Insurance Law Supplement

All of the following items are excluded from coverage under a building and personal property coverage form except patios or other paved surfaces automobiles held for sale currency or securities outdoor furniture

outdoor furniture

An insured's claims-made CGL policy just expired after having been in affect for a year. The policy included a supplemental extended reporting period endorsement to cover claims filed after the end of the 60 day basic extended reporting period. When a 5000$ claim is filed 3 years later for a loss that occurred during the 60 day reporting period. How much will the policy pay

0

What is the max amount PPI insurance will pay to cover damage done to property that is the result of automobile accident

1 million per accident

The BOP will pay reasonable expenses for

1 year from the date of accident

What is the limit for valuable papers and records with a business owners policy, everything else is fully covered

10,000 it's 5000 if papers aren't kept at described property

The federal government is not obligated under the TRIA to make payments for any portion of losses that exceed how much annually?

100 billion

Bob has a liability policy in the amount of 300/500/100. How much coverage does he have per occurrence for property damage liability?

100,000 because 300,000 per person, 500,000 per occurrence for bodily injury liability, and 100,000 for property damage liability

What is the minimum deductible for a single family dwelling insured as a preferred risk in the regular flood program

1000 each for building and contents

Property away from residence premises shown in declarations is covered for up to 10% of the coverage C limit or

1000, whichever is less

If a claim is not paid on a timely basis, the insurer will be charged an annual interest rate of

12%

A new auto should be insured within how many days after purchase date?

14 days

compensation must be paid how many days after the employer has notice and knowledge of the employee's disability or death

14 days

compensation must be paid how many days after the employer has notice and knowledge of the employee's disability or death?

14 days

What is the policy limit on theft of jewelry, watches, furs, and precious stones under coverage C personal property (HO-3)

1500

The insured is a tenant in a shopping mall. A fire starts in the insured's store, resulting in the following damages: business personal property, $15,000; damage to fixtures installed by the insured, $2,000; damage to property belonging to customers, $1,000; and smoke damage to the ceiling and walls, $8,000. How much will the insured's building and personal property coverage form pay for this loss? A) $18,000.00 B) $15,000.00 C) $17,000.00 D) $26,000.00

18,000, the tenant's policy will pay for all of the loss except for damage to ceiling or walls

How long is the temporary license effective in Michigan

180 days

How much will the personal auto policy pay for a rental car if the insured vehicle is stolen? A) $20 per day, up to $600 maximum. B) $25 per day, up to $650 maximum. C) $30 per day, up to $900 maximum. D) Nothing.

20$ per day, up to 600 minimum

When a small restaurant is damaged by a tornado, the owners are forced to close for 1 month while the property is repaired. The building suffers damages of $20,000. The owners estimate they will lose $50,000 in business receipts. In order to keep their staff, the owners must continue to pay salaries totaling $5,000. Ignoring any deductible, how much of the direct loss will the business owners policy pay?

20,000

Max penalty for a single violation of cease and desist order is a fine of

20,000 and possible license revocation

deductible for a standard policy under the emergency program is

2000 for building and contents

Submission of fewer than how many applications for home and auto insurance within the immediately preceding 12 month period is a reason is a reason an insurer can terminate a producer's appointment

25

Two personal auto policies cover one vehicle. Company A's limit of liability is $100,000 and Company B's limit of liability is $300,000. How much will Company A pay for a liability loss in the event of an accident when the damages total $100,000? A) $50,000.00 B) $75,000.00 C) $100,000.00 D) $25,000.00

25,000

Under an HO-2 policy with a coverage limit of $50,000 on the dwelling, what is the amount of personal property coverage that would be available? A) $25,000.00 B) $20,000.00 C) $30,000.00 D) $50,000.00

25,000

What is the max amount paid daily under CGL supplementary payment provision for insured's loss of earnings

250

How many parties are there to a bond agreement? How many for an insurance contract?

3 parties for a bond agreement, 2 parties for an insurance contract

After receiving a claim, an insurer must let the claimant know what constitutes a satisfactory proof of loss within how many days

30 days

Under commercial articles coverage form additional acquired property is automatically covered for up to

30 days if it's a type of property already covered by the form

Under the essential insurance act for home insurance in Michigan, when an insurer decides to cancel a policy that's been in effect for more than 55 days, it must give the named insured written notice of termination at least

30 days in advance

Adam's appliances sustains a fire loss and has the following losses: damage to building 15,000, damage to contents 7000, debris removal 5000, and damage to valuable paper and records is 15,000. What will his business owner's policy pay assuming his limits are adequate

37,000

How many units can a person have to get homeowners insurance?

4 units or less

In Michigan, the commissioner of insurance is appointed to office by the governor for a term of

4 years

An insured has a homeowners policy for 60,000 on the dwelling. Lightning completely destroys the home which has a replacement cost of 40,000. How much will the insured receive?

40,000

The limit on funeral and burial expense benefit under worker's compensation is

6000

The michigan placement facility rates are based on the average of the largest insurance companies. How many insurers help make that rate?

5 insurance companies

Although the commissioner may conduct an examination of an insurer at any time, the commissioner is required to examine the books, records, documents, and affairs of every authorized insurer at least once every

5 years

Although the commissioner may conduct an examination of an insurer at any time, the commissioner is required to examine the books, records, documents, and affairs of every authorized insurer every

5 years

If an insured has a claims-made commercial general liability policy with the basic extended reporting period, the insurer will pay for losses after the policy has been canceled as long as the occurrence is reported within 60 days of cancellation and the claim is filed within how many years

5 years

Homeowners policies provide an automatic amount of coverage for other structures, personal property, and loss of use. The amount of coverage for personal property is what percentage of coverage

50%

the HO-2 homeowners policy provides an additional _________ of the amount of coverage on the dwelling for the loss of personal property, but only ___________ of the personal property limit can be applied to property not located at the insured's primary residence

50% 10%

The insured has a building with a replacement cost of $200,000 but has insured it for only $100,000. An 80% coinsurance provision is present in the policy. When a $80,000 loss occurs, the policy will pay:

50,000

Brenda's bakery, which was covered by a BOP, sustains a fire loss of 50,000 to the building, 25,000 in content damages, A customer and employee are injured in the fire. Medical payments for their injuries are 2000 for the injured customer and 3000 for the injured worker. Brendas business income is 5000 per month and she has to close for 60 days. How much will the policy pay

50,000+25,000+2000+10,000= 87,000

The dwelling policy will provide how much additional coverage for af fire department service charge

500$

The standard deductible for property losses on a BOP is

500$

Sue has a personal articles floater with 20,000 worth of jewelry coverage. She purchases a ring worth 6000. The ring is stolen from her. How much can she collect from her insurance carrier?

5000 because she would get 25% of the amount of jewelry already scheduled under the floater or 10,000 whichever is less

In addition to suspension or revocation of any insurance license a person who knowingly violates insurance licensing laws may be fined up to what amount per violation

5000 per violation

Bill is hurt while he is a customer at Sue's flower shop, which is covered by a business owner's policy. He is awarded 50,000 for bodily injury. He also incurred 2000 for medical expenses of the first year after injury and 1000 after the second year. How much will Sue's business owner's policy pay assuming she has enough insurance

52,000 The only thing not included is the 1000 incurred the second year

How many coverage parts are there to a workers compensation policy

6

In general, the amount of a claim supported by a proof of loss must be paid within how many days after the insurer received proof

60 days

Two insurance policies apply to Monica's home. The limit for Policy A is $100,000, and the limit for Policy B is $50,000. Both policies have a pro rata other insurance clause. If she suffers a $9,000 covered loss to her home, how much will Policy A pay?

6000, because 100,000/150,000 times 9000 is 6000

Bill and Marge have a HO-2 policy insuring their main residence for $150,000. How much coverage do they have for personal property kept at their summer cottage? A) $15,000.00 B) $30,000.00 C) $75,000.00 D) $7,500.00

7,500

The Motor Carrier act of 1980 mandated that trucking operators file proof of pollution liability. Vehicles with a gross weight of 10,000 pounds or more must carry specific limits of liability. Which of the following is not required by this act 750,000 for interstate transportation of nonhazardous property 750,000 for intrastate transportation of nonhazardous property 5 million for interstate transportation of large quanitites of hazardous materials (compressed gas, radioactive materials, explosives, oil), 1 million for interstate or intrastate for transportation of oil or other hazardous waste

750,000 for intrastate transportation of nonhazardous property

Frank's house has a replacement cost of $250,000. His HO-3 policy has a Coverage A limit of $180,000 and a $500 deductible. A fire causes a loss of $10,000 replacement cost and $8,000 actual cash value. What is the most Frank can collect for his loss? A) $7,200.00 B) $9,000.00 C) $10,000.00 D) $8,500.00

8,500 because they don't carry 80% so 180,000/200,000 x 10,000=9,000-500

An insured lives in a house covered by an 80,000 special form (DP-3) policy. While the insured is on vacation, someone breaks into the house and steals 5000 in electronic equipment. The damage to the door is estimated at 800. What coverage is provided by the DP-3 policy

800$

The insured has a homeowners policy (HO-3) with a 100,000 liability limit and a 1 million personal umbrella policy with a self insured retention of 1000. When a child is seriously injured on the insured's property, a jury awards the plaintiff 2 million dollars. What is the insured legally responsible for paying

900,000

legal duty to act (or refrain from acting), failure to perform that duty, injury or damage occurs, the breach of duty caused the injury or accident

A person is only held liable if all of these elements are present

The insurer retains certain rights under the conditions section of a workers' compensation policy. Which of the following is one of those conditions? A) The insurer retains the right to inspect the insured's workplace for insurability when the insured can arrange it. B) The insurer does not have the right to inspect the insured's workplace for insurability at any time. C) The insurer retains the right to inspect the insured's workplace for insurability at any time. D) The insurer retains the right to adjust the premium if the loss experience becomes worse.

A) The insurer retains the right to inspect the insured's workplace for insurability when the insured can arrange it.

which of the following producers must designate an individual to be responsible for compliance with state laws

partnership

Bill's construction company had an experience modification factor added to his workers' compensation policy. What did this do to his premium? A) An experience modification factor is applied as a method of rewarding those employers with better-than-average loss experience. B) An experience modification factor is applied as a method of penalizing those employers with poor experience. C) Nothing. D) An experience modification factor is applied as a method of rewarding those employers with better-than-average loss experience and penalizing those with poorer experience.

