Insurance Chapter 4-6 Quiz

What is the maximum dollar amount an insurer will pay for loss to sound equipment permanently installed in a vehicle insured under a business auto policy?

$1,000

Workers compensation rating is developed by applying a rating bureau job classification rate to each

$100 of payroll

An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and two passengers are injured. Medical treatment costs $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the second passenger. How much will the policy pay under medical payments coverage?

$14,000

Under the commercial crime coverage inside the premises - robbery or safe burglary of other property, what is the special per occurrence limit that applies to loss or damage to precious metals, precious and semiprecious stones, pearls, furs, manuscripts, drawings, or records?

$5,000

An insured hits a deer and crashes his car into a tree. The total damage to the vehicle is $6,000. How will this loss be covered?

$6,000 would be paid under the other-than-collision coverage

The businessowners policy liability coverage will pay for necessary medical expenses of others incurred within what maximum time period?

1 year

In an event of theft of a covered vehicle, transportation expenses coverage in a personal auto policy will cover the expenses starting how many hours after theft?

48 hours

The Employee Theft crime policy form includes a coverage extension that applies to employees temporarily outside the coverage territory for up to

90 days

With respect to auto insurance, the term owned autos includes all of the following EXCEPT

A pickup or van titled to and used in the name of insured's business

Which of the following statements are true regarding the premium computation for workers compensation insurance?

A premium auditor has the right to examine the insured's compensation records at the end of the policy period to determine the actual premium basis

An insured owns and operates a ranch. The insured has several vehicles that are used in the ranching operation and for personal use. Which of the following could NOT be insured under a personal auto policy?

A two-ton grain truck with a 6,500 pound capacity

Which of the following would be considered an uninsured vehicle?

A vehicle fleeing a hit-and-run accident

An uninsured motor vehicle includes all of the following EXCEPT

A vehicle owned and operated by a self-insurer

With respect to the personal auto policy, which of the following vehicles could be classified as a nonowned auto?

A vehicle that is titled to another person, but is being used with permission by an insured

Which of the following would be covered under a business liability insurance policy?

Damage to a watercraft while on shore at the insured's premises

Which of the following special liability coverages will provide protection to managers of a corporation for claims arising form a wrongful act committed by the manager while in an official capacity?

Directors and officers liability

Which commercial crime form would provide coverage for a loss that did not necessarily happen during the policy period but was revealed during the policy period>

Discovery form

What is another name for liquor liability insurace?

Dram shop insurance

Under the examinations of books and records condition, the insurance company has the right to examine and audit the insured's books and records related to the policy

During the policy period and for up to 3 years after the termination of the policy

Directors and officers liability insurance defends actions against a corporation or its officers and directors alleging wrongful acts. With regard to the coverage provided, wrongful acts include any of the following EXCEPT

Embezzlement

Workers compensation statutes provide coverage for diseases that occur as a result of working in the employer's working environment. Which of the following is an example of a disease that would NOT be covered by such provisions?

Employee of a medical facility who suffers from a common cold

In addition to the common policy conditions, all of the following conditions apply to liability coverage EXCEPT

Employers liability

Professional liability coverage protects against legal liability resulting from

Errors and omissions

What method of premium computation relates an employer's losses, payroll, and premiums to the rating bureau's classifications of operations?

Experience modification factor

Which of the following statements would be an example of a product liability claim?

Faulty packaging of a cereal caused spoilage that resulted in someone getting sick.

Which federal act provides benefits to injured civilians who are employed by the federal government?

Federal Employees Compensation Act

An insured is involved in an auto accident in another state. The state has a financial responsibility law that specifics limits of liability higher than the limits shown in the declarations. What amount will the insured's policy pay?

Higher limits

With regards to the personal auto policy, in the event of a claim or loss, the insured is required to do all of the following EXCEPT

Immediately report to an emergency room for an medical examination

In liability insurance policies, supplementary payments are made

In addition to the limit of liability

CGL Coverage B (Personal and Advertising Injury) will cover

Inadvertent injury to others caused in the course of advertising of insured's product.

If an insured needs protection on property other than money and securities inside the premises from losses caused by breaking and entering after business hours, which of the following Crime Coverage forms should be purchased?

Inside Premises - Robbery or Burglary of Other Property

A policy condition that states if a policy broadened with no additional premium, then the expanded coverage will be automatically applied to all policies to the same type is known as

Liberalization Clause

Which of the following is TRUE regarding business liability and medical payments coverage?

