CPCU 551

Question 10 ID# 5941435Points: 1 Flag Question Question text Shelton Industries is insured under a commercial property policy and an equipment breakdown policy. The company has two claims while both policies are in force. The first claim is for a furnace explosion and the second claim is for an explosion of unfired pressure vessels. Which one of the following explains how these losses would be covered under the policies? Select one: A. Each loss would be covered under both the commercial property policy and the equipment breakdown policy. B. Each loss would be covered under the equipment breakdown policy only. C. Each loss would be covered under the commercial property policy only. D. Neither policy provides coverage for any of the losses.

c

Question 11 ID# 5841662Points: 1 Flag Question Question text A buyer has newly purchased goods shipped on an ocean freighter bound for the United States from Europe. To assure there is no liability for the goods until they are delivered to a warehouse in the United States, which one of the terms of sale should this buyer use? Select one: A. CIF B. FOB Vessel C. Ex Point of Origin D. FAS Vessel

c

Question 11 ID# 5941737Points: 1 Flag Question Question text The insurance agent for HJ Accounting Associates suggested that it should add miscellaneous real property coverage through the Condominium Commercial Unit-Owners Optional Coverages endorsement. A situation that suggests a need for optional miscellaneous real property coverage is Select one: A. A storage building erected by the condominium association for use in the association's business operations. B. A balcony that is attached to the external walls that benefits several unit owners. C. A patio with a grill, table, and benches that was built by a unit owner and is only used to entertain the unit owner's business clients. D. A separate garage structure owned by the condominium association and used by multiple unit owners.

c

Question 12 ID# 5829551Points: 1 Flag Question Question text The exclusion for loss due to Acts Committed by You, Your Partners or Your Members in the ISO Commercial Crime Coverage Form would be considered a(n) Select one: A. Exclusion applicable to indirect losses as the result of crime losses. B. Exclusion that only applies to Inside the Premises and Outside the premises insuring agreements. C. General exclusion applying to all crime insuring agreements. D. Exclusion that only applies to the Employee Theft insuring agreement.

c

Question 12 ID# 5868134Points: 1 Flag Question Question text Which one of the following statements is correct with respect to the Newly Acquired or Constructed Property extension of coverage of the Building and Personal Property Coverage Form (BPP)? Select one: A. It specifically excludes coverage for a newly acquired or constructed building at any location if that building will be used as a warehouse. B. It provides automatic coverage for a new building being constructed by or for the insured anywhere within the coverage territory. C. It covers newly acquired buildings, provided the purpose of the newly acquired building is similar to the use of the building described in the declarations. D. This extension applies to buildings only and does not provide any coverage for business personal property.

c

Question 12 ID# 5874871Points: 1 Flag Question Question text The National Flood Insurance Program (NFIP) includes both a regular program and an emergency program. What are the correct maximum limits of insurance for building coverage in both programs? Select one: A. $500,000 in the regular program; $500,000 in the emergency program. B. $100,000 in the regular program; $500,000 in the emergency program. C. $500,000 in the regular program; $100,000 in the emergency program. D. $100,000 in the regular program; $100,000 in the emergency program.

c

Question 12 ID# 5941704Points: 1 Flag Question Question text The possibility of the insured incurring uninsured extra expenses other than expenses that reduce the business income loss is decreased by Select one: A. The Extended Business Income (EBI) additional coverage. B. The Business Income (Without Extra Expense) Coverage Form. C. The Business Income (and Extra Expense) Coverage Form. D. The Expenses To Reduce Loss additional coverage.

c

Question 13 ID# 5841652Points: 1 Flag Question Question text A retail store, owner of various commercial trucks, wants to send a small shipment of goods to their warehouse 40 miles away. They want to keep this process as uncomplicated as possible. Which one of the following methods of shipping would you suggest for the retailer? Select one: A. Ship the goods with a local trucking company to the warehouse. B. Hire a rail car to carry the goods to the warehouse. C. Ship the goods on their own truck to the warehouse. D. Hire an aircraft to transport the goods to the warehouse.

c

Question 13 ID# 5859487Points: 1 Flag Question Question text A business has determined its estimated maximum loss (EML) to be $2,700,000 and its coinsurance basis to be $4,000,000. The limit of insurance that should be purchased by the business is Select one: A. $1,300,000. B. $2,700,000. C. $2,800,000. D. $4,000,000.

c

Question 13 ID# 5869631Points: 1 Flag Question Question text The owners of Uncle Reggie's Steakhouse are insured under a Building and Personal Property Coverage Form (BPP) that covers their building and business personal property for $350,000 and $100,000, respectively. The policy has a $2,500 deductible. A fire results in $350,000 worth of damage to the building and a $70,000 loss of business personal property. In what amounts should the policy provide coverage for this loss? Select one: A. $350,000 Building and $70,000 Property B. $374,500 Building and $67,500 Property C. $347,500 Building and $70,000 Property D. $350,000 Building and $65,000 Property

c

Question 13 ID# 5941693Points: 1 Flag Question Question text The Davis Corporation (DC) owns a building covered by the ISO Earthquake and Volcanic Eruption Endorsement With Percentage Deductible with a 10% deductible. The building is valued at $1.2 million and insured for $1 million, which satisfies the coinsurance requirement. An earthquake causes $250,000 damage to DC's building. How much will DC receive in compensation for this loss? Select one: A. Nothing B. $130,000 C. $150,000 D. $225,000

c

Question 14 ID# 5869635Points: 1 Flag Question Question text Business income coverage is considered a time element coverage for which one of the following reasons? Select one: A. Loss frequency is dependent on the length of time needed to restore damaged property. B. Maximum length of coverage only lasts for a specific amount of time. C. Loss severity is dependent on the length of time needed to restore damaged property. D. The average duration of losses is only a few weeks.

c

Question 14 ID# 5875898Points: 1 Flag Question Question text Inland marine policies can cover physical loss, business income, or legal liability. Of the following loss exposures, which one would be best covered by an inland marine policy? Select one: A. A photography studio's building for loss or damage as a result of fire B. A warehouse owner for damage to property stored at the warehouse and owned by the warehouse owner C. A trucking company's liability for damage to property of others being transported by the trucking company D. A delivery service's liability for property damage due to a car accident

c

Question 15 ID# 5926846Points: 1 Flag Question Question text A building with concrete exterior walls and wooden support beams is which one of the following types of construction as defined by Insurance Services Office, Inc. (ISO)? Select one: A. Combustible B. Noncombustible C. Joisted masonry D. Wood frame

c

Question 15 ID# 5941541Points: 1 Flag Question Question text An advantage of blanket insurance for an insured business that has several locations is that blanket insurance Select one: A. Offers a premium discount if all of the buildings are insured 100% to value. B. Allows the business to waive the coinsurance penalty for all locations. C. Covers additional debris removal if the loss only occurs at one location. D. Allows the business to insure the buildings, business personal property, and business income for the values at the largest location.

c

Question 15 ID# 5941730Points: 1 Flag Question Question text The Praline Finance Company is insured under an ISO Commercial Crime policy. One month after the policy inception date, Praline acquired ownership of a smaller finance company including its premises and employees. Which one of the following best describes Praline's responsibility under the Consolidation—Merger or Acquisition condition of the policy? Select one: A. Praline will not be charged any additional premium at the time of the acquisition for coverage to apply for the remainder of the policy term. B. Any loss that occurs after the acquisition will be covered by the acquired company's prior insurer. C. Coverage is automatically extended to the new employees or premises for 90 days. D. Praline must immediately add the new company as a named insured to cover the new premises and employees.

c

Question 16 ID# 5830513Points: 1 Flag Question Question text The loss of or damage to property can have adverse financial consequences including reduced property value. Which one of the following statements is correct with respect to a reduction in value? Select one: A. For insurance purposes, the dollar amount of a reduction in value is the same regardless of the valuation measure used. B. When property is lost or destroyed, the limit of insurance is deemed to be the amount of the reduction in value. C. A valuable painting that is repaired after being damaged is likely to have declined in value. D. If a cell phone is lost or stolen, its decline in value is measured as its replacement cost minus its salvage value.

c

Question 17 ID# 5841272Points: 1 Flag Question Question text The ISO Flood Coverage Endorsement differs from other coverages in the commercial property coverage part. One of these differences is that Select one: A. It is always written on an actual cash value basis, similar to the NFIP policy. B. Reinsurance is readily available for flood insurance at an affordable price. C. It is often subject to separate and lower limits than the policy limit. D. There is no annual aggregate limit available under the endorsement.

c

Question 17 ID# 5869859Points: 1 Flag Question Question text Which one of the following would be covered under the Extra Expense insuring agreement of the Business Income (and Extra Expense) Coverage Form? Select one: A. Property taxes B. Normal operating expenses C. Costs to move to a temporary location D. Interest Expense

c

Question 17 ID# 5941711Points: 1 Flag Question Question text The Power, Heat, and Refrigeration Deduction endorsement is most valuable for which one of the following industries? Select one: A. Retail clothing B. Grocery C. Manufacturing D. Motor vehicle repair

c

Question 18 ID# 5941454Points: 1 Flag Question Question text Suzanne is the property underwriter for Best Builders. She knows that buildings under construction present unique exposures, such as the increased likelihood that what two perils will occur? Select one: A. Riot and theft B. Vehicle and hail C. Theft and fire D. Windstorm and hail

c

Question 18 ID# 5941708Points: 1 Flag Question Question text An insured has a Business Income (with Extra Expense) Coverage Form with a Maximum Period of Indemnity coverage option. Following a covered loss and after the period of restoration begins, it takes 120 days to complete repairs and another 60 days for revenue to return to normal. How would the policy provide coverage for this loss of business income? Select one: A. The policy would provide coverage for 120 days after the period of restoration begins and 15 additional days. B. The policy would provide coverage for 120 days after the period of restoration begins and 30 additional days. C. The policy would provide coverage for 120 days after the period of restoration begins. D. The policy would provide coverage for the full 180 days after the period of restoration begins to return to normal operations.

c

Question 19 ID# 5941432Points: 1 Flag Question Question text Hickory Manufacturing has a number of equipment breakdown loss exposures. In an equipment breakdown policy, explosion caused by excessive internal pressure of steam is a breakdown loss that can occur to a Select one: A. Mechanical pump. B. Distribution panel. C. Boiler. D. Compressed tank.

c

Question 2 ID# 5829493Points: 1 Flag Question Question text In an unendorsed Business Income (Without Extra Expense) Coverage Form, how is coverage provided for necessary expenses incurred by the named insured to reduce business income loss? Select one: A. As a coverage extension B. As an exception to an exclusion C. As an additional coverage D. Not at all

c

Question 2 ID# 5829590Points: 1 Flag Question Question text Crime loss exposures of financial institutions are covered by financial institution bonds. These policies were developed by Select one: A. The Federal Deposit Insurance Corporation (FDIC). B. The Internal Revenue Service (IRS). C. The Surety and Fidelity Association of America (SFAA). D. The National Council on Compensation Insurance (NCCI).