An experience modification factor is applied as a method of rewarding those employers with better than average loss experience and penalizing those with poorer experience

Which of the following statements is true regarding the Michigan Essential Insurance Act Individuals convicted of malicious destruction of property in the last 5 years is eligible An eligible person of this act must be the owner, occupant, or tenant of the dwelling An insurer cannot limit coverage, refuse to insure, or continue to insure unless the insurer has specific written underwriting rules individuals convicted of a conspiracy to commit arson in the last 5 years are eligible

An insurer cannot limit coverage, refuse to insure, or continue to insure unless the insurer has specific written underwriting rules

From which source does the Michigan Property and Casualty Insurance Guarantee Association obtain its funds

Assessments of association members

Promising a return of profit not disclosed in the insurance policy in order to convince an applicant to buy an insurance policy is called

an illegal inducement

Robert wants open perils coverage on his dwelling and named perils coverage for his personal property. Which homeowners form should he choose? A) HO-6. B) HO-3. C) HO-2. D) HO-4.

HO-3

Which homeowners policy would be written to cover personal property only

HO-4

Which of the following homeowners forms is used to cover tenants or renters

HO-4

promising a return or profit not disclosed in the insurance policy in order to convince an applicant to buy an insurance policy is called

an illegal inducement

A business loses money because it was forced to close after a fire on the premises. The loss is described as

an indirect loss

Mark wants to buy a policy for his manufacturing company to include premises liability, products liability, and completed operations. Which policy would cover all of these?

Commercial general liability

A business owner purchases a (CGL) policy that includes a supplemental extended reporting period (supplemental tail that doesn't expire). The effective dates of the policy are December 31 2007- December 31 2008. The business owner is sued over an incident that occurs on April 15 2008, but isn't discovered until June 30 2009. What coverage will the policy provide

Coverage is granted because reporting period didn't expire

Comprehensive homeowners form

HO-5

Condominium owners form

HO-6

Covers condos or townhomes

HO-6

Which of the following types of business would be better covered by a CGL than a BOP an oil refinery an accountant's office a 12 unit apartment building a greeting card store

an oil refinery

The property coverage in the unendorsed business owners policy is written on

an open peril basis

This coverage form is designed specifically for vehicle dealers, including dealers that have repair operations on the business premises

garage coverage form

Policies that protect against liability resulting from breach of corporate duties by corporate officers and directors

Director and Officers liability

Enforcement of the Michigan Insurance regulations is the responsibility of the

Director of insurance

John's dog bites a friend who is visiting John's house. Which part of John's homeowners policy, if any, would cover the visitor's ensuing medical expenses? A) Coverage F only. B) This loss is excluded because it was caused by an animal owned by the insured. C) Either Coverage E or Coverage F. D) Coverage E only.

Either coverage E or Coverage F

What insuring agreement of the commercial crime coverage form would best protect an insured from losses caused by an employees deceit

Employee theft

An ex employee files suit against her former employer. She believes she was dismissed for missing work because of jury duty. Which policy would cover damages paid to employee if she proves her case

Employment Practices Liability (EPL)

Policy that covers injuries that occur as a result of rendering or failing to render a service by a professional other than a doctor or lawyer

Errors and Emissions liability (E&O)

a contractor built a home for a family. Four months after the family moved into the home the kitchen sink fell on a family member's foot and broke it this is an example of what type of loss

completed operations

Broad form provides open peril coverage on the dwelling and named perils coverage on personal property

HO-2

After business hours, someone breaks into insured's lot behind his car dealership and steals a customer's auto. Which of the following coverages would apply to this loss?

Garagekeepers coverage in the garage coverage form

covers homeowners insurance

HO-2

Provides open perils coverage on his dwelling and named perils coverage for his own personal property

HO-3

What happens when an insurance producer fails to complete his continuing education before his license expiration date

He has 90 days to complete his continuing education without losing his license

This type of policy is designed to provide catastrophic liability coverage for business risk

High limit commercial umbrella policy

Cecil sells his car and buys another one to replace it. How does the liability coverage in his personal auto policy apply to the replacement vehicle? A) It is not covered; Cecil must cancel the existing policy and purchase a new one for the replacement vehicle. B) It is automatically covered. C) It is automatically covered for 14 days, but Cecil must notify the insurer for coverage to continue beyond that point. D) It is not covered until Cecil notifies the insurance company.

It is automatically covered

For a homeowners policy, which one of the following statements about insuring personal property normally kept at a residence other than the residence premises is CORRECT? A) It is not covered when located off the residence premises. B) It is covered for the full limit worldwide, whether on or off premises. C) It is covered only if the insured has paid an additional premium. D) It is covered for up to 10% of the coverage C limit.

It is covered for up to 10% of the coverage C limit

This type of liability arises when a business such as a contractor completes operations off its own premises and someone is injured or property is damaged at the site of its operations

completed operations liability

What is the purpose of the MCS-90, the endorsement for motor carrier policies of insurance for public liability?

It provides proof that the company carries the amount of insurance required by law (the motor carrier act of 1980)

Joe is the general contractor building a new shopping center. He has hired subcontractors to do some of the work for him. What will cover the employees of the subcontractor if the subcontractor does not take out workers' compensation coverage? A) The Federal Employer's Liability Act. B) They must sue their employer for coverage. C) Joe's workers' compensation policy. D) Assigned risk plan.

Joe's workers' compensation policy

John and Mary are a hardworking married couple. The own a sole proprietorship that sells farm produce. John has an additional sole proprietorship where, as an individual, he makes wood kitchen cabinets. John also owns a partnership with his brother James where they make custom furniture. Which of these people is an insured under Johns Commercial General Liability policy

John and Mary

all of the following are kinds of property that are excluded from the property protection insurance benefits except property owned by the insured whose vehicle caused the property damage legally parked automobiles owned by someone other than the insured driver vehicles and their contents property damaged from accidents that occurred outside of Michigan

Legally parked automobiles owned by someone other than the insured driver

If the monthly limit of indemnity option has been selected under the Business Income form, how much will an insurer pay for loss of business income for each month of loss? (Assume the declarations page shows a limit of insurance of $150,000 and a fraction of 1/3.) A) $100,000.00 B) Lesser of $100,000 or the actual loss for each month. C) $50,000.00 D) Lesser of $50,000 or the actual loss for each month.

Lesser of 50,000 or the actual loss for each month

covers finished operations by the insured's business

completed operations liability

Guides to insurance companies' financial integrity and claims-paying ability are published regularly by rating services. All of the following are rating services except Standard's and Poor's Fitch's Lloyd's of London M. Best Inc

Lloyd's of London

organization of individuals or groups who agree to share in insurance contracts

Lloyd's of London

What act covers harbor workers

Longshore and harbor workers compensation act

All insurers writing no fault insurance are members of the

Michigan Catastrophic claims association

All insurers writing no-fault insurance are members of the Michigan Catastrophic Claims Association Michigan underwriting association Michigan Insurance Guarantee association Michigan no fault association

Michigan catastrophic claims association

Which of the following commercial auto covers automobiles in the insured's care? business auto liability garagekeepers comprehensive

garagekeepers

Mrs. Hanks leaves her company owned truck at a garage for some maintenance work. While the mechanic is backing Mrs. Hanks truck out of the service bay, the truck hits and injures someone. Who of the following would be considered the insured under Mrs. Hanks business auto coverage form

Mrs. Hanks

Premiums for workers are based on the amount of payroll and rates established for various occupational classifications set by the

National Council on Compensation Insurance

Premiums for workers compensation are based on the amount of payroll and rates established for various occupational classifications set by the

National council on compensation insurance

Bob's Auto Repair stores its customers' autos inside its building overnight. A fire destroys the building and everything in it. Bob's commercial general liability policy will pay for which of the following? A) Value of Bob's work on the autos but not the damage to the customers' autos. B) Neither the damage to the customers' autos nor the value of Bob's work. C) Damage to the customers' autos and for the value of Bob's work already performed on them. D) Damage to the customers' autos but not the value of Bob's work.

Neither the damage to the customers' autos nor the value of Bob's work

Monica uses her car for her skin care business. One night, she drives the car to meet a friend at a restaurant. While driving home, Monica loses control of the car, hits a parked car, and rolls the car over. Monica is severely injured and taken to the hospital. Will medical payments coverage reimburse Monica for her medical bills?

No, there's no coverage for injuries while occupying a vehicle that is being used in the insured's business

What are the 5 monopolistic states?

North Dakota, Ohio, Washington, West virginia, and Wyoming

while driving to work, Leonard is eating his breakfast, reviewing his appointment book and talking on his cell phone. He runs a red light and collides with a commuter van. The van's occupants are hospitalized. Which part of Leonard's personal auto policy covers the occupants injuries and damage to the van

Part A

Bodily injury and property damage to others when accident is due to insured negligence is covered under..

Part A liability coverage

results when a person is injured or their property is damaged after business operations have been completed on premises away from business premises

completed operations liability

Sue, an employee of Paul's Bicycle Shop, was on a service call repairing some bicycles at Bill's home. On her way back to the shop she was involved in an automobile accident and injured. Where would Sue find coverage? A) Paul's auto policy. B) Both Paul's auto policy and workers' compensation policy. C) Paul's workers' compensation policy. D) Her own auto policy.

Paul's workers compensation policy

Property damage due to the negligence of an employee operating his own auto would be covered by...

Personal auto policy (PAP)

this type of insurance provides coverage for libel, slander, invasion of privacy, and other intentional torts

Personal injury insurance

What is a no-stacking rule?

Prevents the insured or injured person from collecting medical payments from more than one policy or coverage such as uninsured motorists

Which of the following statements regarding the payment of commissions is not correct?

Producer may not share commissions with a licensed nonresident producer

manufacturer or distributor of a faulty product can be held liable if a product injures someone. This is what type of liability

Products liability

this type of liability begins after the insured has relinquished control of the product and it's left the insured's premises

Products liability

Richard and his wife own two family cars. In addition, Richard is given a company car to makes sales calls. He occasionally uses the company car for personal use and is concerned that he may not have sufficient company coverage. Which of the following is the best advice his agent can give him? A) Richard can add the company car to his automobile policy as car number 3. B) Richard can add the extended nonowned coverage for named individual endorsement to his policy. C) Richard has to rely on the coverage his company gives him and follow their usage rules. D) Richard can add the drive other car endorsement to his policy.

Richard can add the extended nonowned coverage for named individual endorsement to his policy

Insurance companies that are owned by their members, The only coverage these groups can write is liability insurance, members of a group are in the same industry and require liability insurance, which would otherwise be prohibitive in premium if obtained elsewhere

Risk Retention group

this type of liability covers finished operations by insured's business

completed operations liability

Guarantees that when contractors borrow money to fund construction projects, the project will be carried out and the work will be delivered free and clear of liens or encumbrances

completion bond

Payments for losses that cannot be precisely measured, such as the loss of companionship of spouse from another, are called ____.

general damages

Which business auto coverage form is the most restrictive because it only applies to autos listed in the policy

Symbol 7

Coverage that applies to autos the insured leases, hires, rents, or borrows. Not autos employees own

Symbol 8-hired autos only

act that covers employees of interstate railroads. It doesn't apply to postal employees, truckers who deliver freight to and from the railroad depot, or contractors involved in railroad construction or repair

The Federal Employer's Liability Act

Ralph is a conductor employed by American Cross-Country Railway System. He routinely travels from Chicago to Los Angeles, and was injured falling from a train platform while helping passengers. Which of the following provides bodily injury coverage for Ralph? A) The U.S. Longshoremen's and Harbor Workers' Compensation Act. B) The Federal Employers Liability Act. C) The Jones Act. D) The Federal Employees' Compensation Act.