Loss of electronic data is excluded under a business liability policy

Which of the following would be covered under the crime coverage inside the premises - theft of money and securities?

Loss or damage to a locked safe, vault, or cash register

In which type of commercial crime policy coverage is triggered by a loss that happens during the policy period but is not necessarily discovered during the policy period?

Loss sustained form

Coverage A - Bodily Injury and Property Damage in the commercial general liability policy will cover

Losses due to the insured's negligence

Coverage A: Bodily Injury and Property Damage in the commercial general liability policy will cover

Losses due to the insured's negligence

The primary purpose of a surety bond is to

Make sure obligations are fulfilled

The type of professional liability coverage a medical doctor needs is?

Malpractice coverage

All of the following would be covered under the medical expense coverage of a businessowners policy EXCEPT

Mental health counseling

A plant worker for a chemicals manufacturer was recently diagnosed with a rare blood disease. She told her doctor that her job required her to handle industrial waste chemicals. Which of the following types of injuries is covered under the workers compensation policy?

Occupational disease caused by or aggravated by a condition of employment

Workers compensation benefits are provided for an employee injury or death that arises out of the course of normal employment in all of the following situations EXCEPT

On his evening stroll, an employee of an advertising company is injured while watching a competitor's billboard sign being removed from an advertising site.

Which of the following personal auto coverages would apply for damage caused by a bird hitting the windshield?

Other-than collision coverage

Workers compensation will pay under which of the following situations?

Paid without consideration of fault or negligence on the part of either employee or employer

A bond is written for a set limit, and the surety will be liable only for this amount of the limit. This limit is known as the

Penalty

If an insured bakery is sued because of its marketing states that the products of another bakery may not be safe, which coverage of a commercial general liability policy will defend the suit?

Personal and advertising injury liability

When ABC Appliance's marketing stated that its mowing machine was the only safe mower available for purchase in town, ABC was sued by XYZ Lawn and Garden. ABC's coverage would come from which part of its general liability coverage?

Personal and advertising injury liability

A customer was injured in a supermarket parking lot when a grocery cart rolled into the customer's leg/ Coverage for this claim would be provided under

Premises and operations

Crunchy Flakes Cereal Company shipped some of its product in faulty containers that caused spoilage. This resulted in some consumers becoming ill. If the company is sued for this event, it would be an example of a

Product liability claim

Under the coverage of which of the following liability policies may an insured require the insurer to defend a claim?

Professional liability

In a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called?

Self-insured retention

An insurance agency could purchase an errors and omission insurance policy which would provide protection in the event of any of the following events EXCEPT

The agency loses commission income from policies that were not issued by the insurer.

Surety bonds are written for a definite limit called

The bond penalty

Which of the following statements is true regarding the commercial general liability policy's Coverage C - Medical Payments?

The coverage is considered good will because payments are made without regard to fault.

Which of the following statements is true regarding the commercial general liability policy's Coverage C-Medical Payments?

The coverage is considered good will because payments are made without regard to fault.

A passenger in a friend's car is injured while getting into the car. Which of the following statements would apply if both the passenger and the driver had medical payments coverage under a personal auto policy?

The driver's policy would be primary

When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays

The excess over the self-insured retention

All of the following situations would be covered under a professional liability policy EXCEPT

The failure of an attorney to properly defend a client due to his personal dislike of the client

All of the following conditions must exist for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy EXCEPT

The injury or damage must occur within 90 days after the insured's work is completed

According to the standard workers compensation and employer liability policy form, a state should be listed in Part Three - other states' insurance of the workers compensation and employers liability policy when

The insured expects to extend operations to that state

The medical payments coverage in a personal auto policy will pay reasonable medical expenses or all of the following EXCEPT

The insured is injured while exiting a friend's mobile home

The medical payments coverage in personal auto policy will pay reasonable medical expenses for all of the following EXCEPT

The insured is injured will exciting a friend's mobile home

Which of the following statements would be correct if an insured failed to maintain the underlying limits as required by a personal umbrella policy?

The insured would be responsible for the amount required as underlying limits in the event of a claim

In personal auto policies, the term "you" refers to

The named insured

What is the primary objective of workers compensation?

