AINS 23 - Segment C
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 Select one: A. Insuring Agreements. B. Conditions. C. Duties Following a Loss. D. Exclusions.
A. Insuring Agreements.
Which one of the following can be insured under Coverage E—Scheduled Farm Personal Property of the ISO Farm Property—Farm Personal Property Coverage Form? Select one: A. Livestock B. Private light poles C. Permanent fixtures attached to a building D. Growing crops
A. Livestock
The Workers Compensation and Employers Liability Policy (WC&EL policy) enables employers to satisfy their state workers compensation obligations by Select one: A. Providing a means to pay benefits required by state workers compensation statutes. B. Mandating strict risk control measures in accordance with state and federal guidelines. C. Paying a specified percentage of the WC&EL policy premium to the state guaranty fund. D. Providing legal liability protection from claims resulting from third party over actions, consequential injury to others, and dual capacity.
A. Providing a means to pay benefits required by state workers compensation statutes.
The workers compensation policies in some monopolistic fund states do not include employers liability coverage. Which one of the following should an employer purchase to address this lack of coverage? Select one: A. Contractual liability coverage B. Stop gap coverage C. Voluntary compensation coverage D. Other states coverage
B. Stop gap coverage
Which one of the following items found in the information page specifies which states the workers compensation policy applies? Select one: A. Item 1 B. Item 2 C. Item 3 D. Item 4
C. Item 3
The coverage provided by Part One of the Workers Compensation and Employers Liability Insurance Policy obligates the insurer to pay which one of the following on behalf of the insured? Select one: A. Benefits over and above the limits of the policy B. Damages assessed against an employer arising out of its common-law liability C. Full income replacement benefits D. All compensation and other benefits required by the workers compensation law of any state listed in Item 3.A of the Information Page
D. All compensation and other benefits required by the workers compensation law of any state listed in Item 3.A of the Information Page
Which one of the following statements about Part One of the Workers Compensation and Employers Liability Policy is true? Select one: A. It does not provide for expenses for investigating claims. B. It shows dollar limits for benefits. C. It does not provide for litigation costs. D. It contains no exclusions.
D. It contains no exclusions.
Under the businessowners policy (BOP) Select one: A. The types of businesses that are considered to be eligible for coverage have become increasingly restricted. B. The trend has been for a decreasing, more restricted number and variety of coverages and endorsements. C. All of the coverage options that are available in the commercial package program are automatically included. D. Many coverages that would require separate policies or coverage parts in the commercial package program are either included or available as options.
D. Many coverages that would require separate policies or coverage parts in the commercial package program are either included or available as options.
Benefits provided by a workers compensation policy are paid based on which one of the following methods? Select one: A. An "all-injury/disease" approach with specific exclusions B. The benefits selected by the employee from a schedule of benefits C. A scheduled amount specified by the type of permanent injury or disease D. The benefits specified by the various state workers compensation laws listed in the policy Information Page
D. The benefits specified by the various state workers compensation laws listed in the policy Information Page
Under the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA 2015), the total annual aggregate for government and insurer liability is capped at Select one: A. $100 billion. B. $20 billion. C. $50 billion. D. $500 billion.
A. $100 billion.
The farm program broad form causes of loss covers death of livestock from which one of the following additional perils? Select one: A. Electrocution B. Theft or attempted theft C. Euthanasia D. Mysterious disappearance
A. Electrocution
Which one of the following types of buildings would most likely be eligible for coverage under a businessowners (BOP) policy? Select one: A. An eight-story office building that covers 50,000 square feet B. A 10,000 square foot building housing an insurance agency C. A 10-story apartment building of 100,000 square feet containing offices D. A 70,000 square foot office building with no apartments
B. A 10,000 square foot building housing an insurance agency
While workers compensation benefits are considered an exclusive remedy, there are legal grounds other than workers compensation law that can give rise to a claim for an employee injury. Based on this exposure, most employers also carry which one of the following coverages? Select one: A. Employee benefits liability B. Employers liability C. General liability D. Employee practices
B. Employers liability
Workers compensation benefits include which one of the following? Select one: A. Property damage benefits B. Rehabilitation benefits C. Death benefits of 100 percent of wage loss D. Pain and suffering benefits
B. Rehabilitation benefits
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? Select one: A. $27.5 billion B. $17.5 billion C. $37.5 billion D. $7.5 billion
C. $37.5 billion
Which one of the following property coverages is often included or available as an option in a businessowners policy (BOP)? Select one: A. Nuclear hazard B. Earthquake, landslide, and subsidence C. Employee dishonesty D. Flood
C. Employee dishonesty
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? Select one: A. Medical malpractice B. Surety C. Federal flood D. Directors and officers liability
D. Directors and officers liability
Which one of the following can be insured under Coverage E—Scheduled Farm Personal Property of the ISO Farm Property—Farm Personal Property Coverage Form? Select one: A. Growing crops B. Trees, plants and shrubs C. Private power and light poles D. Various types of livestock
D. Various types of livestock
Which one of the following best describes the effect of the Voluntary Compensation and Employers Liability Endorsement? Select one: A. It amends the standard Workers Compensation and Employers Liability Insurance Policy to make exempt employees subject to the workers compensation law. B. It obligates the insurer to pay an amount equal to the compensation benefits that would be payable if exempt employees were subject to the workers compensation law. C. It provides limited medical and rehabilitation benefits to exempt employees, which are less than the benefits payable to workers who qualify for workers compensation benefits. D. It modifies the employers liability coverage so the employer can make voluntary payments to injured workers, regardless of whether the employer was liable for the injury.