The Federal Employer's liability act

What act covers ocean going vessels

The Jones Act

Which of the following must be attached to all dwelling and homeowners policies in Michigan The Personal Injury Protection- Michigan The Special Provisions- Michigan Endorsement The Amendment of Policy Provisions- Michigan Endorsement In Michigan there aren't any required endorsements

The Special Provisions- Michigan Endorsement

Which of the following must be attached to all dwelling and homeowners policies in Michigan amendment of policy provisions-Michigan Endorsement The Special Provisions- Michigan Endorsement in michigan there aren't any required endorsements The personal injury protection-Michigan

The Special Provisions-Michigan endorsement

What is the benefit for the employee covered by either the Federal Employer's Liability Act or the US Longshoremen's and harbor workers compensation act?

The benefits are broader than worker's compensation coverage

Which of the following statements about commercial umbrella liability insurance is not true They provide catastrophic liability coverage for business risks they exclude catastrophic liability coverage for business risks The policy will only pay once the policy limits on an underlying policy have been met they require another policy to be in place before they can be issued

The exclude catastrophic liability coverage for business risks

Bob is employed as ship's navigator on an American flagged ship in Duluth, MN, and is injured as a result of the owner's negligence. Under which law would Bob find coverage? A) Federal Employee Compensation Act. B) U.S. Longshoremen's and Harbor Workers' Compensation. C) Jones Act. D) Workers' Compensation.

The jones act

License and permit bonds are required by government entities, including states, cities, and towns, from individuals requesting permission or license to take actions that may affect the public, what do these bonds do?

They guarantee that the principal will perform the described activity in conformance with the specifications, terms, and codes governing such activities

All of the following statements regarding part D coverage for damage to your auto are correct except this coverage is commonly known as physical damage coverage this coverage pays for direct and indirect loss to the named insured's rental or borrowed cars This covers all personal property in the vehicle this coverage pays for direct and indirect loss to the named insured's covered auto

This covers all personal property in the vehicle

An applicant for an insurance license must have all of the following qualifications except good business reputation US citizen honesty and trustworthiness good moral character

US citizenship

Recently the local utility company's main power supply depot was damaged by high winds. Mike who owns a TV store, wants to make sure he has coverage for damage to all the TV components demonstrated in his store if the power goes out. What does Mike need to purchase?

Utility services-direct damage coverage

Which one of the following statements regarding the payment of commissions is correct? a producer can provide financial rewards with a resident non-licensed individual for sales leads When an appointment is cancelled the producer may still receive commissions on any existing policies A producer may not share commissions with another resident licensed producer a producer may not share commissions with a nonresident licensed producer

When an appointment is cancelled the producer may still receive commissions on any existing policies

When a policy is written on a reporting basis, a premium is paid at the beginning of the policy period that is based on an estimate of what the final premium will be.. this is called

a deposit premium

The amounts of coverage and limits of liability are found in which of the following sections of a policy conditions definitions insuring agreement declarations

declarations

The insured is looking for the amount of coverage in a property and casualty policy. This information would be found in the ______.

declarations

Which of the following occurrences would be included under the definition of personal injury? A customer is injured in a department store when a sign falls on her and she sues the store for medical costs and pain and suffering an individual is fired from her job and sues her employer for unemployment benefits a tenant is evicted by his landlord and sues the landlord for invasion of privacy and wrongful eviction an employee is injured lifting a heavy carton and sues his employer for costs

a tenant is evicted by his landlord and sues the landlord for invasion of privacy and wrongful eviction

what defines a burglary and what defines a robbery

a burglary is marked by forced entrance, a robbery is marked by someone using force with an employee

What is a casual host

a business that serves alcohol but doesn't specialize in selling alcohol. They are covered by CGL

Which of the following is covered by the Michigan Property and Casualty Guarantee Association

a claim submitted to an insurer that has just become insolvent

Coverage for workers' compensation may be obtained from all of the following EXCEPT: A) self-insurance. B) a commercial general liability policy. C) assigned risk plans. D) the Federal Employers Liability Act.

a commercial general liability policy

Which of the following parties is the principle in a surety bond the homeowner who will pay the contractor for work the workers who have contracted with the builder to perform the work a contractor who has signed a contract to build an addition to a residence the insurance company that has provided the bond to guarantee the performance of the contractors work

a contractor who has signed a contract to build an addition to a residence

When a policy is written on a reporting basis, a premium is paid at the beginning of the policy period that is based on an estimate of what the final premium will be. This is called

a deposit premium

which of the following is not covered by the Michigan Property and Casualty Guaranty Association? a claim greater than 10$ a claim for a loss that occurred before the insurance policy expired a claim that existed within 30 days of the appointment of the receiver a life insurance death benefit claim greater than 200,000

a life insurance death benefit claim greater than 200,000

For personal property coverage, who is NOT insured by a homeowners policy? A) A live-in housekeeper requested by the named insured. B) A nonresident uncle. C) The named insured. D) A 20 year-old resident.

a nonresident uncle

A difference in conditions contract is

a policy issued to cover what is normally excluded in other property insurance contracts

A difference in conditions policy is

a policy issued to cover what is normally excluded in other property insurance contracts

Which one of the following situations is covered under a commercial general liability policy an insured's boat rams into another boat an insured's customer is killed while traveling in the insured's bus a shopper is injured when a shelf of merchandise collapses an insured car strikes a pedestrian

a shopper is injured when a shelf of merchandise collapses

Which of the following statements regarding bond agreements is correct? If a default occurs, the surety may institute legal action against the obligee the cost of a surety bond reflects the surety's anticipation that a loss will occur A principal may be asked to provide subrogation rights to surety incase a loss occurs A surety bond serves as a guarantee of performance

a surety bond serves as a guarantee of performance

Which of the following situations would most likely be covered by a commercial general liability policy an office workers finger is injured in an electric pencil sharpener a surfboard falls off a shelf and injures a shopper manufacturing exhaust kills a crop of tomatoes in a nearby field an employee drives his auto into his employer's garage door

a surfboard falls off a shelf and injures a shopper

Insurance companies that are nonadmitted insurers fall into 2 categories. They are either authorized non admitted carrier or an unauthorized no admitted insurer. What type of license would a person need to sell for an authorized non admitted insurer

a surplus lines license

has information about the risk, effective date of coverage, deductible, premium, coinsurance percentage, and location of the property

declarations page

A warranty is a statement made by the applicant regarding the risk to be insured. Which of the following statements is NOT true about warranties? A) A warranty is part of the contract. B) A warranty must refer to a material fact. C) A policy can be cancelled if the warranty is false. D) A warranty is guaranteed to be true.

a warranty must refer to a material fact

Which of the following is an example of a peril earthquake indifference gasoline stored on the premises illness

earthquake

The covered auto is defined in the policy as all of the following except.. any auto shown in declarations any auto used as a temporary substitute while an insured auto is being repaired any trailer owned by the insured or spouse any additional auto acquired in the last 30 days

any additional auto acquired in the last 30 days

Barney's breads and bakery store needs workers compensation coverage for his 7 employees. He could purchase coverage from all of the following sources except self insurance or group insurance if possible an assigned risk plan the state fund a private insurance carrier

an assigned risk plan

what a third party (such as a member of the public) assumes an agent has based on actions or words of the principal (business cards, sample policies, and rate books)

apparent authority

The business auto coverage form uses symbols to denote the vehicles to which each of the policies coverages applies. Which symbol is the most restrictive

symbol 7

Policy that provides liability coverage for insurance agents, as well as certain other types of professionals including accountants, architects, stockbrokers, engineers, consultants, and attorneys is referred to as

an errors and emissions policy

Losses in a boat owner's policy are usually paid at _____ and are on an _______ basis

actual cash value, open peril

applies only to autos specifically listed in the policy, most restrictive

symbol 7

Jim and his family are considering a move to the West Coast but are very concerned about earthquakes. Jim called an insurance agent for advice. What is the best advice the agent could give Jim about adequately covering his new home for possible earthquake damage? A) A separate earthquake policy should be purchased to provide full coverage for earth movement. B) Adding the earthquake endorsement will provide the coverage needed. C) The homeowners policy automatically provides earthquake coverage. D) A state insurance fund will cover any damage that occurs.

adding the earthquake endorsement will provide the coverage needed

Joe's plumbing has leased a fleet of vans to be used by his plumbers while going from job to job. Which endorsement is especially important in this situation

additional insured- lessor

Coverage E in the dwelling policy provides coverage for: A) medical payments. B) additional living expense. C) fair rental value. D) personal liability.

additional living expense

the tendency of individuals-whose exposure to loss is higher than average to purchase or continue insurance to a greater extent than those whose exposure is less than average

adverse selection

All of the following about surplus lines insurance are true except agents can place directly with surplus lines companies insured usually must be given a disclosure stating that the policy is placed with a non admitted carrier policies are usually not protected by the state guarantee association each state insurance department determines which type of risks may be put in the surplus and excess market

agents can place directly with surplus lines companies

What is the coinsurance formula?

amount carried divided by the amount of insurance required times the loss amount

applies to autos the insured leases, hires, rents, or borrows, but not to autos the insured's employees own

symbol 8 hired autos only

If a dispute arises over whether an insured is entitled to uninsured motorists coverage, what process is used to settle this dispute?

arbitration which is in part C of PAP

Barney's Breads and bakery store needs workers' compensation coverage for his 7 employees. He could purchase coverage from all of the following services except private insurance state fund assigned risk plan self insurance or group insurance if available

assigned risk plan

Under the CGL form, insured contracts include all of the following EXCEPT: A) contracts for the lease of the premises. B) assumption of an architect's liability for any injury or damage arising out of the insured's rendering or failure to render professional services. C) obligations required by local ordinance to indemnify a municipality (except in connection with actual work done for that municipality). D) elevator maintenance agreements.

assumption of an architect's liability for any injury or damage arising out of the insured's rendering or failure to render professional services.