c

Question 2 ID# 5829639Points: 1 Flag Question Question text The Nationwide Marine Definition was no longer needed following the enactment of legislation in the 1950s that Select one: A. Restricted domestic insurers' underwriting of marine classes of insurance. B. Strictly tightened the rate and form regulation to which commercial inland and ocean marine insurance is subject. C. Permitted a single insurer to offer fire, casualty, and marine coverages. D. Clearly defined the distinction between property insurance and marine insurance.

c

Question 2 ID# 5855905Points: 1 Flag Question Question text Alice bought furniture for her home using store credit. There were no liens attached, and when Alice could not pay the full amount for the furniture, the store owner sued her. The store owner was Select one: A. A secured creditor. B. A bailor. C. An unsecured creditor. D. A lessor.

c

Question 2 ID# 5874714Points: 1 Flag Question Question text In assessing the insurance needs for a condominium association's policy, an agent has determined that the applicable statutes and association agreement require coverage under the all-in concept. This is a particular challenge because Select one: A. The unit owners must be made aware of coverage limitations on like kind and quality coverage if any upgrades are made. B. There are no other coverage options available to alleviate any coinsurance penalty exposures that may exist. C. The upgrades made to units could leave the condominium association under-insured in the event of a loss. D. The association only has ownership of the exterior walls and would subrogate unit owners in the event of a loss to interior fixtures.

c

Question 2 ID# 5941520Points: 1 Flag Question Question text Peter has a Commercial Package Policy (CPP) that has a Building and Personal Property Coverage Form (BPP) with a Causes of Loss - Broad Form covering his building with a $750,000 limit.A tropical storm struck the area near Peter's building and the strong winds tore most of the shingles from the building's roof and shattered multiple windows with flying debris. An outside fixture also sustained heavy damage due to the wind.The total amount of damages was $40,000 for the windows and shingles; and $10,000 for the outside fixture. How much will Peter's insurer pay for damage to his outside fixture? Select one: A. The loss is not covered. B. $5,000 C. $10,000 D. $40,000

c

Question 20 ID# 5829910Points: 1 Flag Question Question text Regarding property coverage under the businessowners policy, which one of the following statements is true? Select one: A. Businessowners policies never include an insurance-to-value provision. B. The standard valuation provision in the businessowners policy is actual cash value. C. One of the distinguishing features of most businessowners policies is the automatic inclusion of business income and extra expense coverage. D. The businessowners policy offers three causes of loss forms, including the basic, broad, and special forms.

c

Question 20 ID# 5869867Points: 1 Flag Question Question text Which one of the following is the coinsurance basis under a Business Income Coverage Form (BIC)? Select one: A. The same as the property covered B. The actual cash value of the building C. The projected net income and all operating expenses except for certain deductible items D. The replacement cost of the building

c

Question 3 ID# 5876032Points: 1 Flag Question Question text Inland and ocean marine policies provide coverage for transportation loss exposures. For an insured that would be considered an infrequent shipper, which one of the following would be the best type of inland/ocean marine insurance to cover this insured's shipping exposure? Select one: A. Open cargo insurance B. Annual transit insurance C. Trip transit insurance D. Motor truck cargo insurance

c

Question 3 ID# 5926847Points: 1 Flag Question Question text Martin enters a warehouse by smashing a basement window and climbing through the opening. He steals supplies and a box of petty cash and exits the building through the same window. This is an example of which one of the following types of theft? Select one: A. Embezzlement B. Robbery C. Burglary D. Employee dishonesty

c

Question 4 ID# 5941444Points: 1 Flag Question Question text Henry and Company carries the Equipment Breakdown Protection Coverage Form including all ten insuring agreements. If the company's steam boiler explodes, which one of the following losses, caused by the steam boiler explosion, will be covered by Henry's coverage form? Select one: A. Damage to a neighboring building not in the company's care, custody, and control B. Bodily injury to the company's employees C. Damage to the company's business personal property D. Bodily injury to visitors not employed by the company

c

Question 6 ID# 5829349Points: 1 Flag Question Question text Under an ISO Commercial Package Policy, the insurer reserves the right to examine and audit the insured's books and records related to the policy at any time during the policy period and for up to how many years after the termination of the policy? Select one: A. One B. Two C. Three D. Four

c

Question 6 ID# 5876029Points: 1 Flag Question Question text A jewelry dealer with coverage under an Inland Marine dealer's policy was victim of a break-in where jewelry inventory as well as jewelry left for repairs by customers was stolen. In addition, six months later, the business suffered another loss when it is discovered that a new line of earrings that was known to have arrived in the store has an unexplained disappearance. The dealer's policy will Select one: A. Cover the theft loss as well as the unexplained disappearance loss. B. Cover neither the unexplained disappearance loss nor the theft loss. C. Cover the theft loss but not the unexplained disappearance loss. D. Cover the unexplained disappearance loss but not the theft loss.

c

Question 7 ID# 5841785Points: 1 Flag Question Question text Which one of the following statements is correct with respect to transfer's ability to meet risk financing goals? Select one: A. Transfer increases the level of liquidity that an organization requires. B. The primary benefit of transfer is that it allows an organization to manage its cost of risk. C. The primary benefit of transfer is certainty regarding the ability to pay losses. D. Transfer is less effective than retention in managing cash flow variability.

c

Question 7 ID# 5843145Points: 1 Flag Question Question text Which one of the following statements about feedlot insurance policies is true? Select one: A. They provide term life insurance on animals. B. They provide protection against loss of gross margin on animals. C. They are a form of bailees' liability coverage. D. They insure farmers against unexpected crop production losses.

c

Question 7 ID# 5869858Points: 1 Flag Question Question text In the ISO Business Income Coverage forms (BIC), which one of the following is defined as the slowdown or cessation of business activities or, in the case of rental value coverage, means that a part of the premises is rendered untenantable (unfit for occupancy)? Select one: A. Premises B. Operations C. Suspension D. Period of restoration

c

Question 7 ID# 5939974Points: 1 Flag Question Question text Sandy's Surf Shop, which is insured under a Business Income (and Extra Expense) Coverage Form, was damaged from a hurricane. It took her four months to repair the damages and resume operations. Normally, Sandy would have had revenues of $10,000 per month, and expenses of $8,000 per month. While closed, she was unable to operate at all and had no continuing expenses. She incurred a total of $5,000 in overtime labor and express mail charges to replenish her inventory. Ignoring any applicable waiting period, what is the amount of Sandy's business income and extra expense loss? Select one: A. $3,000 B. $7,000 C. $13,000 D. $28,000

c

Question 8 ID# 5868189Points: 1 Flag Question Question text An exclusion contained in the Causes of Loss—Basic Form eliminates coverage for damage caused by which one of the following? Select one: A. Fire that results from artificially generated electric currents B. Rupture or bursting of water pipes caused by any covered cause of loss C. Mechanical breakdown, including rupture or bursting caused by centrifugal force D. Sprinkler leakage

c

Question 8 ID# 5874056Points: 1 Flag Question Question text Acme is a manufacturer that makes seasonal products and insures its business personal property with a Business and Personal Property Coverage Form (BPP) with a Value Reporting Form. The amount of insurance is $1,000,000 with a $1,000 deductible. Reports are due monthly. Acme suffered a business personal property loss of $500,000 caused by an insured peril, and the prior monthly report made was $400,000. The actual value of business personal property at the time of this report was $400,000. What amount would Acme's insurer pay for the described loss? Select one: A. $399,000 B. $400,000 C. $499,000 D. $500,000

c

Question 8 ID# 5941742Points: 1 Flag Question Question text An insurance agent advised the owners of Romano Market that they want to switch to a businessowners policy (BOP). Which one of the following statements best describes how businessowners policies coverages compare with those provided by commercial package policies? Select one: A. The list of property not covered in the BOP is longer than the comparable list in the commercial package policy. B. The coverages provided by the BOP are significantly broader than those provided by a commercial package policy. C. The BOP coverages are similar to the coverages provided under commercial package policies. D. The BOP provides exactly the same coverage as the ISO commercial package policy.

c

Question 9 ID# 5830187Points: 1 Flag Question Question text Which of the following describes why a bailee needs to purchase bailees coverage in a commercial inland marine policy? Select one: A. Because a bailee has some of its goods away from its premises for processing B. Because a bailee delivers its own goods to customers using its own trucks C. Because a bailee is legally responsible for loss of or damage to a customer's property D. All of the above

c

Question 9 ID# 5860085Points: 1 Flag Question Question text An insured chooses the "Agreed Value" option for its Building and Personal Property Coverage Form (BPP). The agreed value for the property is $100,000 and the limit of insurance is $120,000. The building is totally destroyed by a covered cause of loss. At the time of the loss, the value of the building was $130,000. Ignoring any deductible and rounded to the nearest $1,000, the insurer would pay Select one: A. $100,000. B. $108,000. C. $120,000. D. $130,000.

c

(SFS) is insured under a Business Income (and Extra Expense) Coverage Form with a $1 million Business Income limit of insurance for the store location, subject to option (2) Business Income Other Than "Rental Value". None of the optional coverages of the Business Income (and Extra Expense) are in effect and no endorsements apply to SFS's Business Income (and Extra Expense) Coverage Form. The one year policy period shown in the declarations began on February 1, 20X1. On February 1, 20X1, SFS was closed for four months until the building could be repaired and the personal property replaced. During the four month interruption, SFS's actual revenue was reduced to nil and the expenses such as payroll, electricity and overtime labor totaled $200,000. SFS expected to gain $550,000 in revenue and have $300,000 in expenses. What is SFS's business income loss? Select one: A. $50,000 B. $250,000 C. $350,000 D. $450,000

d

Question 1 ID# 5900769Points: 1 Flag Question Question text Which one of the following statements best describes the Causes of Loss—Special Form? Select one: A. The placement of the "burden of proof" rests with the insured as opposed to the insurer. B. The Special Form is designed to cover any loss that would not be covered by the Basic and Broad Forms. C. The Special Form contains exclusions that are covered in the Basic and Broad Forms for certain hard to insure perils. D. The Special Form provides coverage for direct physical losses other than those that are specifically excluded.

d

Question 10 ID# 5876809Points: 1 Flag Question Question text Animal mortality insurance provides broader coverage than ISO farm program in which one of the following respects? Select one: A. Animal mortality insurance automatically covers any reduction in an animal's value. B. Animal mortality insurance covers seizure or destruction by a governmental authority. C. Animal mortality insurance lacks policy limits. D. Animal mortality insurance is available in higher per-head limits.