B. It obligates the insurer to pay an amount equal to the compensation benefits that would be payable if exempt employees were subject to the workers compensation law.
Which one of the following statements about provisions in Part One of the Workers Compensation and Employers Liability Insurance Policy is true? Select one: A. An employee retains any rights of recovery against a third party to the extent workers compensation benefits have been received. B. The accident causing the injury must occur during the policy period. C. Obligations of the insurer are null and void if the employer fails to comply with policy requirements. D. Disease must manifest itself during the policy period.
B. The accident causing the injury must occur during the policy period.
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? Select one: A. A site-specific EIL policy B. A CGL/EIL combination policy C. A remediation stop-loss policy D. A property transfer policy
C. A remediation stop-loss policy
Federal workers compensation statutes apply to which one of the following workers? Select one: A. A nurse working in a hospital B. An insurance company receptionist C. An interstate railroad worker D. A department store salesclerk
C. An interstate railroad worker
To be covered under a workers compensation statute, an injury or disease (in most states) must meet which one of the following requirements? Select one: A. Result in total disability B. Occur away from the regular work premises C. Arise out of and in the course of the employment D. Result from the employer's negligence
C. Arise out of and in the course of the employment
To provide protection against seizure of assets, currency inconvertibility, and interference with contractual performance, a firm conducting operations outside the U.S. and Canada would purchase Select one: A. Commercial pollution insurance. B. War risk insurance. C. Political risk insurance. D. Personal injury insurance.
C. Political risk insurance.
Which one of the following would be covered in some states under Part Two of the Workers Compensation and Employers Liability Insurance Policy? Select one: A. An employee who is ineligible for workers compensation intentionally causes a self-inflicted injury while on the job. B. An employee of a cabinet maker comes into the shop on the weekend to use the equipment to fabricate pieces for a boat he is building and is accidentally injured while there. C. The spouse of an injured employee sues the employer for loss of companionship and services such as housekeeping and yard work resulting from the injury. D. The captain of a freighter is accidentally injured when a poorly maintained crane on board his ship malfunctions.
C. The spouse of an injured employee sues the employer for loss of companionship and services such as housekeeping and yard work resulting from the injury.
Which one of the following statements is true regarding the basis of premium for workers compensation insurance? Select one: A. The premium base for workers compensation insurance varies by the type of business classification involved. B. The insured pays an estimated premium based on an estimate of the annual revenue. C. The premium base for workers compensation insurance is usually determined by the degree of hazard in the work performed. D. A premium auditor may examine the insured's records at the end of the policy period to determine the actual payroll.
D. A premium auditor may examine the insured's records at the end of the policy period to determine the actual payroll.
Which one of the following statements is correct with respect to the liability coverage available under a businessowners policy (BOP)? Select one: A. BOPs cannot be endorsed to add professional liability coverage. B. Both ISO and AAIS offer endorsements that allow insureds to add workers compensation coverage to the liability section of their BOP policy. C. Insurers subscribing to ISO or AAIS BOP programs must offer all coverage options that ISO or AAIS makes available. D. Both ISO and AAIS offer BOP endorsements adding employee benefit liability coverage and employment practices liability coverage.
D. Both ISO and AAIS offer BOP endorsements adding employee benefit liability coverage and employment practices liability coverage.
BOP eligibility rules are based on Select one: A. The fire protection class where the building is located. B. The applicant's credit score. C. The applicant's loss history. D. Criteria that relate to business size and complexity of loss exposures.
D. Criteria that relate to business size and complexity of loss exposures.
Which one of the following statements is true regarding insurance coverage for foreign operations? Select one: A. Voluntary workers compensation policies do not provide coverage for endemic diseases. B. Voluntary workers compensation policies exclude coverage for transportation expense to return disabled or deceased employees to the United States. C. Commercial insurance policies usually provide worldwide coverage. D. 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.
D. 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.
Sue is injured at work, and her job responsibilities are limited for 30 days, after which time she fully resumes her duties. Which one of the following workers compensation disability classifications best describes Sue's injury? Select one: A. Permanent partial disability B. Permanent total disability C. Temporary total disability D. Temporary partial disability
D. Temporary partial disability
Which one of the following statements best describes the purpose of a remediation stop-loss policy? Select one: A. The purpose of remediation stop-loss insurance is to protect motor carriers involved in interstate transportation from claims resulting from spills of hazardous cargoes. B. The purpose of remediation stop-loss insurance is to provide limited pollution coverage in connection with products liability policies for hazardous products. C. The purpose of remediation stop-loss insurance is to protect third party sites located near the insured property from the consequences of an accidental release of chemicals. D. 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.
D. 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.
Multiple Peril Crop Insurance (MPCI), offered through the Federal Crop Insurance Corporation (FCIC), covers unexpected crop production losses due to Select one: A. Neglect. B. Poor farming practices. C. Theft. D. Windstorm.
D. Windstorm.
One of the airplanes in the Jake's Message Trailers fleet has a seized engine and is in a prolonged lay-up in a hangar, awaiting a replacement engine. The defective engine has been removed from the plane. Jake's wants to insure the plane for physical damage but would like to pay a low premium for this out-of-service aircraft. Which type of physical damage coverage should Jake's purchase for the aircraft? Select one: A. "All-risks"--not in motion aircraft coverage B. "All-risks"--not in flight aircraft coverage C. With the engine removed, the aircraft is covered under Jake's Building and Personal Property coverage D. "All-risks"--ground and flight aircraft coverage
A. "All-risks"--not in motion aircraft coverage
Which one of the following statements is correct with respect to Coverage G—Barns, Outbuildings and Other Farm Structures of the ISO farm program? Select one: A. Coverage G is used to insure all types of farm buildings and structures other than the dwelling and private garages. B. It provides similar coverage to Coverage B-Other Private Structures Appurtenant to Dwellings. C. It covers both the structure and its contents for each building specifically listed on the form. D. It can be used to insure all buildings located on a farm premises.