applies when a person knowingly exposes himself to danger or injury. By assuming this risk, the person may not be able to recover damages from negligent party

assumption of risk

what are death benefits for Personal injury protection coverages

at least 1750 but no more than 5000

Which of the following is not included in the Personal Injury Protection endorsement in a personal auto policy in Michigan replacement services attorney fees funeral expenses work loss

attorney fees

The insured has an accounts receivable coverage form added to the commercial inland marine coverage form. When a fire destroys the insured's records, coverage is provided for all of the following except reconstruction of records bad debts extra collection fees uncollectible sums

bad debts

Which of the following is not an exclusion in the commercial auto policy liability section contractual liability bail bonds care, custody, and control completed operations

bail bonds

the bailee policy pays the

bailor

which of the following statements regarding workers' compensation laws is correct? Benefits are paid to workers injured on the job regardless of who is at fault An injured worker must prove negligence on the part of the employer worker's compensation is governed at the federal level workers' compensation is optional

benefits are paid to workers injured on the job regardless of who is at fault

guarantees that if a contractor's bid is accepted, the contractor will enter into a contract and provide the required performance bond

bid bond

What is the difference between surety bonds and insurance?

bonds guarantee something will happen Insurance protects if something happens

What does a liberalization clause do to a property policy?

broadens coverage

What is the most coverage available for a single family dwelling covered under the regular flood program?

building- 250,000 contents 100,000

The inside the premises-Robbery or safe burglary of other property insuring agreement in the commercial crime policy covers which of the following perils alteration of a check issued by insured burglary by security guard while store is closed disappearance of money while transported by armored car employee theft

burglary by a security guard while store is closed

Ted's TV shop has a fire, and the shop must be closed for repairs for several months. Ted cannot generate an income while his shop is not open for business. Which additional coverage will pay for the revenue loss while the shop is closed?

business income

will pay for loss of business revenues if it has been caused by a covered loss, must be within 12 consecutive months after the date of the direct physical damage

business income

when someone gets hurt or suffers property damage before the operation is complete

business operations exposure

ABC insurance company has agents who are under a contract that allows them to sell only ABC state insurance company policies. Which distribution system describes ABC state insurance company's organization

captive

The license issued by the state insurance bureau that gives an insurer the legal right to conduct business as an admitted or authorized insurer in Michigan is called a

certificate of authority

In order for a claim to be covered by the Michigan Property and Casualty guaranty association what conditions must be met

claim must come from a policy issued or payable to Michigan resident, claim must have incurred within 30 days after receiver is appointed

Agents have certain responsibilities when dealing with applicants and insureds. All of the following are agent responsibilities except explaining coverages collecting the commission from the applicant field underwriting each risk periodically reviewing the insured's coverage

collecting the commission from the applicant

automobile comprehensive coverage insures all of the following perils except glass breakage collision theft fire

collision

Dennis purchased a small manufacturing firm and wants to purchase coverage for the premises-operations and products-completed operations exposures. Which of the following types of insurance should he purchase? A) Comprehensive general liability. B) Commercial general liability. C) Employment practices liability. D) Boiler and machinery.

commercial general liability

All property policies contain exclusions. An insured may be interested in covering these gaps. A difference in conditions policy bridges these gaps by covering events

commercial property policies otherwise exclude and excluding coverages normally found in a commercial property policy

All property policies contain exclusions. An insured may be interested in filling these gaps. A difference in condition policy bridges these gaps by covering events

commercial property policies otherwise exclude and excluding coverages normally found in a commercial property policy

Which entity could bring an errors and omissions claim against an insurance agent?

companies an agent represents and clients they represent

Joan and Steven have applied for automobile insurance with ABC Auto insurers. They were not asked and did not tell the agent that their neighbor, George, who lost his drivers license due to drunk driving, uses one of their cars on a regular basis to drive to work. Once the company found out about George after he had an accident, they denied the claim citing what legal concept as the reason

concealment because informations was withheld

The procedure for resolving a disagreement between an insured and an insurance company about a loss is described in which of the following parts of an insurance policy?

conditions

defines the insurers and insured's rights and duties

conditions section

A therapist owns office space in a commercial office building that is legally organized as a condominium. Which of the following best protects the therapist's business personal property? A) Condominium commercial unit owners form. B) Condominium association coverage form. C) Commercial package policy (CPP). D) Unit owners form (HO-6).

condominium commercial unit owners form

commercial property form designed to cover the individual needs of commercial (not residential) condominium unit owners. It protects the owner of a business or commercial condominium until against loss or damage to furniture, fixtures, stock, improvements, and alterations owned by the insured. Covers personal property of others in the care and custody of the insured

condominium commercial unit owners form

What is covered under HO-6

condos

the exchange of value

consideration

issued to guarantee performance based on terms and provisions of written contracts. Performance and bid bonds are the two most common types

contract bond

The purpose of the extended reporting period in a commercial general liability policy is to provide: A) coverage for events that happen up to 5 years after a claims-made policy has expired. B) coverage for events that have happened before the policy became effective. C) additional time for the insured to make monthly reports of information for rating purposes. D) coverage for claims made after the policy expires.

coverage for claims made after the policy expires

A hotel has added a guests property endorsement to its commercial crime coverage form. A guest at the hotel removes her jewelry and leaves it wrapped in a towel at the front desk while she uses exercise equipment. When she finishes her workout the jewelry is gone. The policy provides

coverage for guests jewelry for amount shown in the declarations

A hotel has added a guest's property endorsement to its commercial crime coverage form. A guest at a hotel removes her jewelry and leaves it wrapped in a towel at the front desk while she uses some exercise equipment. When she finishes her workout, the jewelry is gone. The policy provides

coverage for the guest's jewelry in the amount shown on the declarations page

A business owner purchases a commercial general liability policy (CGL) that includes a supplemental extended reporting period. The effective dates of the policy are December 31, 2007- December 31, 2008, but it's not discovered or reported until June 30, 2009. What coverage if any will the policy provide

coverage is granted because the reporting period has not expired

Which of the following statements regarding employee theft is not true coverage is automatically canceled for employees causing this loss the insurer only pays the amount of loss that exceeds the deductible insured must notify the insurer as soon as possible of any loss insured against coverage is not canceled for employees causing the loss

coverage is not cancelled for employees causing the loss

Aviation insurance provides coverage for liability arising from the operation of an aircraft. All of the following statements are true except medical payments for injuries to passengers, regardless of fault is covered property damage liability is covered coverage is provided for only for the owner bodily injury to passengers is covered

coverage is provided for only the owner

An insured bank has a commercial crime coverage form with all 7 coverage parts. During a particularly busy day, an employee is given false account information and electronically transfers a large sum of money into another bank account. This amount of improper funds transfer is

covered under the funds transfer insuring agreement

In automobile insurance, the term supplementary payments refer to payments

covering reasonable expenses incurred at the insurers request and other specified expenses that are not subject to policy limit

the Jones act covers

crews of ocean going vessels

named insured, any of the named insured's partners, or any employee

custodian

What does aircraft hull insurance provide coverage for?

damage or loss to aircraft hull, engines, electronic navigation, and communication equipment

The liability coverage in the business auto coverage form covers all of the following except Expenses to settle claims for losses due to an accident damage to property of others as a result of an accident involving a covered auto bodily injury suffered by others as a result of the insured driving a covered auto damage to the covered auto

damage to the covered auto

Personal injury protection coverages includes all of the following except death benefits of 25,000 payment from the loss of income from an income producer of up to 85% of income lost medical services for an injured person's care payment of necessary services with a limit of 20$ a day for 3 years

death benefits of 25,000

Personal injury protection coverage includes all of the following except payment of necessary services with a limit of 20$ per day for 3 years payment for the loss of income from an income producer up to 85% of income loss medical services for an injured persons care death benefits of 25,000

death benefits of 25,000, death benefits are at least 1750 but no more than 5000

specifies the meaning of certain terms as used in the policy

definitions section

Coverage B is for other detached structures, which of the following would be insured under coverage B of a homeowner's policy detached garage rented to travel agent for business detached garage for friend to do discounted oil changes detached garage rented to neighbor to store his sports car in the winter garage with only a roof connecting the two

detached garage rented to neighbor to store his sports car in the winter

of the following occupations, which would not use an errors and omissions policy to provide coverage for professional losses consultant attorney doctor insurance agent

doctor

In homeowners policies, what does coverage A insure?

dwelling

Which of the following forms is not eligible to be written as part of a commercial package policy? commercial crime coverage forms dwelling property coverage forms commercial property coverage forms boiler and machinery coverage forms

dwelling property coverage forms

Which of the following is an optional coverage under the businessowners policy personal effects employee dishonesty valuable papers business income

employee dishonesty

Which of the following individuals would be eligible for workers compensation benefits employee who has a heart attack on the job employee who has an auto accident on the way home from work employee who falls in a restaurant while on her lunch break employee who falls on a wet factory floor

employee who falls on a wet factory floor

Ralph asks his insurance agent to explain how the homeowner's policy covers stolen jewelry. The agent spends some time explaining how, when, where, and what jewelry theft coverage exists in the policy. As a result Ralph believes that his 5000$ watch is fully covered under the basic policy. After the watch is stolen, Ralph is surprised to learn that he only has limited coverage. What legal doctrine might ralph rely upon to get full coverage for his loss

estoppel

Which of the following is not a basic way in which underwriters assign rates judgement rating experience rating expense rating manual rating

expense rating

A condition or situation that presents a possibility of loss is a (an): A) law of large numbers. B) named certainty. C) exposure. D) proximate cause.

exposure

Which of the following is not an exclusion found in section 1 of the homeowners policy water damage from flood or surface water power failure occurring away from insured's premises earth movement such as earthquake, mudflow, and landslide failure of the insured to care for the property before the loss

failure of the insured to care for the property before the loss

All of the following can be designated as an insured under a commercial general liability policy except a real estate management firm family members of the insured for personal activities the insured's legal representative employees of the named insured as it relates to business

family members of the insured for personal activities

a bond purchased to protect employers from the actions of dishonest employees

fidelity bond

guarantees that a person will fulfill his fiduciary obligations set forth by law

fiduciary bond

Which of the following perils is normally excluded in a difference in conditions policy (DIC) which covers things usually excluded from normal commercial property policies radioactive contamination fire earthquake flood

fire

Which of the following exposures to loss is not covered by the equipment breakdown protection coverage form? utility interruption fire or combustion explosion business income spoilage damage

fire or combustion explosion

what does other than collision (comprehensive) cover?

fire, theft, explosion, earthquake, windstorm, missiles, falling objects, hail, water, flood, vandalism, and malicious mischief, riot, civil commotion, glass breakage, collision with wild birds/animals

All of the following are homeowners section 2 additional coverages except claim expenses damage to property of others first aid provided by the insured first aid provided to the insured

first aid provided to the insured

A claims made policy covers claims that are

first reported during the policy period, provided the event occurred after the retroactive date (if any) stated in the policy

part 2 of employers liability insurance, of a workers compensation insurance policy includes all of the following limits of liability except for each employee injured by disease during the policy term for all compensation paid under the benefits required by workers compensation law for all bodily injury arising from a single accident for all bodily injury by disease during the policy term

for all compensation paid under the benefits required by workers compensation law

