AINS Quiz Questions
A manufacturing company is covered under an ISO Commercial Crime Coverage Form. The policy includes a $100,000 coverage limit for employee theft. A group of three employees embezzled $100,000 from the company three times in a series of acts. What amount will the insurer reimburse the company for this loss?
$100,000 *All 3 acts constitute a single occurrence
The limit of insurance for each one of these insuring agreements is $100,000 and the deductible per occurrence for each one of these insuring agreements is $1,000. The policy year is 20X1. During 20x1, ABC performed an inventory calculation and determined that the actual physical inventory on hand was $105,000 less than what the company's records indicated. ABC was able to prove that the loss was a result of employee theft and it was covered under the Employee Theft insuring agreement of ABC's Commercial Crime Coverage Form. How much will the insurer pay for this loss?
$100,000 Limit of insurance
Jim's Barber Shop has a Building and Personal Property Coverage Form (BPP) with a $100,000 limit on the building and a $1,000 deductible. The building suffers a $15,000 fire loss. Which one of the following amounts will Jim's insurer pay?
$14,000
The insured is a sole proprietor who owns a business auto insured by a Business Auto Coverage Form with a personal injury protection (PIP) endorsement. While driving the car, she was in an accident in which the following losses were incurred: $2,000 housekeeper for one month $3,000 physical therapy and rehabilitation $4,000 damage to the covered auto $10,000 hospital bills $20,000 pain and suffering Assuming adequate limits and that no other insurance policies apply, how much can she recover pursuant to the PIP endorsement?
$15,000 *Includes: - housekeeper - PT and rehab - hospital bills *NOT included: - pain and suffering - auto physical damage
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?
$275,000
Zelda has an automobile accident that is covered by a Business Auto Coverage Form. The accident results in a pollution expense due to gasoline spilling from the covered auto, as well as property damage and bodily injury to a third party. The cost for the bodily injury is $1,000 along with $2,000 property damage. The pollution clean-up cost is $5,000. Ignoring any deductible that may apply, how much will Zelda's insurer pay for these losses?
$8,000 *All losses are covered
Which one of the following claims would be covered under Coverage B—Personal and Advertising Injury Liability of the Commercial General Liability Coverage Form (CGL)?
A store manager accuses a young man of shoplifting, apprehends him, and locks him in a storage room until the police arrive. When it is discovered that the young man is innocent, he files a claim against the store
Fiduciary liability insurance provides coverage for negligence involved in which one of the following? Select one: A. Investment decisions in retirement plans. B. Violations of licensee duties. C. Termination of employees. D. Management of the corporation.
A. Investment decisions in retirement plans
The Commercial General Liability (CGL) Coverage Form defines the term "occurrence" as
An accident, including continuous or repeated exposure to substantially the same general harmful conditions
Nonfiled classes of inland marine business...
Are characterized by a relatively small number of potential insured, diverse loss exposures, or both
In an unendorsed Business Income (Without Extra Expense) Coverage Form, how is coverage for necessary expenses incurred by the named insured to reduce business income loss provided?
As an additional coverage
Which one of the following statements about umbrella liability insurance is true? Select one: A. It becomes void when the primary aggregate limits are exhausted. B. It may contain exclusions more restrictive than those found in the primary policies. C. It is normally written as excess insurance only above a comprehensive general liability policy. D. It fills the gaps in primary insurance rather than providing additional coverage.
B. It may contain exclusions more restrictive than those found in the primary policies *Umbrella ins provides additional limits above the insured's primary policies
Which one of the following statements about the appraisal condition in Section IV of the Business Auto Coverage Form (BACF) is true? Select one: A. It applies to both liability and physical damage losses. B. It may lead to a binding settlement, even if the appraisers for the named insured and the insurer cannot agree. C. It applies primarily when there are disagreements about whether there is coverage for a particular loss D. It provides for the appraisal costs to be paid as a supplementary payment that has no effect on policy limits.
B. It may lead to a binding settlement, even if the appraisers for the named insured and the insurer cannot agree
Which one of the following losses would be covered by the Auto Medical Payments Coverage endorsement to the business auto policy? Select one: A. The insured is injured when his pickup falls on him as he is changing a tire. B. The insured is injured when he trips and falls exiting a covered auto. C. The insured is struck by a bicyclist while walking alongside the road. D. An employee of the insured is struck by an auto while driving one of the insured's autos.
B. The insured in injured when he trips and falls exiting a covered auto
Which one of the following statements is correct with respect to the liability coverage provided by the businessowners policy (BOP)?
BOP liability coverage closely resembles the coverage provided by the occurrence version of the CGL coverage form
Why are some of the "property not covered" exclusions in the Building and Personal Property Coverage Form (BPP) not included in the BOP?
Because some of the "property not covered" exclusions apply to types of businesses that are not eligible for a BOP
What type of bond guarantees that a construction contractor will enter into a contract?
Bid bond
To which one of these does the Coverage A Pollution exclusion not apply?
Bodily injury cause by smoke from a hostile fire
Which one of the following statements is correct with respect to the liability coverage available under businessowners policies (BOPs)?
Certain liability coverage options are not part of most BOP programs because the insureds that need them generally do not qualify for BOPs
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 civil authority?
Civil Authority
Insurers that offer professional liability and management liability policies usually have a claims-made trigger. The reason for this is which one of the following?
Claims are sometimes not settled until long after the policy has expired
Part Two of the Workers Compensation and Employers Liability Policy (WC&EL) is the employers liability portion of the policy. Under this portion of the policy the insurer would pay for
Claims that are not covered by a work comp statute
Which one of the filed classes of inland marine insurance would be used to cover the musical instruments of a professional musician?
Commercial Articles Coverage Form
Which one of the following inland marine forms is designed to cover photographic equipment and musical instruments used commercially by photographers, motion picture producers, professional musicians, and others?
Commercial Articles Coverage Form
Which one of the following contains an insuring agreement, delineation of the property covered and not covered, and additional coverages and coverage extensions?
Commercial property coverage forms
A commercial package policy (CPP) component that covers buildings and business personal property is referred to as a
Commercial property coverage part
Fiduciary liability insurance covers which one of the following?
Fiduciaries of employee benefit plans for breach of fiduciary duties involving discretionary judgments
Which one of the following Commercial Crime Coverage Form insuring agreements provides coverage on a full worldwide basis?
Forgery or alteration
Lily's is a retail clothing store with five locations. Several of the locations have had claims against them covered under the personal and advertising injury coverage of the CGL. While none of these claims have been very large, the frequency has become a concern. Lily's also has a frequency claims for injuries in the stores. Which one of the following limits of Lily's CGL policy may be in danger of being exhausted by these types of claims?
General aggregate limit
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)
General exclusion applying to all crime insuring agreements
Joe Harris formed a limited liability corporation (LLC) and purchased liability coverage under a Commercial General Liability (CGL) Coverage Form in the name of the LLC. Joe is the sole controlling member. In a casual conversation with a neighbor, Joe made a slanderous remark regarding a storeowner, who upon finding out about the remark, sued Joe for slander. Joe was acting as a private citizen rather than as a member of the LLC. Which one of the following statements explains whether the CGL policy would or would not cover Joe for this claim?
He would not be covered by the CGL Coverage Form because Joe was not conducting the business of the LLC when the incident occurred
What ocean marine insurance policy or clause covers the damage to an insured's ship if the insured ship collides with an object in the harbor?
Hull insurance policy
What ocean marine insurance policy or clause, if any, covers damage to the insured vessel caused by serious misconduct by the members of the crew contrary to the owner's interest?
Hull insurance policy
Which one of the following statements is correct with respect to ocean marine hull insurance?
Hull policies typically include earthquake coverage for the possibility that a vessel might be damaged by earthquake while docked
Which one of the following statements about employers liability coverage is true? Select one: A. It includes defense costs within the applicable policy limits. B. It does not cover punitive damages for injury or death of any illegally employed person. C. It includes liability assumed under contract. D. It does not cover third-party-over claims.
It does not cover punitive damages for injury or death of any illegally employed person
Which one of the following statements is correct with respect to the Causes of Loss-Basic Form?
It excludes loss caused by earth movement, other than by sinkhole collapse
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?
It states that the total payment under all applicable coverage parts is limited to the actual amount of the loss
Mike, a general contractor, is constructing a large warehouse. He hires Dave to do the electrical work. Dave agrees to complete the work within two weeks, and he uses his own ladder and tools. While working at the site, Dave fails to secure his ladder. The ladder collapses and Dave falls, injuring his back. Which one of the following statements is correct with regard to Mike's Workers Compensation and Employers Liability Insurance (WC&EL) Policy?
It will NOT cover Dave because Dave is an independent contractor
ABC Brokerage Company (ABC) is covered by an Insurance Services Office (ISO) Commercial Crime Coverage Form written on a loss sustained basis. The policy was written to replace an identical policy with another insurer that had expired, and there was no lapse in coverage. ABC recently discovered a covered loss that occurred during the prior insurer's policy term. Which one of the following would be true for the current insurer?
It will pay the lesser of what would be covered under the present or the prior insurance
Entities eligible for financial institution bonds are...
Not eligible for the ISO Commercial Crime Forms
The basic types of ocean marine insurance include which one of the following?
Protection and indemnity (P&I) insurance
Which one of the following is used when determining a vehicle's primary factor for commercial auto insurance? Select one: A. Gross revenue for the auto business B. Radius class C. Payroll for covered drivers D. Driver safety record
Radius class *The primary factors are radius class, size class, and business use
Which one of the following statements is correct with respect to deductibles used in commercial property policies?
Rates are reduced in return for the insured's acceptance of a higher deductible
The Auto Medical Payments Coverage endorsement to the business auto policy provides coverage for
Reasonable and necessary medical and funeral expenses incurred by a person injured while occupying a covered auto
Which one of these offenses would not be considered a personal and advertising injury under Coverage B of the Commercial General Liability Coverage Form? Select one: A. An organization's unauthorized use of another's advertising idea in an advertisement B. Refusing to hire a qualified job applicant because of his ethnicity C. Malicious prosecution D. Wrongful eviction from a dwelling or premises that a person occupies
Refusing to hire a qualified job applicant because of his ethnicity
Workers compensation benefits include which one of the following?
Rehabilitation benefits
An excess policy that applies to a loss that exceeds the underlying policy limits only if the loss is specifically covered under the terms of the excess policy is known as a
Self-contained policy *It is subject to only its own terms, so the loss must be specifically covered by the policy to apply
The Separation of Insureds condition states that the insurance provided by the policy applies in which one of the following ways?
Separately to each person insured
Which one of the following symbols in the Business Auto Coverage Form (BACF) indicates personal injury protection (PIP) coverage is provided for those autos that are required by law to have it? Select one: A. Symbol 3—Owned Private Passenger Autos Only B. Symbol 4—Owned Autos Other Than Private Passenger Autos C. Symbol 5—Owned Autos Subject to No-Fault D. Symbol 6—Owned Autos Subject to a Compulsory Uninsured Motorists Law
Symbol 5 - Owned Autos Subject to No-Fault
Which one of the following best describes how forms and rates for filed classes of inland marine insurance are filed?
The Insurance Services Office (ISO) and the American Association of Insurance Services (AAIS) file forms and rates for many of these classes of behalf of their member companies
Symbol 6 is often used for the uninsured motorists (UM) coverage of the Business Auto Coverage Form. This means which one of the following?
The UM coverage is provided only for autos that are required by law to have UM coverage
Which one of the following losses would be covered under the commercial property policy Causes of Loss—Broad Form additional coverage for Collapse?
The abrupt falling down of part of the insured's building
Which one of the following statements about provisions in Part One of the Workers Compensation and Employers Liability Insurance Policy is true?
The accident causing the injury must occur during the policy period
The Money Orders and Counterfeit Money insuring agreement would cover loss from a clerk's acceptance of a counterfeit $100 bill if
The clerk accepted the counterfeit bill in good faith in exchange for money
The carrier that is prevented by an accident from delivering the cargo aboard its ship may face an exposure called loss of freight, which is
The compensation the carrier receives for transporting cargo
All sums paid under the medical expense limit of the Commercial General Liability (CGL) Coverage Form are subject to
The each occurrence limit
Which one of the following statements is true regarding the each occurrence limit of a CGL policy?
The each occurrence limit is the most the insurer will pay for any one occurrence, regardless of the number of person insured
Under the Commercial General Liability (CGL) Coverage Form, the named insured's employees and volunteer workers are insureds for liability claims arising from which one of the following?
The employees' or volunteer workers' duties such, subject to certain exceptions
Which one of the following types of commercial property would most likely be insured using a "nonfiled" class of inland marine business?
The equipment used by a contractor
Business income insurance covers which one of the following types of losses that could result from a fire?
The extra expenses for renting a temporary office
According to the Common Policy Conditions used with the ISO Commercial Package Policy, if a cancellation results in a return payment, the refund would be sent to
The first named insured
Who of the following can cancel the ISO Commercial Package Policy by mailing or delivering written notice of cancellation?
The first named insured on the declarations page
Which one of the following does Part Two of the Workers Compensation and Employers Liability Policy require coverage with respect to covered injuries?
The injury must arise out of employment necessary or incidental to the insured's work in a state or territory listed in the policy
Which one of the following losses would be covered by the Business Auto Coverage Form (BACF)? A. The insured has to pay an employee's medical bills because of an accident involving one of the insured's vehicles. B. Computers the insured has delivered are damaged by rain after the insured leaves them in an open area following delivery. C. The insured has agreed to pay for liability losses caused by the insured's negligence that a shipper may incur while the insured is hauling goods for the shipper. D. Part of a load of plasma TV screens is damaged when the insured's truck stops suddenly and the TVs slide in the back of the truck.
The insured has agreed to pay for liability losses caused by the insured's negligence that a shipper may incur while the insured is hauling goods for the shipper
The Representations condition states that the named insured, by accepting the policy, agrees to all of the following, EXCEPT:
The insured has represented that they will pay premiums on time
Which one of the following statements is correct with respect to the Recovered Property condition of the Building and Personal Property Coverage Form (BPP)?
The insured has the option of taking the recovered property and refunding the loss payment to the insurer
Justin 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 Justin's building and the strong winds tore most of the shingles from the building's roof and shattered multiple windows on the 5th floor of the building. The rain from the storm caused water to enter Justin's building through the foundation, which caused significant damage to the first and second floors. Justin had equipment stored in closets on the first and second floors which were rendered inoperable due to the water damage. The total amount of damages was $40,000 for the windows and shingles; $110,000 for water damage to the first and second floors; $9,000 for the equipment on the second floor; and $7,000 for the equipment on the first floor.How much will Justin's insurer pay for damage to the first and second floors, including the equipment?
The losses are not covered - due to the water exclusion
The named insured under a Commercial General Liability (CGL) Coverage Form dies, and Sarah becomes a temporary custodian of the named insured's property. The coverage for Sarah under the deceased named insured's CGL form applies only to liability arising out of
The maintenance or use of the named insured's property
Which one of the following is the primary reason that loss prevention is a key goal for both the equipment breakdown insurer and the insured?
The potentially catastrophic effects of equipment breakdown
A payment bond is a contract bond guaranteeing which one of the following?
The project will be free of liens
Which of the following is the coinsurance basis under a Business Income Coverage Form (BIC)?
The projected net income and all operating expenses except for certain deductible items
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
If a state is designated in Item 3.C of the Workers Compensation and Employers Liability Insurance Policy Information Page, and the insured begins operations in that state, the policy provides which one of the following?
The same coverage as if that state were listed in Item 3.A
The seasonal increase provision, commonly included in businessowners policies, functions somewhat like the peak season endorsement used with the commercial property coverage part. However, the BOP seasonal increase provision differs from the peak season endorsement in that
The seasonal increase provision applies automatically
Which one of the following best describes the type of loss covered by the Spoilage Damage insuring agreement of the ISO Equipment Breakdown Protection Coverage Form?
The spoilage of perishable goods resulting from breakdown of covered equipment
Under the Who Is An Insured section of the Commercial General Liability (CLG) Coverage Form, all of these are considered "Other persons and organizations," EXCEPT:
The spouse of an individual named insured **This is under the "Named Insured and Related Parties"
For which one of these does the Coverage A Mobile Equipment exclusion eliminate coverage?
The transportation of mobile equipment by an auto that is owned by an insured
Gawne Manufacturing (Gawne) owns a manufacturing facility that is insured under an unendorsed Commercial General Liability (CGL) Coverage Form. Gawne also has a commercial auto policy. An unregistered truck, not subject to a compulsory or financial responsibility law, is used solely on the premises to move supplies around the facility. Recently, the truck collided with a customer's automobile, which was parked on the premises. Which one of the following statements is true with regard to Gawne's truck?
The truck is considered mobile equipment and the claim would be covered under Gawne's CGL policy
Generally, more than one causes of loss form is used in a commercial property coverage part for which one of the following reasons?
The underwriter is reluctant to provide the broader coverages for certain types of property
Which one of the following statements is correct with regard to the Causes of Loss—Broad Form?
The weight of snow, ice, or sleet cause of loss does not cover damage to personal property in the open
Which one of the following is one of the seven insuring agreements of the Commercial Crime Coverage Form?
Theft committed by any employee
Which one of these would not be covered under the Inside the Premises—Theft of Money and Securities insuring agreement?
Theft committed through a remote computer *An observed theft would still be covered
With regard to workers compensation, which one of the following statements about states with monopolistic state funds is true?
They do not allow private insurers to be licensed to write work comp coverage in that state
Before workers compensation statutes were enacted, what was the remedy for employees with work-related injuries?
They had to establish that the employer was at fault to recover damages
Which one of the following is true with regard to Coverage E—Scheduled Farm Personal Property, Coverage F—Unscheduled Farm Personal Property, and Coverage G—Barns, Outbuildings and Other Farm Structures of the ISO farm program?
They provide coverage for true farming exposures
Which one of the following best explains why, in the 1900s, marine insurers were willing to provide broad perils or "all-risks" coverage on the types of property that fire insurers avoided covering?
They were accustomed to covering ocean cargoes of all types against many different causes of loss, including theft, while the property was either at sea or ashore
There must be at least how many coverage parts in an ISO Commercial Package Policy (CPP)?
Two - it's a policy that covers two or more lines of business
Which one of the following is a type of excess insurance that is broader than ordinary excess liability insurance?
Umbrella policy
A federal workers compensation statute eliminates the right of most maritime workers (other than crew members of vessels) to sue their employers and in return requires such employers to provide injured or ill workers with benefits like those provided by state workers compensation statutes. The name of this statute is the
United State Longshore and Habor Workers' Comp Act (LHWCA)
If the insured has operations in a particular state on the effective date of the policy but that state is not listed in Item 3.A, what coverage is provided in that state?