d

Question 11 ID# 5859541Points: 1 Flag Question Question text In determining an organization's estimated maximum loss (EML) of business income, what is the most likely starting point? Select one: A. Noncontinuing expenses B. Time required to restore property C. Extra expenses D. The coinsurance basis

d

Question 12 ID# 5890604Points: 1 Flag Question Question text When analyzing loss exposures, total dollar losses can be determined by multiplying loss frequency by Select one: A. The maximum possible loss. B. A credibility factor. C. The probable maximum loss. D. Loss severity.

d

Question 12 ID# 5941445Points: 1 Flag Question Question text In the Equipment Breakdown Protection Coverage Form, there are several exclusions that eliminate coverage for certain causes of loss and types of equipment. Which one of the following is an equipment breakdown exclusion? Select one: A. Additional expenses to clean up covered property damaged by a hazardous substance B. Costs to research damaged computer data C. Spoilage damage to covered property resulting from ammonia contamination. D. Breakdown to equipment caused by fire

d

Question 13 ID# 5828991Points: 1 Flag Question Question text Carl worked for a small company that is covered under a crime policy with employee theft coverage. Carl was caught earlier in the year stealing petty cash. After making restitution and promising never to steal again, he was allowed to continue working for the company. Carl has now again stolen petty cash and has left the area. The second employee theft has been reported to the company's insurer. The insurer will likely Select one: A. Pay for the loss of cash and hope the police locate Carl. B. Investigate to determine whether Carl is actually an employee. C. Hire a private investigator to attempt to locate Carl. D. Advise that insurance for Carl was cancelled due to the prior theft.

d

Question 13 ID# 5927117Points: 1 Flag Question Question text An equipment breakdown protection form can have internal limitations that apply to certain types of losses. Which one of the following losses is subject to such a limitation? Select one: A. Water damage resulting from sprinkler leakage B. Fire that ensues from a breakdown C. Breakdown caused by windstorm or hail D. Spoilage damage resulting from ammonia contamination

d

Question 13 ID# 5929945Points: 1 Flag Question Question text Each insured member of a pool contributes premium based on its loss exposures. In exchange, Select one: A. The pool implements various risk financing techniques. B. The pool forms a captive insurer. C. The pool contributes capital. D. The pool pays for each insured's covered losses.

d

Question 14 ID# 5868676Points: 1 Flag Question Question text Under the Loss Sustained During Prior Insurance Not Issued by Us or Any Affiliate condition of the ISO Commercial Crime Coverage Form written on a loss sustained basis, if certain requirements are met, the insurer agrees to pay a loss that occurred during the prior policy period of another insurer. Which one of the following situations is likely to exist if such a condition were not available? Select one: A. The commercial general liability (CGL) policy would cover the loss. B. Most employee dishonesty losses would not be covered. C. Crime insurance would not be affordable. D. It would be nearly impossible to persuade an insured to switch to a new insurer.

d

Question 14 ID# 5941507Points: 1 Flag Question Question text A claim representative explains the settlement of a claim to an insured. The insured is concerned that he will not be able to replace his damaged business personal property when he learns that depreciation will be applied. The cost to replace property with new property of like kind and quality less depreciation is referred to as the Select one: A. Selling price. B. Depreciated value. C. Replacement cost. D. Actual cash value.

d

Question 14 ID# 5941696Points: 1 Flag Question Question text The Ensuing Loss provision in ISO's Earthquake and Volcanic Eruption Sub-limit Endorsement provides that in the event of a fire resulting from an earthquake Select one: A. Consequential loss is subject to a sublimit which will apply to the fire damage. B. The earthquake limits will be added to the property limits. C. No deductible will apply to either the earthquake or the fire damage. D. Coverage limits may not be stacked from the various areas of the policy.

d

Question 14 ID# 5941739Points: 1 Flag Question Question text Which one of the following statements is correct with respect to eligibility for coverage under a businessowners policy (BOP)? Select one: A. Insurers consider most manufacturing businesses as being eligible for their BOP programs. B. Eligible risks must exceed 50,000 square feet in total floor area or $8 million in annual gross sales at each location. C. Every insurer that writes businessowners insurance uses the same eligibility rules to define the types of businesses that it will accept. D. BOP eligibility rules are based on the size of the business and the complexity of loss exposures.

d

Question 15 ID# 5829678Points: 1 Flag Question Question text Judgment rating is used to rate Select one: A. Filed inland marine risks. B. All marine insurance. C. Commercial property insurance. D. One-of-a-kind risks.

d

Question 16 ID# 5829386Points: 1 Flag Question Question text Under which one of the following provisions of the Building and Personal Property Coverage Form (BPP) is the maximum payment $10,000 or five percent of the building limit, whichever is less? Select one: A. Debris Removal additional coverage B. Pollutant Cleanup and Removal additional coverage C. Outdoor Property coverage extension D. Increased Cost of Construction additional coverage

d

Question 17 ID# 5841849Points: 1 Flag Question Question text For shipments between buyers and sellers, most open cargo policies state that the value of covered property will include several elements. Which one of the following is a provision on value of covered property being shipped? Select one: A. A clause that includes U.S. import duty in the valuation clause B. An accumulation clause that doubles the policy limit when shipments accumulate at docks or aboard vessels C. A SR&CC endorsement that can be canceled with 48 hours notice D. An advance equal to 10 percent of the invoice and freight or a higher percentage if so agreed upon

d

Question 17 ID# 5859389Points: 1 Flag Question Question text Which one of the following optional coverages would obligate the insurer to pay for new property of like kind and quality, without any deduction for depreciation? Select one: A. Agreed Value B. Actual Cash Value C. Functional Replacement Cost D. Replacement Cost

d

Question 17 ID# 5926943Points: 1 Flag Question Question text Which one of the following is true regarding the Employee Theft-Name or Position Schedule endorsement? Select one: A. When written on a position-schedule basis, employee theft is restricted to covering theft by employees whose names are listed. B. This endorsement limits the organization to scheduling only one employee for whom coverage is provided. C. This endorsement adds coverage to what is provided by the Employee Theft insuring agreement. D. This endorsement replaces the regular policy definition of employee with one that applies on either a name-schedule or position-schedule basis.

d

Question 18 ID# 5843148Points: 1 Flag Question Question text Livestock policies are available from the Federal Crop Insurance Corporation in eligible states. Coverage may be obtained under which one of the following types of policies? Select one: A. Multiple Peril Crop Insurance (MPCI) policies B. Animal mortality insurance policies C. Feedlot insurance policies D. Livestock Gross Margin (LGM) policies

d

Question 18 ID# 5856418Points: 1 Flag Question Question text One dimension of analyzing loss exposures is timing of losses. The timing of losses is significant because Select one: A. Funds to pay for losses must be readily available and paid in full for valid claims. B. Accurate reserves must be established. C. Compliancy requirements must be met. D. Money held in reserve to pay for a loss can earn interest until the actual payment is made.

d

Question 18 ID# 5941705Points: 1 Flag Question Question text Which one of the following additional coverages would best cover the insured's loss of business income that results when fire damage to another building makes it unsafe for customers to enter the insured's premises and access is prohibited by the fire department? Select one: A. Alterations and New Buildings B. Extended Business Income C. Expenses to Reduce Loss D. Civil Authority

d

Question 19 ID# 5831428Points: 1 Flag Question Question text Generally, funds used to pay for property losses are Select one: A. Delayed depending on when the adverse event occurred. B. Often spread over several decades. C. Partially paid when the losses occur with the balance paid over an extended period. D. Disbursed relatively soon after the losses occur.

d

Question 19 ID# 5941521Points: 1 Flag Question Question text Cameron has a Commercial Package Policy (CPP) that has a Building and Personal Property Coverage Form (BPP) with a Causes of Loss - Broad Form covering his building with a $750,000 limit. A tropical storm struck Cameron's building and the strong winds tore most of the shingles from the building's roof and shattered multiple windows with flying debris. The total amount of damages was $20,000 for the windows and $20,000 for the shingles. How much will Cameron's insurer pay for damage to his windows and shingles? Select one: A. The damage is not covered B. $20,000 C. $30,000 D. $40,000

d

Question 20 ID# 5821332Points: 1 Flag Question Question text Property insurance policies not only protect the property owner but also generally protect a secured lender's interest in the financed property by Select one: A. Sending the lender a letter of intent. B. Issuing a mortgagee interest-only policy. C. Issuing a separate policy. D. Naming the lender on the owner's policy.

d

Question 20 ID# 5829396Points: 1 Flag Question Question text Which one of the following statements is correct with respect to the Recovered Property condition of the Building and Personal Property Coverage Form (BPP)? Select one: A. If property is recovered, the insured must accept the recovered property and refund the loss payment, less the cost of recovering and repairing the property, to the insurer. B. When property is recovered, the insurer need not notify the insured and may dispose of the property as it sees fit. C. Recovered property is returned to the insured, who has no obligation to return the loss payment to the insurer. D. The insured has the option of taking the recovered property and refunding the loss payment to the insurer.

d

Question 20 ID# 5841843Points: 1 Flag Question Question text While traveling the Pacific Ocean, an ocean freighter was taken possession of by a gang of pirates. During this take over, cargo and containers were ruined due to the acts of the pirates. Which one of the following principal warranties under an open cargo policy applies? Select one: A. Perils of the Sea clause warranty B. Delay clause warranty C. Strikes, riots, and civil commotion warranty D. Free of capture and seizure warranty

d

Question 20 ID# 5874745Points: 1 Flag Question Question text Which one of the following statements is true regarding the Legal Liability Coverage Form? Select one: A. Although the form is titled legal liability coverage, it is a property insurance coverage with the typical property coverages and conditions. B. The coverage form is subject to the same coinsurance condition that is found in the Building and Personal Property Coverage Form (BPP). C. The premium rates are generally higher than the rates that would be charged for a usual commercial property policy on the same property. D. Compared to commercial general liability coverage, this form can provide a broader range of coverage when a property is rented for longer than seven consecutive days.