An insurance company that sells insurance only to people who meet specific membership requirements is known as what type of insurance company

fraternal

All of the following people can be excluded from worker's compensation benefits by endorsement except spouse partners manager of a limited liability company with under 10 employees full time factory employee

full time factory employee

Builders risk coverage that is written with the causes of loss- basic loss form will cover loss caused by collapse hail earthquake falling objects

hail

A person acting as a Michigan insurance producer must

have a written appointment from each insurer the person will represent

Tammy was struck by a hit-and-run driver and suffered injuries to her neck. Which part of her personal auto policy, if any, will cover this loss? A) Her collision coverage pays the medical bills. B) Her uninsured motorist coverage pays her medical bills. C) Her liability coverage pays her medical bills. D) Her policy will not cover the loss; she must sue the other driver to recover these expenses.

her uninsured motorists coverage pays her medical bills

Which of the following is covered by ocean marine insurance? commercial property floaters risks imports domestic shipments personal floaters

imports

Which of the following categories is covered by ocean marine insurance? commercial floaters risks imports and exports instrumentalities of communication and transportation domestic shipments

imports and exports are covered by ocean marine insurance

the principle that restores someone to the condition he enjoyed before a loss is

indemnity

a financial loss incurred as a result of direct damage to property

indirect loss

What is a personal injury?

injury other than bodily injury arising out of false arrest, detention, or imprisonment, malicious prosecution, wrongful entry or eviction, publications that slander or libel a person or organization that disparage a person or organization's goods, products, or services, and publications that violate a person's right of privacy

Personal floaters, domestic shipments, instrumentalities of transportation or communication, and commercial property floater risks are covered by what type of insurance

inland marine insurance

Which of the following is an example of control (reduction) as a method of handling risk? reducing coverage installing a burglar alarm buying insurance to reduce risk increasing a deductible

installing a burglar alarm

In most cases, an injured employee receives payments under workers' compensation from whom

insurance company

The difference between coverage E and coverage F in the farm personal property coverage form is

insurance is scheduled under coverage E but a blanket limit applies to coverage F

Part A of the personal auto policy would apply in which of the following situations? A) Driver who intentionally causes an accident. B) Garage mechanic while test-driving the insured's auto. C) Insured's 13-year-old son who, while playing with the car, starts it and lets it roll into the street, damaging other parked cars. D) Driver using the insured vehicle to transport people for a fee.

insured's 13 year old son who, while playing with the car, starts it and lets it roll into the street, damaging other parked cars

In workers compensation insurance, the experience modification factor

is applied as a method of rewarding those employers with better than average loss experience. It evaluates losses occurred in a 3 year period

The coverages offered by an insurance policy are described in the

insuring agreement

The list of perils covered under a policy is found in which part of the policy?

insuring agreement

contains the insurer's promise to pay for a loss if the loss should result from perils insured against and indicates coverages the contract offers

insuring agreement

Which of the following is not an element of a valid contract intent competent parties legal purpose consideration

intent

The commercial property conditions form contains circumstances that apply to all commercial property coverage forms, unless a coverage form contains a condition to the contrary. Commercial endorsements that apply to more than one part of a commercial package policy (CPP) are called

interline

A pickup or van is eligible under PAP as long as

it doesn't exceed 10,000 pounds

All of the following are characteristics of Lloyd's association except its members are individually liable for the contracts in which they enter it's an insurance company it insures unusual risks like a hole in one contest is insurance provided by individual underwriters not companies

it is an insurance company

What is the purpose of a MCS-90, the endorsement for motor carrier policies of insurance for public liability

it provides proof that the company carries an amount of insurance required by law

which of the following statements concerning a terminated appointment is correct?

it removes the producer's authority to represent a specific insurer

Which of the following statements regarding personal liability coverage is correct? it's added by endorsement to homeowners policy automatically included in dwelling and homeowners added by endorsement to both dwelling and homeowners its added by endorsement to dwelling but included automatically in homeowners

its added by endorsement to dwelling but included automatically in homeowners

The purpose of employer's liability insurance is to provide

liability protection where worker's compensation doesn't apply

provides that if the insurer changes its form to provide more coverage without additional premium or if a legislative change requires a change in coverage, any policy already issued automatically provides the additional coverage endorsement is not required

liberalization clause

Which of the following is not one of the requirements for a loss to be paid under the uninsured motorists coverage of the personal auto policy insured is legally entitled to damages loss is sustained by an insured other vehicle meets policy's definition of uninsured vehicle loss involves property damage to insured's auto

loss involves property damage to insured's property

In homeowners policies, what does coverage D insure?

loss of use

An insurance company may measure its underwriting profitability by using which of the following ratios investment ratio return on equity ratio loss ratio capacity ratio

loss ratio

Which of the following is not an additional coverage found in homeowners policy fire department service charge loss assessment debris removal market valuation

market valuation

Chad had his car insurance through the Michigan Automobile Insurance placement facility. If he has a vehicle that is not being driven or moved on the highway; the insurer

may allow the insured to maintain only comprehensive coverage

All of the following statements about the Michigan Property and Casualty Guaranty Association are true except the association.. may not sue or be sued by insured or insurer protects insured from insurer insolvency may cancel policies by 10 days written notice of cancellation to the last known address of the insured can investigate or defend a claim against the insured

may not sue or be sued by insured or insurer

All of the following are considered additional coverages in the business owners policy except mechanical breakdown collapse debris removal increased cost of construction

mechanical breakdown

Paul's bicycle shop is covered by a business owner's policy. Pete a customer is injured when he slips on the wet floor. Where would paul find coverage in his policy

medical expenses

Coverage C in the CGL covers

medical payments

Which of the following is not a supplementary payment provided in the commercial general liability policy costs of judgement interest premium for court bonds medical payments costs of investigation and defense

medical payments

Jane's sister, Maggie, who lives with Jane and just sold her car, drives Jane's sports car to a party. On the way home Maggie loses control of the car, hits a parked car, and rolls the car over. Maggie is severely injured and taken to the hospital. What coverage will reimburse Maggie for her medical bills? A) Uninsured motorist coverage. B) Bodily injury coverage. C) Medical payments coverage. D) Liability coverage.

medical payments coverage

The commercial crime policy covers loss to money and securities outside of the insured's premises while money or securities are in the care and custody of a

messenger

The commercial crime policy covers loss to money and securities outside the insured's premises while money or securities are in the care or custody of a

messenger

The named insured or any partner or employee of the named insured while having care and custody of the money or securities outside the insured's premises

messenger

The building and personal property coverage form can be used to insure each of the following types of property except outdoor fixtures money property belonging to others plants and shrubs held for sale

money

Which of the following auto policy coverages would pay for damage to the insured's car that the insured motorist caused by hitting a farmers cattle while driving through the country

other than collision

All of the following vehicles can be insured under an unendorsed personal auto policy except motorcycles newly acquired vehicles rental cars trailers hitched to insured vehicles

motorcycles

Worker's compensation laws vary from state to state. The categories of coverage are elective or compulsory . In compulsory states, the basic methods of providing coverage monopolistic or competitive. The monopolistic method is when the insurance

must be purchased from the state run insurer

What kind of insurance company is an insurance company owned by its policyholders (insureds)

mutual

The broad form HO-2 policy provides which type of coverage

named perils coverage for dwelling and personal property coverage

Mary is a customer at Bob's bait shop, which is covered by a business owners policy. Bob's auto strikes her when she is leaving the store parking lot, Mary has medical payments expenses of 450. Bob will find coverage

never because business owners policy doesn't cover this type of loss

Howard borrows his neighbor's car because his son took his car to college for a week while moving into the dorm. Under Howard's automobile policy, his neighbor's car is considered a (n): A) temporary substitute automobile. B) owned automobile. C) nonowned automobile. D) uninsured automobile.

nonowned automobile

An insured speeds through a residential neighborhood, almost striking several children. Under the insurance definition of negligence, such an insured would be held: A) negligent. B) strictly liable. C) not legally liable. D) legally liable.

not legally liable because no injury or damage occurred and a person is usually not held legally liable unless all 4 are present

The symbol "4" on a business auto policy applies only to those autos owned by the business that are

not private passenger autos

The symbol "4" on a business auto policy applies to only those autos owned by the business that are

not private passenger autos

Who does a surety bond protect?

obligee

In homeowners policies, what does coverage B insure?

other structures

If the insured hits a deer while driving his own vehicle, which part of the personal auto policy will pay to repair the vehicle? A) Medical payments. B) Other than collision. C) Liability. D) Collision.

other than collision

type of policy that that covers losses that occur while the policy is in force, even if a claim is submitted after the policy expires. This type of policy has a coverage trigger and only covers things that happened before it expired but you can submit a claim for what happened after it expires

occurrence policy

Coverage C of the commercial general liability policy will cover reasonable medical expenses incurred within how many years of the accident? A) Three. B) Five. C) One. D) Two.

one

The special form (DP-3) covers the dwelling and other structures for ____.

open perils

This type of liability arises in the course of a businesses daily operations if someone is injured or property is damaged, either where the business is conducted or by an activity of the owner or an employee

operations exposure

Which one of the following is not a commercial general liability exposure products manufactured or sold owned premises operations by employees operations of automobiles

operations of automobiles

Comprehensive coverage pays for all of the following damages except hitting a deer explosion glass breakage overturning of the auto

overturning of the auto

Liability policies provide certain supplementary payments that are included in the policy's occurrence limits paid in addition to the policy's regular limit of liability included in the policies aggregate limits paid only if the insured is found legally liable

paid in addition to the policy's regular limit of liability

which of the following is not a benefit of workers compensation insurance lost wages medical expenses pain and suffering rehabilitation costs

pain and suffering

funeral expenses for the insured would be paid by what

part B-Medical payments coverage of the PAP

Doug who is 7 years old, accidentally throws a baseball through the neighbors kitchen window. Which part of the homeowners policy will pay for the damages to the window?

part E- Personal liability covers property damages that the insured is legally obligated to pay

This promises to pay all compensation and other benefits required by workers compensation law

part one of workers compensation

Bob's construction company, based in Wisconsin, is doing a job in Illinois. Bob's declaration page for his workers' compensation policy lists Minnesota, Iowa, Illinois, and Wisconsin as states where he will do work. Pete, an employee working in Illinois, is injured on the job. How would Bobs' policy respond? A) Pay benefits only if Bob is held liable. B) Pay benefits based on Illinois workers' compensation laws. C) Pay benefits as if Pete had been injured in Wisconsin. D) Pete may choose coverage under the benefits that are best for him.

