Arkansas P&C Exam
#10. A commercial property special form covers property in transit up to a) Full replacement cost. b) $5,000. c) ACV. d) $500.
$5,000.
#48. An employee sustained a temporary injury while at work. Her average weekly wage at the time of the accident was $900 a week. The statewide average weekly wage at the time was $600. What is the most that the employee can recover from Workers Compensation benefits for her lost wages? a) $400/week b) $450/week c) $510/week d) $600/week
$510/week
#123. A producer moves to another state and terminates her residency in Arkansas. The Arkansas producer's license must be returned to the Commissioner within how many days? a) 3 days b) 10 days c) 30 days d) 45 days
10 days
#41. For reasons other than nonpayment of premium, how many days' notice must an insurer give a policyowner before canceling a homeowners policy? a) 10 days b) 20 days c) 30 days d) 60 days
10 days.
#12. Under the additional living expenses coverage, if a civil authority prohibits the insured from using the dwelling because of direct damage to a neighboring location from a peril covered in the insured's policy, loss would be covered for up to a) 1 month. b) 90 days. c) 1 week. d) 2 weeks.
2 weeks
#45. How long is the licensing period in Arkansas? a) 3 years b) 4 years c) 1 year d) 2 years
2 years
#46. For reasons other than nonpayment of premium, how many days' notice must an insurer give a policyowner before canceling a homeowners policy? a) 10 days b) 20 days c) 30 days d) 60 days
20 days
#35. An insured owns a building that is valued at $400,000. To comply with the 80% coinsurance provision of his insurance policy, how much should he insure the property for? a) 100% of the market value b) $400,000 c) $32,000 d) 80% of the property's replacement cost or more
80% of the property's replacement cost or more
#42. Which of the following would be covered by the broad theft endorsement on a dwelling policy? a) Fabric and patterns in a clothing designer's studio at her home b) An antique car c) A camera the insured has with him on vacation d) A pedigreed show dog
A camera the insured has with him on vacation
#61. With respect to auto insurance, the term owned autos includes all of the following EXCEPT a) A pickup or van acquired by the named insured during the policy period. b) Any private passenger auto leased to the named insured for a period of more than 6 months. c) A pickup or van titled to and used in the named insured's business. d) Any private passenger auto titled to the named insured.
A pickup or van titled to and used in the named insured's business.
#45. Which of the following is an example of a producer's fiduciary responsibilities? a) A producer promptly forwarding premiums to the insurance company b) A producer helping clients to file claims c) A producer doing a review of his/her client's coverage d) A producer offering additional coverage to his client
A producer promptly forwarding premiums to the insurance company
#15. A business income coverage form would cover all of the following situations EXCEPT a) A union strike of construction workers causes the repair of the insured's building to be delayed for a period of time. b) A hurricane damages the insured's building; a temporary relocation to another building is necessary. c) A replacement part for necessary equipment is ordered with overnight delivery charges. d) The building next door is damaged during a drug bust, and the area is barred from the public.
A union strike of construction workers causes the repair of the insured's building to be delayed for a period of time.
#103. Which of the following types of valuation works best for property whose value does not fluctuate much? a) Market value b) Stated amount c) Inflation guard d) Agreed value
Agreed value
#47. Which of the following insurers must be members of the Rural Risk Underwriting Association in this state? a) All authorized insurers b) All insurers that write property insurance c) Insurers who want to secure protection by the Association d) Insurers that only write farm insurance
All insurers that write property insurance
#18. The inspections and surveys condition in a businessowners policy a) Allows the insurer the right to inspect the insured's premises. b) Validates that the insured is in compliance with state and federal guidelines. c) Obligates the insurer to make annual safety inspections. d) Guarantees that all working conditions are safe and healthful.
Allows the insurer the right to inspect the insured's premises.
#33. Which of the following risks would NOT be eligible for coverage under a homeowners policy? a) An applicant who owns and lives in a single-family dwelling that also contains incidental business activities b) An applicant who owns and lives on a commercial farm c) An applicant who lives in a duplex that she does not own d) An applicant who owns and lives in a duplex
An applicant who owns and lives on a commercial farm
#63. Which of the following risks would NOT be eligible for coverage under a homeowners policy? a) An applicant who owns and lives in a single-family dwelling that also contains incidental business activities b) An applicant who owns and lives on a commercial farm c) An applicant who lives in a duplex that she does not own d) An applicant who owns and lives in a duplex
An applicant who owns and lives on a commercial farm
#40. Which would NOT be covered by the inside the premises - robbery or safe burglary of other property coverage? a) An employee is caught stealing cash from the register. b) Two men break a window during an attempted robbery. c) Someone breaks in after business hours, pries open a wall vault and steals several valuable paintings. d) A store clerk is forced into the storage room and locked in while the intruder steals high-value merchandise.
An employee is caught stealing cash from the register.
#129. If an insurance company makes a statement that its policies are guaranteed by the existence of the Insurance Guaranty Association, that would be considered a) A required disclosure. b) A legal representation of the Association. c) An unfair trade practice. d) A misrepresentation.
An unfair trade practice.