d

Question 20 ID# 5925235Points: 1 Flag Question Question text The only material difference between the extra expense coverage provided by the Business Income (and Extra Expense) Coverage Form and the extra expense coverage provided by the Extra Expense Coverage Form is which one of the following? Select one: A. The Loss Determination condition, which in the Extra Expense Coverage Form is based on Agreed Value B. The exclusions section, which is more restrictive in the Extra Expense Coverage Form C. The Coinsurance condition, which is more restrictive and carries higher coinsurance penalties in the Extra Expense Coverage Form D. The Limits on Loss Payment condition found only in the Extra Expense Coverage Form

d

Question 4 ID# 5868550Points: 1 Flag Question Question text Which one of the following is a type of covered property under employee theft coverage? Select one: A. Intangible property B. Computer programs C. Electronic data D. Securities

d

Question 4 ID# 5875781Points: 1 Flag Question Question text Inland marine policies contain many of the general characteristics common to most insurance policies. The characteristic that provides coverage for inland marine floaters is which one of the following? Select one: A. The valuation provisions B. The broad perils coverage C. The conditions of the policy D. Coverage for property in transit

d

Question 4 ID# 5901598Points: 1 Flag Question Question text Your Business Personal Property includes coverage for improvements and alterations as an owner in which of the following coverage forms? Select one: A. Neither Business and Personal Property Coverage Form nor Condominium Commercial Unit-Owners Coverage Form B. Both Business and Personal Property Coverage Form and Condominium Commercial Unit-Owners Coverage Form C. Business and Personal Property Coverage Form only D. Condominium Commercial Unit-Owners Coverage Form only

d

Question 5 ID# 5829503Points: 1 Flag Question Question text The coinsurance basis for business income coverage is Select one: A. Net income plus continuing operating expenses. B. Gross income plus payroll and utilities. C. Gross income less continuing operating expenses. D. Net income plus all operating expenses except certain deductible items.

d

Question 5 ID# 5841867Points: 1 Flag Question Question text Contractor's equipment floaters are the largest class of inland marine insurance. Contractor's equipment Select one: A. Can include electronic data coverage. B. Is written only on an open perils basis. C. Is limited to contractor's tools and equipment. D. Can include rental reimbursement coverage.

d

Question 6 ID# 5829512Points: 1 Flag Question Question text Which one of the following is an option in the business income coverage form that deletes the coinsurance clause while limiting loss payment to the lesser of (1) the amount of loss sustained during the 120 days following the beginning of the period of restoration or (2) the policy limit? Select one: A. Monthly Limit of Indemnity coverage option B. Extended Period of Indemnity coverage option C. Business Income Agreed Value coverage option D. Maximum Period of Indemnity coverage option

d

Question 6 ID# 5868135Points: 1 Flag Question Question text Which one of the following statements is correct with respect to the Non-Owned Detached Trailers coverage extension of the Building and Personal Property Coverage Form (BPP)? Select one: A. The trailer can be used anywhere in the United States. B. The coverage applies while the trailer is attached to any motor vehicle or motorized conveyance, provided it is not in motion. C. Coverage is available only if the insured has no contractual responsibility for loss or damage to the trailer. D. It permits the insured to extend "your business personal property" to include trailers leased to expand office space or to provide additional storage or work areas.

d

Question 6 ID# 5929943Points: 1 Flag Question Question text A pool is made up of Select one: A. Individual states. B. Stock insurers. C. Premiums. D. Member organizations.

d

Question 6 ID# 5941462Points: 1 Flag Question Question text When Peter recommended the Legal Liability Coverage Form to an insured, the businessowner asked how the rates compared with direct property insurance rates. When compared to direct commercial property contents or building rates, the rate charged for the Legal Liability Coverage Form is Select one: A. Higher. B. The same. C. Lower or higher depending on the type of contents and building. D. Lower.

d

Question 6 ID# 5941740Points: 1 Flag Question Question text Julie asked her insurance agent how are businessowners policies (BOP) are rated. Which one of the following is correct regarding rating BOPs? Select one: A. They are rated based on the credit score of the applicant. B. They are rated by the local rating bureau. C. They are rated based on loss experience. D. They are rated based on the amount of coverage provided for building and personal property.

d

Question 7 ID# 5841194Points: 1 Flag Question Question text Under the National Flood Insurance Program (NFIP), flood insurance is Select one: A. Available and underwritten through private insurers who retain all of the underwriting profits or losses. B. Only available through Fair Plan insurers who participate in the NFIP's "Write Your Own" program. C. Only available directly from the Federal Insurance and Mitigation Administration or FEMA. D. Available directly from FEMA or through private insurers who participate in the NFIP's "Write Your Own" program.

d

Question 8 ID# 5841195Points: 1 Flag Question Question text Eligibility for the National Flood Insurance Program (NFIP) is limited. National flood insurance is available Select one: A. Only to owners of properties that hold mortgages from a regulated lending institution. B. In all communities that regulate new construction being built. C. To all property owners who wish to build in flood prone areas. D. Only to owners of properties in communities that have met requirements established by the NFIP.

d

Question 8 ID# 5906144Points: 1 Flag Question Question text All of the following are "perils of the sea" under an ocean marine policy, EXCEPT: Select one: A. Collision B. Stranding C. Groundings D. Jettison

d

Question 9 ID# 5870328Points: 1 Flag Question Question text A contract bond is a surety bond that can be used to guarantee the fulfillment of obligations under which one of the following? Select one: A. Fiduciary agreements B. Licensing requirements C. Judicial agreements and contracts D. Construction contracts

d

Question 9 ID# 5874876Points: 1 Flag Question Question text When an insured has a National Flood Insurance Program (NFIP) policy, ISO's Flood Coverage Endorsement Select one: A. Applies a significantly different definition of flood. B. Replaces the NFIP policy limits and conditions. C. Is primary and responds first before the NFIP policy. D. Is excess over the maximum NFIP limits available unless waived by the insurer.

d

Taunton Company (Taunton) has a Commercial Package Policy (CPP) that has a Building and Personal Property Coverage Form (BPP) with a Causes of Loss—Broad Form. Because the building is older and has unique architectural features, Taunton decided to insure the building on a replacement cost basis. There is a $2 million coverage limit on the building, with a 90 percent coinsurance clause and $2,000 deductible. The building was struck by lightning and a resulting fire caused substantial damage to the building. The cost to repair the damaged portion of the building with materials of like kind and quality was $500,000. At the time of the loss, the replacement cost value of the building was determined to be $2.2 million. How much would the insurer pay when the repairs are completed if the replacement cost option is activated? Select one: A. $0 B. $448,000 C. $450,000 D. $498,000

d

While discussing a claim for an insured, a claim representative and agent realize that there are inconsistencies between the information given to the agent when the insured applied for coverage and the information that the claim rep has discovered in her investigation. They suspect fraud, and need to determine how the conflicting information will impact coverage for the insured. Which one of the following statements is correct with respect to the Concealment, Misrepresentation, or Fraud condition of the Commercial Property Conditions Form? Select one: A. Any misrepresentation, even if it is immaterial, voids coverage. B. Concealment involves an active misstatement of fact. C. A misrepresentation is a passive failure to disclose a material fact. D. The commercial property coverage part voids coverage if the insured conceals a material fact pertaining to the covered property.

d

uestion 16 ID# 5874261Points: 1 Flag Question Question text The coinsurance basis may not be accurate for estimating the maximum loss of business income for which one of the following reasons? Select one: A. The Actual Loss Sustained option is selected. B. Coverage is written on a gross earnings form. C. An income statement is used to determine net profit. D. The period of restoration is significantly shorter or longer than 12 months.

d

uestion 5 ID# 5941707Points: 1 Flag Question Question text Under a Business Income Coverage (BIC) Form, which one of the following should the insured choose if it wishes to extend the duration of the extended business income additional coverage beyond the 60 days initially granted after a property is restored? Select one: A. Maximum Period of Indemnity coverage option B. Monthly Limit of Indemnity coverage option C. Business Income Agreed Value coverage option D. Extended Period of Indemnity coverage option

d

Question 1 ID# 5920777Points: 1 Flag Question Question text Insurers may attach DIC-type endorsements to their commercial property policies. A DIC-type endorsement Select one: A. Fills some of the same coverage gaps that a separate DIC policy provides, such as flood and earthquake coverage. B. Includes coinsurance provisions that apply to the property covered. C. Normally provides broader coverage than when separate DIC policies are written as an adjunct to a property policy. D. Provides the limits of insurance normally desired by most insureds.

a

Question 10 ID# 5834672Points: 1 Flag Question Question text Business income losses can be measured in terms of net income. Toy Company recently experienced $70,000 in expenses and $100,000 in revenue. What is Toy Company's net income? Select one: A. $ 30,000 B. $ 70,000 C. $100,000 D. $170,000

a

Question 10 ID# 5873794Points: 1 Flag Question Question text The policy valuation approach that determines the basis for using new property of like kind and quality and adjusts for depreciation to determine the amount to be paid at the time of a loss is called Select one: A. Actual cash value. B. Reporting value. C. Replacement cost. D. Agreed value.

a

Question 10 ID# 5879039Points: 1 Flag Question Question text One goal of risk financing is to handle risk in a cost-effective manner. To do this, an organization seeks to minimize its total expenditures on loss control, retained losses, loss transfer costs, and administrative expenses. A composite measure encompassing all expenditures on risk is called an organization's Select one: A. Cost of risk. B. Insurance budget. C. Capital budget. D. Cost of capital.

a

Question 12 ID# 5870126Points: 1 Flag Question Question text BOP eligibility rules are based on Select one: A. Criteria that relate to business size and complexity of loss exposures. B. The applicant's loss history. C. The applicant's credit score. D. The fire protection class where the building is located.

a

Question 12 ID# 5941715Points: 1 Flag Question Question text Traditionally, common carriers had a high degree of responsibility for customers' property. Which one of the following is an exception to common-carriers liability? Select one: A. Inherent vice B. Collapse C. Employee dishonesty D. Theft

a

Question 13 ID# 5880221Points: 1 Flag Question Question text The Extra Expense Coverage Form is designed for organizations that want to do which one of the following? Select one: A. Continue operations at any cost and do not want to cover loss of business income B. Cover noncontinuing operations C. Purchase both business income and extra expense coverage D. Have broader extra expense coverage than is provided in the Business Income (and Extra Expense) Coverage Form

a

Question 14 ID# 5855432Points: 1 Flag Question Question text Charlotte, Chloe, and Jessica have concurrent ownership in a restaurant, each owning one third. Their combined interests equal the value of the restaurant. If one of them should die, her share would pass to her heirs. This type of ownership is referred to as Select one: A. Tenancy in common. B. Tenancy by entirety. C. Joint tenancy. D. Tenancy by partnership.

a

Question 15 ID# 5841342Points: 1 Flag Question Question text An output policy provides coverage for personal property Select one: A. Anywhere within the policy territory without listing the locations. B. Identical to that of most standard commercial property forms. C. While in transit, except in the insured's own vehicles. D. While in transit overseas for exports and imports.