A. Coverage G is used to insure all types of farm buildings and structures other than the dwelling and private garages.
Regarding coverage for international operations, which one of the following statements is true? Select one: A. Each insurer in the voluntary workers compensation insurance market develops its own policy wording. B. Voluntary workers compensation policies seldom include coverage for transportation expenses to return disabled or deceased employees to the United States. C. Like homeowners policies, commercial insurance policies also provide worldwide coverage. D. Standard forms for international operations workers compensation exposures are available.
A. Each insurer in the voluntary workers compensation insurance market develops its own policy wording.
Professional liability for professions such as accounting, insurance, law, and engineering is often called which one of the following? Select one: A. Errors and omissions liability B. Malpractice liability C. Fiduciary liability D. Negligence liability
A. Errors and omissions liability
Which one of the following describes a coverage trigger applicable to Part Two—Employers Liability Insurance? Select one: A. For bodily injury by accident, the policy that is in effect when the injury occurs is the policy that applies. B. For bodily injury by disease, the policy that is in effect on the first day that the employee exhibits symptoms of occupational disease is the policy that applies. C. For bodily injury by disease, the policy in effect on the employee's first initial exposure to the conditions causing the disease is the policy that applies. D. For bodily injury by accident, the policy that is in effect when the employer receives notice of the employee's lawsuit is the policy that applies.
A. For bodily injury by accident, the policy that is in effect when the injury occurs is the policy that applies.
Which one of the following best describes the process for rating business income and any additional coverages that are automatically included in the businessowners policy (BOP)? Select one: A. These coverages are usually provided at no additional premium. B. BOP property rates include loadings (built-in charges) for these coverages. C. BOP manuals include a specific additional premium amount for each additional coverage. D. Rates are computed separately for each and then added to the base rate.
B. BOP property rates include loadings (built-in charges) for these coverages.
Which one of the following statements is correct with respect to the business income and extra expense coverage provided by the businessowners policy (BOP)? Select one: A. Business income loss and extra expenses are usually payable for up to 12 months following a covered loss. B. It is generally subject to special underwriting requirements, such as a completed business income worksheet. C. Typically, it is subject to coinsurance, monthly limitation, or a total dollar limit. D. The coverage can be added to the BOP by endorsement and is subject to an additional premium.
A. Business income loss and extra expenses are usually payable for up to 12 months following a covered loss.
The workers compensation laws of some states are inapplicable to which one of the following? Select one: A. Partners, sole proprietors, or executive officers. B. Employees in high-risk industries, such as construction. C. Employers with more than a specified number of employees. D. Any worker in a supervisory or management role.
A. Partners, sole proprietors, or executive officers.
Businessowners policy (BOP) rating incorporates which one of the following variables? Select one: A. The amount of the policy deductible B. Whether the coverage is claims-made or occurrence-based C. The number of stories in the insured building D. Whether the policy is new business or a policy renewal
A. The amount of the policy deductible
Which one of the following statements is correct with respect to Part One of the Workers Compensation and Employers Liability Policy? Select one: A. When the insurer pays benefits, any right of recovery against a third party becomes the right of the insurer. B. An employer's failure to comply with health and safety laws and regulations results in immediate suspension of coverage. C. Dependents of a deceased employee have no right of action against the insurer. D. If the employer fails to comply with policy requirements, the insurer is not obliged to pay benefits.
A. When the insurer pays benefits, any right of recovery against a third party becomes the right of the insurer.
The term "umbrella liability" is generally used to describe a type of excess insurance that is which one of the following? Select one: A. Broader in coverage than ordinary excess liability policies B. Narrower in coverage than ordinary excess liability policies C. Available only through nonadmitted (surplus lines) insurers D. Limited to commercial insurance accounts
A. Broader in coverage than ordinary excess liability policies
Basic liability coverage for drone owners and operators Select one: A. Insures their legal responsibility for bodily injury and property damage resulting from the ownership, maintenance, or use of unmanned aircraft. B. Protects the insured drone owner or operator against liability arising out of the operation of a drone that the insured does not own. C. Insures their legal responsibility for breach of privacy of entities that results from drone operations. D. Protects the insured against liability for injury to others resulting from an accident that takes place at the insured's premises.
A. Insures their legal responsibility for bodily injury and property damage resulting from the ownership, maintenance, or use of unmanned aircraft.
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? Select one: A. It resulted in damage within the U.S. B. It is a violent act or an act that is dangerous to human life, property, or infrastructure. C. It was committed by an individual or individuals as part of an effort to coerce the civilian population of the U.S. or influence U.S. government policy or conduct through coercion. D. It is an act of terrorism.