Unless the info is reported to the insurer within 30 days, no coverage will apply for that state
Which one of the following statements is correct with respect to Part One of the Workers Compensation and Employers Liability Policy? Select one: A. An employer's failure to comply with health and safety laws and regulations results in immediate suspension of coverage. B. Dependents of a deceased employee have no right of action against the insurer. C. When the insurer pays benefits, any right of recovery against a third party becomes the right of the insurer. D. If the employer fails to comply with policy requirements, the insurer is not obliged to pay benefits.
When the insurer pays benefits, any right of recovery against a third party becomes the right of the insurer
Multiple Peril Crop Insurance (MPCI), offered through the Federal Crop Insurance Corporation (FCIC), covers unexpected crop production losses due to
Windstorm
Which one of the following statements is correct with regard to the United States Longshore and Harbor Workers Compensation Act (LHWCA)?
Work comp and LHWCA exposures must be covered and rated separately
The methodology for rating trucks, tractors, and trailers depends on whether the vehicle must be
Zone rated or not
Agreed Value optional coverage is often elected by risk averse firms in order to...
Alleviate the risk of not complying with the Coinsurance condition
Which one of the following statements is correct regarding the Additional Covered Property endorsement to the Building and Personal Property Coverage Form, also referred to as the BPP?
Almost all types of property that are excluded in the BPP can be insured
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
Which one of these is not an element of the Commercial Crime Coverage Form's definition of occurrence?
An act committed by only one person
A self-insured retention (SIR) in an umbrella liability policy is which one of the following?
An amount that is deducted from claims that are payable under an umbrella liability policy and that are NOT covered at all by any primary policy
Which one of the following would be covered under the filed inland marine Valuable Papers and Records Coverage Form?
An architect's blueprints and plans
Which one of the following would be covered under Part Two of the Workers Compensation and Employers Liability Insurance Policy? Select one: A. An employee is injured in an unlisted state where the employer just opened a new store. B. A member suffers from anxiety after being harassed by fellow employees. C. An employee is exposed to disease during the policy period but symptoms don't appear until after the employee is fired. D. A number of a fishing boat's crew is injured while performing routine maintenance aboard the ship.
An employee is exposed to disease during the policy period but symptoms don't appear until after the employee is fired
Which one of the following types of property can be insured under Coverage E—Scheduled Farm Personal Property of the ISO Farm Property—Farm Personal Property Coverage Form?
Farm products, materials, and supplies
On January 1, an insurance company decides to increase its supplementary payments for lost earnings under a coverage extension for liability coverage from $250 a day to $500 a day, without increasing premiums. The change is to be effective on February 1. Allen's Business Auto Coverage Form (BACF) renews on May 1. The change will affect Allen's policy on
February 1 *When the change is effective
Which one of the following statements is true with regard to workers compensation statutes? Select one: A. A corporation that uses independent contractors, leased employees and temporary employees must provide workers compensation for all of them. B. Federal government workers are excluded from workers compensation because they are covered under alternate plans. C. Rehabilitation benefits are not required benefits by the laws of most states. D. The percentage of wage loss payable as a death benefit is a flat amount for every state regardless of the number of dependents.
Federal government workers are excluded from work comp because they are covered under alternate plans
These are types of indirect losses for which coverage under the Insurance Services Office, Inc. (ISO) Commercial Crime Coverage Form is eliminated by the Indirect Loss exclusion, EXCEPT:
Fees, costs, and expenses related to any legal action *The types of indirect losses that are covered include: - payment of damages for which the insured in legally liable - expenses incurred in establishing either the existence or the amount of loss under the policy - business income loss
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?
Financial Institution Bond
Which one of the following is a policy that covers the crime loss exposures of financial institutions such as banks, savings and loan institutions, and insurance companies?
Financial institution bond
The "damage to premises rented to you" limit is the most the insurer will pay under Coverage A for damage to any one premises rented to the named insured or temporarily occupied by the named insured due to which one of the following causes?
Fire
In the early 1900s, U.S. insurers were restricted to writing one of three general kinds of insurance. Which one of the following best describes those three kinds?
Fire, casualty, or marine
Which one of the following expenses incurred by the insured without the consent of the insurer would be covered under a Commercial General Liability (CGL) Coverage Form?
First aid expenses incurred at the time of the occurrence
Which one of the following filed inland marine policies covers merchandise that is being held for sale and can be used to cover the dealer's interest and/or a lender's interest?
Floor Plan Coverage Form
The businessowners policy (BOP) offers a major benefit for smaller insureds because
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 describes a coverage trigger applicable to Part Two—Employers Liability Insurance?
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 statements is correct with respect to ocean marine loss exposures?
For cargo owners, the possibility of loss to the cargo exists either on board a vessel or on land between the vessel and the cargo's point of origin or destination
Which of the following statements is correct? (Has to do with rating and fires)
For rating purposes, external fire protection is graded on a scale of 1 to 10, indicating the availability of fire-fighting personnel and equipment
Which one of the following exclusions applies to the Computer and Funds Transfer Fraud insuring agreement?
Fraudulent instructions
Davison Inc. is a retail store that sells home appliances. A customer in the store is burned while trying out the features on a new toaster oven. The amount paid for the customer's injury would be subject to which one of the following limits of Davison's CGL policy?
General aggregate limit
Under a Commercial General Liability (CGL) policy, if an insurer opts not to renew the policy, the insurer must do which one of the following?
Give at least 30 days written notice of non-renewal to the first named insured before the expiration date of the policy
What do you call the one classification that best describes an insured's activities? - Governing classification - Broad exception classification - Standard exception classification - Not otherwise classified classification
Governing classification
What do you call the one classification that best describes the insured's activities? - Governing classification - Broad exception classification - Standard exception classification - Not otherwise classified classification
Governing classification
Commercial general liability (CGL) coverage for mercantile businesses is rated using a premium base of
Gross sales
The premium base for commercial general liability (CGL) policies for retail or mercantile stores is usually
Gross sales
Rates for the traditional nonfiled classes of inland marine insurance
Have become standardized to an extent for policies that are widely written
Which one of the following statements about Part One of the Workers Compensation and Employers Liability Policy is true? Select one: A. It shows dollar limits for benefits. B. It does not provide for litigation costs. C. It contains no exclusions. D. It does not provide for expenses for investigating claims.
It contains no exclusions
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 statements is correct with respect to large deductible workers compensation plans?
It allows the insured to self-insure most of its work comp claims without establishing a qualifying self-insurance plan
Which one of the following best describes the effect of the United States Longshore and Harbor Workers' Compensation Act (LHWCA) Endorsement?
It amends the definition of work comp law to include the LHWCA with respect to operations in any state designated in the endorsement's schedule
Which one of the following is true regarding the ISO Commercial Crime Coverage Form Joint Insured condition?
It appoints the first named insured as an agent for all insureds
Which one of the following best describes the other states insurance provided in Part Three of the Workers Compensation and Employers Liability Insurance Policy?
It automatically extend work comp and employers liability coverage to the insured's operations in any state listed in Item 3.C of the Info Page
Which one of the following statements about Inflation Guard optional coverage of the Building and Personal Property Coverage Form (BPP) is true?
It automatically increases the limit of insurance by the % of annual increase shown in the declarations
The Coverage B—Personal and Advertising Injury Liability of the Commercial General Liability (CGL) Coverage Form parallels the Coverage A insuring agreement, but personal and advertising injury applies to an
OFFENSE arising out of the named insured's business
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 55 pounds
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?
Obtain coverage from an assigned risk plan
The type of activities conducted inside a building, some of which are riskier than others, is referred to as the...
Occupancy
The key in determining the maximum amount an insurer is obligated to pay for a covered crime loss under the ISO Commercial Crime Coverage Form is the policy's definition of
Occurrence
Morgan Company is involved in a lawsuit that is covered under its unendorsed Commercial General Liability (CGL) Coverage Form. Which one of the following would be covered under the supplementary payments section of the CGL policy?
Post judgement interest awarded by the judge
Which one of the following requirements must be met before an employer may operate a "qualified" self-insurance workers compensation plan?
Posting a surety bond
What 3 exclusions apply only to the Employee Theft insuring agreement?
1. Inventory shortages 2. Trading 3. Warehouse receipts
Under a business income form, if the Maximum Period of Indemnity coverage option is selected, it limits loss payment to the lesser of the policy limit or the amount of loss sustained during the...
120 days immediately following the beginning of the period of restoration
Under the Legal Action Against Us condition of the Commercial Property Conditions Form, if the insured wishes to bring legal action against the insurer, he or she must do so within which one of the following timeframes?
2 years after the date on which the direct physical loss occurred
An insured has a Business Income (and Extra Expense) Coverage Form (BIC) with an Extended Period of Indemnity coverage option for 180 days. Following a covered loss, the period of restoration is 120 days. It takes an additional 90 days for revenue to return to normal. Ignoring waiting periods, for what period would the BIC cover the business income loss?
210 days
Which one of these would not be covered under the Inside the Premises—Robbery or Safe Burglary of Other Property insuring agreement?
Robbery committed against a watchperson working inside the insured's store
Which one of the following can be added to a builders risk policy to cover various incidental expenses that might result from a physical loss to a building project, such as additional interest, advertising expenses, or real estate taxes?
Soft cost coverage
What can be added to the inland marine builders risk form to include incidental expenses such as lease renegotiation?
Soft costs coverage - covers incidental expenses, such as additional costs and commissions incurred during lease renegotiation
Which one of the following statements is correct with respect to motor truck cargo liability insurance?
Some policies limit coverage to losses caused by specified perils
Under a Commercial General Liability (CGL) policy, an insured is found to be legally liable to pay medical expenses as well as loss of earnings to a claimant. This describes which one of the following types of damages?
Special damages
The supplementary payments section of the Commercial General Liability (CGL) Coverage Form describes which one of the following?
Specific items to be paid in addition to damages
Which one of the following describes property that can be covered under the filed inland marine Theatrical Property Coverage Form?
Stage scenery, costumes, and other similar personal property, including property of others in the insured's care, that insured has used or intends to use in a production stated in the declarations
The most widely used financial institution bond is...
Standard Form No. 24
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)?
Suspension
Smith Company owns 2 cars, 2 trucks, and 2 large dump trucks. What Business Auto Coverage Form symbols would be used to provide the best protection for Smith? A. Symbol 1 for each desired coverage indicated B. Symbol 2 for each desired coverage indicated C. Symbol 1 for liability; symbol 2 for medical payments and UM D. Symbol 2 for liability; symbol 1 for medical payments and UM
Symbol 1 for liability; symbol 2 for medical payments and uninsured motorists (UM)
Which one of the following would be the most appropriate symbol to show on the schedule of coverages and covered autos of the Business Auto Coverage Form (BACF) if the insured wants to cover only autos owned at policy inception and any others that might be acquired later?
Symbol 2 - Owned Autos Only *Covers only owned autos including those that are acquired during the policy period
Which one of the following correctly indicates the three Business Auto Coverage Form (BACF) symbols that combined are equivalent to symbol 1?
Symbol 2 - Owned Autos Only Symbol 8 - Hired Autos Only Symbol 9 - Nonowned Autos Only
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?
Temporary partial disability
Which one of the following statements is correct with respect to coinsurance used with commercial property policies?
The 80% coinsurance rate is reduced when a policy requires a higher coinsurance percentage
Fancy Dress Shop is a small specialty clothing boutique for women. Liability claims against Fancy Dress Shop would most likely arise from its
Premises and operations exposure
Upon entering a restaurant, a customer grasped a handrail that broke off, causing the customer to fall and break his wrist. This is an example of which one of the following types of commercial general liability loss?
Premises and operations liability
The Workers Compensation and Employers Liability Policy (WC&EL policy) enables employers to satisfy their state workers compensation obligations by
Providing a means to pay benefits required by state work comp statutes
Joe Motors is an automobile repair shop. Which one of the following would be the best way for the owner to maintain the goodwill of its customers?
Purchasing garagekeepers insurance
Coverage for injury arising out of the failure of goods, products, or services to conform to any statement of quality or performance made in the named insured's advertisement is covered under which CGL exclusion?
Quality or Performance of Goods—Failure to Conform to Statements
The formula used to determine the premium for a Commercial General Liability policy is
Rate x Rate Exposure = Premium
Which one of the following statements best describes how businessowners policies (BOP) coverages compare with those provided by commercial package policies?
The BOP coverages are similar to the coverages provided under commercial package policies
Which one of the following best describes the "property not covered" provisions of the businessowners policy (BOP)?
The BOP has a relatively short list of "property not covered" because the insured eligible for a BOP are generally lower-risk, more homogeneous types of businesses
The Causes of Loss—Basic Form differs from the Causes of Loss—Broad Form in which one of the following ways?
The Broad Form provides coverage for loss caused by collapse of a building or personal property resulting from specified perils.
Three employees of a hardware store damaged a tile floor while moving concrete pavers from their delivery truck to an outdoor patio shop. Many of the pavers were also damaged during the move. How will the hardware store's Business Auto Coverage Form apply to this loss?
The Business Auto Coverage Form will cover only the property liability for the damage to the tile floor *Damage to the pavers is not covered because of the care, custody, or control exclusion
The possibility of the insured incurring an uninsured extra expense loss other than the reduction in business income loss is greatly reduced by...
The Business Income (and Extra Expense) Coverage Form
Under which one of the following causes of loss forms is the burden of proof on the insurer to prove why coverage does not apply?
The Causes of Loss - Special Form
Rating methods for the filed ISO commercial inland marine forms are based on procedures established by which one of the following?
The ISO Commercial Lines Manual (CLM)
Which one of the following statements best describes the Causes of Loss—Special Form?
The Special Form provides coverage for direct physical losses other than those that are specifically excluded
Crime loss exposures of financial institutions are covered by financial institution bonds. These policies were developed by...
The Surety and Fidelity Association of America (SFAA)
An automobile dealership intended to sell an automobile for $25,999, but mistakenly advertised it for sale at a price of $15,999. The dealership honored the advertised price and sustained a loss of $10,000 by doing so. The dealership has an unendorsed Commercial General Liability policy. The dealership files a claim for this loss with its insurer. Which one of these statements best describes the insurer's probable response to the claim filed by the dealership?
The Wrong Description of Prices Coverage B exclusion applies, and there is no coverage
All of these are criteria that must be met by an accident for Coverage C to apply, EXCEPT: - The accident must occur in the CGL policy's coverage territory. - The accident must also be covered under a workers compensation policy. - The accident must occur during the CGL policy period. - The accident's associated medical expenses must be incurred and reported to the insurer within one year after the date of the accident.
The accident must also be covered under a work comp policy
Which one of the following statements is true if the Replacement Cost optional coverage of the Building and Personal Property Coverage Form (BPP) is activated?
The amount of insurance required by the Coinsurance condition is calculated by multiplying replacement cost by the coinsurance percentage
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?
The applicable work comp laws are incorporated by reference in the policy
Smith Construction Company is covered under an unendorsed Commercial General Liability (CGL) Coverage Form. While working at a job site, Smith ruptured a natural gas line causing a small fire to a neighboring retail store. The following claims have been made against Smith due to this occurrence. -Fire damage to the neighboring store -Pain and suffering claimed by the store owner -Loss of income by the store owner until repairs are made to the store -Fire damage to the backhoe owned by Smith Which one of the following statements is correct?
The backhoe is property owned and is excluded
Benefits provided by a workers compensation policy are paid based on which one of the following methods?
The benefits specified by the various state work comp laws listed in the policy Info Page
Johnson Construction Company (JCC) will be able to insure a bulldozer using its business auto coverage form (BACF) only when
The bulldozer is subject to motor vehicle or financial responsibility laws
Paris Cuisine, a fine-dining restaurant, rents space in a commercial building, which is insured by its owner. Paris Cuisine spends $50,000 on wallpaper, floor coverings, windows, and other improvements that would remain in the building if Paris Cuisine were to move out. Paris Cuisine's interest in these improvements is insured under which one of the following?
The business personal property section of Paris Cuisine's BPP
Which one of the following best describes the property covered by the filed inland marine Equipment Dealers Coverage Form?
The stock in trade of dealers that sell agricultural or construction equipment and customers' equipment in the insured's care, custody, or control
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.
Coverage is provided for which one of the following losses under the Inside The Premises—Theft of Money and Securities insuring agreement of the ISO Commercial Crime Coverage Form?
Unexplained disappearance of securities from the insured's office
One of the supplementary payments deals with reasonable expenses incurred by the insured at the insurer's request including loss of earnings. What is the amount that will be paid for loss of earnings?
Up to $250 a day
An employer that decides to purchase specific excess insurance to cover catastrophic workers compensation losses must pay losses that are which one of the following?
Up to the retention for one occurrence
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?
Three
For business income coverage, the period of restoration is the period of time that begins 72 hours after the...
Time the physical loss occurs
The personal and advertising injury limit is the most the insurer will pay under Coverage B of the CGL policy for damages arising out of personal and advertising injury
To any one person or organization
Why does an employer need employer's liability insurance in addition to workers compensation insurance and a commercial general liability (CGL) insurance policy?
To cover claims not covered by work comp statute
Which one of the following best describes the purpose of stop gap coverage when used with workers compensation insurance?
To cover employers in monopolistic fund states that do not include employers liability with their work comp policies
An employer should purchase stop gap coverage for which one of the following reasons?
To provide employers liability coverage in a state with a monopolistic state fund
Which one of the following is not an exclusion under Coverage A of the CGL coverage form? - Mobile equipment - Tort liability - Electronic data - Workers compensation and employers liability
Tort liability
Which one of the following statements is correct with respect to workers compensation premium adjustment through dividend plans? Select one: A. Under a sliding-scale dividend plan, the size of the dividend varies with the insured's own loss experience. B. Under a flat-dividend plan, all eligible policies receive the same dollar amount of dividend. C. Insurers that offer dividend plans generally make them available to marginal accounts as a loss control incentive. D. In order to offer a dividend plan, state regulation requires that the insurer guarantee the dividend will be paid annually.
Under a sliding-scale dividend plan, the size of the dividend varies with the insured's own loss experience
When an ocean marine policy is judgment rated, the judgment used is that of the
Underwriter
Which one of the following is a required component of the commercial property coverage part that specifies the perils covered?
Causes of loss form
Which one of the following explains how "occurrence" is defined in the Commercial Crime Coverage Form?
"Occurrence" includes an individual act, the combined total of all separate acts (whether or not related), or a series of acts (whether or not related).
Which one of the following does Part Three—Other States Insurance of the Workers Compensation and Employers Liability Insurance Policy require the insured to do?
"Tell us at once if you begin work in any state listed in Item 3.C of the Info Page"
Sizemore Industries has a Building and Personal Property Coverage Form (BPP) that covers four buildings at one location. Each building is insured for a separate limit of $150,000, and a $5,000 deductible applies. A windstorm causes $4,000 worth of damage to each of the buildings for a combined total of $16,000 of damage. How much will the insurer pay for Sizemore's losses to its buildings?
