fina 443 ch.11

To meet the needs of firms with international loss exposures, some insurers offer a variety of coverages, including all of the following, EXCEPT:

Commercial pollution liability

Fiduciary bonds are commonly required of a person who does which one of the following?

Holds property in trust for the benefit of others

Which one of the following statements concerning site-specific environmental impairment liability insurance policies is most accurate?

Site-specific environmental impairment liability policies typically cover only losses that arise from pollution conditions beyond the policy site listed in the declarations, but may be endorsed to cover on-site cleanup.

The coverage that an umbrella liability policy provides for claims not covered at all by the underlying policies is called

Drop-down coverage.

Under the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA 2015), the total annual aggregate for government and insurer liability is capped at

$100 billion.

Under the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA 2015), insurers must retain, through their deductibles and co-pays, an industry retention threshold that gradually increases to which one of the following amounts in 2020?

$37.5 billion

Insurance agreements that are commonly found in cyber risk insurance policies include many categories, one of which is coverage for electronic data protection. Which one of the following losses would be covered by an electronic data protection insuring agreement?

A computer virus corrupts the insured's software and database, requiring the insured to purchase replacement software and restore the corrupted data.

The type of cyber insurance policy that is best for an organization that handles a lot of money and is worried about a hacker diverting funds from its accounts is

A cyber crime policy.

Ace Builders is considering purchasing a large tract of land where a local fuel oil company had its storage facility for more than 100 years. Ace knows that because of the long-time operation at the site, some environmental clean-up will be necessary. However, the amount of clean-up and its cost are unknown and cannot precisely be estimated. What is a specific policy that Ace should consider purchasing to address clean-up costs in excess of what it might estimate?

A remediation stop-loss policy

Which one of the following statements is correct regarding aggregate umbrella liability insurance limits?

Almost all umbrella policies contain aggregate limits that operate like the aggregate limits in the primary insurance.

Aircraft liability coverage can be structured as a single limit, or separate limits may apply to

Bodily injury excluding passengers liability, passenger bodily injury liability, and property damage liability coverages.

The term "umbrella liability" is generally used to describe a type of excess insurance that is which one of the following?

Broader in coverage than ordinary excess liability policies

A contract bond is a surety bond that can be used to guarantee the fulfillment of obligations under which one of the following?

Construction contracts

An environmental insurance policy that covers the loss exposures of a contractor performing environmental remediation services on contaminated sites is a(n)

Contractors pollution liability policy.

A bond that guarantees that investors will be paid both the interest due on municipal bonds and the principal when the bond matures is a

Credit enhancement financial guaranty bond.

A company that needs coverage for theft of money and securities resulting from computer fraud should choose which one of the following insuring agreements in a cyber risk insurance policy?

Cyber crime

Which one of the following commercial lines of business is eligible for the Terrorism Risk Insurance Program Reauthorization Act of 2015's (TRIPRA 2015's) loss-sharing program?

Directors and officers liability

Regarding coverage for international operations, which one of the following statements is true?

Each insurer in the voluntary workers compensation insurance market develops its own policy wording.

Insurance covering an employer against liability claims alleging improper advice in the administration of a group health program is

Employee benefits liability insurance.

Professional liability for professions such as accounting, insurance, law, and engineering is often called which one of the following?

Errors and omissions liability

Professional liability insurance is now available for more than just the technical professions. These occupations range from chemists to veterinarians, all of which entail liability for which one of the following?

Failure to use the degree of skill expected of a person in a particular field

Fiduciary liability insurance covers which one of the following?

Fiduciaries of employee benefit plans for breach of fiduciary duties involving discretionary judgments

Darlene was appointed by a court as conservator of her aunt's estate. If Darlene is required to post a bond with the court it would most likely be a

Fiduciary bond.

Basic liability coverage for drone owners and operators

Insures their legal responsibility for bodily injury and property damage resulting from the ownership, maintenance, or use of unmanned aircraft.

Some umbrella policies combine an excess policy and an umbrella policy in one policy, using the letters "A" and "B." A and B refer to the

Insuring Agreements.

Which one of the following statements is true of a contractors pollution liability (CPL) policy?

It addresses the environmental insurance needs of contractors performing environmental remediation services on contaminated sites.

Which one of the following criteria may not always apply to an "act of terrorism" certified by the United States secretary of the Treasury, in consultation with the secretary of Homeland Security and U.S. attorney general?

It resulted in damage within the U.S.

A multinational enterprise may purchase admitted coverages and combine them with difference in conditions (DIC) and differences in limits (DIL) coverages written to wrap around the admitted coverages, thereby accomplishing which one of the following?

Maintaining uniform coverage for all the insured's locations

The Federal Aviation Administration (FAA) Small Unmanned Aircraft Systems Regulations (Part 107) provide operational rules intended for

Operators on the use of unmanned aircraft systems weighing less than fifty-five pounds

Which one of the following is a supporting coverage offered by some insurers that provides a scheduled sum to the survivors of a deceased passenger or to a passenger who was injured, resulting in dismemberment or loss of sight, and that meets specified conditions?

Passenger voluntary settlement coverage

Professional liability and management liability policies can provide duty-to-defend coverage in the same manner as the typical commercial general liability policy. However, some professional liability policies provide defense costs reimbursement coverage requiring that the insurer do which one of the following?

Reimburse the insured for defense expense covered by the policy

Officials generally required to obtain public official bonds include those whose duties involve which one of the following?

Seizing or disposing of property.

Which one of the following statements is true regarding insurance coverage for foreign operations?

Small to mid-sized businesses in the United States frequently must concern themselves with loss exposures that exist outside of the usual coverage territory in standard U.S. coverage forms.

A network administrator assists a client in performing upgrades to its computer hardware. The administrator makes several errors during the process and the client loses money when its system malfunctions repeatedly for the next two weeks. The client sues the network administrator and his company for loss of business income. Which one of the following insuring agreements is necessary to cover the administrator and his company against the suit under a cyber liability insurance policy?

Technology errors and omissions liability

Which one of the following statements is correct regarding the maintenance of underlying insurance condition of an umbrella liability insurance policy?

The condition obligates the insured to monitor the required underlying coverages to ensure that they remain in force.

Which one of the following is true regarding disclosures and endorsements pertaining to the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA 2015)?

The endorsements define an insured loss as any loss resulting from an act of terrorism, and for purposes of workers compensation coverage, the endorsements include acts of war.

A payment bond is a contract bond guaranteeing which one of the following?

The project will be free of liens.

Which one of the following statements best describes the purpose of a remediation stop-loss policy?

The purpose of remediation stop-loss insurance is to facilitate real estate sales where there is known pollution contamination on the property, but the total cleanup costs are unknown.

Which one of the following statements is correct regarding the maintenance of underlying insurance condition of an umbrella liability insurance policy if the underlying insurance is not kept in force?

The umbrella policy would cover claims that exceed the limits of the underlying policies as if they had been kept in force.

A fundamental difference between auto insurance and aircraft insurance is that

Underwriters have stricter requirements for pilots of manned aircraft, usually requiring a pilot's license, medical certification, and experience hours as a pilot-in-command, as compared with minimal auto insurance driver requirements.