a

Question 15 ID# 5843083Points: 1 Flag Question Question text Which one of the following is covered under the Farm Dwellings, Appurtenant Structures and Household Personal Property Coverage Form of the ISO farm program? Select one: A. Loss of use B. Farm machinery C. Hay and straw D. Barns

a

Question 15 ID# 5878032Points: 1 Flag Question Question text Which one of the following statements is true with regards to the Extra Expense Coverage Form? Select one: A. The form is intended to meet the goals of organizations that, when suffering a loss, must continue their operations at any cost. B. The form insures extra expense in addition to minimal coverage for loss of business income. C. The form offers 120 extra days of coverage as compared to the Business Income (and Extra Expense) Coverage Form. D. The form exclusively offers limits of loss payments in the form of a 40%-80%-100% combination.

a

Question 15 ID# 5941453Points: 1 Flag Question Question text James was reviewing the Builders Risk Coverage Form (BRCF) with a new insured. He explained that the Property Not Covered section of the BRCF applies to which one of the following? Select one: A. Signs not attached to the building B. Foundations C. Underground pipes D. Flues and drains

a

Question 16 ID# 5829513Points: 1 Flag Question Question text Which one of the following is an option in the business income coverage form that suspends the coinsurance clause as long as the insured carries an amount of business income insurance that is equal to the value agreed on by the policyholder and the insurer? Select one: A. Business Income Agreed Value coverage option B. Extended Period of Indemnity coverage option C. Maximum Period of Indemnity coverage option D. Monthly Limit of Indemnity coverage option

a

Question 16 ID# 5829921Points: 1 Flag Question Question text Which one of the following coverages is often included or available as an option in a businessowners policy (BOP)? Select one: A. Mechanical breakdown B. Dishonest acts by the insured's partners, members, officers or managers C. War, riot, or military action D. Workers compensation

a

Question 16 ID# 5841851Points: 1 Flag Question Question text A motor truck cargo liability policy Select one: A. Covers a trucking company's liability for damage to goods of others while being transported by the trucker. B. Covers cargo either on an inland marine policy or an ocean marine policy. C. Covers property in the care, custody or control of a governmental agency. D. Provides broad coverage for parcel post shipments throughout the United States, Canada, and Mexico.

a

Question 17 ID# 5821322Points: 1 Flag Question Question text Many businesses have refrigeration equipment, production equipment, steam boilers, and air conditioning systems. These are all examples of Select one: A. Boilers and machinery. B. Personal property. C. Property in transit. D. Mobile equipment.

a

Question 18 ID# 5941537Points: 1 Flag Question Question text Which one of the following common policy conditions permits the insurer to verify property and business income values necessary for premium rating purposes? Select one: A. Examination of Books and Records B. Changes C. Inspections and Surveys D. Premiums

a

Question 18 ID# 5941694Points: 1 Flag Question Question text Lazar Industries owns a building that is covered by the Earthquake and Volcanic Eruption Endorsement (Sub-Limit Form With Percentage Deductible) with no coinsurance. The policy has a 10% deductible, a $3,000,000 insurable property value, and a $1,500,000 earthquake sublimit. The building has suffered a $350,000 earthquake loss. The policy will pay Select one: A. $50,000. B. $100,000. C. $110,000. D. $200,000.

a

Question 19 ID# 5829482Points: 1 Flag Question Question text During a business interruption, some of the organization's expenses, called continuing expenses, will continue, and other expenses, called noncontinuing expenses, will not continue. Which one of the following is an example of a continuing expense? Select one: A. Payroll of key employees B. Overtime wages to employees C. Cost of overnight air shipment of needed repair parts D. Cost to rent temporary office space

a

Question 19 ID# 5859527Points: 1 Flag Question Question text An insured is planning on transporting a valuable turbine from its place of manufacture to a power plant across the country. What type of inland marine policy would best meet the insurance needs to cover this cargo during the trip? Select one: A. Trip transit policy B. Annual transit policy C. Parcel post policy D. Open cargo policy

a

Question 19 ID# 5901569Points: 1 Flag Question Question text The Payroll Limitation or Exclusion endorsement is used if which approach is used to handle payroll expenses? Select one: A. Limit payroll or exclude payroll B. Cover, limit, or exclude payroll, depending on job duties of each employee C. Cover payroll in full or limit payroll D. Cover payroll in full or exclude payroll

a

Question 2 ID# 5868244Points: 1 Flag Question Question text Which one of the following is true about the Business Income Agreed Value coverage option in a business income form? Select one: A. The coinsurance condition is suspended as long as the insured carries the amount of insurance that is agreed upon with the insurer. B. The agreed value is effective for a period of 36 months. C. The agreed value must be equal to at least the insured's net income for the next 12 months. D. The option eliminates the need for an insured to complete a report/worksheet for the insurer.

a

Question 2 ID# 5941479Points: 1 Flag Question Question text WP Dental Associates rents a small office building, which it insures under the Building and Personal Property Coverage Form (BPP). It added the Scheduled Building Property-Tenant's Policy endorsement to its BPP. Which one of the following statements about the Scheduled Building Property--Tenant's Policy endorsement is most accurate? Select one: A. It broadens coverage provided by the Building and Personal Property Coverage Form. B. It does not cover building glass. C. It reduces the BPP's coverage. D. It does not require a schedule.

a

Question 2 ID# 5941695Points: 1 Flag Question Question text Eastwind Incorporated purchased an Earthquake and Volcanic Eruption Endorsement (Sub-Limit Form With Percentage Deductible) to attach to a Building and Personal Property Coverage Form (BPP). The insured building has an insurable value of $3,000,000. The endorsement is subject to a 10% deductible and a sublimit of $2,000,000. In the event of a covered $450,000 loss, the amount payable is Select one: A. $150,000. B. $250,000. C. $405,000. D. $450,000.

a

Question 20 ID# 5941430Points: 1 Flag Question Question text Which one of the following statements is correct with respect to the Building and Personal Property Coverage Form's (BPP) coverage for personal property of others? Select one: A. Coverage protects the insured while the property is in or on the building described in the declarations or within 100 feet of either the building or structure, whichever is greater. B. Coverage for personal property of others applies only if the insured is legally responsible for the damage. C. The BPP covers personal property of others while it is located anywhere in the world. D. The BPP specifically excludes coverage for businesses (bailees) that have customers' property in their custody, such as laundries, dry cleaners, appliance repair shops, and furniture upholstery shops.

a

Question 3 ID# 5829438Points: 1 Flag Question Question text Which one of the following statements is correct with respect to the Causes of Loss-Basic Form? Select one: A. It excludes loss caused by earth movement, other than by sinkhole collapse. B. The Water exclusion contains an exception for damage due to the backing up of sewers, drains, or sumps. C. It excludes loss caused by power failure only if the damage causing such failure occurs on the described premises. D. The War and Military Action exclusion eliminates coverage for loss caused by acts of terrorism, such as the terrorist attacks of September 11, 2001.

a

Question 3 ID# 5868990Points: 1 Flag Question Question text Richard's Clothing Store has a $500,000 Business Income (and Extra Expense) Coverage Form on which there is an 80 percent coinsurance clause. A fire swept through the store. Richard's Clothing Store estimates that its net income plus all operating expenses for the policy period would have been $1,875,000. The estimated business income loss is $300,000. How much will the insurer pay? Select one: A. $100,000 B. $200,000 C. $300,000 D. $375,000

a

Question 3 ID# 5941750Points: 1 Flag Question Question text Sandy's Farm is insured under the ISO farm program Farm Dwellings, Appurtenant Structures and Personal Property Coverage Form. Which one of the following is covered under Coverage B—Other Private Structures Appurtenant to Dwellings? Select one: A. Private garages B. Silos C. Barns D. Dwellings

a

Question 4 ID# 5841291Points: 1 Flag Question Question text The ISO Flood Coverage Endorsement is subject to exclusions and limitations. Which one of the following is an exclusion under this endorsement? Select one: A. Damage to property in the open that is not specified in the flood schedule B. Sewer backup resulting from a flood which occurs within 72 hours of the receding flood C. Loss caused by underground water that is associated with the flood water D. Loss caused by tsunami causing the overflow of tidal waves

a

Question 4 ID# 5941424Points: 1 Flag Question Question text The availability of funds to pay for losses is most important to organizations when Select one: A. Operations have been disrupted. B. The organization's retained exposures are low. C. The level of uncertainty surrounding losses is low. D. Asset liquidity is extremely high.

a

Question 4 ID# 5941513Points: 1 Flag Question Question text Under which one of the following optional coverages of the Building and Personal Property Coverage Form (BPP) must the insurer be notified within 180 days after the occurrence of loss that a claim will be made under the terms of the optional coverage? Select one: A. Replacement Cost B. Agreed Value C. Extension of Replacement Cost to Personal Property of Others D. Inflation Guard

a

Question 5 ID# 5868137Points: 1 Flag Question Question text Which one of the following statements is correct with respect to the Building and Personal Property Coverage Form (BPP) deductible? Select one: A. The insurer is not obligated to pay anything to the insured unless the loss exceeds the deductible. B. If the Coinsurance condition or the Agreed Value optional coverage applies, the amount of the loss is first reduced by the deductible before applying any penalty imposed by those provisions. C. If an occurrence involves a loss that affects more than one category of covered property and a separate limit of insurance applies to each category, losses to all categories are totaled and the deductible applied to that total amount. D. Under the ISO Commercial Lines Manual rules, the standard deductible must be at least $2,500.

a

Question 5 ID# 5919949Points: 1 Flag Question Question text Which one of the following is a characteristic of an organization that would be more appropriate for risk transfer than risk retention? Select one: A. Weak financial condition B. Diversity of loss exposures C. High risk tolerance D. Loss control capabilities

a

Question 5 ID# 5941724Points: 1 Flag Question Question text All of the following losses are covered under the Forgery or Alteration insuring agreement, EXCEPT: Select one: A. Losses resulting from the insured's knowing acceptance of a forged check B. Losses related to the forgery of a check drawn on by the insured C. Losses related to forgery of a written promise to pay funds that is drawn on by the insured D. Losses related to the alteration of a promissory note drawn on by the insured

a

Question 6 ID# 5829490Points: 1 Flag Question Question text Which one of the following terms has a specific definition in the business income coverage form? Select one: A. Operations B. Negligence C. Liability D. Products

a

Question 7 ID# 5842781Points: 1 Flag Question Question text In an equipment breakdown policy, the insurer agrees to pay for direct damage to covered property under the Property Damage insuring agreement. Which one of the following statements about this insuring agreement is true? Select one: A. It includes property under the insured's care, custody, or control for which the insured is legally liable. B. It contains coverage for most perils that are also covered under other property forms. C. It includes property situated at any premises away from the described location. D. It includes coverage for loss of business income if there are certain types of direct losses.

