Colorado Casualty - Certificate Exam

What is the minimum number of employees for Workers Compensation coverage to become mandatory? A) 1 B) 10 C) 50 D) 100

A) 1

Which of the following would guarantee the performance of another person or entity? A) A broker B) A surety C) An obligee D) A principal

B) A surety

If the Department issues a cease and desist order, that means the insurer must do which of the following? A) Stop committing a particular violation B) Terminate all producer appointments C) Suspend all insurance transactions in this state D) Surrender its certificate of authority

A) Stop committing a particular violation

Of $10,000 in premiums, a producer wrote over the past year $3,000 came from sales to a business which employs the producer's spouse. This is considered A) A violation of the controlled business regulations B) A legal practice C) Coercion D) Rebating

B) A legal practice

On what basis is a professional liability policy written? A) Open peril B) Occurrence C) Claims-made D) Excess

C) Claims-made

Which of the following principles describes creating or increasing the chance of loss? A) Warranty B) Risk C) Hazard D) Indemnity

C) Hazard

A coverage extension under a commercial crime policy may cover theft by employees outside of the coverage territory for A) Up to 30 days B) Up to 60 days C) Up to 90 days D) The entire policy period

C) Up to 90 days

The Insurance Commissioner may examine admitted companies A) Every 3 years B) Every 2 years C) Annually D) As deemed necessary

D) As deemed necessary

When a producer uses his insurance license for the primary purpose of writing insurance on himself, or for members of his immediate family or business, this is called A) Self-insurance retention B) Adverse selection C) Unfair discrimination D) Controlled business

D) Controlled business

Which provision requires that an insured protects property from further damage following a loss? A) Notice of claim B) Severability C) Legal action D) Duties after loss

D) Duties after loss

Which of the following sections of a contract contains the insurer's promise to pay in the event of a loss? A) Endorsements B) Conditions C) Declarations D) Insuring Agreement

D) Insuring Agreement

For what reason may an insurer cancel a personal auto policy that has been in place for more than 60 days? A) The insured has multiple auto polices. B) Multiple people drive the insured vehicle. C) Auto limits are exhausted. D) The insured fails to pay the premium.

D) The insured fails to pay the premium.

If an insured changes his or her name, the change may be reflected on the insurance policy by attaching what to the policy? A) An additional insuring agreement B) A signed endorsement C) An additional coverage form D) A notarized authorization

B) A signed endorsement

What method is used in the event an insurer and insured cannot agree on a claim settlement? A) Loss valuation B) Arbitration C) Subrogation D) Appraisal

B) Arbitration

How are premiums affected if an insurance policy has the additional or supplementary coverage provision? A) The premium is split between the policy coverage and the additional coverage B) The premium decreases C) The premium increase D) The premium is not affected

D) The premium is not affected

Which of the following commercial liability policies would protect an insurance agent from providing incorrect advice to customers? A) Fiduciary liability B) Employment practices liability C) Directors and officers liability D) Errors and omissions liability

D) Errors and omissions liability

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

D) Make sure obligations are fulfilled

Which party to a surety bond is the person or entity to whom a guarantee is made? A) Obligor B) Surety C) Guarantor D) Obligee

D) Obligee

Liability imposed on a parent as a result of the actions of a child would be considered A) Vicarious liability B) Absolute liability C) Comparative negligence D) Strict liability

A) Vicarious liability