$0
Dan owns a bike repair shop which is located on the first floor of a 3 story building owned by Jane. Jane uses the third floor for her own business and rents out the second floor to a graphic design studio. While doing some bike repair work, Dan accidentally started a fire which spread throughout the entire building. The damage from the fire consisted of : i) damage to Dan's business personal property - $250,000; ii) damage to the bike repair shop building rented to Dan - $125,000; iii) damage to the remainder of the building - $200,000; and iv) bodily injury to a customer of the graphic design studio on the 2nd floor - $300,000. Dan's bike repair shop is insured by a Commercial General Liability policy (occurrence version) with no deductible and no endorsements. The insuer has determined that Dan is legally liable for all the damages. The policy's each occurrence limit is $1,000,000; the Damage to Premises Rented to You limit is $100,000; and the policy's general aggregate is $2,000,000. Under the Commercial General Liability policy, how much will the insurer pay for Dan's business personal property?
$0 **The CGL policy does not cover damage to property which the insured owns (ex. Dan's business personal property)
Black and White Bakery (BWB) owns a private passenger vehicle and two vans, which are insured under an unendorsed Business Auto Coverage Form (BACF) with a $500,000 limit of insurance for liability coverage. James, a BWB employee, was driving his own vehicle to meet with a customer to discuss a large wedding that BWB was catering. His vehicle is insured under a Personal Auto Policy (PAP) with a $100,000 limit of insurance for liability coverage. On his way to the meeting James went through a stop sign and struck another vehicle, seriously injuring the driver. The other driver made a claim against James and BWB for $60,000 in bodily injury to himself and damage to his vehicle. The investigation determined that James was responsible for the accident. BWB was also liable because James was driving his vehicle in the course of employment for BWB at the time of the accident. How much, if any, will BWB's auto insurer pay for this accident?
$0 *BWB won't pay anything cause the vehicle is owned by James
An insured keeps his truck in a garage. A deer gets trapped in the garage and, in an attempt to escape, climbs on top of the truck, breaking the windshield and causing several dents in the hood. The insured's Business Auto Coverage Form (BACF) provides physical damage coverage for specified causes of loss with a $100 deductible and collision with a $250 deductible. It will cost the insured $750 to replace the broken windshield and $1,200 to repair the dents. How much, if anything, will the business auto insurer pay for this loss?
$0 *Cause specified cause covered causes of loss does not include damage caused by animals
During 20X1, ABC performed an inventory calculation and determined that the actual physical inventory on hand was $102,000 less than what the company's records indicated. ABC could not establish that it had sustained a loss without the inventory calculation. How much of this loss will be covered by the Employee Theft insuring agreement of the Commercial Crime Coverage part?
$0 *Need proof
Jill, who is the named insured on an unendorsed Business Auto Coverage Form (BACF), hired Jimmy to assist in her business. Jill asked Jimmy to purchase some business supplies. While he was driving his own car, Jimmy's vehicle was hit by an uninsured motorist. Jimmy's medical expenses were $2,000, and the damage to his car was $4,000. Which one of the following correctly indicates how much Jill's auto insurer will pay Jimmy for his losses?
$0 *The employees is not insured if the covered auto is owned by the employee
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?
$1,000,000
Acme Manufacturing Company is insured under two primary Commercial General Liability (CGL) policies. Policy A has an each-occurrence limit of $1,000,000 and Policy B has an each-occurrence limit of $2,000,000. Acme submitted a claim for $2,400,000 arising from a single occurrence for an incident that is covered by both policies. How much of the claim is payable under Policy B if the loss payment is based upon contribution by equal shares?
$1,400,000 Each policy pays an equal amount, but Policy A limit exhausted at $1,000,000, so Policy B pays an extra $400,000
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?
$10,000
Dan owns a bike repair shop which is located on the first floor of a 3 story building owned by Jane. Jane uses the third floor for her own business and rents out the second floor to a graphic design studio. While doing some bike repair work, Dan accidentally started a fire which spread throughout the entire building. The damage from the fire consisted of : i) damage to Dan's business personal property - $125,000; ii) damage to the bike repair shop building rented to Dan - $250,000; iii) damage to the remainder of the building - $300,000; and iv) bodily injury to a customer of the graphic design studio on the 2nd floor - $300,000. Dan's bike repair shop is insured by a Commercial General Liability policy (occurrence version) with no deductible and no endorsements. The insurer has determined that Dan is legally liable for all the damages. The policy's each occurrence limit is $1,000,000; the Damage to Premises Rented to You limit is $100,000; and the policy's general aggregate is $2,000,000. Under the Commercial General Liability policy, how much will the insurer pay for damage to the bike repair shop building rented to Dan?
$100,000 **The coverage for damage to premises rented to you had a limit of $100,000 **Total loss is $250,000, but limit is $100,000
Ajax Corporation (Ajax) is insured under a Business Auto Coverage Form (BACF) with a $300,000 liability limit. An Ajax employee is involved in an accident while using his own truck to move property belonging to Ajax. The employee's personal auto policy has a $500,000 liability limit. If $600,000 in damages is awarded because of the accident, Ajax's BACF insurer would pay
$100,000 *Excess of the personal limit of $500,000
The limit of insurance for each one of these insuring agreements is $100,000 and the deductible per occurrence for each one of these insuring agreements is $1,000. The policy year is 20X1. During 20X1, two employees, Beth and Jim, in collusion, stole money and merchandise from ABC. Beth and Jim stole money on May 1, 20X1 and August 13, 20X1. 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 much will the insurer pay for the employee theft loss?
$100,000 Limit of insurance
Joe has a Business Auto Coverage Form with a $100,000 policy limit. In a claim that results in an $80,000 court award along with $50,000 for expenses due to defending the claim, what is the total amount that will be paid under Joe's Business Auto Coverage Form?
$130,000 *Defense costs are payable in addition to the policy limit
Allen, a sole proprietor, is crossing the street when he is struck by a passing uninsured auto. He sustains $2,500 in medical bills, $3,000 damage to the laptop he was carrying, and $1,000 in lost wages. Allen's business auto policy has $100,000 liability limit and $5,000 medical payments limit. Assuming there is no other coverage, how much will his business auto policy pay?
$2,500 *Medical payments coverage will pay for medical bills *Uninsured motorist ins would be needed to loss wages and potentially the damaged laptop
Smith Electricians has a Commercial General Liability (CGL) Coverage Form with the following limits: $500,000 general aggregate$500,000 products-completed operations aggregate$250,000 personal and advertising injury$250,000 each occurrence$100,000 damage to premises rented to you$10,000 medical expense While installing new wiring at a building under construction, Smith Electricians accidentally starts a fire that causes $400,000 damage to the building, but not to the wiring it was installing. How much will Smith's CGL insurer pay?
$250,000 **This is a covered loss, and the each occurrence limit is $250,000
Alice has the use of a company car insured with a Business Auto Coverage Form with one endorsement, for uninsured motorists (UM) coverage. Alice was in an accident while driving the car and sustained the following losses: $ 200 - housekeeper for one day $ 300 - physical therapy and rehabilitation $ 400 - lost wages $1,000 - hospital bills $2,000 - pain and suffering The other driver was at fault but had no insurance. Assuming that no other insurance applies, how much can Alice collect under her employer's UM coverage?
$3,900 *All losses are covered under uninsured motorist coverage
The insured has a Business Auto Coverage Form (BACF). When the insured's truck was destroyed in a fire, the insurer offered him $20,000 for the loss. The insured valued his loss at $35,000. Each party selected an appraiser, and the two appraisers chose an umpire. The insured's appraiser came up with a value of $30,000, while the insurer's appraiser came up with a value of $24,000. The umpire agreed with the insured's appraiser. The fee for the insured's appraiser was $750, the insurer's appraiser was $950, and the umpire was $600. The total cost to the insurance company for this loss is
$31,250 *$950 (cost of insurer's appraiser) $300 (split cost of umpire) $30,000 (decided on value)
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?
$347,500 Building and $70,000 Property
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?
$40,000
Robert, a single father of two, owns a painting business. While driving his insured van on the job, Robert is involved in a serious accident and spends several days in the hospital. Robert incurs the following expenses. $4,000 Lost wages$6,000 Payment for a nanny to watch his two children$5,000 Cost to replace the painting equipment he was hauling$30,000 Medical bills Assuming Robert has adequate limits and a typical personal injury protection (PIP) endorsement to his Business Auto Coverage Form, how much of the above will be paid by Robert's auto insurer?
$40,000 *Includes: - lost wages - payment for a nanny - medical bills *NOT included: - cost of lost equipment (would be a property damage claim)
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?
$498,000 IDK why
Which one of the following is the maximum National Flood Insurance Program (NFIP) limit per building for commercial properties?
$500,000
Robert has a Business Auto Coverage Form (BACF) with limits of liability of $500,000. A claimant is suing Robert for $1,000,000 because of an accident involving one of Robert's trucks. Before a jury can render a judgment, Robert files for bankruptcy. If the jury subsequently finds in favor of the claimant for $1,000,000, the insurer will pay
$500,000 *Insurer will still pay, but only up to its limit
A company has employee theft coverage with a $100,000 limit and a $1,000 deductible. Which one of these is the amount that the insurer would pay if one employee stole $7,000 of covered property?
$6,000
Artful Ways is covered by two primary business auto policies. Policy A has a $100,000 limit and Policy B has a $300,000 limit. The organization experienced an $80,000 covered loss. Under the other insurance provision of Artful's Business Auto Coverage Form (BACF), how much will be contributed under Policy B?
$60,000 80,000 * (3/4) = 60,000
Omega Holdings owns a building with an actual cash value of $200,000. The property is insured under a Building and Personal Property Coverage Form (BPP) with a building limit of $140,000, an 80 percent coinsurance clause, and a $1,000 deductible. The policy includes a Causes of Loss—Broad Form covering the building. The building suffers $80,000 in fire damage. Which one of the following amounts will Omega's insurer pay?
$69,000 0.80 * $200,000 = $160,000 [($140,000/$160,000) * $80,000] - $1,000 = $69,000
Argot, Inc. is insured under a CGL policy with a $2,000,000 general aggregate limit, a $1,000,000 products-completed operations aggregate limit, and a $1,000,000 each occurrence limit. After already incurring $1,350,000 in losses subject to the general aggregate, Argot is sued by a customer for an injury that occurs at Argot's main location. The lawsuit results in $800,000 in damages and $50,000 in defense costs. Applying the limits, which one of the following represents the amount of coverage available under the policy for the damages and defense costs resulting from this lawsuit?
$700,000 **Defense costs are not subject to the limits, so they are paid in full in addition to the remaining limit available under the general aggregate $650,000 limit available + $50,000 defense costs = $700,000
Dan owns a bike repair shop which is located on the first floor of a 3 story building owned by Jane. Jane uses the third floor for her own business and rents out the second floor to a graphic design studio. While doing some bike repair work, Dan accidentally started a fire which spread throughout the entire building. The damage from the fire consisted of : i) damage to Dan's business personal property - $150,000; ii) damage to the bike repair shop building rented to Dan - $250,000; iii) damage to the remainder of the building - $300,000; iv) damage to Jane's business personal property - $80,000 and v) bodily injury to a customer of the graphic design studio on the 2nd floor - $300,000. Dan's bike repair shop is insured by a Commercial General Liability policy (occurrence version) with no deductible and no endorsements. Dan's insurer has determined that Dan is legally liable for all the damages. The policy's each occurrence limit is $1,000,000; the Damage to Premises Rented to You limit is $100,000 and the policy general aggregate is $2,000,000. Under the Commercial General Liability policy, how much will the insurer pay for all damages?
$780,000 $100,000 (damage to shop building rented to Dan) + $300,000 (property damage to the remainder of the building) + $80,000 (damage to Jane's business personal property) + $300,000 (bodily injury on 2nd floor)
Dan owns a bike repair shop which is located on the first floor of a 3 story building owned by Jane. Jane uses the third floor for her own business and rents out the second floor to a graphic design studio. While doing some bike repair work, Dan accidentally started a fire which spread throughout the entire building. The damage from the fire consisted of : i) damage to Dan's business personal property - $125,000; ii) damage to the bike repair shop building rented to Dan - $250,000; iii) damage to the remainder of the building - $300,000; iv) damage to Jane's business personal property - $80,000 and v) bodily injury to a customer of the graphic design studio on the 2nd floor - $300,000. Jane has coverage under her own business insurance policy which would pay 80 percent of damages to her business personal property with a $1,000 deductible. Dan's bike repair shop is insured by a Commercial General Liability policy (occurrence version) with no deductible and no endorsements. Dan's insurer has determined that Dan is legally liable for all the damages. The policy's each occurrence limit is $1,000,000; the Damage to Premises Rented to You limit is $100,000 and the policy general aggregate is $2,000,000. Under Dan's Commercial General Liability policy, how much will the insurer pay for damage to Jane's business personal property?
$80,000 **This is the amount of damages to Jane's business personal property
The ISO commercial property program offers three causes of loss forms-basic, broad, and special. Most insurers' businessowners policies (BOPs) provide
A named perils form, similar to the broad form, and a special form
Which one of the following is an example of injury or damage arising from an occurrence that would be covered by the products and completed operations liability portion of the Commercial General Liability (CGL) Coverage Form?
A defective gas range manufactured by the insured explodes causing injury
A contractor was hired by a railroad to work on a bridge adjacent to railroad tracks. Which one of the following types of insurance coverage would best respond to claims against the railroad arising out of the contractor's work?
A Railroad Protective Liability Coverage Form purchased by the contractor
Which one of the following types of risks generally would be eligible for the businessowners policy program?
A clothing store
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
Which one of the following best describes a package modification factor?
A factor that is applied to the regular policy premiums for certain coverage parts of a CPP, resulting in premium discounts for those coverage parts
Which one of the following statements is correct with respect to contractors equipment floaters?
A large contractor may obtain blanket coverage applying to all equipment, whether owned, rented, or borrowed by the contractor
For commercial auto insurance, a truck, tractor, or trailer is non-zone rated if it is
A light truck operating over any distance
Which one of these is an example of a loss that would be covered under the Commercial Crime Coverage Form?
A loss caused by a fraudulent entry made by an employee acting on a fraudulent instruction from a computer-software contractor who has a written agreement with the insured
Which one of these describes a situation in which the Acts Committed by Your Employees, Managers, Directors, Trustees or Representatives commercial crime exclusion would not apply?
A loss covered under the Employee Theft insuring agreement
Which one of the following types of surety bonds might be required for a street food vendor? - A permit bond - A maintenance bond - A contract bond - A fiduciary bond
A permit bond
The Employee Theft insuring agreement of an ISO Commercial Crime Coverage Form includes which one of the following as an employee?
A person compensated and subject to the direction of the insured
Which one of the following is a form of excess liability coverage? Select one: A. A maximum-possible-loss policy B. A coinsurance policy C. A self-contained policy D. A primary policy
A self-contained policy
Which one of the following types of contractors would some insurers consider eligible for coverage under a businessowners policy?
A small residential carpentry contractor
Johnny's Contracting Service has a Business Auto Coverage Form (BAC) covering his vehicles. He also has a Commercial Package Policy (CPP) covering his equipment. Which one of the following would be covered under Johnny's BAC?
A truck used for hauling dirt from jobsites
Under the Commercial General Liability (CGL) Coverage Form, medical payments coverage applies to which one of the following?
A volunteer worker of the named insured
Which one of the following statements is correct with respect to the business personal property coverage provided by the Building and Personal Property Coverage Form (BPP)? Select one: A. 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. B. "Your business personal property" specifically excludes labor, materials, or services furnished by the insured on the personal property of others. C. 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. D. 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.
A. 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.
Which one of the following statements is correct with respect to Property Not Covered under the Building and Personal Property Coverage Form (BPP)? Select one: A. Only contraband or property in the course of illegal transportation or trade is totally uninsurable by endorsement or in other policies. B. Almost all of the items listed in the Property Not Covered section are considered to be uninsurable. C. ISO manual rules prohibit removing the exclusion of many of the items specified under Property Not Covered. D. By endorsement, insurance can be made available for any of the items listed in the Property Not Covered section.
A. Only contraband or property in the course of illegal transportation or trade is totally uninsurable by endorsement or in other policies.
Which one of the statements is correct with respect to the Building and Personal Property Coverage Form (BPP)? Select one: A. 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. B. The BPP includes satisfactory coverage for physical damage to automobiles owned by the named insured. C. Any type of personal property can be insured under the BPP. 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.
A. 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.
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?
All compensation and other benefits required by the work comp law of any state listed in Item 3.A of the Info Page
Which one of the following statements is correct with respect to the Building and Personal Property (BPP) Coverage Form? Select one: A. The BPP lists several types of classes of property that do not qualify as covered property. B. The BPP must be written to provide coverage for all of the following: buildings, business personal property, and personal property of others. C. The BPP covers business personal property and property of others up to a specified percentage of the building coverage limit. D. The BPP provides coverage against both direct and indirect loss or damage caused by a covered cause of loss.
A. The BPP lists several types of classes of property that do not qualify as covered property.
Which one of the following statements is correct? Select one: A. The types of equipment covered by equipment breakdown insurance are covered under the Building and Personal Property Coverage Form (BPP), but only with regard to the perils insured against by the causes of loss forms used with the BPP. B. Equipment breakdown insurance covers physical damage to other property of the insured that results from the accidental breakdown of specifically listed equipment; it does not cover damage to the listed equipment itself. C. The types of equipment covered by equipment breakdown insurance are strictly limited to steam boilers; electrical generating and transmitting equipment; pumps, compressors, turbines, and engines. D. Equipment breakdown insurance provides no coverage for loss of business income, extra expense, and other losses resulting from physical damage to covered equipment.
A. The types of equipment covered by equipment breakdown insurance are covered under the Building and Personal Property Coverage Form (BPP), but only with regard to the perils insured against by the causes of loss forms used with the BPP.
Although buildings can be classified in many ways, the system used to classify buildings for purposes of rating commercial property insurance is based on their
Ability to resist fire
Which one of these excludes coverage for an exposure that should be addressed by loss control measures?
Account of Arithmetical Errors or Omissions exclusion
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?
Accounting Temporaries work comp insurer would cover the claim because a temporary employee is an employee of the providing firm, not the firm using his or her services
The cost to replace property with new property of like kind and quality less depreciation is referred to as the...
Actual cash value
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
Actual cash value
If an insured fast food franchise cannot list all of its locations on the commercial property declarations page, which one of the following options would be most appropriate?
Add supplemental declarations on a separate page.
Commercial general liability (CGL) policies are often issued with estimated premiums. When is the final premium determined?
After the policy has expired
Under which one of the following provisions 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 in order for that optional coverage to pay the maximum benefit available?
Agreed value
Mitchell is a highway contractor whose company is covered with a workers compensation policy and an unendorsed Business Auto Coverage Form (BACF). Which one of the following losses would be covered by his business auto policy?