a

Question 8 ID# 5841787Points: 1 Flag Question Question text Risk transfer measures are most appropriate for losses that exhibit which one of the following patterns? Select one: A. Low-frequency, high-severity B. High-frequency, low-severity C. Low-frequency, low-severity D. High-frequency, high-severity

a

Question 9 ID# 5949590Points: 1 Flag Question Question text During a long period of business interruption, payroll expenses Select one: A. May or may not continue depending on various factors. B. Remain steady. C. Tend to increase and decrease on a monthly basis. D. Increase.

a

Upon submitting a claim to its insurer, an insured discloses that he has a written waiver of recovery against the other party. The insured asks the insurer how the waiver will impact the settlement of his claim. Which one of the following is correct with respect to the Transfer of Rights of Recovery Against Others to Us condition of the Commercial Property Conditions Form? Select one: A. Waiver of recovery against any other party may be given by the insured, provided the waiver is made in writing before the loss occurs. B. Waiver of recovery against any other party may be given by the insured before or after the loss, provided the waiver is made in writing. C. Any waiver given by the insured, either before or after the loss, impairs the insured's right to collect from the insurer for the loss. D. The insured is prohibited from waiving recovery against any other party.

a

(MDC) is insured under a Business Income (and Extra Expense) Coverage Form with a $1 million Business Income limit of insurance for the dry cleaners location, subject to option (2) Business Income Other Than "Rental Value". None of the optional coverages of the Business Income (and Extra Expense) are in effect and no endorsements apply. The policy period began on July 1, On October 1, access was denied to MDC for five weeks. The resulting loss of business income that MDC sustained was $70,000, including a $5,000 loss for the first 72 hours. After the first 72 hours, MDC sustained $11,000 business income loss in week 1, $12,000 business income loss in week 2, $13,000 business income loss in week 3, $14,000 business income loss in week 4 and $15,000 business income loss in week 5. How much of MDC's business income loss would be covered? Select one: A. $36,000 B. $50,000 C. $65,000 D. $70,000

b

A store, which carries $20,000 limit, its building window was damaged and the safe door was missing on Monday morning when an employee arrived at work. The storeowner immediately reported this incident to its insurance carrier. The theft consisted of precious metal and gemstones that totaled $19,000 in value. How much should the retail store's insurer pay for this loss? A. The insurer should pay nothing because precious metals are excluded from Inside the Premises—Robbery or Safe Burglary of Other Property coverage. B. The insurer should pay $5,000, the special limit for this type of property under Inside the Premises—Robbery or Safe Burglary of Other Property. C. The insurer should pay $19,000, since it is falls within the limit of liability under Inside the Premises—Safe Burglary of Other Property. D. The insurer should pay $20,000, the limit of liability under Inside the Premises—Safe Burglary of Other Pr

b

An insured is purchasing a (BPP) and she elects the replacement cost option. She asks the agent to explain how her property will be valued in the event of a loss. Which made by her agent accurately describes how the covered property will be valued in the event of loss? A. If the insured elects to accept an ACV claim settlement, the insured is barred from later requesting payment of replacement cost. B. The insurer is obligated to pay the cost to replace the damaged or destroyed property with new property of like kind and quality without any deduction for depreciation or obsolescence. C. The insurer is obligated to pay replacement cost regardless of whether or not the property has actually been repaired or replaced. D. Insurers underwrite the coverage carefully because some items that can be difficult to value, such as manuscripts, works of art, antiques, and rare articles, are covered for replacement cost.

b

Question 1 ID# 5874037Points: 1 Flag Question Question text Wholesale Merchandiser leases five warehouses, each in a different city, to supply retail customers in each city with timely service. The average value of the merchandise at each warehouse is $750,000. Which one of the following blanket insurance limits would best suit this insured's needs while minimizing the cost of over-insuring? Select one: A. Blanket $3,750,000 limit B. Blanket $3,375,000 limit C. Blanket $4,500,000 limit D. Blanket $5,000,000 limit

b

Question 1 ID# 5926848Points: 1 Flag Question Question text A self-supporting solid wall that prevents a fire from passing through or around it is a Select one: A. Hostile fire. B. Fire wall. C. Fire division. D. Fire stop.

b

Question 1 ID# 5941467Points: 1 Flag Question Question text The values of personal property at Rachel's Dress Shop increase at certain times periods during the year. Which one of the following endorsements covers the fluctuating values of business personal property by providing different amounts of insurance for certain time periods during the policy period? Select one: A. Manufacturer's Selling Price Finished "Stock" Only endorsement B. Peak Season Limit of Insurance endorsement C. Value Reporting Form endorsement D. Functional Personal Property Valuation (Other Than Stock) endorsement

b

Question 10 ID# 5941709Points: 1 Flag Question Question text A neighborhood elementary school wants to obtain insurance coverage for operational extra expenses in the event of a covered peril. In reviewing whether an Extra Expense Coverage Form or Business Income (and Extra Expense) Coverage Form is most beneficial, the school should likely review which one of the following? Select one: A. The decreased limitation for the Extra Expense Coverage in the Maximum Period of Indemnity. B. Whether its business income exposure is best served by covering lost income and expenses. C. Differences in the Monthly Limit of Indemnity between the two coverages. D. The high additional cost of the Business Income (and Extra Expense) Coverage Form.

b

Question 11 ID# 5841790Points: 1 Flag Question Question text Which one of the following statements is correct with respect to self-insurance as a risk financing measure? Select one: A. It is an informal retention plan in which an organization pays losses using cash flows or current liquid assets with no method of recording losses. B. It is often used to cover workers compensation and other loss exposures that have claim payouts that extend over time. C. Cost of risk with self-insurance is typically higher than with other risk financing measures. D. It is usually used for low-frequency loss exposures.

b

Question 11 ID# 5876531Points: 1 Flag Question Question text The Property Damage insuring agreement of the Equipment Breakdown Protection Coverage Form does which one of the following? Select one: A. Excludes coverage for damage to property of others in the insured's care. B. Includes coverage for damage to property the insured owns. C. Excludes coverage for the equipment that causes a loss. D. Includes coverage for damage to property of others that is not in the insured's care.

b

Question 12 ID# 5863184Points: 1 Flag Question Question text Blanket insurance operates by Select one: A. Adding a coinsurance factor of 80% for both personal property and building. B. Combining values for personal property and/or building(s) into one limit. C. Adding a coinsurance rating factor to receive a discount for blanketing limits. D. Naming a specific value for each type of property and each location.

b

Question 13 ID# 5840921Points: 1 Flag Question Question text The dividing line between unit owners' property interests and the association's interests is important when assessing condominium loss exposures. Under the bare walls concept, the condominium association Select one: A. Maintains their interest in original installations of the condominium unit. B. Has no interest in property within the unit's walls. C. Owns improvements made by the condominium unit owner. D. Controls all property contained within the unit as sold to the purchaser.

b

Question 14 ID# 5874285Points: 1 Flag Question Question text A computer manufacturer has an exclusive contract with a microchip manufacturer. After manufacture, the computers are shipped to a warehouse owned by a third party. The computers are then sold at a national retailer that pays the computer manufacturer directly for units sold. This retailer is responsible for 85% of the manufacturer's sales. The manufacturer has a Business Income From Dependent Properties endorsement on its business income policy. The endorsement will cover business income losses as a result of damage to which one of the following? Select one: A. The microchip manufacturer and the national retailer only B. The microchip manufacturer, warehouse, and national retailer only C. The computer manufacturer and the microchip manufacturer only D. The computer manufacturer, warehouse, and national retailer only

b

Question 14 ID# 5941448Points: 1 Flag Question Question text Simon Industries is covered under a separate Equipment Breakdown Protection (EBP) Coverage Form. Which one of the following is a policy condition in Simon's EBP Coverage Form? Select one: A. Limits of Insurance B. The Joint or Disputed Loss Agreement C. Other Exclusions D. The Percentage of Loss Deductible

b

Question 14 ID# 5941474Points: 1 Flag Question Question text The Causes of Loss—Special Form is a commercial property form that covers causes of loss that are not specifically excluded. One reason to purchase this form is Select one: A. It does not have the exclusions and limitations that are in the other causes of loss forms. B. It shifts the burden of proof to the insurer to prove a loss is excluded. C. It lists more covered perils than the other commercial forms. D. It is less expensive than the other policy causes of loss forms.

b

Question 15 ID# 5841761Points: 1 Flag Question Question text Which one of the following is one of the covered causes of loss in the commercial property policy Causes of Loss—Basic form? Select one: A. Water damage B. Vandalism C. Falling objects D. Weight of ice

b

Question 15 ID# 5869863Points: 1 Flag Question Question text The amount of a business income loss is determined on the basis of net income of the business before the loss occurred, operating expenses that must continue during the period of restoration to permit the insured to resume operations with the quality of service that existed prior to loss, other relevant sources of information and which one of the following? Select one: A. Coinsurance percentage B. Probable net income of the business if no loss had occurred C. Net income that might have been earned as a result of an increase in business due to favorable business conditions caused by the effect of the covered cause of loss D. Net income from an increase in business resulting from a catastrophe

b

Question 16 ID# 5842525Points: 1 Flag Question Question text Which one of the following perils affecting equipment is covered by a commercial property policy? Select one: A. Mechanical breakdown B. Furnace explosion C. Rupture from centrifugal force D. Electrical breakdown

b

Question 16 ID# 5926941Points: 1 Flag Question Question text Which one of the following is true regarding the Destruction of Electronic Data or Computer Programs endorsement? Select one: A. This endorsement addresses software piracy, the unauthorized reproduction of computer software. B. This endorsement helps close the coverage gap of most commercial property policies that provide inadequate coverage for the cost to restore damaged electronic data. C. The crime policy exclusion of acts of employees, managers, directors, trustees, or representatives also applies to this coverage. D. For coverage to exist, the damage or destruction to the electronic data or computer program must be by a computer virus.

b

Question 16 ID# 5941700Points: 1 Flag Question Question text The owners of Wilcote Industries were happy to learn that their building may qualify as a highly protected risk (HPR). All of the following are generally characteristics of a HPR, EXCEPT: Select one: A. Adequate public fire protection B. Frame or joisted masonry construction C. Automatic sprinkler system installed D. Adequate water supply

b

Question 17 ID# 5842502Points: 1 Flag Question Question text In an equipment breakdown policy, a closed container that is heated by the direct fire of burning fuel and can withstand internal pressure is a Select one: A. Generator. B. Fired pressure vessel. C. Power transformer. D. Motor.