A. It resulted in damage within the U.S.
Jack, employed at KZ Industries (KZ), is injured in a work accident and suffers a permanent partial disability. Because Jack is unable to perform many of his household chores, his wife, Lucy, hires a handyman to perform those chores. Lucy sues KZ for the cost of the handyman, claiming loss of services. Which one of the following statements is correct? Select one: A. KZ's employers liability policy would defend the claim and pay any damages. B. KZ's workers compensation policy would cover the cost of the handyman because it is an expense resulting from an occupational injury. C. KZ's workers compensation policy would cover the cost of the handyman because Jack suffered a permanent partial disability. D. KZ's employers liability policy would not defend or pay any damages assessed because Lucy is not an employee of the company.
A. KZ's employers liability policy would defend the claim and pay any damages.
Which one of the following must an insurer pay on behalf of the insured according to Part One of the Workers Compensation and Employers Liability Insurance Policy? Select one: A. Medical payments for a claimant who was exposed to a disease during the policy period but filed a claim two years after retiring B. Damages assessed against an employer arising out of its common-law liability C. Full income replacement for any injured employee D. Claims for care and loss of services by the spouse or family member of an injured employee
A. Medical payments for a claimant who was exposed to a disease during the policy period but filed a claim two years after retiring
Exclusions are generally very common in all insurance policies. Which one of the following is a correct statement regarding the exclusions in Part One of the standard Workers Compensation and Employers Liability (WC&EL) Insurance Policy? Select one: A. Part One contains no out right exclusions. B. Part One exclusions are limited by the National Council on Compensation Insurance (NCCI). C. Part One exclusions only apply to federal claims. D. Part One excludes discrimination.
A. Part One contains no out right exclusions.
Angela, a zookeeper, travels to another zoo at her employer's request in order to borrow a rare bird. During the return trip, Angela is exposed to a virus carried by the bird and becomes seriously ill. The illness leaves her with impaired balance and coordination, as well as an inability to concentrate. Which one of the following best describes how the workers compensation insurer for Angela's employer is likely to respond to a claim for Angela's illness? Select one: A. Provide coverage because the majority of state statutes require coverage for occupational disease B. Provide coverage because the lending zoo was negligent in not verifying the bird's health before placing it in Angela's care C. Deny coverage because the virus originated at the other zoo and did not arise out of Angela's employment D. Deny coverage because Angela's illness did not occur while she was at her place of employment
A. Provide coverage because the majority of state statutes require coverage for occupational disease
Which one of the following statements is correct with respect to eligibility for coverage under a businessowners policy (BOP)? Select one: A. Some insurers have expanded the eligibility for their BOP programs to include restaurants and contractors. B. Every insurer that writes businessowners insurance uses the same eligibility rules to define the types of businesses that it will accept. C. Insurers consider most manufacturing businesses as being eligible for their BOP programs. D. Eligible risks must exceed 50,000 square feet in total floor area or $8 million in annual gross sales at each location.
A. Some insurers have expanded the eligibility for their BOP programs to include restaurants and contractors.
Which one of the following statements is correct regarding the maintenance of underlying insurance condition of an umbrella liability insurance policy? Select one: A. The condition obligates the insured to monitor the required underlying coverages to ensure that they remain in force. B. The condition obligates the insurer to monitor the required underlying coverages to ensure that they remain in force. C. It is necessary to have the required underlying coverage in effect only at the beginning of an umbrella policy's coverage period. D. If the underlying coverage is not maintained, the umbrella policy will drop down to pay claims that would have been covered by the required underlying policy.
A. The condition obligates the insured to monitor the required underlying coverages to ensure that they remain in force.
The Voluntary Compensation and Employers Liability Coverage Endorsement to a workers compensation policy is needed for which one of the following reasons? Select one: A. The workers compensation laws of most states exempt some types of employment from statutory workers compensation benefits. B. An insured may wish to obtain workers compensation and employers liability coverage for employees of a third party, such as a subcontractor. C. An employer may wish to compensate employees for injury, illness or other damages immediately and regardless of fault so as to maintain goodwill and prevent lawsuits. D. An insured may want to pay benefits that are more generous than those specified in applicable state workers compensation legislation.
A. The workers compensation laws of most states exempt some types of employment from statutory workers compensation benefits.
Which one of the following statements is correct with respect to large deductible plans for workers compensation insurance? Select one: A. They allow the insured, in effect, to self-insure most of its workers compensation exposures. B. The deductible applies to medical expense claims only. C. The insured administers the claims. D. They provide no incentive to reduce workplace accidents.
A. They allow the insured, in effect, to self-insure most of its workers compensation exposures.
Before workers compensation statutes were enacted, what was the remedy for employees with work-related injuries? Select one: A. They had to establish that the employer was at fault to recover damages. B. They had no right to sue their employers for compensation. C. They were covered by no-fault protection. D. They received guaranteed payments.
A. They had to establish that the employer was at fault to recover damages.
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? Select one: A. An insured posts information on its website about a competitor that proves to be untrue, provoking a lawsuit against the insured for defamation and false advertising. B. A computer virus corrupts the insured's software and database, requiring the insured to purchase replacement software and restore the corrupted data. C. An employee of the insured gains unauthorized access to the insured's accounting system and diverts funds from the insured's cash accounts into the employee's private bank account. D. A hacker breaks into the insured's computer system and steals trade secrets, requiring the insured to pay extortion money to the hacker to recover the information.
B. A computer virus corrupts the insured's software and database, requiring the insured to purchase replacement software and restore the corrupted data.
