Guarantee 2

When an insured's gardener was spraying weeds in his lawn, he failed to notice that the wind was drifting the spray into the neighbor's yard where he damaged their flower bed. The insured was found to be legally liable for this damage. This is an example of

vicarious liability

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

Employment Practices Liability

Which of the following exposures is NOT covered under a homeowners policy?

Medical payments to an insured

When does the federal emergency flood insurance program go into effect?

When a community applies for the program

Which commercial property form is used to insure buildings while under construction?

Builders Risk

The businessowners liability coverage form would respond to a claim arising from which of the following events?

An injury arising out of a customer falling because of a wet floor

What part of the insurance contract describes the covered perils and the nature of coverage of the contractual agreement between the insurer and the insured?

Insuring agreement

If an insurance policy has the additional coverage provision, how does it affect the policy premium?

There is no additional premium

All of the following are optional endorsements that may be added to the standard equipment breakdown coverage form EXCEPT

debris removal

If a fire erupts in the kitchen and spreads to the upstairs bedroom, resulting in the destruction of furniture, what type of loss has occurred?

direct

How is the premium paid for the businessowners policy?

one indivisible premium

Unless additional coverages are added to the businessowners policy (BOP), the maximum amount of coverage on an outdoor sign attached to a building is limited to

1,000

How long does the Commissioner have to disapprove a private passenger auto insurance rate once filed?

100 days

When a hearing regarding an insurance matter is requested, all parties must receive

15 days

What is the maximum number of days that binders for temporary insurance may be valid in this state?

90 days

Coverage D, additional living expenses, is intended to

Allow the family to maintain their normal standard of living

Which of the following injuries may be covered under Coverage C - Medical Payments of a commercial general liability policy?

Injuries to a member of the general public that occurs on premises

How does insurance distribute the financial consequences of individual losses?

It transfers the risk to all persons insured.

Agents may be found guilty of defamaxion if they make false statements that are intended to

Maliciously criticize another insurance company.

According to the Section I - Property of the Businessowners policy definitions, what is the term for insured's business activities occurring at

Operations

What sublimit in a liability policy sets the maximum amount that will be paid for all claims arising from a single accident?

Per occurrence

A small appliance manufacturer in this state provides products around the globe. A customer in Switzerland is injured using one of its products. If the appliance manufacturer is found liable for the damages, why would its commercial general liability policy cover the customer's claim for bodily injury?

The appliance was manufactured in the United States

Which of the following is FALSE concerning liability coverage of a business auto policy?

The company will reimburse the insured for all loss of earnings

What is the purpose of the Terrorism Risk Insurance Act?

To share the risk of loss from terrorist attacks with the insurance industry

While engaged in a pick-up soccer game in the neighborhood park, the insured collides with another player, breaking his nose. Would the insured's homeowners medical payments cover the injury?

Yes, medical payments coverage also applies off the insured premises

To have insurable interest in the person or property covered by a property insurance policy, which of the following potential risks must the policyowner face?

financial loss

What is the purpose of requiring licenses for persons who transact insurance?

protect the general public

Under Coverage C, and at the request of an insured, personal property of a guest or residence employee is covered

while it is in any residence premises occupied by an insured

Coverage E (Personal Liability) and/or Coverage F (Medical Payments to Others) would respond to a claim arising from all of the following situations

An insured's 14-year-old son was throwing rocks at the neighbor's house and broke several windows.

With respect to the commercial package policy, an interline endorsement is one that

May apply to more than one line of insurance that is included in the package

Which statement best describes agreement as it relates to insurance contracts?

One party accepts the exact terms of the other party's offer

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 damag for the repairs to be completed. The insured was without income for that period of time. The insured's policy includes both direct and indirect loss cov the loss would be paid as indirect loss?

The loss of income for the time the diner was closed

Under an HO-2 policy, the insurer will pay no more than the actual cash value of the property damage until

The property repair or replacement is complete

What types of injuries could incur additional penalties and/or increased benefits paid by the employer?

the employer's willful failure to provide required safety goggles

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

collision coverage

An insured was having a new home built. While digging the footings for the foundation, the contractor struck a solid rock formation and found that was necessary to blast the formation in order to remove the rocks. The force of the blast broke several windows and some chinaware in a neighbor's home several blocks away. Who pays for this damage?

contractor

Which of the following is a method of establishing a premium on large commercial accounts?

retrospective rating