b

Question 17 ID# 5888753Points: 1 Flag Question Question text Which one of the following statements about Coverage F—Unscheduled Farm Personal Property Coverage Form is true? Select one: A. Coverage F applies only if an insured rejects Coverage E—Scheduled Farm Personal Property. B. Coverage is subject to an 80 percent coinsurance clause. C. A "per head" limitation applies to livestock. D. A separate limit applies to each class of property.

b

Question 17 ID# 5941500Points: 1 Flag Question Question text The Causes of Loss—Special Form provides coverage for which one of the following scenarios? Select one: A. Faulty or inadequate planning zoning, surveying, repair, construction or maintenance B. Damage to the interior of the building caused by melting ice, sleet, or snow on the building or structure C. Acts or decisions, including the failure to act or decide, by any person, group, organization, or governmental body D. Weather conditions that contribute to other excluded causes of loss

b

Question 18 ID# 5829384Points: 1 Flag Question Question text Under the Building and Personal Property Coverage Form (BPP), which one of the following extensions covers loss only by fire, lightning, explosion, riot or civil commotion, and aircraft? Select one: A. Newly Acquired or Constructed Property B. Outdoor Property C. Property Off-Premises D. Personal Effects and Property of Others

b

Question 18 ID# 5841886Points: 1 Flag Question Question text Large Manufacturer, Inc. needs to move its expensive three ton piece of equipment that it manufactured from its manufacturing plant to the buyer's premises some 50 miles away. Which one of the following is the best way to insure this equipment for the move? Select one: A. Purchase open cargo insurance B. Purchase trip transit insurance C. Purchase motor truck cargo insurance D. Purchase annual transit insurance

b

Question 18 ID# 5926940Points: 1 Flag Question Question text The commercial crime endorsement that has three options for the insured's level of verification of transfer instructions is the Select one: A. Unauthorized Reproduction of Computer Software by Employees endorsement. B. Fraudulent Impersonation endorsement. C. Include Virtual Currency as Money endorsement. D. Securities Deposited With Others endorsement.

b

Question 19 ID# 5829392Points: 1 Flag Question Question text Worldwide Warehousing has a Building and Personal Property Coverage Form (BPP) with a $1,000,000 limit on a building and a $5,000 deductible. The warehouse suffers a $1,010,000 fire loss. Which one of the following amounts will Worldwide's insurer pay? Select one: A. $ 995,000 B. $1,000,000 C. $1,005,000 D. $1,010,000

b

Question 19 ID# 5830203Points: 1 Flag Question Question text The difference in conditions (DIC) policy is a specialty commercial property policy. Which one of the following identifies the primary exposures for which the DIC is used? Select one: A. Robbery and burglary B. Earthquake and flood C. Fire and lightning D. Windstorm and hail.

b

Question 19 ID# 5841173Points: 1 Flag Question Question text Cromely and Company is purchasing a commercial condominium unit that it will occupy. Cromely wants to insure its business personal property along with any improvements that it makes to the unit. Which one of the following forms would meet its needs? Select one: A. Building and Personal Property Coverage Form B. Condominium Commercial Unit-Owners Coverage Form C. Condominium Association Coverage Form D. Leasehold Interest Coverage Form

b

Question 2 ID# 5869629Points: 1 Flag Question Question text Billy owns a baseball souvenir store in Cooperstown, NY. He insured his store under a Building and Personal Property Coverage Form (BPP) with a $275,000 limit and a $1,500 deductible. A large fire in the store caused significant damage amounting to $310,000 in covered damages. How much would Billy's insurer pay under his BPP? Select one: A. $273,500 B. $275,000 C. $308,500 D. $310,000

b

Question 20 ID# 5941698Points: 1 Flag Question Question text The purpose of the difference in conditions (DIC) policy is to provide coverage where standard property forms leave off. One use of the DIC is to cover Select one: A. The perils of aircraft and vehicles. B. Property in transit. C. Vacant land that is owned. D. Jewelry and precious metals.

b

Question 3 ID# 5829509Points: 1 Flag Question Question text The Business Income Agreed Value coverage option in the business income form is an option that Select one: A. Deletes the coinsurance clause while limiting loss payment to the lesser of (1) the amount of loss sustained during the 120 days following the beginning of the period of restoration or (2) the policy limit. B. Suspends the coinsurance clause as long as the insured carries an amount of business income insurance that is equal to the value agreed on by the policyholder and the insurer. C. Extends the duration of extended business income coverage to include business income losses that continue for more than thirty days after the property is restored. D. Deletes the coinsurance clause while limiting the amount recoverable during any month of business interruption to a stipulated fraction (1/6, 1/4, or 1/3) of the insurance amount.

b

Question 3 ID# 5941440Points: 1 Flag Question Question text Wilson Vacuum Cleaner Repair Shop owns a building in which a steam boiler exploded damaging the building and the customers' vacuum cleaners. Which one of the following insuring agreements in Wilson's Equipment Breakdown Protection Coverage Form would best respond to the loss of customers' vacuums if Wilson is legally liable? Select one: A. Business Income and Extra Expense B. Property Damage C. Brands and Labels D. Contingent Business Income and Extra Expense

b

Question 3 ID# 5941721Points: 1 Flag Question Question text A widely used financial institution bond is Select one: A. The fidelity bond. B. Standard Form No. 24. C. The Insurance Services Office Financial Institution Crime Policy for Banks and Saving Institutions. D. The commercial general liability fiduciary bond.

b

Question 4 ID# 5868131Points: 1 Flag Question Question text Which one of the statements is correct with respect to the Building and Personal Property Coverage Form (BPP)? Select one: A. Any type of personal property can be insured under the BPP. B. Some property, such as building foundations below the lowest basement floor, is excluded because it may not be subject to loss by the perils insured against. C. The BPP includes satisfactory coverage for physical damage to automobiles owned by the named insured. D. The Covered Property section is the only section that must be read in order to determine whether a specific kind of property is insured.

b

Question 4 ID# 5868241Points: 1 Flag Question Question text In the business income coverage form, the period of restoration Select one: A. Begins immediately after the physical loss occurs with no waiting period. B. Ends when the property is or should have been restored. C. Includes additional time to repair the building to comply with building code or law. D. Includes additional time to assess the effects of pollutants.

b

Question 4 ID# 5941710Points: 1 Flag Question Question text The Power, Heat, and Refrigeration Deduction endorsement is most valuable for which one of the following types of businesses? Select one: A. Warehousing firms B. Manufacturing firms C. Distribution firms D. Agricultural firms

b

Question 5 ID# 5840927Points: 1 Flag Question Question text Which one of the following describes an aspect of a planned unit development? Select one: A. The real property is owned by a corporation. B. The occupant has exclusive ownership of his/her unit. C. The ownership resembles condominium and cooperative corporations. D. The occupant owns the surrounding recreational land adjoining his/her unit.

b

Question 5 ID# 5875176Points: 1 Flag Question Question text A commercial manufacturing operation with multiple locations may choose an output policy over a typical standard property policy because Select one: A. Liability coverage is included. B. Personal property can be covered without listing the location. C. Flood damage is a covered peril. D. Output policies are subject to lower deductibles for loses.

b

Question 5 ID# 5876534Points: 1 Flag Question Question text Which one of the following is the type of deductible most often used for spoilage coverage in the Equipment Breakdown Protection Coverage Form? Select one: A. Dollar deductible B. Percentage of loss deductible C. Multiple of daily value deductible D. Time deductible

b

Question 5 ID# 5941536Points: 1 Flag Question Question text The Cancellation provision in the ISO Common Policy Conditions is nearly always Select one: A. Subject to the Rights and Duties Under This Policy clause. B. Superseded by state law. C. Enforced only when the insurer is an admitted carrier. D. Enforced over individual state laws.

b

Question 6 ID# 5874869Points: 1 Flag Question Question text In the continental United States, a flood may occur in a town that has recently become eligible for participation in the National Flood Insurance Program (NFIP). If Flood Insurance Rate Maps have not been developed for the area at the time of the flood, the NFIP would provide insurance coverage under the emergency program with a maximum amount of Select one: A. $150,000 in building coverage and $100,000 in contents coverage. B. $100,000 in building coverage and $100,000 in contents coverage. C. $150,000 in building coverage and no contents coverage. D. $250,000 in building coverage and $150,000 in contents coverage.

b

Question 6 ID# 5941726Points: 1 Flag Question Question text All of the following losses are covered under the Inside the Premises—Robbery or Safe Burglary of Other Property insuring agreement, EXCEPT: Select one: A. Robbery committed against a cashier working inside the insured's store B. Robbery committed against a watchperson working inside the insured's store C. Burglary committed against a salesperson working inside the insured's store D. Burglary committed against an employee of the insured

b

Question 7 ID# 5842772Points: 1 Flag Question Question text Which one of the following carriers are airlines, railroads, trucking companies, and other entities that furnish transportation services to the public? Select one: A. Public carriers B. Common carriers C. Private carriers D. Contract carriers

b

Question 7 ID# 5868190Points: 1 Flag Question Question text The Causes of Loss—Broad Form differs from the Causes of Loss—Basic Form in which one of the following ways? Select one: A. The Broad Form covers "risks of direct physical loss" subject to the form's exclusions and limitations. B. The Broad Form provides coverage for loss caused by collapse of a building or personal property resulting from specified perils. C. The Broad Form adds coverage for flooding, rainfall, sewer backup, and similar causes of water damage. D. The Broad Form specifically excludes rupture or bursting of water pipes and leakage of water or steam from any part of a system or appliance.

b

Question 7 ID# 5941516Points: 1 Flag Question Question text Sherman's Shoe Store files an insurance claim for damage to stock. The claim representative realizes that Sherman's property is covered under two separate coverages of its commercial policy. Which one of the following statements is correct with respect to the Insurance Under Two or More Coverages condition of the Commercial Property Conditions Form? Select one: A. It states that duplication, or "stacking," of the all applicable limits is allowed in the case of a loss. B. It states that the total payment under all applicable coverage parts is limited to the actual amount of the loss. C. It explains how to apportion the loss among multiple policies for the purpose of developing rates. D. It is necessary because some property might be covered under two or more commercial package policies.

b

Question 8 ID# 5869866Points: 1 Flag Question Question text Which one of the following coverages of the Business Income Coverage Form (BIC) is subject to its own limit of insurance? Select one: A. Extended Business Income B. Interruption of Computer Operations C. Alterations and New Building D. Civil Authority

b

Question 8 ID# 5874284Points: 1 Flag Question Question text One advantage that a Business Income (and Extra Expense) Coverage form has over the separate Extra Expense Coverage Form is that Select one: A. Limited coverage for fungus, wet rot, dry rot, and bacteria is included. B. Loss payments are not limited to a certain percentage per month of the amount of insurance. C. Coinsurance penalties are waived. D. Time deductibles do not apply.