The payment of benefits to employees for injuries arising out of their employment

All of the following statements concerning liability coverage are true EXCEPT

The policyholder can sue the insurer whether or not all conditions and provisions of the policy have been met.

A used car dealer takes a car in trade as partial payment for a car on its car lot. The customer promises to bring in the car's title but does not. Another customer takes the trade-in for a test drive and has an accident. In regard tot he dealership's business auto physical damage coverage, which of the following is true?

There is no coverage.

If covered auto is involved in an accident in another state, what happens to the limits of policy liability in a personal auto policy?

They adjust to at least the minimum limits of the other state

All of the following are true statements regarding the supplementary payments of a commercial general liability policy EXCEPT

They pay defense costs even after the aggregate limit has been reached

Prior to state-directed workers compensation statutes being enacted, employees had

To sue an employer for the "loss" and prove that the employer was at fault

Which of the following IS considered a work-related injury/Occupational disease under Workers Compensation law?

Tom works as a painter in a auto body shop. The chemicals from he paint aggravate Tom's asthma to the point that he must be hospitalized for several day.

Which common policy condition prohibits the insured from changing the rights or duties as defined under the policy to any other person or entity without the written consent of the insurance company?

Transfer of rights and duties under the policy

What is the business auto coverage territory for?

United States and its territories, Canada, or worldwide for private passenger hired autos

All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT

Up to $100 for the cost to secure the release of a vehicle from the impoundment lot following a covered accident

When a replacement auto is acquired during the policy period, what coverage will apply to it automatically under a personal auto policy?

Whatever coverage applied to the vehicle being replace

When does a business need to purchase a liquor liability policy?

When it is in business of manufacturing, distributing, serving, or furnishing alcoholic beverages

When would uninsured motorist coverage apply?

When the other party is legally liable but has no insurace

If an employer in a state with elective workers compensation laws chooses not to be subject to those laws, what does the employer lose?

it is common law defenses against liability suits

A premium discount is the term that describes when an insured owes a total standard premium greater than

$5,000

In a participation plan, the insured may be eligible for which of the following?

A partial premium refund

The liability coverage of the

Businessowners liability coverage form

What are the two major sections of commercial crime policies?

Commercial entities and government entities

A professional who wants coverage for all liability exposures should purchase what form of liability insurance?

Commercial general and professional

A plasterer has finished a job. What kind of liability coverage would protect him if the plaster falls and hurts someone because he did not do the job correctly

Completed operations

In commercial auto insurance, what type of coverage will pay for loss or damage to a covered auto by any cause other than collision or overturn?

Comprehensive

A bank manager has had several instances of employee dishonesty involving transfer of funds. His risk manager is researching the best coverage for this situation. Which bond rider should he recommend to the bank manager?

Computer systems rider

The at-fault driver in an insured's auto crash had the state required minimums for auto liability coverage, but not enough to pay for all the damage done to the insured. This driver is

Considered underinsured

A professional liability policy will provide coverage for loss in all of the following cases, except, when the insured doctor was shown to be

Criminally negligent

Employment practices liability insurance (EPLI) would NOT cover claims arising from

Deliberate law violation

Who are the parties to a bond?

Principal, obligee, and guarantor

Which of the following would be insured's duty in the event of a loss according to the duties in event of occurrence, claim, or suit condition?

Providing specific details regarding an occurrence

What is the deductible of a personal liability umbrella policy called?

Self-Insured Retention (SIR)

Supplementary payments on CGL provide all of the following EXCEPT

Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds

In personal auto policy, the medical payments coverage is similar to

Accident insurance, because it pays medical expenses regardless of fault

The inspections and surveys condition in a businessowners policy

Allows the insurer the right to inspect the insured's premises

Which would NOT be covered by the inside the premises - robbery or safe burglary of other property coverage?

An employee is caught stealing cash from the register

Under a businessowners policy, an insured can cancel the policy

At any time by mailing a written notice of cancellation

An employee is injured while visiting the employer's out-of-state site. How will the workers compensation benefits be determined?

Benefits will be provided if the state was listed on the policy information page

What of the following would NOT be covered under the liability section of a personal auto policy?

Bodily injury caused by the insured's negligence while driving a three-wheel-all-terrain vehicle

A liability policy that provides coverage for a claim for injury or damage if the claim is first reported or filed against the insured during the policy period is called?

Claims-made form