An employee runs over a subcontractor's equipment with an owned auto
Regarding coverage under the ISO Commercial Crime Coverage Form, which one of the following statements about custodians or messengers is true?
An employee taking the day's receipts to the bank is an example of a messenger, but not a custodian *Messenger has care and custody outside the premises, whereas custodian in inside the premises
Which one of the following is a reason an insured might reimburse its workers compensation and employers liability insurer?
An illegally employed individual suffered an occupational injury
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?
An important different between the BOP's liability coverage and the CGL's is the availability of optional professional liability coverage endorsements for use with BOP
Which one of the following is an example of a loss covered by Part Two—Employers Liability Insurance?
An injured employee sues a third party who, in turn, sues the injured person's employer for negligence that resulted in the injury
Which one of the following best describes a reason why insureds purchase the filed inland marine Accounts Receivable Coverage Form?
An insured can use the inland marine form to obtain a higher coverage limit than the insurer is willing to include in a package policy
Which one of these is an example of an entity to whom the Coverage A Liquor Liability exclusion would not apply?
An insured not in the alcoholic-beverage business that becomes liable for injury resulting from serving alcoholic beverages
Which one of the following most fully describes what must occur in order for business income insurance to apply?
An interruption of operations caused by property damage from a covered peril to property at locations or situations described in the policy resulting in a loss of business income and/or extra expense.
Federal workers compensation statutes apply to which one of the following workers?
An interstate railroad worker
Which one of the following would be excluded under Coverage B—Personal and Advertising Injury Liability of the Commercial General Liability (CGL) policy? Select one: A. Malicious prosecution B. The use of another's advertising idea in the insured's advertisement C. Written publication of material that violates a person's right of privacy D. An offense committed by an insured whose business is broadcasting
An offense committed by an insured whose business is broadcasting
An ocean marine insurance policy that covers all goods shipped or received by the insured during the policy's term, that is comparable to an inland marine annual trip transit policy but without a set policy expiration date, is referred to as
An open cargo policy
Which one of the following types of farm insurance is essentially term life insurance on animals?
Animal mortality
The Recoveries condition of the ISO Commercial Crime Coverage Form specifies how...
Any subrogation or salvage recoveries will be divided between the insurer and the insured
Which one of the following types of business is usually eligible for coverage under a businessowners policy?
Apartment building
Physical damage and liability premiums are calculated for zone rated vehicles by doing which one of the following?
Applying the primary factor to base premiums *Whereas non-zone rated multiplies base premiums by combined factors
The condition of the Building and Personal Property Coverage Form (BPP) that establishes a method for the insurer and the insured to resolve disputes about the insured property's value or amount of loss is referred to as the
Appraisal condition
To be covered under a workers compensation statute, an injury or disease (in most states) must meet which one of the following requirements?
Arise out of and in the course of the employment
The ISO Business Auto Coverage Form uses symbols to identify which autos are covered under the policy. Which one of the following would be covered under Symbol 9—Non-Owned Autos Only?
Autos owned by the named insured's employees while being used in the named insured's business
Which one of the following statements is correct with respect to the liability coverage available under a businessowners policy (BOP)? Select one: A. Both ISO and AAIS offer endorsements that allow insureds to add workers compensation coverage to the liability section of their BOP policy. B. Both ISO and AAIS offer BOP endorsements adding employee benefit liability coverage and employment practices liability coverage. C. BOPs cannot be endorsed to add professional liability coverage. D. Insurers subscribing to ISO or AAIS BOP programs must offer all coverage options that ISO or AAIS makes available.
B. Both ISO and AAIS offer BOP endorsements adding employee benefit liability coverage and employment practices liability coverage
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. The BPP covers personal property of others while it is located anywhere in the world. B. Even if the insured does not buy coverage for personal property of others the BPP still provides a coverage extension for personal property of others, which is limited to $2,500 at each insured location. C. 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. D. Coverage for personal property of others applies only if the insured is legally responsible for the damage.
B. Even if the insured does not buy coverage for personal property of others the BPP still provides a coverage extension for personal property of others, which is limited to $2,500 at each insured location.
Which one of the following statements is correct with respect to the building coverage provided by the Building and Personal Property Coverage Form (BPP)? Select one: A. The BPP covers all buildings located at the insured premises whether specifically listed and described in the declarations or not. B. Personal property owned by the insured and used to maintain or service the building or its premises is included in the BPP's definition of "building" C. Outdoor fixtures are excluded from building coverage. D. Machinery and equipment, whether permanently installed or not, must be insured as business personal property.
B. Personal property owned by the insured and used to maintain or service the building or its premises is included in the BPP's definition of "building"
Which one of the following statements best describes the rating process used with businessowners policies (BOPs)?
BOP rating is not as complicated as the rating for a commercial package policy
For coverage to apply under an Inside the Premises—Theft of Money and Securities insuring agreement of an ISO Commercial Crime Coverage Form, the thief must
Be present inside the "premises" or the "banking premises"
Ace Accounting has a Building and Personal Property Coverage Form (BPP) through Delta Insurance with a limit of $300,000 on business personal property. The insured's computer system is valued at $150,000 and it is insured for $100,000 under a separate electronic data processing (EDP) equipment policy issued by Omicron Insurance. The computer system is totally destroyed by fire, a cause of loss insured under both policies. Which one of the following correctly describes how the loss would be settled?
Because Omicron's policy more specifically describes the computer system, it must pay its limit before Delta pays anything; Delta would pay the remaining $50,000.
Sullivan Construction Company (SCC) is an excavation contractor specializing in digging foundations for homes. It has five dump trucks, each of which is fitted with a tow hitch. Each vehicle tows a trailer used to move excavation equipment to and from job sites as well as to haul dirt. SCC's president, Bill Sullivan, drives a sport utility vehicle owned and insured by SCC. The company has one outside salesman and 10 construction employees, all of whom drive their own vehicles to work and on company business. SCC's equipment includes four backhoes used to dig building foundations and one bulldozer. Among other insurance, SCC has an unendorsed Business Auto Coverage Form (BAC). SCC uses symbols on its BAC to custom-tailor coverage to fit its needs. Which one of the following vehicle types would be eligible for coverage under Symbol 3—owned private passenger autos only?
Bill Sullivan's car - a sport utility vehicle *Because Bill is the named insured
Bob, an employee of Tank's Trucks, is backing one of Tank's trucks toward the loading dock on the insured premises. Bob accidentally strikes Alice, another employee, while she is directing Bob toward the loading dock. Alice sues Bob for her injuries. Which one of the following correctly indicates whether Bob is covered under Tank's unendorsed Business Auto Coverage Form (BACF) for liability coverage?
Bob is not covered because fellow employees' suits are excluded
The each occurrence limit in the Commercial General Liability (CGL) Coverage Form is the most the insurer will pay for the sum of which one of the following arising out of a single occurrence?
Bodily injury and property damage liability under Coverage A and medical expenses under Coverage C
One of the conditions in the Business Auto Coverage Form addresses physical damage losses where the named insured and the insurer disagree about the amount of a covered loss. Which one of the following statements concerning those conditions is most accurate?
Both the named insured and the insurer hire and pay their own appraisers and then share the cost of hiring an umpire
An insured's office building is valued $500,000, contents valued $100,000 and leased computers valued $50,000. The insured wants to be certain covered property can be repaired or replaced without any coinsurance or depreciation penalties in the event of physical loss or damage. Which Limits and Optional Coverage(s) on the Building and Personal Property Coverage Form would best suit this insured's wants?
Building $500,000 with Replacement Cost and Agreed Value Optional Coverages; Contents $100,000 with Replacement Cost and Agreed Value Optional Coverages; Extension of Replacement Cost to Personal Property of Others $50,000
Which one of the following is covered under the Building and Personal Property Coverage Form (BPP) as business personal property?
Building contents such as furniture
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?
Business Income Agreed Value coverage option
Rachel's salon is insured under a commercial package policy that includes the Business Income (and Extra Expense) Coverage Form. Rachel's salon sustained an actual loss of business income at the described premises as a result of a fire damage and access to Rachel's salon was prohibited by civil authority. Rachel decided to rent a temporary location and rent substitute equipment while her shop was being repaired. However, while at the temporary location, Rachel's regular customers attended other salons and Rachel' income was below normal levels. Rachel returned to her salon once it was repaired and her business income returned to normal. Which one of the following insuring agreements would best apply to Rachel's claim under the Business Income (and Extra Expense) Coverage Form?
Business Income and Extra Expense insuring agreements
Which one of the following is an example of the exclusion for Indirect Loss in the ISO Commercial Crime Coverage Form?
Business income loss
Which one of the following statements is correct with respect to the business income and extra expense coverage provided by the businessowners policy (BOP)?
Business income loss and extra expenses are usually payable for up to 12 months following a covered loss
The Indirect Loss exclusion of the ISO Commercial Crime Coverage Form eliminates coverage for indirect losses, including expenses incurred in establishing either the existence of or the amount of loss, payment of damages for which the insured is legally liable, and
Business income losses
Which one of the following is a Common Policy Condition found in the ISO Commercial Package Policy (CPP)?
Cancellation
The commercial property policy Causes of Loss Form that provides coverage for "risks of direct physical loss," unless excluded or limited by the policy is called the
Causes of Loss - Special Form
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. A premium auditor may examine the insured's records at the end of the policy period to determine the actual payroll. D. The premium base for workers compensation insurance is usually determined by the degree of hazard in the work performed.
C. 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 about uninsured motorists insurance coverage in most states is true? Select one: A. It excludes injuries caused by a hit-and-run driver. B. It covers injuries caused by motorists who have liability insurance but for an amount less than the insured's limit for underinsured motorists coverage. C. It is applicable only to bodily injury. D. It is a third-party type of coverage.
C. It is applicable only to bodily injury
Which one of the following statements about commercial property coverage forms is correct? Select one: A. A commercial property coverage part cannot include more than one commercial property coverage form. B. Commercial property coverage forms cannot be used to insure the loss of business income. C. Specialized coverage forms exist for insuring buildings under construction, condominium association buildings, and the property of condominium commercial unit owners. D. Commercial Property Conditions specify the causes of loss for which the described property is covered.
C. Specialized coverage forms exist for insuring buildings under construction, condominium association buildings, and the property of condominium commercial unit owners.
Which one of the following statements is correct with respect to the businessowners policy (BOP)? Select one: A. Whether a building is frame, joisted masonry, or fire resistive is an underwriting consideration, not a rating factor. B. BOP policies are, with a few, limited exceptions, rated manually. C. The available limits for certain property such as money orders are often quite low with minimal or no options for higher limits. D. Business income coverage on BOP policies is most often separately rated.
C. The available limits for certain property such as money orders are often quite low with minimal or no options for higher limits
The Limited Coverage for Unmanned Aircraft (Scheduled and/or Blanket Coverage) endorsement
Can be added to the Building and Personal Property Coverage Form and a few other commercial property coverage forms to cover physical loss to covered drones
A description of the property insured, a list of mortgagees, and the applicable coinsurance percentage(s) are shown on which one of the following documents?
Commercial property declarations
Which one of the following lists the covered causes of loss (basic, broad, or special); the deductible amount; and any optional coverages?
Commercial property declarations
In the ISO Commercial Crime Coverage Form, the insuring agreement that provides employee theft coverage covers money, securities, and other property. Which one of the following would be considered covered "other property" under this insuring agreement?
Company supplies
Which one of these is an example of a loss that would be covered under the Commercial Crime Coverage Form?
Compensatory damages arising directly from a loss covered by the policy
An animal damaged the interior of an insured's automobile while it was parked with the windows down. Which one of the following types of physical damage coverage under the Business Auto Coverage Form (BACF) would cover this loss?
Comprehensive *Comprehensive coverage applies to any peril except collision or overturn or a peril specifically excluded
Which one of the following is an insuring agreement contained in an ISO Commercial Crime Coverage Form?
Computer and Funds Transfer Fraud
Which one of the following insuring agreements of the ISO Equipment Breakdown Protection Coverage Form covers business income and extra expense loss due to equipment breakdown occurring at a location, shown in the Declarations, that the insured does not own or operate?
Contingent Business Income and Extra Expense
Lumber Company owns several large pieces of mobile equipment used in its lumbering operations. What type of inland marine coverage form would best be used to insure Lumber's equipment?
Contractors equipment
Extra expenses are expenses, in addition to ordinary expenses, that an organization incurs to mitigate the effects of a business interruption. Which one of the following is an example of an extra expense?
Cost to rent temporary office space
Most protection and indemnity (P&I) policies cover all of these miscellaneous loss exposures, EXCEPT - Expenses incurred to remove the wreck of an insured vessel - Costs incurred to rescue crew members and passengers of a ship found "in distress" at sea - Costs of entering an unscheduled port to obtain medical assistance for a passenger or crew member - Fines resulting for the violation of laws
Costs incurred to rescue crew members and passengers of a ship found "in distress" at sea are NOT covered
Which one of the following would be covered under the Extra Expense insuring agreement of the Business Income (and Extra Expense) Coverage Form?
Costs to move to a temporary location
Lance purchased an electric knife from Sharp Objects. When he first used the knife to carve a turkey, it malfunctioned resulting in injury to Lance. Sharp Objects' Commercial General Liability (CGL) Coverage Form will do which one of the following?
Cover any damages payable as a result of Lance's injuries subject to both the each occurrence limit and the products-complete operations aggregate limits
John Smith owns a bookstore that is covered under an unendorsed Commercial General Liability (CGL) Coverage Form. A customer falls in the store resulting in a covered lawsuit against Smith. Smith is asked to testify in court by the defense attorney; Smith incurs $500 in lost earnings for the one day trial. The supplementary payments section of Smith's CGL policy will
Cover the lost earnings up to $250
Which one of the following statements is correct with respect to the coverage provided under the ISO Farm Property—Farm Dwellings, Appurtenant Structures and Household Personal Property Coverage Form?
Coverage A - Dwellings provides coverage comparable in most respects to Coverage A on homeowners policies
Which one of the following statements is correct with respect to the ISO's Farm Property—Farm Personal Property Coverage Form?
Coverage E - Scheduled Farm Personal Property applies to only those classes of farm personal property for which a specific limit of insurance is shown in the declarations
Which one of the following statements is correct with respect to Coverage G—Barns, Outbuildings and Other Farm Structures of the ISO farm program?
Coverage G is used to insure all types of farm buildings and structures other than the dwelling and private garages
The workers compensation laws of some states are inapplicable to which one of the following?
Partners, sole proprietors, or exec officers
John, a store owner, has an unendorsed Commercial General Liability (CGL) Coverage Form. A customer has sued John alleging he was injured when John restrained him and a scuffle ensued. John claims he used reasonable force to restrain the customer from damaging a display of merchandise in the store. Which one of the following is true regarding coverage for this lawsuit under John's CGL policy?
Coverage and defense applies as John was using reasonable force to protect his property
The XYZ Finance Company is insured under an ISO Commercial Crime policy. One month after the policy inception date, XYZ acquired ownership of a smaller finance company including its premises and employees. Which one of the following best describes XYZ's responsibility under the Consolidation—Merger or Acquisition condition of the policy?
Coverage applies automatically for 90 days, but XYZ must promptly notify the insurer and pay the appropriate additional premium for coverage to continue beyond that time.
Which one of the following statements is true if the named insured is an individual under the Commercial General Liability (CGL) Coverage Form?
Coverage applies only to claims arising from the conduct of a business owned solely by the named insured
An insured plumbing contractor is installing copper water lines in a new building for a general contractor. While soldering a connection, the plumber causes a fire that damages the building, including the copper water lines. The plumber is covered under an unendorsed Commercial General Liability (CGL) Coverage Form. Which one of the following best explains how the plumber's CGL Coverage Form applies to a claim for the building damage, including damage to the copper water lines?
Coverage applies to the building damage but excludes the damage to the copper water lines being installed by the plumber
A general exclusion of the ISO Commercial Crime Coverage Form applies to acts of employees. However, an exception is made for
Coverage provided by the Employee Theft insuring agreement
In applying for the Business Auto Coverage Form (BACF), the insured mistakenly listed the age of one of its drivers as 28 instead of 22. Which one of the following correctly indicates whether coverage would be void if that driver were involved in an accident?
Coverage would apply because the misrepresentation was not intentional
A toy manufacturer operates in Pennsylvania, New Jersey, and Delaware. While at a convention in Colorado, a salesperson is injured. The employee elects Colorado as his benefit state for workers compensation. How would a standard workers compensation policy address out-of-state injuries?
Coverage would extend since the injury arose out of employment and was incidental to the insured's work
What does the voluntary compensation and employers liability endorsement provide coverage for?
Covers employees not subject to work comp statutes
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
BOP eligibility rules are based on...
Criteria that relate to business size and complexity of loss exposures
Which one of the following covers crops against hail, fire, windstorm accompanying hail, damage caused by livestock, and vehicles?
Crop-hail insurance
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
The purpose of the Representations condition of the Commercial General Liability (CGL) Coverage Form is to
Encourage the named insured to read the policy declarations and ensure that the representations made during policy negotiations are correct
All of the following are specialty farm coverages, EXCEPT: - Crop-hail insurance - Farm Property - Barns, Outbuildings, and Other Structures - Federal Crop Insurance - Animal mortality coverage
Farm Property - Barns, Outbuildings, and Other Structures
Drone physical damage coverage insures against loss of or damage to the drone and its platform, payload, and ground equipment, as well as medical costs related to the injury or death of persons who are not part of the drone operation
False *Drone physical damage coverage covers this first part, but it does not cover medical costs
Big Corporation leases automobiles for its employees to drive on business. In addition, a few employees use their own cars in performing their job duties. Which one of the following automobile loss exposures exists for Big Corporation?
Employers nonownership liability loss exposure
The discovery form covers losses actually sustained during the policy period and discovered no later than one year after policy expiration. True or False
False *The LOSS SUSTAINED form covers this
Which one of the following statements about the loss conditions in Section IV of the Business Auto Coverage Form (BACF) is true? Select one: A. The named insured may begin legal actions against the insurer before complying with all provisions of the coverage form. B. Under certain circumstances, the named insured can commit the insurer to make payments for damages. C. If the insurer pays a loss, the named insured can waive the insurer's right of recovery against a negligent third party who caused the loss. D. Anyone seeking coverage under the form must submit to physical examinations by physicians as often as the insurer may reasonably request.
D. Anyone seeking coverage under the form must submit to physical exams by physicians as often as the insurer may reasonably request
All of the following statements regarding Coverage E—Scheduled Farm Personal Property of the ISO Farm Policy are true, EXCEPT: Select one: A. Coverage E applies to only those classes of farm personal property for which a specific limit of insurance is shown in the declarations. B. Coverage E can be used to cover individually scheduled items of farm personal property. C. The types of property that can be insured under Coverage E include farm products, farm equipment, and several other classes of farm personal property. D. Coverage E is subject to an 80 percent coinsurance provision.