b

Question 8 ID# 5921626Points: 1 Flag Question Question text All of the following are included in the Commercial Crime Coverage Form's definition of occurrence, EXCEPT: Select one: A. A series of acts B. An accident C. The combined total of all separate acts D. An individual act

b

Question 9 ID# 5832525Points: 1 Flag Question Question text If the organization wishes to pre-fund for retained future losses, it must determine the present value of the expected future losses. Calculating the present value of a future amount is known as Select one: A. Depreciating. B. Discounting. C. Compounding. D. Indexing.

b

Question 9 ID# 5869865Points: 1 Flag Question Question text The additional coverage of the Business Income Coverage Form (BIC) which extends the regular business income coverage to include business income losses that continue after the period of restoration ends is the Select one: A. Civil Authority. B. Extended Business Income. C. Interruption of Computer Operations. D. Expenses To Reduce Loss.

b

Question 9 ID# 5941468Points: 1 Flag Question Question text Frank is a small business owner selling lawnmowers and gardening equipment purchased a Building and Personal Property Coverage Form (BPP) with a peak season endorsement bringing coverage limits up from $1,000,000 to $2,000,000 in the spring and summer months. The peak season endorsement Select one: A. Provides coverage on specific items exclusively during a predetermined peak period. B. Provides different amounts of insurance for certain time periods during the policy period. C. Decreases the coverage deductible during the peak period. D. Provides increased limits based on values the insured reports periodically during the policy period.

b

Question 9 ID# 5941499Points: 1 Flag Question Question text Which one of the following is an exclusion unique to the Causes of Loss—Special Form? Select one: A. Rupture or bursting of water pipes B. Wear and tear C. Mudslide or mudflow D. War

b

Question 9 ID# 5941729Points: 1 Flag Question Question text Which one of these would not be subject to a special limit of $5,000 per occurrence under the Inside the Premises—Robbery or Safe Burglary of Other Property coverage under the Commercial Crime Coverage Form? Select one: A. Furs B. Securities C. Precious metals D. Pearls

b

Warehouse covers its building and personal property with a $2,000,000 blanket limit under a (BPP) with the Causes of Loss—Special Form, plus the ISO Flood Coverage Endorsement with a $1,000,000 limit. The insured property suffered a covered loss of $250,000. As a consequence of the flooding, a fire ensued within the building that destroyed the entire building and personal property. The total loss is $3,000,000. Ignoring deductibles and coinsurance, and considering the Ensuing Loss condition in the Flood Coverage Endorsement, how much will Warehouse, Inc. be able to recover ? A. $250,000, the amount of the flood loss only B. $2,000,000, the blanket limit for building and personal property C. $2,250,000, the blanket limit for building and personal property and the amount of the flood loss D. $3,000,000, the total loss for flood and fire

b

Which is correct with respect to the business personal property coverage provided by the (BPP)? Select one: A. "Your business personal property" specifically excludes labor, materials, or services furnished by the insured on the personal property of others. B. Except for limited off-premises coverage, coverage for business personal property applies only when the property is located in or on the described building or in the open (or in a vehicle) within 100 feet of the building or structure or within 100 feet of the premises, whichever is greater. C. The definition of business personal property limits the coverage to furniture, fixtures, machinery and equipment owned by the insured and used in the insured's business. D. Leased personal property for which the named insured has a contractual responsibility to procure coverage is excluded from the BPP, but the coverage can be added by endorsement.

b

uestion 11 ID# 5829550Points: 1 Flag Question Question text Technical Corporation (TC) is covered by an ISO Commercial Crime Coverage Form with Inside the Premises and Outside the Premises insuring agreements. During a recent audit, TC discovered a significant monetary loss due to an accounting omission. Which of the following best explains the insurer's response to a claim presented by TC? Select one: A. The policy will likely be cancelled. B. Loss due to accounting omission is excluded. C. The funds transfer fraud exclusion would apply. D. Inside the Premises will respond for the loss.

b

(SDC) is insured under a Business Income (and Extra Expense) Coverage Form with a $1 million Business Income limit of insurance for the dry cleaners location, subject to option (2) Business Income Other Than "Rental Value". None of the optional coverages of the Business Income (and Extra Expense) are in effect and no endorsements apply to SDC's Business Income (and Extra Expense) Coverage Form. The policy period began July 1. On October 1, SDC suffered a loss. The loss of income was $800,000, including $5,000 for the first 72 hours. The dry cleaners continued to sustain loss of business income loss for 90 days due to customers using other dry cleaners in the neighborhood. The first period of 30 days after reopening was $15,000, second period of 30 days was $10,000 and third period of 30 days was $5,000. How much of SDC's business income loss would be covered? A. $800,000 B. $810,000 C. $820,000 D. $835,000

c

Jancey owns a chain of office complexes. The largest exposure for any one complex is $40 million. company A provides first layer $750,000 above $250,000 deductible. Insurance B provides $10 million second layer, beginning at a $1 million attachment . Insurance C provides the third $10 million layer at an $11 million attachment point. Company D provides the forth attaching at $21 million. Jancey made claim $15 million in damage. What dollar amount will each of the insurance companies in the layered program pay? A. company A pays $750,000; company B pays $9.75 million; company C pays $3.25 million. company D pays nothing. B. company A pays $750,000; company B pays $9.75 million; company C pays $3.5 million C. company A pays $750,000; company B pays $10 million; company C pays $4 million. company D pays nothing. D. company A pays $1 million; company B pays $10 million; company C pays $4 million; company D pays nothing.

c

Marnell is a retailer that sells consumer goods. Marnell carries a Policy that includes Commercial Crime Coverage Form (Loss Sustained) with the following: Employee Theft; Forgery or Alteration; Inside the Premises—Theft of Money and Securities; and Inside the Premises—Robbery or Safe Burglary of Other Property. The limit for each is $100,000 and deductible per occurrence for each one of these insuring agreements is $1,000. The policy year is 20X1. During 20x1, Marnell performed an inventory calculation and determined that the actual physical inventory on hand was $105,000 less than what the company's records indicated. Marnell was able to prove that the loss was a result of employee theft and it was covered under the Employee Theft insuring agreement of Marnell's Commercial Crime Coverage Form. How much will the insurer pay for this loss? A. $0 B. $99,000 C. $100,000 D. $101,000

c

Question 1 ID# 5868683Points: 1 Flag Question Question text James is in the process of forming his own brokerage company which will include several employees. James will be best protected by purchasing which one of the following to cover the crime loss exposures of his company? Select one: A. Commercial Crime Insurance. B. Surety Bond. C. Financial Institution Bond. D. Fidelity Bond.

c

Question 10 ID# 5830207Points: 1 Flag Question Question text IMA Manufacturing has just purchased a difference in conditions (DIC) policy with a $5 million general limit with a $50,000 deductible. The company's earthquake coverage has a $2 million limit with a $100,000 deductible and a 10 percent participation by the insured in all earthquake losses over the $100,000. If IMA suffers a $1 million earthquake loss, which one of the following is true of the coverage provided? Select one: A. $0 is provided by earthquake coverage; $950,000 is provided by DIC coverage B. $50,000 is provided by earthquake coverage; $950,000 is provided by DIC coverage C. $810,000 is provided by earthquake coverage; $0 is provided by DIC coverage D. $810,000 is provided by earthquake coverage; $190,000 is provided by DIC coverage

c

Question 10 ID# 5841848Points: 1 Flag Question Question text A traditional exclusion for an open cargo policy is called a warranty. One principal warranty is Select one: A. The Inchmaree clause. B. Assailing thieves. C. The delay clause. D. Particular average.

c

Question 10 ID# 5901581Points: 1 Flag Question Question text Which one of these exclusions applies only to the Employee Theft insuring agreement? Select one: A. Acts Committed by You, Your Partners or Your Members B. Pollution C. Inventory Shortages D. Indirect Loss

c

Question 10 ID# 5941429Points: 1 Flag Question Question text "Merchandise, raw materials and in-process or finished goods" is the Building and Personal Property Coverage Form's (BPP) definition for which one of the following? Select one: A. Contents B. Inventory C. Stock D. Business personal property

c

After submitting claim to insurance company, insured becomes concerned that he will not be paid the amount to replace his damaged personal property. learn the insurer's options for paying a covered loss. Which correct with regard to the Loss Payment condition of the (BPP)? A. regardless of the value of the loss, the insurer will pay no more than the insured's financial interest in the covered property. B. Insurers preferred settlement option is to repair, rebuild, or replace the damaged property with other property of like kind and quality because it keeps loss settlement costs down. C. The insurer has 90 days after receiving a satisfactory proof of loss to notify of its intent to either pay or deny. D. states that the insurer will pay the cost of repairing or replacing the damaged property, including any increased cost attributable to enforcement of ordinances or laws regulating the construction, use, or repair

a

Mason is a retailer that sells goods. Mason carries a Policy that includes Commercial Crime Coverage Form (Loss Sustained) with the following insuring agreements: Employee Theft; Forgery or Alteration; Inside the Premises—Theft of Money and Securities; and Inside the Premises—Robbery or Safe Burglary of Other Property. The limit of insurance for each one of these insuring agreements is $100,000 and the deductible each of these insuring agreements is $1,000. Two employees in collusion, stole money and merchandise from Mason. Beth and Jim stole money on May 1 and August 13. They also stole merchandise on January 15, 20X1 and September 29, 20X1. The amount of the money loss totaled $15,000 while the amount of the merchandise loss totaled $110,000. With respect to applying the limit of insurance applicable to the employee theft loss, how many occurrences were involved in this loss? A. One B. Two C. Three D. Four

a

Question 1 ID# 5828908Points: 1 Flag Question Question text Bailee liability and bailees' customer's policies both provide coverage for goods of others that are in the possession of the insured. Which one of the following correctly describes the main difference between these two policies? Select one: A. The bailees' customer's policy does not require legal liability. B. The bailor must be the one holding the goods under the bailees' customer policy. C. The bailee must be the negligent party in the bailees' liability policy. D. A bailment is only required in the bailees' liability policy.

a

Question 1 ID# 5829481Points: 1 Flag Question Question text In business income insurance, the expenses that an organization would not have incurred if the business interruption had not occurred are called Select one: A. Extra expenses. B. Excludable expenses. C. Continuing expenses. D. Contingent expenses.

a

Question 1 ID# 5830134Points: 1 Flag Question Question text Clarence entered into a contract bond that guarantees his insulation work will be free from defects in materials and workmanship for a specified period of five years after completion of the work. The type of bond used by Clarence is a Select one: A. Maintenance bond. B. License and permit bond. C. Bid bond. D. Performance bond.

a