Which one of the following is correct with respect to the professional liability coverage available under the businessowners policy (BOP) and the Commercial General Liability (CGL) Coverage Form? Select one: A. The professional liability exposures of pharmacies, barbers, beauticians, veterinarians, funeral directors, optical and hearing aid stores, and printers are automatically covered under the BOP. B. An important difference between the BOP's liability coverage and the CGL's is the availability of optional professional liability coverage endorsements for use with BOP. C. A CGL policy is typically used to cover the professional liability exposures of providers of professional services, such as physicians, accountants, or engineers. D. BOP liability includes coverage for bodily injury or property damage resulting from the rendering of or failure to render any professional service.
B. An important difference between the BOP's liability coverage and the CGL's is the availability of optional professional liability coverage endorsements for use with BOP.
The Commercial General Liability (CGL) policy provides that the insurer may, at its discretion, settle any claim or suit. In contrast, professional liability and management liability policies typically have what is referred to as a "hammer clause." This clause is invoked when the insured does not agree to a proposed settlement. The hammer clause has the effect of doing which one of the following? Select one: A. Mandating settlement within 180 days of triggering the hammer clause B. Compelling the insured to agree to the settlement proposed by the insurer C. Forcing the insurer to make a subsequent settlement offer within 60 days of the initial offer D. Requiring the insured to submit the claim to arbitration procedures
B. Compelling the insured to agree to the settlement proposed by the insurer
Which one of the following best describes one of the major differences between liability coverage provided by the typical businessowners policy (BOP) and the Insurance Services Office (ISO) Commercial General Liability (CGL) Coverage Form? Select one: A. The typical BOP provides much broader pollution liability coverage than does the typical CGL policy. B. Hired and nonowned autos liability coverage is usually offered by BOPs, either as part of the form or by endorsement. C. Most BOPs include employers liability coverage; this benefits smaller insureds by eliminating the need for a separate employers liability policy. D. BOPs generally include liquor liability coverage, which is a particular benefit to bars and full-service restaurants.
B. Hired and nonowned autos liability coverage is usually offered by BOPs, either as part of the form or by endorsement.
Fiduciary liability insurance provides coverage for negligence involved in which one of the following? Select one: A. Termination of employees. B. Investment decisions in retirement plans. C. Management of the corporation. D. Violations of licensee duties.
B. Investment decisions in retirement plans.
Which one of the following best describes the effect of the United States Longshore and Harbor Workers' Compensation Act (LHWCA) Endorsement? Select one: A. It removes the exclusion in the Workers Compensation and Employers Liability Insurance (WC&EL) Policy that prohibits workers subject to the LHWCA from suing the insured employer. B. It amends the definition of workers compensation law to include the LHWCA with respect to operations in any state designated in the endorsement's schedule. C. It modifies the definition of "insured worker" in the WC&EL policy to include longshore and harbor workers, and masters and crew of vessels. D. It obliges the insurer to pay the equivalent of workers compensation benefits if longshore or harbor workers are injured due to the insured employer's negligence.
B. It amends the definition of workers compensation law to include the LHWCA with respect to operations in any state designated in the endorsement's schedule.
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? Select one: A. Eliminating all coverage gaps B. Maintaining uniform coverage for all the insured's locations C. Reducing the need for surplus lines insurance D. Reducing the likelihood of having frequent small claims
B. Maintaining uniform coverage for all the insured's locations
Joe signs a contract with Home Builders to install the electrical wiring for a new home. He uses his own tools and follows the specifications in the contract. Joe is burned while installing the wiring. Does Home Builders' workers compensation policy cover Joe's injury? Select one: A. Yes, because Home Builders must provide no-fault protection for employees B. No, because Joe is not an employee of Home Builders C. Yes, because the injury arose out of and in the course of employment D. No, because Joe probably contributed to the injury
B. No, because Joe is not an employee of Home Builders
Which one of the following statements is correct regarding the application of workers compensation laws in foreign countries? Select one: A. Employees who are temporarily working outside the U.S. are not covered by the workers compensation law of the state where they regularly work. B. Only a few countries have workers compensation laws comparable to those found in the U.S. and Canada. C. Foreign workers compensation laws are virtually identical to U.S. Laws. D. Under most states' workers compensation laws, an employee temporarily working abroad has coverage limited to repatriation expenses and endemic illnesses only.
B. Only a few countries have workers compensation laws comparable to those found in the U.S. and Canada.
The Federal Aviation Administration (FAA) Small Unmanned Aircraft Systems Regulations (Part 107) provide operational rules intended for Select one: A. Manufacturers on the specifications for unmanned aircraft systems weighing less than fifty-five pounds. B. Operators on the use of unmanned aircraft systems weighing less than fifty-five pounds. C. Insurers on insurance specifications for unmanned aircraft systems weighing less than fifty-five pounds. D. Service providers on the specifications of unmanned aircraft systems weighing less than fifty-five pounds.
B. Operators on the use of unmanned aircraft systems weighing less than fifty-five pounds.
Which one of the following statements concerning site-specific environmental impairment liability insurance policies is most accurate? Select one: A. Because of the potential for virtually unlimited losses, site-specific environmental impairment liability policies typically cover only bodily injury and not property damage. B. 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. C. Site-specific environmental impairment liability policies are typically written on an occurrence basis, but may be endorsed to provide coverage on a claims made basis. D. Defense costs are usually excluded from site-specific environmental impairment liability policies to keep the premiums lower.
B. 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.
Which one of the following statements is correct with respect to the businessowners policy (BOP)? Select one: A. Business income coverage on BOP policies is most often separately rated. B. The available limits for certain property such as money orders are often quite low with minimal or no options for higher limits. C. Whether a building is frame, joisted masonry, or fire resistive is an underwriting consideration, not a rating factor. D. BOP policies are, with a few, limited exceptions, rated manually.