D. Coverage E is subject to an 80% coinsurance provision *Coverage E is not subject to a coinsurance requirement
Which one of the following statements about the general conditions under Section IV of the Business Auto Coverage Form is true? Select one: A. The coverage territory is worldwide for autos rented with a driver. B. Bankruptcy of an insured relieves the insurer of any obligations under the form to that insured. C. The premium shown in the declarations is the minimum amount the named insured will pay during the policy period. D. Coverage for trailers follows the autos to which they are attached.
D. Coverage for trailers follows the autos to which they are attached
Which one of the following statements regarding liability coverage under the Business Auto Coverage Form (BACF) is true? Select one: A. The coverage form defines "suit" to include a civil proceeding but not other alternative dispute resolution proceedings. B. Covered pollution cost or expense is paid in addition to the stated limit of liability. C. The costs of defending the claim are subject only to the limits of insurance carried on the policy. D. The insurer must defend against even false or fraudulent claims or suits as long as they allege covered damages.
D. The insurer must defend against even false or fraudulent claims or suits as long as they allege covered damages
Which one of the following sets of information is used in private passenger auto premium calculations for commercial auto physical damage? Select one: A. Condition and age of the vehicle B. Age and gender of the driver C. Insurance limit and type of coverage D. The vehicle's original cost new and the rating territory
D. The vehicle's original cost new and the rating territory *Physical damage rating uses the vehicle's cost new, rating territory, and the deductible amount chosen
Injury arising out of which one of the following offenses could be covered under Coverage B of the Commercial General Liability policy? Select one: A. False arrest B. Lawful prosecution C. Breach of contract D. Vandalism
False arrest
Which one of the following statements is correct with respect to the Commercial Property Conditions? Select one: A. They are printed in bold type on the commercial property declarations page. B. They provide definitions for words and phrases used in the policy to which they are attached. C. They are an optional component of the commercial property coverage part, used at the underwriter's discretion. D. They apply to all coverage forms included in a commercial property coverage part, unless a coverage form contains a condition to the contrary.
D. They apply to all coverage forms included in a commercial property coverage part, unless a coverage form contains a condition to the contrary.
Which one of the following perils would be covered under the commercial property policy broad form but not covered under the basic form?
Damage due to weight of snow
Carl's Cabinets sells and installs cabinets in apartment buildings. After installation but before an apartment is occupied, two of the cabinets are damaged when they fall from the wall as a result of improper installation. Carl's Commercial General Liability (CGL) Coverage Form excludes coverage for the damage to the cabinets because of which one of the following exclusions?
Damage to Your Work
Sullivan Construction Company (SCC) is an excavation contractor specializing in digging foundations for homes. It has five dump trucks, each of which is fitted with a tow hitch. Among other insurance, SCC has an unendorsed Business Auto Coverage Form (BAC). Which one of the following claims would be covered for liability under SCC's BAC? A. Damage to a fire hydrant caused by the bulldozer while it was in operation B. Damage to a parked car caused by the bulldozer while the bulldozer was being towed C. Damage to an underground water line caused by a backhoe while it was in operation D. Damage to the sport utility vehicle, which struck a deer while Bill was driving home from work
Damage to a parked car caused by the bulldozer while the bulldozer was being towed
A claim under an ISO Commercial Crime Coverage Form is subject to the Valuation—Settlement condition. Which one of the following is true regarding this Valuation—Settlement condition?
Damaged property is valued at replacement cost or the insurer can repair or replace the property
Which one of the following statements is true regarding the Property Damage insuring agreement of the ISO Equipment Breakdown Form?
Debris removal is covered as part of the property damage limit
Which one of these sections of the Commercial Crime Coverage Form contains the limit of insurance?
Declarations
Which one of the following best describes the components of a coverage part for an ISO Commercial Package Policy (CPP)?
Declarations page, one or more coverage forms, and applicable endorsements
Which one of the following property loss exposures can a business most likely avoid by leasing an auto instead of buying it?
Decrease in or loss of the auto's value
The Coverage B—Personal and Advertising Injury Liability insuring agreement parallels the Coverage A— Bodily Injury and Property Damage Liability insuring agreement in that the insurer agrees to
Defend the insured against any suit seeking such damages
In some no-fault states, the noneconomic loss threshold is expressed in terms of a dollar amount of damages resulting from the injury. In other states, the threshold is expressed as a
Definition of serious injury
The Delicious Restaurant suffered a covered money loss under its ISO Commercial Crime Coverage Form. The form had a limit of $10,000. The value of the loss was $14,500. The insurer paid the policy limit. After paying the $10,000 policy limit, the insurer recovered $11,000 of the stolen money. Ignoring any deductibles that might apply, what dollar amount of covered property, if any, would go to Delicious Restaurant and to the insurer?
Delicious would receive $4,500 and the insurer $6,500
The specified causes of loss coverage of the business auto policy includes coverage for which one of the following?
Derailment of a conveyance transporting the insured vehicle
When an insured is choosing between replacement cost and actual cash value on a policy, the insured should...
Determine if the policy limits is adequate for replacement cost
A company owns land that is used as a softball diamond and recreational park for hosting employee picnics. Once a year the company also allows a non-profit organization to hold a softball game on these premises. During this year's softball game, the director of the non-profit was injured when a softball hit him in the head. He asked the company that owns the land to pay for his trip to the emergency room. The company's unendorsed Commercial General Liability policy
Does not respond to the director's injuries sustained because they happened during an athletic event
Which one of the following statements is correct with respect to the Building and Personal Property Coverage Form (BPP)?
Due to coverage extensions, it is possible for the total payment for one loss to exceed the policy limit
The business auto policy condition that states that the insured must cooperate with the insurer in its investigation and defense of the accident or loss is the
Duties in the Event of Accident, Claim, Suit, or Loss Condition
Everything You Need, Inc., (EYN) produces a variety of travel bags & luggage for consumer use. EYN has manufacturing locations in Pennsylvania and New York. Due to growing demand, EYN plans to expand operations into New Jersey and Delaware. EYN has a Workers Compensation and Employers Liability Insurance Policy (WC&EL policy) in effect for the policy year January 1, 20x1 to December 31, 20x1. EYN's insurer is licensed in all states. EYN's policy lists Pennsylvania and New York in Item 3.A of the Information Page of the WC&EL policy. The New Jersey and Delaware sites were not in operation on the effective date of policy, January 1, 20x1, but are expected to begin operations during 20x1. If EYN wants to have coverage under its policy for the New Jersey and Delaware operations, what action should EYN take?
EYN should have the New Jersey and Delaware operations listed in Item 3.C of the Info Page
An insurer that writes Commercial General Liability (CGL) coverage develops a rate for which one of the following?
Each business classification the insurer is willing to write
Which one of the following statements is true about judgement rating in ocean marine insurance?
Each insurer writing ocean marine insurance develops its own ocean marine rates, guided by the judgement of its underwriters
Omicron Incorporated is insured under an ISO commercial property policy and an ISO equipment breakdown policy. Both policies include the Other Insurance provision. In the case of a loss for which both policies provide coverage under the same plan, terms, and conditions, which one of the following statements is correct?
Each policy pays in relation to all applicable policies
For the owners of oceangoing cargo, the possibility of loss to the cargo while it is in the course of transit exists
Either aboard the vessel or on land between the vessel and the cargo's point of origin or destination
The farm program broad form causes of loss covers death of livestock from which one of the following additional perils?
Electrocution
The Business Auto Coverage Form (BACF) includes provisions for all of these in addition to the basic physical damage coverages, EXCEPT: - Towing and labor - Electronic equipment - Transportation expenses - Loss of us of rental autos
Electronic equipment
Which one of the following property coverages is often included or available as an option in a businessowners policy (BOP)? Select one: A. Flood B. Nuclear hazard C. Employee dishonesty D. Earthquake, landslide, and subsidence
Employee dishonesty
Policies for the crime loss exposure for financial institutions are called "bonds" because...
Employee dishonesty, a key coverage, was traditionally called a "fidelity bond"
Bilo Manufacturing is weighing whether to lease vehicles for its employees or have them drive their own autos while on company business. Which one of the following exposures is created if Bilo decides in favor of employee-owned autos?
Employer's Nonownership Liability
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?
Employers liability
Which one of the following is the correct term for documents that are used to tailor commercial property coverage to meet the specialized needs of particular insureds or eliminate exposures that underwriters are not willing to insure?
Endorsements
In the business income coverage form, the period of restoration...
Ends when the property is or should have been restored
Under the Auto Medical Payments Coverage endorsement to the business auto policy, "occupying" a covered auto means
Entering into, riding in, or alighting from a covered auto
Which one of the following common policy conditions permits the insurer to verify property and business income values necessary for premium rating purposes?
Examination of books and records
Tom's CD player was stolen from the front seat of his van while he was making a service call for a customer. Under the Business Auto Coverage Form (BACF), this loss is
Excluded
Becky, the owner of Becky's Muffin Shop, sees a teenage boy take a cookie from the counter and start to leave the store without paying for the cookie. Becky intends to injure him as punishment for his misdeed. She tackles the boy, pins his arms behind his back, and pushes his face to the floor until the police arrive. The boy suffers a cracked rib, dislocated shoulder, and broken nose. Which one of the following exclusions in the Commercial General Liability (CGL) Coverage Form applies to this occurrence?
Expected or intended injury exclusion
Which one of the following insuring agreements of the ISO Equipment Breakdown Protection Coverage Form covers the reasonable extra cost to make temporary repairs in order to speed up permanent repairs or replacement of covered property?
Expediting Expenses
After a covered equipment breakdown loss, a cellular phone company paid a manufacturer $1,000 extra to obtain faster processing and shipping of replacement parts to repair its equipment. An insuring agreement under an equipment breakdown policy that would cover this additional expense is:
Expediting Expenses insuring agreement
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?
Experience rating
Which one of the following is a workers compensation rating plan that rewards the insured for successfully controlling its losses?
Experience rating plan
Which one of the following statements is correct with respect to the covered causes of loss under the Causes of Loss—Basic Form?
Explosion includes the explosion of gases or fuel in a furnace or flue
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
Extended Business Income
Under an ISO 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?
Extended Period of Indemnity coverage option
In which one of the following additional coverages in a Business Income Coverage Form are losses covered that continue after the period of restoration ends?
Extended business income
Adjacent properties can increase the probability of loss to the insured's building and contents. When rating commercial property exposures, the term used to refer to the hazard posed by adjacent or surrounding properties is
External exposure
In business income insurance, the expenses that an organization would not have incurred if the business interruption had not occurred are called
Extra expenses
Which one of the following causes of loss is covered by the commercial property policy Causes of Loss—Broad Form but not the Basic Form?
Falling objects
The Commercial General Liability (CGL) Coverage B—Personal and Advertising Injury Liability provides coverage for which one of the following?
False arrest
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?
Hired and nonowned autos liability coverage is usually offered by BOPs, either as part of the form or by endorsement
Automobile liability exposures can result from: A. Demand to or destruction of an owned vehicle B. Work comp laws C. Hiring or borrowing an automobile D. Loss of use of an owned automobile
Hiring or borrowing an automobile
Which one of the following would qualify as an uninsured motorist pursuant to a UM endorsement on a business auto policy?
Hit-and-run driver
Which one of the following statements is correct with respect to the condition Duties in the Event of Loss or Damage of the Building and Personal Property Coverage Form (BPP)?
If the insured fails to perform any of them, the insurer may not have to pay for the loss
One of the conditions found in the Business Auto Coverage Form addresses the bankruptcy or insolvency of the named insured. Which one of the following statements about claims settlement in the event of bankruptcy of the insured is most accurate?
If the insured is relieved through bankruptcy of an obligation to pay a liability claim, the insurer is still obligated to pay the loss
Which one of the following is correct with respect to how the covered causes of loss affect commercial property insurance premiums?
If the policy provides Broad Form coverage, an additional rate is added to the Basic Form rates for the cost of covering the additional perils of the Broad Form
Alterations or additions made to the building at the expense of an insured who does not own the building and who cannot legally remove them are referred to as
Improvements and betterments
The Suspension condition of an equipment breakdown policy allows an insurer to immediately suspend equipment breakdown insurance on an item of equipment that the insurer determines to be
In a dangerous condition
Which one of the following statements is correct with respect to the effect optional coverages of the Building and Personal Property Coverage Form (BPP) have on premiums?
In some cases, the limit of insurance must be increased to cover the additional property values being insured
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?
Increased cost of construction additional coverage
Loss to property after it has been transferred or surrendered is an exclusion that applies under certain circumstances to which one of the following Commercial Crime insuring agreements?
Inside the Premises - Theft of Money and Securities
On June 5, 20X1, a thief entered ABC through an open window while the store was closed and stole $2,500 worth of electronic merchandise. The thief also broke into a safe causing $1,500 damage to the safe and stole $3,000 in cash from the safe. Under which insuring agreement would the damage to the safe be covered?
Inside the Premises—Theft of Money and Securities *This covers damage to a locked safe, vault, cash register, bash box, or cash drawer
Which one of the following is a key service provided by equipment breakdown insurers?
Inspection
The forgery or alteration insuring agreement to a Commercial Crime Coverage Form applies to loss resulting from dishonest acts of the
Insured's customers
Insurers underwrite Agreed Value optional coverage carefully for which one of the following reasons?
Insureds are often tempted to underinsure, knowing they will not suffer a coinsurance penalty when the agreed value option is in effect
Which of the following statements is correct with regard to the Building and Personal Property Coverage Form (BPP)?
Insureds who have selected the replacement cost option may also elect to have the personal property of others valued at replacement cost
Which one of the following coverages of the Business Income Coverage Form (BIC) is subject to its own limit of insurance?
Interruption of Computer Operations $2,500 limit
Which one of these exclusions applies only to the Employee Theft insuring agreement?
Inventory shortages
A Commercial Package Policy (CPP) premium may be modified by a package modification factor. This factor
Is a discount justified by the greater efficiency in providing a package policy.
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 defines important terms such as "workers compensation law", "we" and "you." B. It covers all operations of the employer except those otherwise insured or specifically excluded by endorsement. C. It covers the employer only for those locations and employees listed on the Information Page. D. It takes precedence if the policy and the applicable workers compensation law conflict.
It covers all operations of the employer except those otherwise insured or specifically excluded by endorsement
Which one of the following statements is correct regarding the Spoilage Coverage endorsement to the Building and Personal Property Coverage Form?
It covers damage to perishable stock resulting from on-premises breakdown, among other causes
Which one of the following statements is correct with respect to the Inside the Premises—Robbery or Safe Burglary of Other Property coverage of an ISO Commercial Crime Form?
It covers damage to the insured's premises resulting from a covered cause of loss
Many businesses need equipment breakdown insurance because
It covers loss due to the accidental breakdown of almost any type of equipment that operates under pressure or that controls, transmits, or uses mechanical or electrical power
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)?
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.
Which one of the following best describes the Ordinance or Law Coverage endorsement to the Building and Personal Property Coverage Form's Coverage B?
It covers the cost to demolish the undamaged portion and remove its debris when demolition is required by the building code
Which one of the following is correct with respect to animal mortality insurance?
It covers the loss of valuable animals by death resulting from accident, injury, sickness, or disease, or theft
Which one of the following statements about owners and contractors protective liability coverage is true? Select one: A. It covers the property owner for damage arising from the contractor's operations. B. It is issued in the contractor's name. C. It is purchased by the owner of property to protect contractors. D. It protects the contractor from liability for normal business operations.
It covers the property owner for damage arising from the contractor's operations
Which one of the following best describes nonfiled inland marine builders risk insurance?
It covers the structure under construction, temporary structures at the building site, and building materials that have not yet become part of the building
Which one of the following best describes the protection afforded by the Utility Interruption insuring agreement of the ISO Equipment Breakdown Protection Coverage Form?
It extends the business income and extra expense coverage to include loss sustained because of breakdown of equipment owned by a utility or other supplier of electricity, communications, air conditioning, heating, gas, sewer, water, or steam.
Which one of the following statements is correct with respect to limits of liability applicable to Part Two—Employers Liability Insurance? Select one: A. Punitive damages are covered in addition to the limits of liability. B. Supplementary payments are covered within the stated limits of liability. C. It includes a property damage by accident limit. D. It includes a bodily injury by disease policy limit.
It includes a bodily injury by disease policy limit
What does the liberalization condition do?
It indicates that if the insurer charges the form with additional coverage at no additional premium, the new form would apply to the insureds policy as soon as the form was approved
Which one of the following statements about the collision liability clause of an ocean marine hull insurance policy is true?
It is a separate amount of insurance ordinarily equal to the amount of insurance on the hull
Which one of the following statements about interest that accrues on the amount of a judgment before the actual entry of the judgment by the court is true?
It is called prejudgement interest
Prior to settlement of a claim under Andy's commercial general liability (CGL) policy, Andy declared bankruptcy. Due to Andy's bankruptcy proceeding, what is the obligation of Andy's insurer?
It is obligated to defend Andy and pay judgments or settlements as though Andy has remained solvent
Which one of the following best describes the bailees' customers policy?
It is purchased by bailees to cover damage to customers' goods while in the possession of the bailee, regardless of whether the bailee is legally liable for the damage
Which one of the following statements is correct with respect to crop-hail insurance?
It may also cover harvested crops against named perils while being transported to the first place of storage
Which one of the following best describes the effect of the Voluntary Compensation and Employers Liability Endorsement?
It obligates the insurer to pay an amount equal to the compensation benefits that would be payable if exempt employees were subject to the work comp law
The products-completed operations hazard, as defined in the Commercial General Liability (CGL) Coverage Form, includes bodily injury and property damage under which one of the following circumstances?
It occurs away from premises owned or rented by the named insured and arises out of the named insured's product or work
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)?
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.
Which one of the following statements is correct with respect to the Preservation of Property additional coverage of the Building and Personal Property Coverage Form (BPP)?
It protects against "any direct physical loss or damage" and is not limited to either the covered causes of loss or locations stipulated in the coverage form
Which one of the following is correct with respect to the Increased Cost of Construction additional coverage of the Building and Personal Property Coverage Form (BPP)?
It provides a small amount of insurance to cover the increased cost to comply with ordinances or laws regulating the repair, rebuilding, or replacement of covered buildings.
Which one of the following is a purpose for buying difference in conditions (DIC) insurance?
It provides coverage for flood and earthquake exposures not covered by basic policies.
Which one of the following statements is the purpose of the No Benefit to Bailee condition of the Commercial Property Conditions Form?