pay benefits based on Illinois workers compensation laws

How would a loss be adjusted under a homeowners policy with an insurance to value clause if a homeowner failed to carry coverage of at least 80% of the replacement cost of the home

payment of the actual cash value or a proportional share of the loss, whichever is greater

A property that is vacant is described as having an absence of people and property furniture people property

people and property

What type of bond is used by a contractor to guarantee that work will be completed to specifications/ contractor will complete contract as drawn

performance bond

Which of the following is a contract bond public official bond judicial bond fidelity bond performance bond

performance bond

bond that guarantees to the owner (obligee) that the contractor/principal will complete the contract as drawn

performance bond

which of the following is a contract bond performance bond judicial bond fidelity bond public official bond

performance bond

2 types of contract bonds

performance bonds and bid bonds

The garage coverage form is designed to cover vehicle dealers, including dealers that have repair facilities on premises. This form includes all of the following except personal damage garage keepers physical damage liability

personal damage

The garage coverage form is designed to cover vehicle dealers, including dealers that have repair facilities on the premises. The form includes all of the following except personal damage garagekeepers physical damage liability

personal damage

Aviation physical damage coverage, also known as aircraft hull insurance covers all of the following except controls personal effects engines electronic navigation

personal effects

All of the following could create an employer's liability loss except legal defense cost lawsuit brought by an injured worker's spouse personal injury An employee not covered by worker's compensation law

personal injury

All of the following could create an employers' liability loss except.. an employee not covered by workers' compensation law personal injury legal defense costs lawsuit brought on by injured worker's spouse

personal injury

provides coverage for libel, slander, invasion of privacy, and other intentional torts

personal injury

In homeowners policies, what does coverage C insure?

personal property

All of the following are optional property coverages under the business owners policy except mechanical breakdown money and securities personal property off premises outdoor signs

personal property off premises

All of the following additional coverages are included in homeowners form except reasonable repairs property removed debris removal pollution removal

pollution removal

A person is injured after slipping on a wet floor in a grocery store. Insurance against which of the following exposures would provide coverage

premises

A person is injured after slipping on a wet floor in a grocery store. Insurance against which of the following exposures would provide coverage? premises completed operations liability products liability operations

premises

Barbra is demonstrating a floor model for her company's product in its showroom when something goes wrong with the demonstration and the customer is injured. This is an example of what type of loss? premises liability personal injury products liability completed operations

premises liability

Barbra is demonstrating a floor model of her company's product in its showroom when something goes wrong with the demonstration and the customer is injured. This is an example of what type of loss? This type of liability protects insured against injury to third party that occurs on or arises outside of insured premises

premises liability

protects the insured against injury to third parties that occurs on or arises out of the insured's premises

premises liability

Marcus, an employee at the Beautiful Home Gift Store, dropped and broke a customer's purchase while carrying it to the customer's car. The resulting loss would be considered which of the following under the store's commercial general liability policy? A) Products-completed operations. B) Premises-operations. C) Personal injury. D) Products liability.

premises operations

Marcus, employee of the Beautiful Home Gift Store, dropped and broke a customer's purchase while carrying it to a customer's car. The resulting loss would be considered which of the following under the stores Commercial General Liability policy (day to day operations) personal injury products completed- operations premises-operations products liability

premises-operations

In the insurance business, the insurance company is also known as the

principal

In a surety bond, the _____________ is the party who promises to do or not do a specific thing, the ______________ is the party (usually the insurance company that agrees to be responsible for loss that may result if the principal doesn't keep their promise. the _________ is the party to whom the principal makes the promise, and for whose protection the bond is written

principal, surety, obligee

3 sources for workers compensation

private insurance, state funds, self insurance

3 sources for workers' compensation insurance

private insurance, state funds, self insurance

begins after the insured has relinquished control of the product and it has left the insured's premises

products liability

Which of the following classes of property are not specifically excluded from coverage C-personal property animals, birds, fish property rented to others off residence premises property away from residence credit cards

property away from residence

All of the following coverages are typically included in the supplementary payments of a liability policy except property damages the insured is found legally liable for defense costs loss of earnings first aid to others at the time of accident

property damages the insured is found legally liable for

Yacht policies provide physical damages and liability coverage. What is the liability section called?

protection and indemnity insurance

While driving down the street, an insured swerves to avoid a pedestrian, goes over a curb, and damages a neighbors fence. What would pay the repairs to the fence?

the driver's automobile policy under the property damage liability provisions

Explain the 6 parts to a workers compensation policy

provides bodily injury, employers liability coverage, the other 4 parts outline other states insurance, duties of the insured, premiums, and conditions

An insured has a CGL policy and hires a contractor to complete some work on a building. Which of the following is the best way to protect the insured from having to personally pay for damages as a result of the contractors operations

purchase an owners and contractors protective (OCP) policy

In states that use workers compensation competitive state funds method, all of the following would typically be viable options available to employer except purchasing coverage from a private insurance company if the employer meets a certain criteria, providing coverage through self insurance purchasing coverage from the state fund purchasing coverage from the state fund only

purchasing coverage from the state fund only

The federal employees liability act (FELA) covers which of the following types of workers railroad employees crews of ocean going vessels corporate CEOS harbor workers

railroad employees

The federal employees liability act covers

railroad workers

To motivate a buyer to buy an application for insurance, a producer promises a gift equal to one half of the commission, this is an example of...

rebating

illegal inducement to buy insurance, offering to pay part of the commission or giving gifts, services, or anything of value to the customer

rebating

The garage coverage form is designed specifically for all of the following except auto dealers a repair shop on a dealers lot truck dealers rental car companies

rental car companies

Section 2 of the homeowners policy provides liability coverage for all of the following except use of a 17 foot sailboat renting the garage to a jewelry maker actions of a domestic animal in the care of the insured actions of a residence employee

renting the garage to a jewelry maker

insurer agrees to reimburse the insured for the difference between the actual cash value of the property at the time damage occurs and amount spent to repair or replace damaged property

replacement cost endorsement

under this endorsement, insurer agrees to reimburse the insured for the difference between the actual cash value of the property at the time damage occurs and the amount actually spent to repair property

replacement cost endorsement

Which of the following phrases best describes actual cash value? replacement cost minus depreciation original cost minus appreciation original cost minus depreciation replacement cost plus appreciation

replacement cost minus depreciation

Of the following statements regarding employment practices liability insurance (EPL), which is not correct? The policy covers legal costs whether the company wins or not retaliation is not covered in an EPL policy wrongful termination, failure to promote, and discrimination are covered harassment is covered

retaliation is not covered in an EPL policy

Self insurance is an example of which type of risk management

retention

In a claims made liability policy, the specific date shown in the declarations indicating the first date events are covered by the policy is called its

retroactive date

what are the only types of watercraft covered by a dwelling policy

rowboats and canoes

Which of the following HO-3 endorsements will change coverage on specifically identified personal property from named peril to open peril

scheduled personal property

Which of the following methods of canceling a policy is used when a policyholder cancels her policy before it reaches natural expiration? pro rata long rate short rate flat

short rate

method of cancellation used when a policy is cancelled by a policyholder before it reaches its natural expiration, and the insured receives a less than pro rata return of premium

short rate cancellation

Which of the following dwellings would an HO-3 homeowners form cover single family home office building apartment building condominium

single family home

The risk that involves the chance of both loss and gain is:

speculative risk

which of the following determines the amount of a workers' compensation claim agreement of parties state law mandate of commissioner federal law

state law

unemployment insurance is provided at the...

state level

A parking valet at a hotel uses a guest's car to do a personal errand and damages the car in a collision. The guest has a personal auto policy (PAP). The insurance company will pay the claim and ____ against the valet.

subrogate

bond that provides monetary compensation if bonded party fails to perform a certain act such as a contract

surety bond

Henry is a pilot who just purchased his first Cessna Skyhawk single engine airplane. He asks his insurance agent about aviation liability insurance and learns that this type of insurance is part of a special line of insurance requiring a different agent. To which special line of insurance business is the agent referring?

surplus lines

Which business auto coverage symbol allows coverage of all vehicles including owned, nonowned, and hired autos

symbol 1

least restrictive and covers any auto

symbol 1

which business auto coverage form is the least restrictive and covers any auto

symbol 1

Which business auto coverage form covers owned autos only

symbol 2

covers owned autos only

symbol 2

Patrick's Widget Company has a small fleet of owned cars used by local salespeople. Most of the salespeople, however, travel to other cities and rent cars to make sales calls. Which coverage should Patrick include on his commercial auto policy to cover this exposure? A) Symbol 7--Specifically described autos only. B) No coverage is available for rental cars under the commercial auto policy. C) Symbol 8--Hired autos only D) Symbol 9--Nonowned autos.

symbol 8-hired autos only

Which business auto coverage form covers non owned autos owned by employees or partners of the insured

symbol 9

covers non owned autos- those owned by employees or partners of the insured

symbol 9

When applying for a producer's license, an business entity must do all of the following except complete an application pay the required fee take and pass the license examination designate an individual to comply with all of the laws

take and pass the license examination

covers employees of interstate railroads, doesn't apply to postal employees, truckers who deliver freight to and from railroad depot, or contractors involved in railroad construction or repair

the Federal Employers' Liability Act

failure to carry insurance of at least 80% of replacement cost value results in the payment of the greater of which two sums

the actual cash value or the result of dividing the policy limit by 80% of the replacement cost, multiplied by the cost to repair or replace, less the deductible

Which of the following statements regarding the Michigan Basic Property Insurance Association is not correct? to be eligible for insurance, applicants must be an owner occupant or tenant occupant of the property All insurers authorized to transact home insurance or basic property insurance must be members of the association the association issues policies for two year terms policies are intended to primarily insure property not used for business

the association issues policies for 1 year terms not two year terms

Which of the following statements regarding the Michigan Basic Property Insurance Association is not correct To be eligible for insurance, applicants must be an owner-occupant or tenant occupant of the property All insurers authorized to transact home insurance or basic property insurance must be members of the association the association issues policies for 2 year terms policies are intended to primarily insure property not used for business

the association issues policies for 2 year terms

Which of the following individuals has the authority to suspend or revoke a producer's insurance license the commissioner all of these the insurer the judge

the commissioner

Towing and labor coverage covers all of the following except towing costs after a breakdown the cost of a fan belt replaced at the scene of a breakdown labor for changing a tire at the scene of a breakdown towing costs after an accident

the cost of a fan belt replaced at the scene of a breakdown

Mary was involved in an accident with a hit-and-run driver. Her car was damaged. Which of the following items would be covered under the collision coverage in the personal auto policy? A) The front windshield is shattered. B) The vehicle is stolen before the tow truck can tow it to the body shop. C) The vehicle is towed to the body shop. D) Mary's luggage in the trunk is destroyed.