B. The available limits for certain property such as money orders are often quite low with minimal or no options for higher limit
Aircraft liability coverage can be structured as a single limit, or separate limits may apply to Select one: A. Bodily injury for crew members liability, bodily injury for passengers and others (excluding crew members) liability, and property damage liability coverages. B. Coverages for liability for bodily injury of individual persons who are injured in an aircraft loss, excluding crew members, and for property damage. C. Bodily injury excluding passengers liability, passenger bodily injury liability, and property damage liability coverages. D. Coverages for liability for bodily injury of individual persons who are injured in an aircraft loss, including crew members, and for property damage.
C. Bodily injury excluding passengers liability, passenger bodily injury liability, and property damage liability coverages.
To meet the needs of firms with international loss exposures, some insurers offer a variety of coverages, including all of the following, EXCEPT: Select one: A. Commercial crime B. Commercial property and business income C. Commercial pollution liability D. Commercial supplemental and excess auto
C. Commercial pollution liability
The businessowners policy (BOP) offers a major benefit for smaller insureds because Select one: A. The Business Auto Coverage Form is generally included in BOPs, either as part of the form or by endorsement. B. Insureds that do not own automobiles represent a lower liability risk and are therefore eligible for a premium discount on their BOP liability coverage. C. For an insured that owns no automobiles, the availability of hired and nonowned auto coverage under the BOP eliminates the need to obtain a separate business auto policy. D. Liability coverage for hired and nonowned autos, aircraft, and watercraft can be added to the form by endorsement.
C. For an insured that owns no automobiles, the availability of hired and nonowned auto coverage under the BOP eliminates the need to obtain a separate business auto policy.
Which one of the following statements is true of a contractors pollution liability (CPL) policy? Select one: A. It provides coverage for radioactive matter, claims arising out of the insured's products, and damage to sites owned by the insured. B. It is available with a claims-made coverage trigger only, and not an occurrence trigger. C. It addresses the environmental insurance needs of contractors performing environmental remediation services on contaminated sites. D. It covers property damage, cleanup costs and defense costs, but does not cover bodily injury.
C. It addresses the environmental insurance needs of contractors performing environmental remediation services on contaminated sites.
Which one of the following best describes the other states insurance provided in Part Three of the Workers Compensation and Employers Liability Insurance Policy? Select one: A. It automatically extends workers compensation coverage into any state in which the insured has temporary operations for up to 30 days. B. It allows the insurer to provide workers compensation coverage in ND, OH, WA, WV, and WY. C. It automatically extends workers compensation and employers liability coverage to the insured's operations in any state listed in Item 3.C of the Information Page. D. It allows an insurer to extend workers compensation and employers liability coverage for an insured into states in which the insurer is not licensed.
C. It automatically extends workers compensation and employers liability coverage to the insured's operations in any state listed in Item 3.C of the Information Page.
Which one of the following statements is true with respect to Part One of the Workers Compensation and Employers Liability Policy? Select one: A. It covers the employer only for those locations and employees listed on the Information Page. B. It takes precedence if the policy and the applicable workers compensation law conflict. C. It covers all operations of the employer except those otherwise insured or specifically excluded by endorsement. D. It defines important terms such as "workers compensation law", "we" and "you."
C. It covers all operations of the employer except those otherwise insured or specifically excluded by endorsement.
Which one of the following statements is correct with respect to limits of liability applicable to Part Two—Employers Liability Insurance? Select one: A. The insurer has a duty to pay defense costs even after damages equaling the limit of insurance have been paid. B. It includes a property damage by accident limit. C. It includes a bodily injury by disease policy limit. D. Supplementary payments are covered within the stated limits of liability.
C. It includes a bodily injury by disease policy limit.
Which one of the following is a characteristic of a site-specific environmental impairment liability policy? Select one: A. It excludes coverage for bodily injury claims against the insured. B. It typically provides coverage for acid rain, war, and nuclear liability. C. It provides coverage on a claims-made basis. D. It may be used to demonstrate an owner's proof of ability to pay claims resulting from the release of fuels from an underground storage tank.
C. It provides coverage on a claims-made basis.
Omicron Corporation currently does business in Colorado, Wyoming, Nebraska, and Kansas. These states are listed in Item 3.A on the Information Page of Omicron's Workers Compensation and Employers Liability Insurance Policy. The company is hoping to expand its operations into Utah, Arizona, and New Mexico during the next year. Which one of the following statements is correct? Select one: A. The policy automatically extends workers compensation and employers liability coverage to any state in which the insured operates. B. If Utah, Arizona, and New Mexico are added in the appropriate section of the Information Page, the insurer is obligated to extend coverage, even if the insurer usually declines to write insurance in any or all of those states for underwriting reasons. C. Omicron should include Utah, Arizona, and New Mexico in Item 3.C on the Information Page and advise the insurer immediately if the company begins operations in any of those states. D. Utah, Arizona, and New Mexico should be added to Item 3.A on the Information Page of Omicron's policy.
C. Omicron should include Utah, Arizona, and New Mexico in Item 3.C on the Information Page and advise the insurer immediately if the company begins operations in any of those states.
Which one of the following best describes the "property not covered" provisions of the businessowners policy (BOP)? Select one: A. The BOP form typically excludes wharves and docks. B. In most BOPs, the list of property not covered is far more extensive than the comparable list of excluded property in the Building and Personal Property Coverage Form (BPP). C. The BOP has a relatively short list of "property not covered" because the insureds eligible for a BOP are generally lower-risk, more homogenous types of businesses. D. Many of the "property not covered" items listed in the BOP are specifically excluded because they relate to types of businesses that are not eligible for BOP coverage.
