance percentage.

Which one of the following statements is correct with respect to the Building and Personal Property (BPP) Coverage Form?

The BPP lists several types of classes of property that do not qualify as covered property.

Which one of the following causes of loss is covered by the commercial property policy Causes of Loss—Broad Form but not the Basic Form?

The Broad Form covers all the Basic Form causes of loss, plus: (1) falling objects, (2) weight of snow, ice, or sleet, (3) water damage, and (4) collapse-due to specified causes-as an additional coverage.

Three employees of a hardware store damaged a tile floor while moving concrete pavers from their delivery truck to an outdoor patio shop. Many of the pavers were also damaged during the move. How will the hardware store's Business Auto Coverage Form apply to this loss?

The Business Auto Coverage Form will cover only the property liability for the damage to the tile floor. The Business Auto Coverage Form will cover damage from accidents that occur while property is being moved from a covered auto to the place where the property is finally delivered. Damage to the pavers is not covered because of the care, custody, or control exclusion.

The Commercial General Liability (CGL) Coverage Form defines the term "occurrence" as

The Commercial General Liability (CGL) Coverage Form defines the term "occurrence" as an accident, including continuous or repeated exposure to substantially the same general harmful conditions.

ABC, Inc., is a large, national retailer that sells a variety of consumer goods. ABC carries a Commercial Package Policy that includes Insurance Services Office's Commercial Crime Coverage Form (Loss Sustained) with the following insuring agreements: Employee Theft; Forgery or Alteration; Inside the Premises—Theft of Money and Securities; and Inside the Premises—Robbery or Safe Burglary of Other Property. The limit of insurance for each one of these insuring agreements is $100,000 and the deductible per occurrence for each one of these insuring agreements is $1,000. The policy year is 20X1. During 20X1, ABC performed an inventory calculation and determined that the actual physical inventory on hand was $102,000 less than what the company's records indicated. ABC could not establish that it had sustained a loss without the inventory calculation. How much of this loss will be covered by the Employee Theft insuring ag

The Employee Theft insuring agreement does not provide coverage for inventory shortages when the insured can only establish a loss by means of an inventory calculation. If the insured can establish it has sustained a loss by means other than an inventory calculation, the Commercial Crime Coverage form allows the insured to offer inventory records and actual physical count of inventory in support of the amount of loss claimed. D. $102,000

Which one of the following is an option in the business income coverage form that deletes the coinsurance clause while limiting loss payment to the lesser of (1) the amount of loss sustained during the 120 days following the beginning of the period of restoration or (2) the policy limit?

The Maximum Period of Indemnity coverage option is an option that deletes the coinsurance clause while limiting loss payment to the lesser of (1) the amount of loss sustained during the 120 days following the beginning of the period of restoration or (2) the policy limit.

Which one of the following statements about provisions in Part One of the Workers Compensation and Employers Liability Insurance Policy is true?

The accident causing the injury must occur during the policy period.

Which one of the following is a required component of the commercial property coverage part that specifies the perils covered?

The causes of loss form is a required component of the commercial property coverage part that specifies the perils covered.

A not-for-profit public interest group posted a newspaper editorial on its electronic chatroom that falsely accused a local politician of criminal activity. The public interest group is insured under an unendorsed Commercial General Liability (CGL) policy. The politician who was falsely accused filed suit against the public interest group for libel. Which one of these statements best describes the probable response the public interest group will receive from its insurer after the insurer reviews these facts?

The claim will be denied because Coverage B of the CGL policy excludes any injury arising out of an electronic chatroom or electronic bulletin board that is owned, hosted, or controlled by the insured.

Which one of the following is true about the Business Income Agreed Value coverage option in a business income form?

The coinsurance condition is suspended as long as the insured carries the amount of insurance that is agreed upon with the insurer.

Baker Company's salesperson negligently injures a pedestrian while driving a Baker Company vehicle on a sales call. Under which one of the following legal doctrines could the pedestrian hold Baker Company responsible for injury caused by the negligence of its employee?

The doctrine of respondeat superior states that an employer may be held liable for the acts of an employee as long as those acts are within the scope of his or her employment.

Under the Commercial General Liability (CGL) Coverage Form, the named insured's employees and volunteer workers are insureds for liability claims arising from which one of the following?

The employees' or volunteer workers' duties as such, subject to certain exceptions

Which one of the following is true regarding disclosures and endorsements pertaining to the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA 2015)?

The endorsements define an insured loss as any loss resulting from an act of terrorism, and for purposes of workers compensation coverage, the endorsements include acts of war.

Part Two of the Workers Compensation and Employers Liability Policy requires which one of the following with respect to covered injuries?

The injury must arise out of employment necessary or incidental to the insured's work in a state or territory listed in the policy.

Which one of the following losses would be covered by the Business Auto Coverage Form (BACF)?

The insured has agreed to pay for liability losses caused by the insured's negligence that a shipper may incur while the insured is hauling goods for the shipper.

Which one of the following losses would be covered by the Auto Medical Payments Coverage endorsement to the business auto policy?

The insured is injured when he trips and falls exiting a covered auto.

The Delicious Restaurant suffered a covered money loss under its ISO Commercial Crime Coverage Form. The form had a limit of $10,000. The value of the loss was $14,500. The insurer paid the policy limit. After paying the $10,000 policy limit, the insurer recovered $11,000 of the stolen money. Ignoring any deductibles that might apply, what dollar amount of covered property, if any, would go to Delicious Restaurant and to the insurer?

The insured receives $4,500 and the insurer $6,500. The insured receives the amount of the loss not covered by insurance and then the insurer recovers up to the amount of its loss payment.

