Other Coverages and Options

The party to a surety or fidelity bond who promises to fulfill the obligations is the 1. Principal 2. Custodian 3. Surety 4. Obligee

1. Principal

If the ownership of an insured vessel changes involuntarily, within how many days of the ownership transfer will the hull policy terminate? 1. 7 days 2. 15 days 3. 30 days 4. 60 days

2. 15 days

During a house fire, an insured moves an antique chair listed in the policy to a storage unit. In the Standard Fire Policy, how many days will the antique chair be covered at the new location? 1. 3 days 2. 5 days 3. 15 days 4. 30 days

2. 5 days

When Mary decided to sue her neighbor for damages to her yard, she was told to get a bond that would guarantee she would be able to pay this court costs and resulting damages if she loses the case. What kind of bond is this? 1. A bail bond 2. A cost bond 3. An appeal bond 4. A license and permit bond

2. A cost bond -a cost bond guarantees that the person (plaintiff) who brings legal action against another (defendant) will be able to pay the court costs and any resulting damages in the even he or she loses the case.

Bob's neighbor will not stop parking his motorcycle in Bob's rose garden no matter how many times he has been asked to quit parking there. Bob finally gets a court order requiring the neighbor to refrain from parking there. Bob finally gets a court order requiring the neighbor to refrain from parking there. It turns out it was his neighbor's property all along. What bond was Bob required to post guaranteeing his neighbor's damages in this wrongful action will be paid? 1. Cost 2. Injunction 3. Attachment 4. Bail

2. Injunction -this bond is a guarantee that if the injunction should not have been issued, damages will be paid to the injured party.

What type of property does a Personal Floaters policy cover? 1. Movable personal property located in the insured's home, only 2. Movable personal property, wherever it may be located 3. Permanently attached property located on the insured's premises 4. None of these

2. Movable personal property, wherever it may be located

Which surety bond guarantees that bills for labor and materials will be paid by the contractor as they are due? 1. Bid bond 2. Payment bond 3. Performance bond 4. Supply bond

2. Payment bond

Who would participate in a Write Your Own (WYO) flood insurance program? 1. Businesses requiring National Flood Insurance policies 2. Private insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis 3. Lloyd's associations 4. Government insurance companies that write and service National Flood Insurance policies.

2. Private insurers that wish to write and service National Flood Insurance policies on a no risk-bearing basis.

What is the deductible of a commercial liability umbrella policy called? 1. The CPP 2. The SIR 3. The PIL 4. The CGL

2. The SIR -The Self-Insured Retention is an initial part of a loss the insured pays before the umbrella pays if no other policy covers the loss.

Which bond is required by a court before allowing one to take the assets of another to satisfy a legal obligation? 1. Cost bond 2. Injunction bond 3. Attachment bond 4. Bail bond

3. Attachment bond -used to guarantee that if the action to attach property was wrong, any damage suffered will be paid.

Employment practices liability insurance (EPLI) would NOT cover claims arising from 1. Wrongful termination 2. Discrimination 3. Deliberate law violation 4. Sexual harassment

3. Deliberate law violation

Section 1 of a boatowners policy covers 1. Medical payments 2. Death 3. Physical damage 4. Liability

3. Physical damage

Which professional liability form provides coverage for liability arising out of malpractice, error, or mistakes made in rendering professional services? 1. Directors and officers liability 2. Medical malpractice 3. Physicians, surgeons, and dentists malpractice 4. Lawyers professional liability

3. Physicians, surgeons, and dentists malpractice

When an employee benefit plan pays the premium for a fiduciary liability policy, what provision must be included in that policy? 1. Waiver of premium 2. Surety bond 3. Subrogation 4. Designated beneficiary

3. Subrogation

What is another name for liquor liability insurance? 1. Third-party liability insurance 2. Error and omissions 3. Intoxicants and narcotics insurance 4. Dram shop insurance

4. Dram shop insurance

Residential structures, including individual condominium units, and their contents are insured by what part of the National Flood Insurance Program? 1. Basic coverage form 2. Residential Condominium Building Association Policy (RCBAP) 3. General property policy form 4. Dwelling policy form

4. Dwelling policy form

Which of the following is NOT true about earthquake coverage? 1. Coverage is commonly provided through a federally-funded program. 2. Coverage is excluded by most property forms. 3. Coverage may be added to property policies by endorsements. 4. Coverage may be written in a Difference of Conditions policy.

1. Coverage is commonly provided through a federally-funded program.

Directors and officers liability insurance defends actions against a corporation or its officers and directors alleging wrongful acts. With regard to the coverage provided, wrongful acts include any of the following EXCEPT 1. Embezzlement 2. Misstatements 3. Neglect 4. Breach of duty.