C. The BOP has a relatively short list of "property not covered" because the insureds eligible for a BOP are generally lower-risk, more homogenous types of businesses.
Which one of the following explains why the same "Workers Compensation and Employers Liability Insurance Policy" is able to be used in all states even though the provisions of the various state laws and the employee benefits have many differences? Select one: A. Even though there are differences, the basic laws and benefits are similar in amount and duration. B. All states have accepted the provisions put forth by the National Council on Compensation Insurance (NCCI). C. The coverage provided by Part One obligates the insurer to pay all benefits required of the insured by the workers compensation law or occupational disease law of any state listed in Item 3.A of the Information Page. D. Although a state run program, the federal government provides for uniformity between the various states.
C. The coverage provided by Part One obligates the insurer to pay all benefits required of the insured by the workers compensation law or occupational disease law of any state listed in Item 3.A of the Information Page.
Which one of the following statements is correct with respect to experience rating of workers compensation insurance? Select one: A. In all states, the minimum annual premium required to qualify for experience rating is $50,000. B. The past period used in experience rating is usually the single year prior to policy inception. C. The experience rating computation produces an experience modification, or mod, which serves as a rate multiplier. D. The insured receives either a refund or a bill for an additional premium after the end of the period, depending on the losses during that period.
C. The experience rating computation produces an experience modification, or mod, which serves as a rate multiplier.
Upsilon Incorporated is a furniture manufacturer. The company's management is casual about complying with health and safety regulations and the housekeeping and maintenance at the plant are poor. When a makeshift stairway at its plant collapses, two of Upsilon's employees are killed. Although the company is insured under a Workers Compensation and Employers Liability Insurance (WC&EL) Policy, the plant manager refuses to submit a loss report to Upsilon's insurer because he is concerned that the company's workers compensation premiums will increase. The deceased workers' dependents contact Upsilon's WC&EL insurer directly. Which one of the following best describes how the insurer should respond? Select one: A. The insurer should deny coverage due to Upsilon's lack of compliance with health and safety regulations. B. The insurer should advise the dependents that their only recourse would be to launch an employers liability suit. C. The insurer should pay applicable death benefits to the employee's dependents. D. The insurer has no obligation to the dependents because the policy is a contract between Upsilon and the insurer.
C. The insurer should pay applicable death benefits to the employee's dependents.
With regard to workers compensation, which one of the following statements about states with monopolistic state funds is true? Select one: A. They sell workers compensation insurance in competition with private insurers in the state. B. They provide workers compensation insurance through assigned risk plans within the state. C. They do not allow private insurers to be licensed to write workers compensation coverage in that state. D. They usually provide both workers compensation and employers liability coverage within the state.
C. They do not allow private insurers to be licensed to write workers compensation coverage in that state.
A fundamental difference between auto insurance and aircraft insurance is that Select one: A. Auto policies are divided into liability and physical damage sections, and aircraft insurance requires separate policies for each coverage. B. Commercial auto policies have no coverage that is comparable to aircraft hull coverage. C. 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. D. Auto policies include medical payments coverage, but with aircraft policies, no medical payments coverage exists, so insurers must determine liability for payment of any aircraft injury claims.
C. 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.
Gertrude Anderson and Associates (GAA), an accounting firm, is busy preparing year-end reports for its many clients. To help deal with the peak in workload, the firm contacts Accounting Temporaries, a temporary placement agency. The agency provides three experienced bookkeepers for a period of three weeks. While working at GAA, one of the temporary employees injures her back picking up a heavy box of documents. Which one of the following best describes how her workers compensation claim would be handled? Select one: A. There would probably be no coverage for the worker's injury because temporary workers are exempt from workers compensation coverage in most states. B. GAA's workers compensation insurer would cover the claim because the injury arose out of and in the course of the worker's employment there. C. A separate workers compensation policy would have been written in the names of both Accounting Temporaries and GAA, and that policy would cover the claim. D. Accounting Temporaries workers compensation insurer would cover the claim because a temporary employee is an employee of the providing firm, not the firm using his or her services.
D. Accounting Temporaries workers compensation insurer would cover the claim because a temporary employee is an employee of the providing firm, not the firm using his or her services.
Which one of the following is a reason an insured might reimburse its workers compensation and employers liability insurer? Select one: A. Court taxes are assessed against the insured in a lawsuit. B. An employee injury occurs in a state with higher mandatory workers compensation limits. C. An insurer must spend additional costs to investigate a claim. D. An illegally employed individual suffered an occupational injury.
D. An illegally employed individual suffered an occupational injury.
Which one of the following statements is correct with respect to the liability coverage provided by the businessowners policy (BOP)? Select one: A. Personal and advertising injury liability coverage and medical payments coverage may be added to the BOP by endorsement. B. Hired and nonowned auto liability coverage is not available with a BOP. C. BOP liability coverage is limited to premises and operations, products and completed operations, and liability assumed under contract. D. BOP liability coverage closely resembles the coverage provided by the occurrence version of the CGL coverage form.