In the liability coverage agreement of the Business Auto Coverage Form (BACF), the insurer expresses its three distinct duties. Which one of the following identifies one of those duties?

The insurer agrees to pay covered pollution costs, to pay damages, and to defend the insured.

Which one of the following is correct with respect to the Inspections and Surveys common condition of the Insurance Services Office (ISO) Commercial Package Policy?

The insurer does not make safety inspections, and does not guarantee that conditions are safe or healthful.

A local civic club carries $10,000 per occurrence coverage for loss due to employee theft under the ISO Commercial Crime Coverage Form. The club president reported to the insurance carrier there were seven separate acts of theft by the same two employees acting in collusion over the course of the policy year. The losses totaled $50,000. How much should the club's insurer pay?

The insurer should pay $10,000 for one occurrence, despite the number of employees.

Lambda International manufactures fertilizers. The company has a Workers Compensation and Employer's Liability Insurance Policy. The Information Page for the policy includes the following limits: Bodily Injury by Accident: $100,000 each accident Bodily Injury by Disease: $500,000 policy limit Bodily Injury by Disease: $100,000 each employee When an employee at Lambda's plant accidentally backs a forklift into a tank containing a caustic chemical, the tank ruptures and six employees are badly burned. Although all of the workers recover fully, each of the six requires $25,000 in medical treatment. Which one of the following best describes how Lambda's insurer would respond?

The insurer would pay the benefits required by the workers compensation law up to the limits found within the law itself.

Joe Motors is an automobile repair shop. Which one of the following would be the best way for the owner to maintain the goodwill of its customers?

The main purpose of garagekeepers insurance is the protection of customer's goodwill.

An insured has a Business Income (with Extra Expense) Coverage Form with a Maximum Period of Indemnity coverage option. Following a covered loss and after the period of restoration begins, it takes 120 days to complete repairs and another 60 days for revenue to return to normal. How would the policy provide coverage for this loss of business income?

The policy would provide coverage for 120 days.

The self-insured retention in an umbrella liability policy applies under which one of the following circumstances?

The self-insured retention applies to the coverage provided by an umbrella liability policy when the underlying policy does not cover the claim.

Green Parks employs three secretaries and accountants, five farm laborers, and one housekeeper. What endorsement would Green Parks likely add to its workers compensation policy to make sure all employees have coverage?

The voluntary compensation endorsement would provide coverage for employees, such as farm workers and domestics, who are often exempt from workers compensation laws.

Justin has a Commercial Package Policy (CPP) that has a Building and Personal Property Coverage Form (BPP) with a Causes of Loss—Broad Form covering his building with a $750,000 limit. A tropical storm struck Justin's building and the strong winds tore most of the shingles from the building's roof and shattered multiple windows on the 5th floor of the building. The rain from the storm caused water to enter Justin's building through the foundation, which caused significant damage to the first and second floors. Justin had equipment stored in closets on the first and second floors which were rendered inoperable due to the water damage. The total amount of damages was $40,000 for the windows and shingles; $110,000 for water damage to the first and second floors; $9,000 for the equipment on the second floor; and $7,000 for the equipment on the first floor. How much will Justin's insurer pay for damage to the first and s

The water damage losses to the first and second floors are not covered due to the water exclusion.

Which one of the following best describes coverage for crime losses under the commercial property policy Causes of Loss—Basic Form?

There is coverage for building damage caused by burglars breaking in or exiting the insured's property.

Which one of the following statements about umbrella liability insurance is true?

Umbrella liability insurance provides additional limits above the insured's primary policies. It may contain exclusions more restrictive than those found in the primary policies.

ABC, Inc., is a large, national retailer that sells a variety of consumer goods. ABC carries a Commercial Package Policy that includes Insurance Service Office's Commercial Crime Coverage Form (Loss Sustained) with the following insuring agreements: Employee Theft; Forgery or Alteration; Inside the Premises—Theft of Money and Securities; and Inside the Premises—Robbery or Safe Burglary of Other Property. The limit of insurance for each one of these insuring agreements is $100,000 and the deductible per occurrence for each one of these insuring agreements is $1,000. The policy year is 20X1. During 20X1, two employees, Beth and Jim, in collusion, stole money and merchandise from ABC. Beth and Jim stole money on May 1, 20X1 and August 13, 20X1. They also stole merchandise on January 15, 20X1 and September 29, 20X1. The amount of the money loss totaled $15,000 while the amount of the merchandise loss totaled $110,000.

Under the Commercial Crime Form, one of the ways in which occurrence is defined is as "a series of acts whether or not related, committed by an "employee" acting alone or in collusion during the policy period . . . " Consequently, all the separate acts of employee theft that Beth and Jim committed (both money and merchandise) qualify as only one occurrence when applying the limit of insurance applicable to employee theft loss.

If the Replacement Cost optional coverage of the Building and Personal Property Coverage Form (BPP) is selected, tenants' improvements and betterments are

Valued at replacement cost if the tenant actually repairs or replaces them, at its own cost, as soon as reasonably possible after the loss.

Which one of the following is one of the covered causes of loss in the commercial property policy Causes of Loss—Basic form?

Vandalism

Which one of the following is a common example of a bailee's coverage form that covers loss to customers' goods only if the insured bailee is legally liable for the loss?

Warehouse operator's legal liability policy

The "damage to premises rented to you" limit is the most the insurer will pay under Coverage A for damage to any one premises rented to the named insured or temporarily occupied by the named insured due to which one of the following causes?

fire