It reinforces the insurer's rights of subrogation against the bailee
The limit of insurance applicable to commercial property coverage is an important component of the final premium because
It represents the exposure against which the applicable rate is multiplied to calculate the premium
All of these describe the CGL policy's occurrence coverage trigger, EXCEPT: - It requires only that bodily injury occurs during the policy period. - It requires the addition of an endorsement that covers claims made after the policy period ends. - It requires only that property damage occurs during the policy period. - It requires that bodily injury or property damage occurs during the policy period.
It requires the addition of an endorsement that covers claims made after the policy period ends
Which one of the following statements is correct with respect to the Causes of Loss—Special Form?
It shifts the burden of proof as to whether a loss is covered from the insured to the insurer
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
It shifts the burden of proof to the insurer to prove a loss is excluded
Which one of the following best describes the coverage provided under Coverages A through D of the ISO's Farm Property—Farm Dwellings, Appurtenant Structure and Household Personal Property Coverage Form?
It specifically excludes structures that the insured uses principally for farming and "farm personal property"
Which one of the following statements is correct with respect to the Control of Property condition of the Commercial Property Conditions Form?
It states that coverage under the policy will not be affected by acts or omissions of persons other than the insured, if the others are not acting under the direction or control of the insured
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?
It would be nearly impossible to persuade an insured to switch to a new insurer
Frederico is a punch press operator at Tillson-Jones Manufacturing (TJM). When his press malfunctions, Frederico's hand and arm are badly mangled and he suffers a below-the-elbow amputation. Frederico sues the manufacturer of the punch press for his injuries and is awarded damages. The manufacturer then sues TJM to recover the damages it paid to Frederico, alleging poor maintenance of the equipment, insufficient employee training, and negligence in not requiring employees to use safety guards. TJM is insured under a Workers Compensation and Employers Liability Insurance (WC&EL) Policy. Which one of the following best describes how TJM's insurer would respond?
It would defend TJM against the manufacturer's suit and pay any common-law damages that TJM becomes legally obligated to pay
Warren works at Omega Corporation (Omega). One morning while walking to work, Warren is hit by another Omega employee riding her bicycle to work. He suffers a permanent partial disability. Which one of the following statements is correct with regard to Omega's workers compensation insurance?
It would not provide coverage because injuries occurring while traveling to or from work at a fixed location are generally not covered
Which one of the following items found in the information page specifies which states the workers compensation policy applies?
Item 3
Employers liability insurance covers an employer against which of the following?
Its liability for an employee's occupational injury or disease that is not covered by a work comp statute
Acme Insurance cannot agree with insured Jill Jenkins on the amount of a covered physical damage loss under Jill's Business Auto Coverage Form (BACF). Jill requested an appraisal. Acme and Jill each appoint an appraiser, and the appraisers appointed an umpire. One appraiser and the umpire ruled for Jill and against Acme. Which one of the following statements regarding this scenario is true?
Jill and Acme must each pay their own appraiser and will share the cost of the umpire
The condition that appoints the first named insured as agent for all other insureds is called...
Joint insured condition
Under which one of the following conditions of an insured's ISO Equipment Breakdown Protection Coverage Form and its commercial property insurance coverage does each insurer pay half of certain losses to quickly indemnify the insured, with the insurers then resolving their differences among themselves?
Joint or Disputed Loss Agreement
Which one of the following statements is true regarding the rating of ocean marine insurance?
Judgement rating for ocean marine insurance is influenced by many factors, including the product being shipped and the type of packing
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?
KZ's employers liability policy would defend the claim and pay any damages
Kenneth, the named insured under a Business Auto Coverage Form (BACF) with symbol 1 shown for liability coverage, causes an automobile accident while driving a rental car on a business trip. Which one of the following correctly indicates whether Kenneth is covered under the liability insuring agreement of his BACF for this accident?
Kenneth is covered because Kenneth, the named insured, is an insured for any auto
The filed classes of inland marine business are characterized by a
Large number of potential insureds and reasonably homogeneous loss exposures
If an insured has failed to cooperate with an insurer in the settlement of a claim, which one of the following policy conditions prevents the insured from suing the insurer if the insured is not satisfied with the insurer's handling of the claim?
Legal Action Against the Insurer
Employers liability insurance excludes which one of the following?
Liability assumed under contract
Lime Green Paper Company owns three cars and a pickup truck. Lime Green's sales employees use their own vehicles for business. Lime Green is insured under a Business Auto Coverage Form (BACF) form with symbol 1—Any Auto for liability coverage and symbol 2—Owned Autos Only for physical damage and medical payments coverages. One of Lime Green's employees caused an accident while driving his own car on company business, damaging another auto and injuring the driver and two passengers. Lime Green's employee was injured in the accident, and his car was damaged. Which one of the following correctly indicates the coverage that Lime Green's BACF provides for this loss?
Liability coverage for the damage to the other auto and injuries to the other driver and passengers
One of the general conditions in Section IV of the Business Auto Coverage Form (BACF) states that if the insurer revises the form to provide more coverage without additional premium charge, the policy will automatically provide the additional coverage as of the date the revision is effective in the named insured's state. This condition is referred to as
Liberalization
CD Services (CDS) provides e-commerce services to entities that are too small to maintain an e-commerce program of their own. CDS relies exclusively on personal computers to perform its activities. A fire destroys the building in which it operates, including all of the electronic data. CDS has an Insurance Services Office (ISO) Business Income (and Extra Expense) Coverage Form. Which one of the following explains how CDS's business income policy will apply to the loss from the interruption of computer operations?
Limited to $2,500 for loss of income and extra expense due to the Interruption of Computer Operations additional coverage
Which one of these is not an example of a coverage that is excluded under Coverage A of the CGL coverage form because it is insured under another policy?
Liquor 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. Livestock B. Growing crops C. Private light poles D. Permanent fixtures attached to a building
Livestock
Which one of the following can be insured under Coverage F—Unscheduled Farm Personal Property of the ISO Farm Property—Farm Personal Property Coverage Form? Select one: A. Livestock B. Vehicles primarily designed and licensed for road use C. Irrigation equipment D. Racehorses and show horses
Livestock
The Computer Store (TCS) brought a claim under the Employee Theft insuring agreement of its ISO Commercial Crime Coverage Form. TCS's claim is based on an inventory shortage. To overcome the inventory shortages policy exclusion, TCS must demonstrate that the
Loss can be established wholly apart from inventory computations
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?
Loss due to accounting omission is excluded
An ocean marine carrier faces a loss exposure when an accident prevents the carrier from delivering the cargo aboard its ship. The carrier may lose compensation that the shipper would otherwise have paid. What is this exposure called?
Loss of freight
Employer's liability would provide coverage for which one of the following claims?
Loss of services
Which one of these would not be covered under the Computer and Funds Transfer Fraud insuring agreement?
Loss resulting from the fraudulent entry of electronic data into a computer system that is not owned, leased, or operated by the named insured
Business income coverage is considered a time element coverage for which one of the following reasons?
Loss severity is dependent on the length of time needed to restore damaged property
Which one of these would not be covered under the Forgery or Alteration insuring agreement?
Losses resulting for the insured's knowing acceptance of a forged check
Which one of the following statements is correct with respect to electronic data processing equipment floaters?
Many cover special perils such as mechanical or electrical breakdown, and they may also insure covered property while it is in transit or at unlisted locations
Under the businessowners policy (BOP)...
Many coverages that would require separate policies or coverage parts in the commercial package program are either included or available as options
Inland marine insurance is insurance that covers
Many different classes of property that typically involve an element of transportation
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?
Many of the expenses of providing work comp insurance do not increase proportionately with increases in premium
The management of Maryland Marine Co. (MMC) must ensure that proper coverage is obtained for work- related injuries. The employee population of MMC is a mixture of full-time and part-time employees as well as some casual employees for one-time tasks. Much of MMC's work is done by independent contractors and temporary employees during peak seasons. Which one of the following statements about these persons is true?
Many states work comp statutes exclude casual labor (short-term employees)
In the early 1900s, the inventories of jewelry stores, property while in the course of inland transit, tourists' baggage, and even bridges were typical inland properties insured by which one of the following types of insurer?
Marine insurers
Mary works as a volunteer at a local library. The library is covered by an unendorsed commercial general liability policy. Which one of the following best describes Mary's status under the policy if she is named in a lawsuit by a visitor that was injured in the library?
Mary would qualify as an insured
A corporation purchased an unendorsed Commercial General Liability policy with an inception date of July 1, 20X4. On August 15, 20X4, it was notified that it was being sued for injuries arising out of its advertising brochures first published on April 1, 20X4, and not used since that date. The alleged cause of action was its slanderous statements in its April 1, 20X4, brochures. Which one of these Coverage B exclusions is the correct exclusion for the insurer to use to deny coverage?
Material Published Prior to the Policy Period exclusion
Chuckie's chicken distributor researches the benefits of consuming chicken versus consuming beef. In November 2011, Chuckie's publishes a brochure outlining the potential health hazards of consuming beef and explaining why chicken is a healthier alternative. Chuckie continues to publish and distribute the same brochure for six months. In March 2012, several beef distributors file a suit against Chuckie's for personal and advertising injury. Which one of the following exclusions would apply to this claim under Coverage B of Chuckie's Commercial General Liability Coverage Form (CGL) with a policy period of January 2012 - January 2013?
Material published prior to the policy period
Matthew Jones, the named insured under a Business Auto Coverage Form (BACF), requires his employees to use their own cars for business purposes. One of Matthew's employees, Paul, causes an accident while driving his own truck for the business. Matthew's BACF shows symbol 1 for liability coverage. Which one of the following correctly indicates whether Mathew is an insured under the policy for Paul's use of his own truck in this situation?
Matthew is an insured under the policy because Matthew is an insured for any auto
Matthew Jones, the named insured under a Business Auto Coverage form (BACF), requires his employees to use their own cars for business purposes. One of Matthew's employees, Paul, causes an accident while driving his own truck for the business. Matthew's BACF shows symbol 3 for liability coverage. Which one of the following correctly indicates why Matthew is not an insured under the policy for Paul's use of his own truck in this situation?
Matthew is covered for owned private passenger autos only
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?
Maximum Period of Indemnity coverage option
Which one of the following is true with regard to the coverage limits in the liability section of the businessowners policy (BOP)?
Maximum limits are more restricted than the CGL; few insurers offer per occurrence limits over $2 million in their BOPs
The inspections and surveys condition, a common policy condition attached to the ISO Commercial Package Policy, makes it clear that the insurer has the right to inspect the insured premises and
May recommend changes
Which one of the following coverages is often included or available as an option in a businessowners policy (BOP)? Select one: A. War, riot, or military action B. Workers compensation C. Mechanical breakdown D. Dishonest acts by the insured's partners, members, officers or managers
Mechanical breakdown
An exclusion contained in the Causes of Loss—Basic Form eliminates coverage for damage caused by which one of the following?
Mechanical breakdown, including rupture or bursting caused by centrifugal force
The typical workers compensation statute provides payment for which one of the following?
Medical bills for an injury sustained by an employee while working
Which one of the following is a sublimit subject to the each occurrence limit of a CGL policy?
Medical expense limit
Which one of the following statements is true regarding Coverage C—Medical Payments of the Commercial General Liability policy?
Medical payments coverage is a means of making prompt settlements
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?
Medical payments for a claimant who was exposed to a disease during the policy period but filed a claim two years after retiring
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?
Meeting state requirements to qualify as a self-insurer
Which one of the following is covered by the Causes of Loss—Special Form but not by the Causes of Loss—Basic Form?
Melting of ice, sleet, or snow on the building structure
These types of equipment can be insured under an equipment breakdown policy, EXCEPT: - Mobile equipment used in construction - Communication and computer equipment - Electrical or mechanical equipment used in the generation, transmission, or utilization of energy - Equipment built to operate under internal pressure or vacuum
Mobile equipment used in construction
The Causes of Loss—Special Form states that it covers "risks of direct physical loss." The loss or damage
Must be accidental and unforeseen by the insured in order to be covered
The coinsurance basis for business income coverage is...
Net income plus all operating expenses except certain deductible items
The Alterations and New Buildings additional coverage to the Business Income Coverage Form (BIC) provides coverage for loss of income resulting from a delay in starting operations, if the delay results from damage at the described premises by a covered cause of loss to which one of the following?
New buildings under construction
Which one of the following insuring agreements of the ISO Equipment Breakdown Protection Coverage Form extends all of the equipment breakdown coverages to property situated at locations that the insured has purchased or leased after policy inception?
Newly Acquired Premises
Northern Company (Northern) uses a large forklift in its operations. The forklift is subject to the state compulsory auto insurance law and has a license tag. In the process of moving some items on Northern's premises, the operator loses control of the forklift and runs into a car owned by a customer. Which one of the following statements is true regarding coverage for this loss under Northern's Commercial General Liability (CGL) Coverage Form?
No coverage applies under the CGL Coverage Form because the forklift is considered to be an "auto", and coverage would be provided by a commercial auto policy
Nathan's Furniture Store delivers a sofa to a customer. While placing the sofa in the living room, the delivery person breaks the customer's coffee table. The delivery person admits that the accident was his fault and the customer requests that a claim be submitted for damage to his personal property. Would the claim be covered under Coverage B—Personal and Advertising Injury Liability of the Commercial General Liability Coverage Form (CGL)?
No, because Coverage B does not respond to liability claims for property damage
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?
No, because Joe is not an employee of Home Builders
Outdoor Sporting Goods Store has a Commercial General Liability (CGL) Coverage Form. While demonstrating the features of a small boat for a customer, an employee drops the anchor, injuring his foot. Does Outdoor Sporting Goods Store's CGL Coverage Form cover this loss?
No, because injuries to employees are excluded
Betty's Birdhouses constructs and sells birdhouses. Betty discovered a fungus in the wood used to construct the birdhouses that would kill birds. Betty withdrew her entire stock of birdhouses to avoid any claims from environmental organizations for loss to wildlife. Does Betty's Commercial General Liability (CGL) Coverage Form cover the cost to withdraw the birdhouses and feeders?
No, because the cost to withdraw Betty's product is excluded
Lucy, the owner of Lucy's Flower Shop, was delivering a vase of flowers to a customer, Mrs. White. When Mrs. White opened her front door, her dog ran outside, knocking the flowers from Lucy's hands, and causing the vase to shatter and injure Mrs. White. Although the customer insisted that she would be fine, Lucy received a medical bill for injuries to Mrs. White two years later. The medical treatment had been received one week before Lucy received the bill. Lucy explains the situation to her insurer and requests coverage under her Commercial General Liability Coverage Form (CGL). Will the medical expenses be covered under Coverage C—Medical Payments of the CGL?
No, because the medical expenses must be incurred and reporter to the insurer within one year after the date of the accident
On June 5, 20X1, a thief entered ABC through an open window while the store was closed and stole $2,500 worth of electronic merchandise. The thief also broke into a safe causing $1,500 damage to the safe and stole $3,000 in cash from the safe. Under which insuring agreement would the theft of electronic merchandise be covered?
None *Not Inside the Premises - Theft of Money and Securities insuring agreement because it is neither money nor securities *Not Inside the Premises—Robbery and Safe Burglary of Other Property because the cause of loss is not a robbery or burglary (open window)
Which one of the following best describes an advantages to insurers of nonfiled compared with filed classes of inland marine insurance?
Nonfiled classes allow for the customization of policy provisions and rates for individual insured
Which one of the following is included in the Cancellation condition of the Common Policy Conditions of an ISO Commercial Package Policy?
Notice of cancellation for nonpayment of premium must be mailed or delivered to the insured at least 10 days before the date of cancellation
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?
Omicron should include Utah, Arizona, and New Mexico in Item 3.C on the Info Page ad advise the insurer immediately if the company begins operations in any of those states
During 20X1, two employees, Beth and Jim, in collusion, stole money and merchandise from ABC. Beth and Jim stole money on May 1, 20X1 and August 13, 20X1. 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?
One
Regarding property coverage under the businessowners policy, which one of the following statements is true?
One of the distinguishing features of most businessowners policies is the automatic inclusion of business income and extra expense coverage
Judgement rating is used to rate
One-of-a-kind risks
Which one of the following statements is correct regarding the application of workers compensation laws in foreign countries?
Only a few countries have work comp laws comparable to those found in the US and Canada
SSA Company (SSA) has coverage under an ISO Commercial Crime Coverage Form. SSA suffered a covered safe burglary of its premises during which property that belonged to a customer was taken. How does the Ownership of Property—Interests Covered condition apply to the customer's loss of property?
Only the insured can make a claim under the policy for the customer's property
To what extent are extra expenses covered under the ISO Business Income Coverage (without Extra Expense) Coverage Form?
Only to the extent that they actually reduce the business income loss
A policy that covers all goods shipped or received by the insured during the policy's term is called a
Open cargo policy
Which one of the following terms has a specific definition in the business income coverage form?
Operations
The primary rating factors depend on all of the following EXCEPT: - Size class - Use of the vehicle - Radius of operation - Original cost new
Original cost new
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?
Outdoor property
Which one of the following property coverages is often included or available as an option in a businessowners policy (BOP)? Select one: A. Aircraft, automobiles, and watercraft B. Land on which the property is located, growing crops, and lawns C. Outdoor signs D. Radio, television, or satellite antennas and their wiring, masts or towers
Outdoor signs
Symbol 3 entered for a coverage under the Business Auto Coverage Form indicates that coverage is provided only for
Owned private passenger autos
All of the following are benefits provided by state workers compensation laws, EXCEPT:
Pain and suffering benefits
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?
Part One contains no out right exclusions
A unique coverage that provides for the insurer to offer a sum, not exceeding the applicable limit, to passengers or their survivors in the event that a passenger suffers death or injury resulting in dismemberment or loss of sight is called - Medical payments coverage - Passenger voluntary settlement coverage - Nonowned aircraft liability coverage - Aircraft bodily injury liability coverage
Passenger voluntary settlement coverage
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
Which one of these is not covered under the Employee Theft insuring agreement?
Patents
Matthew Jones, the named insured under an unendorsed Business Auto Coverage Form (BACF), requires his employees to use their own cars for business purposes. One of Matthew's employees, Paul, causes an accident while driving his own truck for the business. Matthew's BACF shows symbol 1 for liability coverage. Which one of the following correctly indicates whether Paul is an insured under the policy for the accident?
Paul is not covered because employees are not insured while using their own autos in the named insured's business
With only a few exceptions, the premium base for workers compensation insurance is...
Payroll
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?
Payroll of key employees
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. Penalties required under a workers compensation law because of the employer's willful misconduct. D. Benefits paid to employees with pre-existing injuries.
Penalties required under a work comp law because of the employer's willful misconduct
The Nationwide Marine Definition was no longer needed following the enactment of legislation in the 1950s that
Permitted a single insurer to offer fire, casualty, and marine coverage
For which one of the following must coverage be added by endorsement to the filed inland marine Physicians and Surgeons Equipment Coverage Form?