1. Embezzlement

The Residential Condominium Building Association Policy (RCBAP) is used for residential condominium building associations to cover the entire building under one policy. Which of the following statements about RCBAP is true? 1. It does not protect the individual owner from loss to personal property owned exclusively by the unit owner. 2. It provides limited coverage for personal property owned exclusively by the unit owner. 3. It is designed to provide exclusive coverage for the individual owner and provides not coverage for the unit owner. 4. This policy form is not approved for use in the states of New York or New Jersey.

1. It does not protect the individual owner from loss to personal property owned exclusively by the unit owner.

Which of the following statements is NOT true regarding a personal umbrella liability policy? 1. It provides error and omissions coverage for an agency. 2. It may cover certain exposures not provided under the primary layer. 3. It may require the payment of a self-insured retention. 4. It provides excess liability coverage over underlying personal liability.

1. It provides errors and omissions coverage for an agency. -E & O is only in a professional liability policy.

A municipality can protect itself against the construction or repair of properties that do not conform to the building codes established by ordinance by requiring the contractors to obtain 1. License and permit bonds 2. Fidelity bonds 3. Performance bonds 4. Bid bonds

1. License and permit bonds

Which of the following statements is INCORRECT with regard to surplus lines insurance? 1. Policies written by a surplus lines insurer typically contain standard coverages and forms. 2. To sell surplus lines insurance, the licensee must obtain a surplus lines broker's license. 3. Before coverage is places with a surplus lines company, diligent effort must be made to place the risk with admitted insurers. 4. Business with a surplus lines insurer is subject to a premium tax that must be collected by the broker.

1. Policies written by a surplus lines insurer typically contain standard coverages and forms.

When an umbrella policy is broader than the underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays 1. The excess over the self-insured retention (SIR). 2. The amount specified in the policy under the additional coverage provisions. 3. The amount excess of the underlying policy deductible. 4. A percentage of the loss as described on the declarations.

1. The excess over the self-insured retention (SIR). -Retention is the equivalent of a deductible in property insurance.

The New York Standard Fire Policy is classified as "Standard" because 1. The rates charged for coverage is identical in every state. 2. The policy conditions are identical in every state. 3. The policy's inception and expiration time are based upon the "standard" time. 4. All of the above.

2. The policy conditions are identical in every state.

All are true if a contractor defaults on a performance contract (bond) EXCEPT 1. The surety will attempt to seek reimbursement from the contractor for any amounts it pays. 2. The surety may cancel the bond so as to avoid having to pay losses and expenses. 3. The obligee may hire another contractor to complete the job and have the surety repay the obligee. 4. The principal's obligations end.

2. The surety may cancel the bond so as to avoid having to pay losses and expenses. -the performance bond is a guarantee by the surety that if the principal (contractor) does not perform as promised, the surety will pay the obligee any losses.

Which of the following would be considered causes for flood conditions covered by the National Flood Insurance Program? 1. Overflow of inland or tidal waters 2. Unusual and rapid accumulation or runoff of surface waters from any source 3. A mudflow 4. All of the above could be considered flood sources

4. All of the above could be considered flood sources

Which of the following special liability coverages will provide protection to managers of a corporation for claims arising from a wrongful act committed by the manager while in an official capacity? 1. Employment practices liability 2. Errors and omissions insurance 3. Malpractice insurance 4. Directors and officers liability

4. Directors and officers liability

Professional liability coverage protects the insured against legal liability resulting from 1. Liability assumed under a contract 2. Dishonest acts 3. The unprofessional conduct of an employee 4. Errors and omissions

4. Errors and omissions -covers liability arising out of the failure to use due care and the degree of skill expected of a person in a particular profession.

A yacht policy would provide a pleasure boat owner with all of the following coverages EXCEPT 1. Protection and Indemnity 2. Hull insurance 3. Boat trailer insurance 4. Freight coverage

4. Freight coverage

An ocean marine loss that occurs through the voluntary sacrifice of a part of the vessel or cargo to save the ship, crew, or cargo is known as 1. Particular average 2. Inchmaree clause 3. Protection and indemnity 4. General average

4. General average

According to the conditions of a hull policy after a loss, when would wages and maintenance be paid for the master, officers, and crew? 1. While laid up in port awaiting repair. 2. Within 15 days after filing claim for damages. 3. While on shore leave. 4. When moving the vessel from one port to another.

4. When moving the vessel from one port to another.

As you leave the dock in your yacht, you carelessly cut in front of another yacht, causing its crew to change course. They run into a buoy damaging their boat. What coverage take care of the damages? 1. Your Inchmaree clause 2. The collision clause of your hull policy 3. The other boat's hull policy 4. Your P & I (protection and indemnity)

4. Your P & I (protection and indemnity) - P & I coverage pays for damage to other vessels not caused by collision.

The conditions of the Standard Fire Policy addressing the rules, duties, and provisions of the insured and the insurer are found in 1. The exclusions 2. An endorsement 3. The declarations 4. The 165 lines of conditions

4.. The 165 lines of conditions