the front windshield is shattered

In Michigan who appoints the commissioner for a term of four years

the governor

In Michigan, who appoints the commissioner for a term of 4 years

the governor

An insured rents a car while on vacation in Canada and causes an accident. What coverage is provided for this loss under the personal auto policy? A) The loss is covered if the insured has purchased a foreign country endorsement. B) The loss is covered under an unendorsed policy. C) The loss is not covered. D) The loss is covered if the insured has purchased a rental car endorsement.

the loss is covered under an unendorsed policy

When calculating premiums for a workers compensation policy, the insurer will multiple the job classification rate by

the number of 100$ payroll units paid to employees in each job classification

The insured rear-ends another vehicle that is stopped at a red light. The driver of the car struck by the insured is badly injured. The insured, his daughter and her friend were in the car and were also injured. Part B of the insured's personal auto policy will pay medical expenses for all of the following EXCEPT: A) the insured. B) the occupant of the car struck by the insured. C) the insured's daughter's friend. D) the insured's daughter.

the occupant of the car struck by the insured

If a California resident with a personal auto policy with the minimum liability limits has an accident in a state that requires higher limits, which of the following will occur? A) The policy will automatically provide the required higher limits at no extra charge. B) The loss is not covered. C) The policy will provide the higher limits, but the insured must first pay the additional premium. D) The insured must first purchase an other states coverage endorsement.

the policy will provide the higher limits, but the insured must pay the additional premium

Which of the following statement regarding the flood coverage is true the standard deductibles are 2000 under the emergency program and 1000 for the regular program sewer backup into a dwelling is considered a flood and is not covered personal property in a basement or outside the yard is covered agents have the authority to bind coverage on flood policies

the standard deductibles are 2000 under the emergency program and 1000 for the regular program

Which of the following losses could be covered under a crime insurance policy indirect losses theft committed by hotel maid loss due to seizure of property by government theft committed by insured

theft by hotel maid

Which of the following statements about umbrella policies is not correct? they are written only for commercial risks they provide coverage above the limits of underlying policies Losses that are excluded by the underlying policy but covered by the umbrella are subject to the umbrella's retention limits if the insured fails to keep the underlying coverage in force, the umbrella policy will not cover the amount of loss that would have been paid by the underlying policy

they are written only for commercial risks

Which of the following statements about commercial umbrella liability insurance is not true they require another policy to be in place before they can be issued they provide catastrophic liability coverage for business risks they exclude catastrophic liability coverage for business risks the policy will only pay once the policy limits on an underlying policy have been met

they exclude catastrophic liability coverage for business risks

Which of the following statements about dwelling policies is correct? theft can be covered by an unendorsed dwelling policy they may be used to insure rental homes liability coverage is automatically included in a dwelling policy The building must be occupied to be insured

they may be used to insure rental homes

Medical payments coverage in commercial general liability policy covers injuries to

third party regardless of liability

At the national level, the federal government provides all of the following types of insurance except federal crop insurance flood insurance war risk insurance unemployment insurance

unemployment insurance

Which of the following is not a use of auto symbols in the commercial auto policy to determine which rating territory applies to the covered autos to customize the policy to the insured's needs by selecting the appropriate coverage to identify which coverage applies to which vehicle to determine how coverage will apply to vehicles acquired after policy effective date

to determine which rating territory applies to the covered autos

which of the following is not a use of auto symbols in the commercial auto policy to determine how coverage will apply to vehicles acquired after the policy effective date to customize the policy to the insured's needs by selecting the appropriate coverage to identify which coverage applies to which vehicle to determine which rating territory applies to the covered autos

to determine which rating territory applies to the covered autos

Worker's compensation laws cover employees in the course of employment. Some classes of workers such as domestic servants are exempt but may be covered by a voluntary compensation endorsement. This endorsement agrees to pay benefits

to employees not covered or exempt

This coverage provides physical damage loss protection for which the insured is legally liable for trailers not owned by the insured and left at an interchange for pickup. This coverage is designed specifically for truckers policy

trailer interchange coverage

Other additional coverages in the businessowners policy include all of the following except money orders and counterfeit money trees and detached signs fire department service charges pollutant cleanup

trees and detached signs because they are a coverage extension not an additional coverage

provide broadened coverage and higher limits of liability for businesses, organizations, and individuals

umbrella policies

The condominium association coverage form may include all of the following property except alterations that are part of the building unit owners personal property owners business personal property refrigerators, dishwashers, or stoves that are within the individual units

unit owner's personal property

commercial auto policy provides how much for bail bonds

up to 2000

Which of the following best describes a short rate cancellation upon cancellation, insurer keeps all earned premium plus overhead expenses incurred upon cancellation, the insurer returns all unearned premium upon cancellation, all earned premium is returned minus overhead expenses incurred upon cancellation, 100% of the premium is returned

upon cancellation, insurer keeps all earned premium plus overhead expenses incurred

The boatowners policy provides liability and physical damage coverage. What is the value and size of a boat eligible for the boatowner's policy

value is less than 25,000 and the watercraft is less than 26 inches in length, or both

Which of the following endorsements is used to provide coverage based on actual cash values at certain location at specific times

value reporting endorsement

The greatest difference between the dwelling basic form (DP-1) and the broad form (DP-2) is that DP-2 automatically includes coverage for

vandalism and malicious mischief

what principle is used to describe liability for the actions of another person

vicarious liability

In legal terms, voluntary relinquishment of a known right is called:

waiver

The federal government provides..

war risk insurance, nuclear energy liability, flood, and federal crop insurance

Statements made on an insurance application that are believed to be true to the best of the applicant's knowledge are called

warranties

any person the named insured retains specifically to have care and custody of property inside the premises and who has no other duties

watchperson

Which of the following is not a peril covered under the personal property coverage in the HO-3 special form hail water damage malicious mischief freezing

water damage

If a building has been vacant for 60 consecutive days prior to a loss, which one of the following types of damages will be covered under a building and personal property coverage form building glass breakage attempted theft weight of snow, ice, or sleet vandalism

weight of snow, ice, or sleet

After a fire damages a home, how much is the insured entitled to recover for buying materials to board up the windows under the homeowners policy? A) 5% of the Coverage A limit. B) $500.00 C) No coverage is available. D) Whatever it will reasonably cost.

whatever it will reasonably cost

Ann and her agent meet to discuss automobile insurance. The agent completes an application for coverage, takes Ann's check for 200, and mails the application to the insurance company. Two weeks later, Ann recieves the policy in the mail. When did the consideration take place

when Ann wrote the premium check

when is a person ineligible for auto insurance

when they have a suspended license, have been convicted of reckless driving in the last 3 years, has accumulated 6 or more insurance eligibility points in the last 3 years

Trees, shrubs, and other plants are covered as additional coverages for Coverages A through D. The coverage is limited to certain perils, however. All of the following perils are covered when causing damage to a tree or shrub EXCEPT: A) wind. B) explosion. C) theft. D) riot.

wind

Which is one of the major differences between the application of commercial blanket bond policy limit versus a blanket position bond policy limit

with a commercial blanket bond, the bond's policy limit applies separately to each loss, regardless of the number of employees involved. With a blanket position bond, the bond's policy limit applies separately to each employee involved in a loss

workers compensation pays....

without regard to fault

Premiums for workers compensation policies are based on

work classification, number of employees, and the total payroll

Which of the following statements about workers compensation insurance is correct the social security administration handles the administration of workers compensation benefits workers compensation benefits apply without regard to the employer's negligence the legal foundation for workers compensation is the doctrine of tort liability Employers liability insurance is the same as workers compensation coverage

workers compensation benefits apply without regard to the employer's negligence

What type of coverage is typically found in professional liability

wrongful acts, errors, or emissions the insured commits and in some cases, bodily injury

Mary's purse was stolen from her as she walked down the sidewalk. She has an HO-2 policy. Will Mary's policy cover this loss subject to the deductible? A) Yes, if Mary has added the Scheduled Personal Property endorsement to her policy. B) No, theft is not a covered peril in the HO-2. C) Yes, theft is a covered peril under all of the homeowners forms. D) No, because the loss occurred away from the insured premises.

yes, theft is a covered peril under all of the homeowners forms

If an insured has a claims made commercial liability policy with the basic extended reporting period, the insurer will pay for losses after the policy has been canceled as long as the occurrence is reported within 60 days of cancellation and the claim is filed within how many years

5 years

All of the following are current penalties in Michigan except 20,000 for each violation of a cease and desist order 500 per violation of insurance law 1000 per violation of insurance law 5000 for knowingly violating an insurance law

500 per violation of insurance law

cancellation of an auto policy is not subject to appeal for how many of the first number of days

55 days

In property insurance, an underwriting rule an insurer may establish for home insurance is that if the building has been unoccupied, the insurer can deny coverage. How many days can that be?

60 days

The basic extended reporting period included in the commercial general liability (CGL) form covers claims made up to five years after the end of the policy period, as long as the occurrence is reported within how many days

60 days

the commissioner must decide whether to accept an application for an insurance license within

60 days

which of the following is a producer not required to report to the director of insurance within 30 days? change of address change of name assured name administrative action against producer

Assured name

which of the following statements is not correct regarding automobile insurance PPI provides coverage only in Michigan Burial expenses provided under PIP are covered up to 6000 PIP benefits are overdue if not paid within 30 days UM/UIM are optional coverages

Burial expenses provided under PIP are covered up to 6000

Which of the following describes the authority of a licensed insurance counselor

Insurance counselor provides advice concerning an insurance policy and charges a fee for that service

Sue, and employee of Paul's bicycle shop, was on a service call repairing some bicycles at Bills home. On her way back to the shop, she was involved in an automobile accident and injured. Where would sue find coverage?

Paul's worker's compensation policy

A corporation in Chicago has added an extortion- commercial entities endorsement to its commercial crime coverage form. One of the directors of the corporation is captured and held for a 3 million dollar ransom in La Paz Bolivia. The policy... excludes coverage in foreign countries pays only if Bolivia is listed on the endorsement schedule as a covered territory pays only if there is a threat of bodily harm excludes coverage for directors and officers who are traveling in foreign countries

Pays only if Bolivia is listed on the endorsement schedule as a covered territory

a claims-made policy covers claims that are

first reported during the policy period, provided the event occurred after retroactive date in policy.]