Personal effects of the insured or others while on premises
Various interests are insured in the ISO Commercial Crime Coverage Form. Which one of the following statements describes what happens if, during the policy period, the insured adds any premises or employees, other than by consolidation, merger, or acquisition?
Policy coverage will be extended automatically
The filed classes of inland marine business are those for which the
Policy forms and/or rates must be filed with the state insurance department
Commercial auto liability premium tables list premiums for private passenger autos by rating territory and by
Policy limit
XYZ contractor, covered under an unendorsed Commercial General Liability (CGL) Coverage Form, is installing kitchen cabinets in a customer's home. The contractor manufactured the cabinets. While the contractor is fastening a cabinet, it falls and injures the customer. Which one of the following best explains how coverage under the contractor's CGL Coverage Form applies in this case?
Premises and operations liability applies because the contractor was in the process of installing the cabinets
Pedestrian Wilma was injured as a result of a contractor's negligence when the contractor failed to adequately warn the public of a hazard when paving a road. Any resulting liability claim by Wilma against the contractor would be considered to have arisen from the contractor's
Premises and operations liability exposure
When rating Commercial General Liability (CGL) Coverage, the two rates that apply for most classifications are the
Premises-operations rate and the products-completed operations rate
For the purpose of the Other Insurance condition of the Commercial General Liability (CGL) Coverage Form, all applicable coverages are classified as either excess insurance or
Primary insurance
Premiums for private passenger autos insured under a business auto policy are obtained directly from which one of the following?
Private passenger premium tables
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?
Probable net income of the business if no loss had occurred
Top Electronics manufactures and sells electronic equipment and is insured under a CGL policy. A television manufactured by Top Electronics malfunctions in a customer's home, causing a fire. Assuming Top Electronics is found to be liable for the damage to the customer's home, any payments made under the policy will be subject to which one of the following limits?
Products-completed operations aggregate
Which one of the following Additional Coverages is covered under the Causes of Loss—Special Form but not under the Causes of Loss—Broad Form?
Property in Transit
Under the Property Damage insuring agreement of the Insurance Services Office (ISO) Equipment Breakdown Protection Coverage Form, the insurer agrees to pay for direct damage to "covered property." Which one of the following best describes the meaning of "covered property"?
Property that the named insured owns or property that is in the named insured's care, custody, or control and for which the named insured is legally liable
What ocean marine insurance policy or clause covers an insured shipowner's liability for damage to cargo of others being transported by the insured on the ship?
Protection and indemnity (P&I) insurance
Which one of the following ocean marine insurance policies or clauses covers an insured shipowner's liability for injuries to the passengers on board a ship into which the insured ship collided?
Protection and indemnity (P&I) insurance
Which one of the following ocean marine insurance policies or clauses covers the insured shipowner's liability for injuries to crew members of the insured ship in the event it collides with another vessel?
Protection and indemnity (P&I) insurance
Which one of the following ocean marine policies or clauses covers an insured shipowner's liability for damage to a docking pier struck by the insured vessel?
Protection and indemnity (P&I) insurance
The workers compensation and employers liability (WC&EL) policy primarily covers an employer's obligation to pay benefits required by workers compensation statutes, but also
Protects the employer against claims or suits for bodily injury to an employee when the work comp statute does not eliminate the right to sue the employer
Package modification factors for the Commercial Package Policy (CPP) often...
Provide a premium discount for the insured
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?
Provide coverage because the majority of state statutes require coverage for occupational disease
The standard property valuation provision in businessowner policies (BOPs) is...
Replacement cost
Which of the following optional coverages would obligate the insurer to pay for new property of like kind and quality, without any deduction for depreciation?
Replacement cost
One Common Policy Condition in the Commercial Package Policy (CPP) is the examination of books and records. The intent of this policy condition is to
Reserve the right of an insurer to inspect and audit the insured's books and records
Baker Company's salesperson negligently injures a pedestrian while driving a Baker Company vehicle on a sales call. Under which one of the following legal doctrines could the pedestrian hold Baker Company responsible for injury caused by the negligence of its employee?
Respondeat superior
The rule of placing liability on an employer for the acts of an employee is best known as
Respondeat superior
In 1933, the National Association of Insurance Commissioners adopted a Nationwide Marine Definition to
Restrict the underwriting powers of marine insurers to specified types of property
Business owner Joanna paid an estimated premium under her Commercial General Liability (CGL) policy. After the initial policy period had expired, the insurer determined through its premium audit that Joanna's estimated premium was $5,200 greater than her true earned premium determined. In this situation, the insurer is obligated to do which one of the following?
Return the $5,200 to Joanna, subject to any applicable policy minimum premium that might apply to the policy.
Which one of the following statements is true regarding the Inside the Premises—Robbery or Safe Burglary of Other Property insuring agreement of the Commercial Crime Coverage Form?
Safe burglary means the unlawful taking of a locked safe or vault from inside the premises
Which one of the following is a type of covered property under employee theft coverage?
Securities
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?
Securities
Ocean marine hull insurance policies usually cover on a specified perils basis rather than an "all-risks" basis. One of the specified causes of loss is "barratry." Which one of the following best describes the meaning of the term "barratry"?
Serious misconduct by the vessel's master or crew that is contrary to the owner's interest, such as a fraudulent or criminal act that causes damage to the vessel
When freight is guaranteed, the part primarily exposed to the loss of freight is the
Shipper *It's the shipper than guarantees that freight charges will be paid, regardless of whether the cargo is delivered
Which one of the following best describes the purpose served by transit insurance?
Shippers use it because their property may be damaged in circumstances under which a carrier has no legal obligation to pay the shipper's loss
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
When rating Commercial General Liability (CGL) Coverage, the exposure is a measure of the
Size of the business operations to be insured
A filed jewelers block coverage form is designed to meet the needs of
Small retail jewelers
Which one of the following is an exclusion unique to the Causes of Loss—Special Form?
Smog
Which one of the following is an example of a loss that would fall under the smoke cause of loss under the commercial property policy?
Smoke discharge due to sudden furnace malfunction
The Causes of Loss—Special Form provides coverage for which one of the following scenarios?
The melting ice, sleet, or snow on the building or structure
"Merchandise held in storage or for sale, raw materials and in-process or finished goods, including supplies used in their packing or shipping" is the Building and Personal Property Coverage Form's (BPP) definition for which one of the following?
Stock
The workers compensation policies for some monopolistic fund states do not include employers liability coverage. Which one of the following should an employer purchase to address this coverage gap?
Stopgap coverage
Under the Business Auto Coverage Form (BACF), collision is generally understood to mean
Striking together with violent impact
Which one of the following statements is correct with respect to the Valuation condition of the Building and Personal Property Coverage Form (BPP)?
Subject to certain exceptions, insured property is valued at its actual cash value (ACV)
Under the conditions of ISO Commercial Crime Coverage Form, which one of the following is a duty of the insured after discovering a loss or a situation that might result in a loss?
Submit a detailed, sworn proof of loss within 120 days
Which one of the following losses would be considered covered water damage under the commercial property policy Causes of Loss—Broad Form?
Sudden and accidental discharge of water from the breaking apart of an insured's water pipe
A clause included in ocean marine cargo insurance that covers the cost of reasonable measures that the insured is required to take to protect property from damage at the time of loss is referred to as the
Sue and labor clause
The cancellation provisions in the ISO Common Policy Conditions form are nearly always
Superseded by state law
The Business Income Agreed Value coverage option in the business income form is an option 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
Sullivan Construction Company (SCC) is an excavation contractor specializing in digging foundations for homes. It has five dump trucks, each of which is fitted with a tow hitch. Each vehicle tows a trailer used to move excavation equipment to and from job sites as well as to haul dirt. SCC's president, Bill Sullivan, drives a sport utility vehicle owned and insured by SCC. The company has one outside salesman and 10 construction employees, all of whom drive their own vehicles to work and on company business. SCC's equipment includes four backhoes used to dig building foundations and one bulldozer. Among other insurance, SCC has an unendorsed Business Auto Coverage Form (BAC). Which one of the following auto symbols should SCC select for physical damage coverage under its BAC?
Symbol 2 - Owned autos only Why?? Cause employees use their own cars too
Which one of the following symbols is normally entered only on the personal injury protection (PIP) line of the declarations of the Business Auto Coverage Form?
Symbol 5 - Owned Autos Subject to No-Fault
Wilson was driving his business auto when it was struck by a hit-and-run driver. He looked to his business auto policy for coverage for his injuries. Which one of the following symbols shown on his policy automatically provides such coverage?
Symbol 6 - Owned Autos Subject to a Compulsory Uninsured Motorists Law
Which one of the following coverage symbols in the ISO Business Auto Coverage Form requires that the insured notify the insurer within 30 days of newly acquired autos in order for those autos to have coverage under the policy? A. Symbol 3—Owned Private Passenger Auto Only B. Symbol 2—Owned Autos Only C. Symbol 7—Specifically Described Autos D. Symbol 8—Hired Autos Only
Symbol 7 - Specifically Described Autos *Symbol 7 requires that the insured notify the insurer within 30 days of newly acquired autos in order for those autos to have coverage under the policy
Which one of the following Business Auto Coverage Form (BACF) symbols requires that the insured notify the insurance company within 30 days of acquiring a new auto of the same type already insured for coverage to apply?
Symbol 7 - Specifically Described Autos *Symbols 1-6 and 19 automatically over newly acquired autos of the same types without the need for the insured to report them to the insurance company. Symbol 7 requires such notice.
Which one of the following symbols used in the Business Auto Coverage Form (BACF) is correctly described? Select one: A. Symbol 1—Owned Autos Only B. Symbol 2—Owned Private Passenger Autos Only C. Symbol 7—Hired Autos Only D. Symbol 9—Nonowned Autos Only
Symbol 9 - Nonowned Autos Only
A named insured's employee rents an auto while on a business trip and is involved in an accident. Which one of the following symbols on the business auto policy would provide coverage for the named insured?
Symbol 9 - Nonowned Autos Only *It is Symbol 9 and NOT Symbol 8 (Hired Autos Only) because the auto was not rented by the named insured
The Albert Corporation wishes to provide liability coverage for owned and nonowned autos, but not for hired autos. Under Albert's Business Auto Coverage Form, which symbol or symbols should be used for liability coverage?
Symbols 2 and 9 *Symbol 2 provides coverage for owned autos, and Symbol 9 provides coverage for nonowned autos
Sue is injured at work, and her job responsibilities are curtailed for 30 days, after which time she is fully recovered. Sue has which one of the following types of workers compensation disabilities?
Temporary partial disability
A not-for-profit public interest group posted a newspaper editorial on its electronic chatroom that falsely accused a local politician of criminal activity. The public interest group is insured under an unendorsed Commercial General Liability (CGL) policy. The politician who was falsely accused filed suit against the public interest group for libel. Which one of these statements best describes the probable response the public interest group will receive from its insurer after the insurer reviews these facts?
The claim will be denied because Coverage B of the CGL policy excludes any injury arising out of an electronic chatroom or electronic bulletin board that is owned, hosted, or controlled by the insured
Which one of the following is true about the Business Income Agreed Value coverage option in a business income form?
The coinsurance condition is suspended as long as the insured carries the amount of insurance that is agreed upon with the insurer
Equipment breakdown insurance is needed because
The commercial property causes of loss form excludes electrical breakdown, mechanical breakdown, and steam boiler explosion
Which one of the following statements is correct with respect to the Concealment, Misrepresentation, or Fraud condition of the Commercial Property Conditions Form?
The commercial property coverage part voids coverage if the insured conceals a material fact pertaining to the covered property
Which one of the following statements is correct with regard to Loss Payment of the Building and Personal Property Coverage Form (BPP)?
The condition states that regardless of the value of the loss, the insurer will pay no more than the insured's financial interest in the covered property
Which one of the following is correct with respect to the Vacancy condition of the Building and Personal Property Coverage Form (BPP)?
The conditions under which a building is considered to be vacant are different for a tenant than for an owner
Joan has a Business Auto Coverage Form (BACF). Which one of the following losses would be covered as auto physical damage?
The cost to repair vehicle damage that results from hitting a deer
Which one of the following is true regarding the Extended Period to Discover Loss condition of the ISO Commercial Crime Coverage Form written on a loss sustained basis?
The coverage applies to acts discovered during the policy period or within one year after the policy is cancelled
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?
The coverage provided by Part One obligates the insurer to pay all benefits required of the insured by the work comp law or occupational disease law of any state listed in Item #.A of the Info Page
The Voluntary Compensation and Employers Liability Coverage Endorsement provides for which one of the following if an employee entitled to payment under the endorsement brings a suit under the common law?
The coverage provided by the endorsement reverts to employers liability insurance
In determining commercial auto base premiums for zone rated autos, insurers consider the vehicle's cost new, the type of vehicle, the chosen deductible, the geographical zone, and
The current age of the vehicle
Under the Loss Sustained During Prior Insurance Not Issued by Us or Any Affiliate condition, the current insurer agrees to pay a loss that occurred prior to its policy term and that was discovered during its policy term when four criteria have been met. If all of the criteria have been met, how will the insurer(s) pay the loss?
The current insurer will pay the lesser of the amount recoverable under the present insurance or the prior insurance
The Commercial Crime Coverage Form's Inside the Premises—Theft of Money and Securities insuring agreement extends coverage to apply to loss of or damage to a container that holds covered property if
The damage is caused by actual or attempted theft or unlawful entry
The class code in a commercial general liability policy is assigned according to
The description in the classifications table that best fits the operations of the organization
There are many kinds of inland marine policies covering many classes of business. The reason some classes are referred to as filed classes is because these are the classes for which the rates and/or policy forms are filed with
The state insurance department
Which one of the following statements is correct with respect to experience rating of workers compensation insurance? Select one: A. The past period used in experience rating is usually the single year prior to policy inception. B. The experience rating computation produces an experience modification, or mod, which serves as a rate multiplier. C. In all states, the minimum annual premium required to qualify for experience rating is $50,000. 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.
The experience rating computation produces an experience modification, or mod, which serves as a rate multiplier
The loss determination section of a business income insurance policy states that the business income loss is determined by all of the following, EXCEPT: A. The 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 B. The increase in business resulting from a catastrophe C. The net income of the business before the loss occurred D. The probable net income of the business if no loss had occurred
The increase in business resulting for a catastrophe
Many states and municipalities require that boilers and other pressure vessels be inspected by a qualified inspector. Which one of the following is usually licensed to perform these inspections, which are often referred to as "jurisdictional inspections"?
The inspectors working for equipment breakdown insurers
A state should be listed in Item 3.C of the Workers Compensation and Employers Liability Insurance Policy Information Page under which one of the following circumstances?
The insured expects operations might be extended to that state
The Random Bookstore (Random) is covered by an unendorsed Commercial General Liability (CGL) Coverage Form. A customer in the store tripped over her untied shoelace and fell, breaking her right arm. Which one of the following is a reason Random's insurer might refuse to pay any damages under Random's CGL policy?
The insured must be legally obligated before the insurer has the duty of paying
The damage to premises rented to you limit of Coverage A of the Commercial General Liability (CGL) policy applies to
The insured's liability for fire damage to premises it rents or temporarily occupies
Which one of the following is correct with respect to the Inspections and Surveys common condition of the Insurance Services Office (ISO) Commercial Package Policy?
The insurer does not make safety inspections, and does not guarantee that conditions are safe or healthful
An insured is reviewing the Commercial Package Policy (CPP) to determine which conditions apply to all coverage parts in the policy. One of those conditions states that
The insurer has the right to do an on-site inspection of the insured's books and records
Which one of the following statements is correct with respect to the Building and Personal Property Coverage Form (BPP) deductible?
The insurer is not obligated to pay anything to the insured unless the loss exceeds the deductible
Which one of the following statements is correct with respect to the Replacement Cost optional coverage of the Building and Personal Property Coverage Form (BPP)?
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 obsolesce
Which of the following statements is correct with respect to the Mortgageholder condition of the Building and Personal Property Coverage Form (BPP)?
The insurer is sometimes obligated to make a loss payment to the mortgageholder even though it has denied coverage, for example, to an insured who has committed arson
A local civic club carries $10,000 per occurrence coverage for loss due to employee theft under the ISO Commercial Crime Coverage Form. The club president reported to the insurance carrier there were seven separate acts of theft by the same two employees acting in collusion over the course of the policy year. The losses totaled $50,000. How much should the club's insurer pay?
The insurer should pay $10,00 for one occurrence, despite the number of employees *This would all be considered a single occurrence
A small retail store, which carries a $20,000 limit for Robbery of Safe Burglary of Other Property under an ISO Commercial Crime Coverage Form, discovered 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 and semiprecious gemstones that totaled $19,000 in value. How much should the retail store's insurer pay for this loss?
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. *Because theft consisted of precious and semiprecious stones
An independent contractor, while working at the insured's premises, gained access to a company computer and diverted a $50,000 shipment of platinum from the insured's premises to another address unauthorized by the insured. The platinum importer is demanding payment for the shipment it delivered. The insured carries a $100,000 computer and funds transfer fraud limit of liability under the ISO Commercial Crime Coverage Form. How much should the insurer pay for this loss?
The insurer should pay $50,000, which is within the $100,000 limit of liability
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?
The insurer should pay applicable death benefits to the employee's dependents
An insured has a CGL with an each occurrence limit of $1,000,000 and a general aggregate limit of $2,000,000. Four occurrences take place on the insured's premises during a policy period: $100,000; $300,000; $400,000; and $1,000,000. How much will the insurer pay for all of the losses?
The insurer will pay $100,000 + $300,000 +$400,000 + $1,000,000 = $1,800,000.
Bill's Premium Packing (BPP) operates a fruit and vegetable canning operation. It purchases its produce from growers in three states in the Northeast. As a result, its operations are seasonal and during peak periods it depends on large numbers of casual laborers who are exempt from coverage under the applicable state workers compensation laws. Therefore, the company has purchased a Voluntary Compensation and Employers Liability Endorsement for its Workers Compensation and Employers Liability Insurance (WC&EL) Policy. When a casual laborer is badly injured on the job, the worker launches a lawsuit against BPP, alleging negligence. Which one of the following best describes how BPP's WC&EL insurer would respond?
The insurer would defend the insured against the employee's suit and pay any settlements awarded, subject to the stipulated limits of liability
Theta Logistics and Warehousing is insured under a Workers Compensation and Employers Liability Insurance Policy. Item 3.A of the policy's Information Page lists California. Item 3.C of the Information Page reads: "All states except those listed in Item 3.A. and ND, OH, WA, WV, and WY." On January 2, Theta takes possession of an empty warehouse that it has purchased in New Mexico. That same day, Theta sends a letter to its insurer advising of its newly expanded operations. On January 3, one of Theta's employees is injured on the job at the new location. On January 4, the insurer receives the letter. Which one of the following best describes how Theta's insurer would respond?