D. BOP liability coverage closely resembles the coverage provided by the occurrence version of the CGL coverage form.
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? Select one: A. Failure to act in the manner of a "reasonable person" when performing skills related to the chosen profession B. Advertising injury due to failure to render professional services C. Gross and wanton negligence on the part of the professional D. Failure to use the degree of skill expected of a person in a particular field
D. Failure to use the degree of skill expected of a person in a particular field
Which one of the following best explains why the premium discount plan for workers compensation insurance provides an increasing credit for premiums in excess of a certain minimum? Select one: A. Larger workers compensation insurance accounts typically generate better loss experience than small accounts. B. Competitive pressures often result in significant premium discounts even for average or below average risks. C. In some states, insurers are permitted to apply a rate deviation credit to the premium as calculated by the rating manual. D. Many of the expenses of providing workers compensation insurance do not increase proportionately with increases in premium.
D. Many of the expenses of providing workers compensation insurance do not increase proportionately with increases in premium.
Workers compensation statutes require employers to demonstrate financial ability to pay any claims that might arise. Possible methods for meeting this obligation include which one of the following? Select one: A. Adding coverage to a Commercial General Liability Coverage Form B. Adding coverage to a Business Auto Coverage Form C. Purchasing voluntary insurance from a federal plan D. Obtain coverage from an assigned risk plan
D. Obtain coverage from an assigned risk plan
Part One of the Workers Compensation and Employers Liability Insurance Policy provides that the insured will reimburse the insurer for which one of the following? Select one: A. Common-law liability for occupational injury to employees. B. Any benefits paid even though the employer has failed to comply with policy conditions. C. Benefits paid to employees with pre-existing injuries. D. Penalties required under a workers compensation law because of the employer's willful misconduct.
D. Penalties required under a workers compensation law because of the employer's willful misconduct.
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? Select one: A. Network security liability B. Electronic media liability C. Privacy liability D. Technology errors and omissions liability
D. Technology errors and omissions liability
The workers compensation policy contains uniform provisions even though benefits vary by state. It is possible to use a single policy to provide varying benefits by state for which one of the following reasons? Select one: A. The extraterritorial provisions cover the differences in benefits. B. The specific benefits payable in each state are outlined in separate schedules attached to the policy. C. Part Two—Employers Liability Insurance covers the differences in benefits. D. The applicable workers compensation laws are incorporated by reference in the policy.
D. The applicable workers compensation laws are incorporated by reference in the policy.
Which one of the following statements is correct with regard to the United States Longshore and Harbor Workers Compensation Act (LHWCA)? Select one: A. Insurers are required by law to provide LHWCA coverage for insureds that request it. B. An employer cannot be simultaneously subject to both the LHWCA and the state workers compensation law. C. The LHWCA coverage endorsement automatically extends coverage to the United States, its territories and possessions, and Canada. D. Workers compensation and LHWCA exposures must be covered and rated separately.
D. Workers compensation and LHWCA exposures must be covered and rated separately.
Which one of the following statements is correct with respect to the exclusions of an umbrella liability insurance policy? Select one: A. There is no exclusions section of an umbrella policy, since the insuring agreement is written to avoid the need for any. B. The exclusions of an umbrella policy always match those on the underlying policies to avoid any related problems. C. An umbrella policy can use exclusions to broaden or narrow exclusions found in the underlying policies. D. The exclusions of an umbrella policy are written so they never invoke the drop-down feature.
C. An umbrella policy can use exclusions to broaden or narrow exclusions found in the underlying policies.
The self-insured retention in an umbrella liability policy applies under which one of the following circumstances? Select one: A. A claim covered by the umbrella liability policy is covered by the primary policy. B. An umbrella liability policy is dropping down to pay a claim because the primary policy's aggregate limit has been exhausted. C. An underlying policy does not cover the claim. D. A claim exceeds the limits of the umbrella liability policy.
C. An underlying policy does not cover the claim.
An environmental insurance policy that covers the loss exposures of a contractor performing environmental remediation services on contaminated sites is a(n) Select one: A. Site-specific environmental impairment liability policy. B. Remediation stop-loss policy. C. Contractors pollution liability policy. D. Environmental professional errors and omissions (E&O) liability policy.
C. Contractors pollution liability policy.
If the premium applicable to a particular workers compensation insured is increased or decreased for a future period based on that insured's loss experience for a period in the recent past, the policy uses which one of the following types of rating plans? Select one: A. Premium discount rating B. Retrospective rating C. Experience rating D. Schedule rating
C. Experience rating
Purchasing workers compensation insurance from a private insurer is one way employers demonstrate their ability to pay their financial obligations to injured workers. Which one of the following is another acceptable method of meeting this obligation? Select one: A. Using a Comprehensive General Liability Coverage Form B. Purchasing insurance from a federal fund C. Meeting state requirements to qualify as a self-insurer D. Keeping a reserve of easily accessible funds
C. Meeting state requirements to qualify as a self-insurer
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 Select one: A. A notification or remediation policy. B. An electronic data protection policy. C. A business interruption policy. D. A cyber crime policy.
D. A cyber crime policy.
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? Select one: A. Cyber extortion B. Network security liability C. Electronic data protection D. Cyber crime
D. Cyber crime
Professional liability insurance is usually written on Select one: A. Standard forms. B. A blanket basis. C. Forms required by the NAIC. D. Forms independently developed by individual insurers.
D. Forms independently developed by individual insurers.
Employers liability insurance covers an employer against which one of the following? Select one: A. Liability for damages arising out of its employment practices B. Suits alleging negligence on the part of its employees C. Liability for damage to employees' property caused by its negligence D. Its liability for an employee's occupational injury or disease that is not covered by a workers compensation statute
D. Its liability for an employee's occupational injury or disease that is not covered by a workers compensation statute