Michigan issues licenses to all of the following except resident producers nonresident producers counselors field underwriters

field underwriters

What are the required limits of liability for auto liability policies

20,000/40,000/10,000

While on a tour of a toy manufacturers workshop, a child severely cuts their finger. The toy manufacturers insurer will cover the claim if the manufacturer carried this type of insurance

Commercial general liability

Which of the following statements regarding maintenance of an insurance license is not correct? must complete 24 hours of continuing education every 2 years license can be revoked by director if convicted for a felony Company can revoke license for violation of insurance laws director may suspend license to protect public interest

Company can revoke license for violation of insurance laws

Which of the following guarantees that an insurer cannot refuse to insure an eligible applicant Michigan Automobile insurance placement facility Essential insurance act Michigan FAIR plan Basic property insurance association

Essential insurance act

Michigan residents who cannot otherwise obtain automobile insurance through ordinary methods can apply to the

Michigan Automobile insurance placement

One of Susan's jobs as the office manager for Acme Insurance is to drop the daily deposits at the bank on her way home from the office. If Susan is robbed one night while making the deposit, what crime form would provide coverage to Acme insurance for the loss

Outside the premises

The agent of record for a large commercial insurance account contacts her competing producers and strongly encourages them to not put in a competing bid for the account. What unfair practice may the producer have committed

boycott, coercion, and intimidation

Occupational diseases are covered under worker's compensation. All of the following are occupational diseases except exposure to chemicals on the job that lead to cancer black lung disease for a coal miner chicken pox contacted at work cancer contracted by workers working with asbestos

chicken pox contacted at work

Jeffrey, an insurance producer, publishes a written statement that is false and derogatory. It concerns the financial condition of Wesley, another licensed producer in the insurance business, and it's designed to injure Wesley's reputation. This can be considered an act of

defamation

A person is ineligible for automobile insurance if she

has a suspended drivers license

A person acting as a Michigan Insurance producer must

have a written appointment from each insurer the person will represent

A tavern owner has a CGL policy. A patron who claims he was injured when the bartender forcibly removed him from the premises sues both the tavern owner and the bartender. Under the CGL's duty to defend provision the policy would

have no duty to defend because the damages aren't covered

The garage policy covers all of the following except insured's automobile liability, insured's premises and operations, insured's medical bills, insured's products and completed operations

insured's medical bills

which of the following statements regarding use of aftermarket crash parts is correct? a garage has obligation to identify which parts are original and which are aftermarket parts insurer may require a body shop provide the insured with a written estimate that identified all of the aftermarket crash parts to be used in the repair aftermarket crash parts are considered interchangeable with original parts and their use need not meet any special requirements estimates using aftermarket crash parts may be oral or written

insurer may require a body shop provide insured with a written estimate that identified all of the aftermarket crash parts to be used in the repair

A person must not act as a Michigan Insurance producer unless she

is licensed by the state of Michigan

All of the following are examples of insurance transactions except soliciting applications delivering policies licensing of producers collecting premiums

licensing producers

All of the following are unfair claims practices except misrepresenting amount of coverage available failing to affirm or deny coverage after proof of loss forms are filed attempting to settle a claim for less than the contract provides maintaining a claim related complaint file

maintaining a claim related complaint file

the commission of an illegal act, one of the three things an officer and director can be held liable

malfeasance

which of the following would not be covered under an employment practices liability insurance policy? Sexual harassment age discrimination mass layoffs of employees wrongful discharge

mass layoff of employees

Coverage C of the commercial general liability policy covers

medical payments

Which of the following is not a supplementary payment provided in commercial general liability policy medical payments costs of judgement interest premiums for court bonds cost of investigation and defense

medical payments

performance of an act in an improper manner, one of the three things an officer and a director can be held liable

misfeasance

In the commercial crime forms the definition of theft does not include burglary theft mysterious disappearance robbery

mysterious disappearance

a person's failure to perform an act he has a duty to perform, one of the three things an officer and director can be held liable

nonfeasance

All of the following are considered insurance fraud except offering a prospect an inducement to purchase insurance submitting false information on an insurance application with the intent to deceive the insurer, submitting a claim of loss that did not occur, concealing a material fact for the purpose of misleading the insurer.

offering a prospect an inducement to purchase insurance

Producers must report the following to the director within 30 days except criminal convictions bankruptcy parking or minor speeding tickets change of name

parking or minor speeding tickets

Which of the following bonds guarantees that bills for labor and materials will be paid to the contractor as they are due performance payment completion contract

payment

Which of the following limits doesn't apply to worker's compensation part two- employers liability per property damage per limit per accident per employee

per property damage

A producer owes a fiduciary responsibility to all of the following except the insured on cancelled policies the insurer for premiums due the director for license fees prospective purchaser of insurance when application is rejected

prospective purchaser of insurance when application is rejected

Purpose of Michigan Property and Casualty insurance guarantee association is to

protect persons against failure in the performance of contractual obligations of certain insurance policies

The purpose of the Michigan Property and Casualty Guarantee Association is to

protect the public by paying legitimate claims when insurers become insolvent

The Michigan Property and Casualty Guarantee Association

protects insured against insurer insolvencies

in order for an employer to avoid purchasing a workers compensation insurance policy to cover its employees it must

prove to the commissioner that its self insured

certain transactions may be legally conducted by nonadmitted insurers without requiring a certificate of authority are

surplus lines coverage

Which business auto coverage symbol allows coverage for all vehicles, including owned, nonowned, and hired autos

symbol 1

Bob's trucking company contracts with boat companies to haul its boats as well as boat parts. Bob is concerned that he has enough coverage if he is contacted to haul a trailer owned by the boat company. What coverage should be used to provide this coverage

trailers in insured's possession

An insurer incorporated under the laws of Illinois with its home office in Chicago and not licensed in the state of Michigan would be identified as

unauthorized foreign company

An applicant who has been denied an insurance license has how many days to request a hearing to protest denial?

30 days

If a producer moves, she must report her new address to the commissioner within how many days after moving

30 days

If a producer undergoes criminal prosecution, he must notify the director within how many days?

30 days

Rates must be filed with the director within how many days of use

30 days

when an employer has employees use their own autos in connection with the employers business, the employer should purchase

nonowned auto liability

The inspection of a dwelling to determine if an applicant is eligible for home insurance may be based on which of the following? location of dwelling number of occupants marital status of applicants if applicant is handicapped

number of occupants

A nonresident producer may be licensed in Michigan if he

requests a license and pays a fee

the first date on which an event may occur and be covered by the policy if a claim is filed

retroactive date

what is the max amount PPI insurance will pay to cover damage done to property that is the result of an automobile accident

1 million per accident

Upon the death or disability of a licensee, the surviving spouse, next of kin, administrator or executor of the estate, or legal guardian may apply to the Commissioner of Insurance for a Temporary License to continue the effected producers business for a period no longer than how many days? 30 days 60 days 12 months 180 days

180 days

In the event an insurer cancels or refuses to renew a motor vehicle insurance policy it must provide how many days of written notice to the insured prior to the effective date of cancellation or refusal to renew

20 days

In worker's compensation policy, Michigan law requires that the bureau of workers disability compensation be notified in advance of the date of cancellation of a policy how many days in advance

20 days

Maximum fine for knowingly violating a cease and desist order is

20,000 and possible revocation of license

Property and Casualty producers must complete how many hours of continuing education every 2 years

24 hours

How many hours of continuing education credit does an agent need to complete every 2 years

24 hours with a minimum of 3 hours in ethics

All of the following are correct statements regarding workers compensation except work loss benefits are payable on 8th day of disability, if disability lasts longer than 2 weeks, benefits will be retroactive funeral and burial cost cannot exceed actual cost or 6000, whatever is less vocational rehabilitation cannot exceed 52 weeks without authorization presumption of total and permanent disability doesn't extend beyond 900 weeks from date of injury

Presumption of total and permanent disability doesn't extend beyond 900 weeks from date of injury

Which of the following statements regarding property insurance is not correct property insurance pays a lump sum benefit if the insured is disabled director must approve all policy rates and applications Property insurance can be written for 7500 property insurance can be issued as a repair cost policy

Property insurance pays a lump sum benefit if insured is disabled

Which of the following individuals would be eligible for homeowners coverage under the Michigan Essential Act? someone who will not purchase a replacement cost policy for at least 80% of replacement cost Someone who doesn't occupy insured dwelling someone whose policy has been canceled for nonpayment of premium within the last 2 years someone wishing to insure a dwelling with a 150,000 replacement cost policy

Someone wishing to insure a dwelling with a 150,000 replacement cost policy

In Michigan all property and casualty insurers are responsible for

The acts of their appointed producers

After ACME construction wins a bid to build an office complex, the owner demands that ACME purchase a payment bond to cover electrical and heating subcontractors. What guarantee is the owner seeking from acme construction by demanding the payment bond?

The principal will complete and deliver the work free of any liens or encumbrances

Which of the following statements regarding bond agreements is correct a surety bond serves as a guarantee of performance a principal may be asked to provide subrogation rights to surety in case of loss if a default occurs, the surety may institute legal action against the obligee The cost of a surety bond reflects the sureties anticipation that a loss will occur

a surety bond serves as a guarantee of performance

Which of the following is not a reason to refuse to renew homeowners policy deterioration of the building for the last 3 years payment of 3 claims that were not liability claims during the last 3 years totaling more than 1000$ aging of the building significant change that occurred during the preceding policy period that poses a physical hazard to the building

aging of the building

a bid bond guarantees to the entity awarding the contract that the bidding contractor, if selected, will undertake the contract and will furnish a performance bond for the project. What will the bond do if the contractor doesn't take the job?

agree to pay the difference between the selected contractor's bid and the bid that is then accepted

Which of the following statements about worker's compensation is not correct? An employee who is eligible for worker's compensation may sue a negligent employer workers compensation covers work related injuries An employee must accept the benefits mandated by law most occupations are subject to state worker's compensation laws

an employee who is eligible for worker's compensation may sue a negligent employee

All of the following parties are exempt from taking and passing a written examination in order to transact insurance business except applicant for limited lines license applicant for property and casualty license who holds a ChFC nonresident producer whose license is valid applicant who has been licensed within previous 12 months

applicant for property and casualty license who hold as ChFC

What can an insurer not do regarding the Michigan Essential Insurance act?

cannot limit coverage, refuse to insure, or continue to insure unless the insurer has specific, written, underwriting rules

Mark wants to purchase a policy for his manufacturing company to include premises liability, products liability, and completed operations. Which policy would cover all of these losses? A) Contractual liability. B) Products and completed operations liability. C) Personal injury liability. D) Commercial general liability.

commercial general liability

Which of the following coverages would protect a policyholder for assumed liability under a construction contract to install water lines for a city

contractual liability

At the time a relationship is established to whom must licensee give a privacy notice?

customers

the retroactive date of claims-made professional liability policy is which of the following date no claims can be submitted earliest date an event or loss may occur and be eligible for coverage under the policy date policy expires inception date of the policy

earliest date an even or loss may occur and be eligible for coverage

Which policy provides coverage for professional liability

errors and emissions policy

If after a hearing, the director believes a producer knowingly violated insurance licensing laws, the director may

fine the producer a maximum of 5000 for each violation