The insurer would pay benefits as outlined in the New Mexico state work comp law
Lambda International manufactures fertilizers. The company has a Workers Compensation and Employer's Liability Insurance Policy. The Information Page of the policy includes the following limits for employers liability insurance: Bodily Injury by Accident: $100,000 each accident Bodily Injury by Disease: $500,000 policy limit Bodily Injury by Disease: $100,000 each employee When an employee at Lambda's plant accidentally backs a forklift into a tank containing a caustic chemical, the tank ruptures and six employees are badly burned. Although all of the workers recover fully, each of the six requires $25,000 in medical treatment. Which one of the following best describes how Lambda's insurer would respond?
The insurer would pay the benefits required by the work comp law up to the limits found within the law itself
Which one of the following statements is true regarding the personal and advertising injury limit under the Commercial General Liability (CGL) Coverage Form? Select one: A. The limit is the most the insurer will pay for all personal and advertising injury to one person or organization. B. Payments made under this limit do not reduce the general aggregate limit. C. The limit is the most the insurer will pay for personal injury per occurrence. D. Payments made under this limit reduce the each occurrence limit for bodily injury and property damage under Coverage A.
The limit is the most the insurer will pay for all personal and advertising injury to one person or org
Which one of the following statements is correct with respect to the livestock coverage provided by most farm policies?
The livestock coverage provided by most farm policies is not adequate for some farmers and ranchers
The businessowners policy (BOP) liability coverage differs from the standard occurrence version of the ISO Commercial General Liability (CGL) Coverage Form in that: - CGL policies typically offer insured fewer choices regarding policy limits - A CGL policy can be endorse to cover many different professional liability exposures, but no counterparts to these endorsements exist within the BOP policy - The minimum liability limit is higher in a BOP than in the CGL coverage form - ISO offers endorsements to add employee benefits liability coverage and employment practices liability coverage to a CGL policy, but BOP insured must purchase stand-alone policies to obtain these coverages
The minimum liability limit is higher in a BOP than in the CGL coverage form
General liability declarations forms contain spaces for showing these common items of information, EXCEPT:
The names of any additional insureds
Which one of the following is true of the supplementary payments in the Commercial General Liability (CGL) Coverage Form?
The obligation to pay these supplementary payments ends when the limit of insurance is exhausted
When an independent contractor is performing operations on a property owner's premises, the property owner sometimes requires the contractor to provide a policy that protects the owner against which one of the following?
The operations being performed by the contractor
The determination of which state's law applies depends on the provisions of the laws in question and typical considerations include all of the following, EXCEPT: - The place and nature of employment - The place where the employee was interviewed for employment - The employee's place of residence - The state in which the employer is domiciled
The place where the employee was interviewed for employment
The Common Policy Conditions of the ISO Commercial Package Policy include a clause concerning changes in the policy. This clause states that
The policy can be changed only by a written endorsement issued by the insurer
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?
The policy would provide coverage for 120 days
Which one of the following would be covered in some states under Part Two of the Workers Compensation and Employers Liability Insurance Policy?
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 is true regarding the application of symbols under the Business Auto Coverage (BAC) Form?
The symbols indicate the autos to which each coverage applies
A factory fire caused by an employer's negligence results in the death of one employee. The employee was the sole parent and caregiver of a disabled young adult. The young adult sues the employer for loss of services. Which one of the manufacturer's policies would respond to this suit?
The work comp and employers liability policy would respond as loss of services is considered under employers liability insurance
The Voluntary Compensation and Employers Liability Coverage Endorsement to a workers compensation policy is needed for which one of the following reasons?
The work comp laws of most states exempt some types of employment from statutory work comp benefits
When a worker is required to travel to another state and is injured in that other state, which one of the following is a typical consideration in determining which state's law applies for the purpose of determining workers compensation coverage?
The worker's place of residence
An employee of Argot Architects is taking expensive $20,000 drawings to a client's location 30 miles away. While on the way to the company vehicle, a stranger accosts the employee and takes the drawings. How would the limit of insurance apply to this loss under the Outside the Premises insuring agreement of the ISO Commercial Crime Coverage Form?
There is a per occurrence limit of $5,000
BBC Manufacturing (BBC) has an unendorsed Commercial General Liability (CGL) Coverage Form. BBC has expanded its sales outside the United States. Due to injuries from alleged defective products of BBC, lawsuits are brought in Europe, Mexico, Canada and Puerto Rico. Which one of the following statements describes the extent for which BBC's insurer will provide coverage or defense in these jurisdictions?
There is coverage and defense for Canada and Puerto Rico, since these are covered territories
Which one of the following best describes coverage for crime losses under the commercial property policy Causes of Loss—Basic Form?
There is coverage for building damage caused by burglars breaking in or exiting the insured's property
A software company whose main business is designing and providing borders and frames on websites is sued for libel along with the website's host. The software company has an unendorsed Commercial General Liability policy and submits this claim to its insurer. Which one of these responses best describes the probable response the software company will receive from its insurer?
There is coverage under Coverage B because tthe exclusion regarding insured in media and Internet-type businesses specifically states that placing frames, borders, links, or ad materials for the insured or others anywhere on the Internet is not considered the business of advertising, broadcasting, publishing, or telecasting
Which one of the following statements is correct with respect to large deductible plans for workers compensation insurance?
They allow the insured, in effect, to self-insure most of its work comp exposures
All of the following are exclusions that appear under the employers liability section of the workers compensation and employers liability policy, EXCEPT: - Punitive damages for injury or death of any illegally employed person - Bodily injury to employees employed in violation of the law with knowledge of the insured or any exec officers of the insured - Bodily injury intentionally caused by the insured - Third-party-over claims
Third-party-over claims
If the Replacement Cost optional coverage of the Building and Personal Property Coverage Form (BPP) is selected, tenants' improvements and betterments are
Valued at replacement cost if the tenant actually repairs or replaces them, at its own cost, as soon as reasonably possible after the loss
Which one of the following is one of the covered causes of loss in the commercial property policy Causes of Loss—Basic form?
Vandalism
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?
Various types of livestock
Which one of the following is a covered cause of loss under the Causes of Loss—Basic Form?
Volcanic action
Green Parks employs three secretaries and accountants, five farm laborers, and one housekeeper. What endorsement would Green Parks likely add to its workers compensation policy to make sure all employees have coverage?
Voluntary compensation endorsement
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?
Waiver of recovery against any other party may be given by the insured, provided the waiver is made in writing BEFORE the loss occurs
Which one of the following is a common example of a bailee's coverage form that covers loss to customers' goods only if the insured bailee is legally liable for the loss?
Warehouse operator's legal liability policy
An importer needs protection for its cargo not only while on board an oceangoing vessel, but also while it's being shipped by truck both to the vessel from the point of origin and from the vessel to the final destination. Which one of the following ocean marine clauses accommodates the importer's needs for continuous coverage during the entire course of transit, including the land transportation?
Warehouse to warehouse clause
To which one of these would the Coverage A Aircraft, Auto, or Watercraft exclusion not apply?
Watercraft while ashore on the insured's premises
All of the following are supplementary payments under the Business Auto Coverage Form, Except: - All expenses incurred by the insurer - Work comp expenses - All reasonable expenses incurred by the insured at the insurer's request - All court costs taxed against the insured in any suit against the insured defended by the insurer
Work comp expenses
Directors and officers liability insurance is insurance that covers a corporation's directors and officers against liability for which one of the following?
Wrongful acts that would be covered under the policy
Luis Munoz's corporation is insured under a Commercial General Liability (CGL) Coverage Form. On March 1, Luis acquired an additional organization but did not notify his insurer. On April 15, the acquired organization suffered a liability loss. Will Luis' CGL cover the liability loss of the newly acquired organization?
Yes, because the newly acquired org qualifies as a named insured and is covered for 90 days after its acquisition
International Toys (IT) manufactures toys in South Carolina and sells them to stores around the world. A customer in Europe is injured when one of the toys malfunctions and severs the customer's hand. The customer files suit in the United States. If IT is found liable, does its Commercial General Liability (CGL) Coverage Form cover the customer's claim?
Yes, because the toys were manufactured in the US
Dale's Dive Shop rents a 20-foot boat for an employee outing. While Dale is driving the boat on a lake, he accidentally injures a swimmer. Does Dale's Commercial General Liability (CGL) Coverage Form cover the swimmer's bodily injury?
Yes, because this watercraft qualifies as an exception to the watercraft exclusion
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?
"All-risks" - not in motion aircraft 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
Officials generally required to obtain public official bonds include those whose duties involve which one of the following? Select one: A. Paying of court judgments if appeals fail. B. Guaranteeing that work will be completed according to the contract. C. Exercising a privilege in connection with a business. D. Seizing or disposing of property.
D. Seizing or disposing of property
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
Business personal property eligible for coverage under the businessowners policy (BOP) includes Select one: A. Business personal property of a wholesaler that occupies a 15,000 square foot building. B. Business personal property owned by a bank. C. Business personal property in a 100,000 square foot office. D. Personal property in residential condominium units.
A. Business personal property of a wholesalers that occupies a 15,000 square foot building *Wholesalers operations of less than 35,000 square feet are typically eligible for businessowners coverage
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. Like homeowners policies, commercial insurance policies also provide worldwide coverage. C. Standard forms for international operations workers compensation exposures are available. D. Voluntary workers compensation policies seldom include coverage for transportation expenses to return disabled or deceased employees to the United States.
A. Each insurer in the voluntary work comp insurance market develops its own policy wording
Which one of the following elements would you find in the Conditions of an umbrella liability insurance policy? Select one: A. Maintenance of underlying insurance condition B. Coverage triggers condition C. Restrictions on coverages beyond what may appear on underlying policies condition D. Self-insured retention condition
A. Maintenance of underlying insurance condition
Insurers in a particular nation selling insurance in that same nation are known as admitted insurers. These admitted insurers provide which one of the following?
Admitted coverage
Which of the following policies provides coverage for liability arising from the insured's electronic content?
An electronic media liability insuring agreement
Which one of the following statements is correct with respect to the exclusions of an umbrella liability insurance policy?
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?
An underlying policy does not cover the claim
CGL coverage differs from the liability coverage afforded to physicians as it relates to the source of liability. A physician's professional liability usually arises for professional practices or failure to act in a professional manner. An example of a medical error that causes injury and can result in liability is which one of the following? Select one: A. Filing insurance claims more than 30 days after a medical procedure B. Failing to properly diagnose a disease C. Overstating charges or fees relating to medical procedures D. Prescribing medication which is not covered by the patient's insurance
B. Failing to properly diagnose a disease
Which one of the following is a characteristic of a site-specific environmental impairment liability policy? Select one: A. 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. B. It provides coverage on a claims-made basis. C. It typically provides coverage for acid rain, war, and nuclear liability. D. It excludes coverage for bodily injury claims against the insured
B. It provides coverage on a claims-made basis
Which one of the following statements is correct with respect to eligibility for coverage under a businessowners policy (BOP)? Select one: A. Eligible risks must exceed 50,000 square feet in total floor area or $8 million in annual gross sales at each location. B. Some insurers have expanded the eligibility for their BOP programs to include restaurants and contractors. C. Insurers consider most manufacturing businesses as being eligible for their BOP programs. D. Every insurer that writes businessowners insurance uses the same eligibility rules to define the types of businesses that it will accept.
B. Some insurers have expanded their eligibility for their BOP programs to include restaurants and contractors
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)?
BOP property rates include loadings (built-in charges) for these coverages
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
Which one of the following types of buildings would most likely be eligible for coverage under a businessowners (BOP) policy? Select one: A. A 10-story apartment building of 100,000 square feet containing offices B. An eight-story office building that covers 50,000 square feet C. A 10,000 square foot building housing an insurance agency D. A 70,000 square foot office building with no apartments
C. A 10,000 square foot building housing an insurance agency *Buildings that do not exceed 35,000 square feet in area are generally eligible for BOP coverage
Fiduciary bonds are commonly required of a person who does which one of the following? Select one: A. Disputes the ownership of personal property B. Wishes to appeal an adverse court decision C. Holds property in trust for the benefit of others D. Acts as treasurer for public funds
C. Holds property in trust for the benefit of others
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 is an act of terrorism. B. It is a violent act or an act that is dangerous to human life, property, or infrastructure. C. It resulted in damage within the U.S. D. 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.
C. It resulted in damage within the US
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?
Compelling the insured to agree to the settlement proposed by the insurer
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
Which one of the following situations illustrates a professional liability loss exposure? Select one: A. An attorney serves on the board of a not-for-profit organization. B. A physician fails to maintain adequate lighting in the office parking lot. C. A foreman fails to install safety nets in a building under construction. D. An insurance producer fails to properly advise a client on his or her insurance needs.
D. An insurance producer fails to properly advise a client on his or her insurance needs
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 supplemental and excess auto D. Commercial pollution liability
D. Commercial pollution liability
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. Judicial agreements and contracts B. Licensing requirements C. Fiduciary agreements D. Construction contracts
D. Construction contracts
Which one of the following statements is true regarding insurance coverage for foreign operations? Select one: A. Voluntary workers compensation policies exclude coverage for transportation expense to return disabled or deceased employees to the United States. B. Voluntary workers compensation policies do not provide coverage for endemic diseases. 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 US frequently must concern themselves with loss exposures that exist outside of the usual coverage territory in standard US coverage forms
Insurers are unwilling to provide professional liability insurance under the CGL because
Different underwriting and claim handling skills are required
Which of the following lines of insurance is eligible for TRIPRA 2015's loss-sharing program? - Personal lines - Directors and officers liability - Life - Federal flood
Directors and officers liability
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
The coverage that an umbrella liability policy provides for claims not covered at all by the underlying policies is called
Drop-down coverage
The human resources vice president of LZ Corporation (LZ) informed Barbara, a new employee, that she must wait sixty days to enroll in the company health insurance plan. The advice was incorrect, and Barbara was unable to obtain employer-sponsored health insurance until the next open enrollment period nine months later. Barbara sues LZ for the extra cost to purchase private health insurance for the nine-month period. Which one of the following types of insurance would cover LZ for this claim?
Employee benefits liability
Insurance covering an employer against liability claims alleging improper advice in the administration of a group health program is
Employee benefits liability insurance
Mark, a 50-year-old employee of Ajax Company (Ajax), is fired even though his annual performance reviews have indicated that his work has been outstanding. Mark believes he has been discriminated against because of his age and sues the directors of Ajax. What type of insurance policy does Ajax need to provide coverage for this type of lawsuit?
Employment practices liability
Diseases that are generally associated with a specific geographic region are known as what type of diseases?
Endemic *These are not normally found in the US and need to be included under foreign work comp coverage
Professional liability for professions such as accounting, insurance, law, and engineering is often called which one of the following?
Errors and omissions liability
An umbrella liability policy differs from an ordinary excess liability policy in that an umbrella liability policy almost always provides which one of the following?
Excess coverage over several primary policies
Professional liability and management liability policies differ from the Commercial General Liability (CGL) Coverage Form in all of the following ways, EXCEPT: - Claims-made trigger - Consent to settle - Exclusions - Deductibles
Exclusions *Exclusions are in both professional liability policies and the CGL coverage form, so they are not a way in which the 2 forms differ
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
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
An excess liability policy covers a liability loss that exceeds the underlying limits only if the loss is covered by the underlying insurance. What type of excess liability policy is this?
Following-form policy
Professional liability insurance is usually written on
Forms independently developed by individual insurers
All of the following are main types of management liability insurance, EXCEPT: - Directors and officers liability - Employment practices liability - Fiduciary liability - Insurance agents and brokers errors and omissions (E&O) liability
Insurance agents and brokers errors and omissions (E&O) liability *These are professional liability, not mgmt liab
In many cases, the law of a particular nation requires that coverage for properties in that nation be purchased from which one of the following?
Insurers licensed to engage in the insurance business in that nation
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
Fiduciary liability insurance provides coverage for negligence involved in which one of the following? Select one: A. Termination of employees. B. Violations of licensee duties. C. Investment decisions in retirement plans. D. Management of the corporation.
Investment decisions in retirement plans
An umbrella liability policy performs which one of the following basic functions?
It provides additional limits above the each occurrence limits of the insured's primary policies
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
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
Maintenance bond
Although sometimes included in the definition of professional liability insurance, coverages such as directors and officers liability, employment practices liability, employee benefits liability, and fiduciary liability are now commonly referred to as
Management liability insurance
CGL policies differ from professional liability and management liability policies in how deductibles are applied. Most professional liability and management liability policies have which one of the following?
Mandatory minimum deductibles
Drop-down coverage in an umbrella liability policy is provided for claims that are which one of the following?
Not covered by an underlying policy, INCLUDING claims not covered due to the depletion of the underlying policy's aggregate limits
Most insurers that offer businessowner-type policies for contractors rate the liability coverage for eligible contractors separately from the property coverages by applying a separate liability rate to the insured's
Payroll, receipts, or number of full- and part-time employees
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
Political risk insurance
An advantage of the BOP is that it: - Increases adverse selection for the insurer - Permits the insurer to use complex rating - Increases insurers' handling costs - Provides convenience and economy for insureds
Provides convenience and economy for insureds
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
Coverage enhancements of site-specific environmental impairment liability (EIL) policies allow policyholders to purchase protection against the costs of all of the following, EXCEPT: - On-site cleanup - Remediation stop-loss - Claims arising from releases from third-party disposal sites - Claims arising from preexisting pollution at insured sites
Remediation stop-loss *This is an environmental insurance policy, not a cost covered by a coverage enhancement of site-specific EIL policies
Umbrella liability policies almost always provide excess coverage over several primary policies while include all of the following, EXCEPT: - Commercial general liability - Auto liability - Replacement liability - Employers liability
Replacement liability
Which one of the following is true regarding the Terrorism Risk Insurance Program Reauthorization Act of 2015 (TRIPRA 2015)?
TRIPRA 2015 requires all commercial property-casualty insurers to make coverage available for terrorism losses as defined by the act
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
Businessowners policy (BOP) rating incorporates which one of the following variables?
The amount of the policy deductible
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
Contractor Jerry provides a bid bond guaranteeing he will enter into a construction contract if his bid is accepted by business owner Sue. If Jerry's bid is accepted, but he fails to enter into a construction contract, the issuer of the bid bond would pay Sue which one of the following?
The difference between the amount of Jerry's bid and the next lowest bid accepted plus additional expenses incurred due to Jerry's default
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 work comp coverage, the endorsements include acts of war
Even when the duty to select investments for an employee benefits plan has been delegated to others, such as in a mutual fund or brokerage firm, the fiduciaries may be responsible for which one of the following?
The errors or negligence of the investment managers
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 *NOT subject to a self-insured retention (SIR)
How are businessowners policies rated?
They are rated based on the amount of coverage provided
Many of the provisions in professional liability policies resemble those found in commercial general liability policies. However, some of the provisions differ in key ways such as the
Use of a claims-made trigger