#38. Which coverage form would provide coverage for all incoming and outgoing shipments? a) Motor truck cargo b) Mail coverage c) Annual transit d) Trip transit
Annual transit
#11. While an insured's covered auto is in the repair shop following damage caused by a collision, the insured would have coverage for which of the following vehicles under a personal auto policy? a) Any vehicle while located inside a racing facility for the purpose of racing b) Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair c) Any vehicle used by the insured without the reasonable belief that the insured is entitled to use such vehicle d) Any auto furnished for the insured's regular use, but not named on the policy
Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair
#39. While an insured's covered auto is in the repair shop following damage caused by a collision, the insured would have coverage for which of the following vehicles under a personal auto policy? a) Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair b) Any vehicle used by the insured without the reasonable belief that the insured is entitled to use such vehicle c) Any auto furnished for the insured's regular use, but not named on the policy d) Any vehicle while located inside a racing facility for the purpose of racing
Any vehicle not owned by the insured, but furnished for use while the covered auto is out of normal use because of repair
#43. In order to get a non-resident license is this state, producers must a) Apply and pay a fee to a non-resident state that reciprocates. b) Pass the non-resident state exam and satisfy their continuing education requirements. c) Represent an agency located is this state. d) Surrender their license in their state of residence.
Apply and pay a fee to a non-resident state that reciprocates.
#120. How often must the insurers notify policyholders who do not currently carry residential earthquake insurance of potential eligibility for residential earthquake insurance through the Market Assistance Program? a) At least 3 times over a 4-year period b) Once every 3 years c) Annually d) At least once every 2 years
At least 3 times over a 4-year period
#83. Who will transport the property of anyone who hires them? a) Common carriers b) Private carriers c) Motor truck carriers d) Commercial carriers
Common carriers
#22. When applying for an individual life insurance policy, an applicant states that he went to the doctor for nausea, but fails to mention that he was also having severe chest pains. This is an example of a) Warranty. b) Concealment. c) Misrepresentation. d) Fraud.
Concealment.
#64. Because an insurance policy is a legal contract, it must conform to the state laws governing contracts which require all of the following elements EXCEPT a) Conditions. b) Consideration. c) Legal purpose. d) Offer and acceptance.
Conditions.
#4. An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of the following insurance principles has the insurer violated? a) Adhesion b) Consideration c) Good faith d) Representation
Consideration
#49. Which of the following only provides professional advice regarding insurance policies? a) Nonresident producer b) Consultant c) Producer d) Broker
Consultant
#15. An individual's construction company leaves mobile equipment and construction machinery on the job site until the project is completed. What could this individual use to insure it? a) Bailee's customers form b) Builders risk form c) General property form d) Contractors equipment floater
Contractors equipment floater
#13. Which of the following property coverages would provide protection to contents damaged by fire? a) Coverage B b) Coverage C c) Coverage D d) Coverage A
Coverage C
#12. A startup used car dealership buys cars at auto auctions in 30 states. It wants to be certain that damage coverage is provided when the cars are driven or transported from the auctions to the dealership. In regard to the business auto physical damage coverage, which is true? a) Coverage is provided if dealership employees are in possession of the subject automobile. b) Coverage is provided at additional premium. c) Coverage is provided for the wholesale amount only. d) Coverage is not provided under this form.
Coverage is provided at additional premium.
#21. The extra expense coverage form provides a) Payment for unforeseen expenses an insured may incur while the business is shut down following a property damage loss. b) Coverage that will permit the insured to continue in business without interruption following a property damage loss. c) Extra money for an insured whose accounts receivable records have been damaged. d) Additional money to pay for property damage losses at a covered location.
Coverage that will permit the insured to continue in business without interruption following a property damage loss.
#27. Additional coverages in the liability section of a homeowners policy cover all of the following EXCEPT a) Damage to a third-party property for which the insured is legally liable. b) Claims expense. c) Expenses the insured incurs rendering first aid for bodily injury to third parties.
Damage to a third-party property for which the insured is legally liable.
#13. Which of the following examples of losses paid under an HO-3 also would be paid under an HO-2 homeowners policy? a) Interior damage caused by water seeping under the shingles on the roof b) Damage to the dwelling caused by lava or dust from a volcanic eruption c) Damage to the dwelling caused by the insured when moving furniture d) Accidental scorching caused when a hot iron is placed upon a built-in counter top
Damage to the dwelling caused by lava or dust from a volcanic eruption
#30. Which of the following is NOT covered under the Utility Services - Time Element endorsement? a) Damage to the insured's property caused by utility service disruption b) Loss of business income arising from loss of utility service caused by an insured peril c) Extra expense incurred to remain open for business following the loss of utility service caused by a covered peril d) None of the above would be covered.
Damage to the insured's property caused by utility service disruption
#35. Employment practices liability insurance (EPLI) would NOT cover claims arising from a) Discrimination. b) Deliberate law violation. c) Sexual harassment. d) Wrongful termination.
Deliberate law violation.
#114. Which of the following will NOT be considered unfair discrimination by insurers? a) Discriminating in benefits and coverages based on the insured's habits and lifestyle b) Charging applicants with similar health histories different premiums based on their ethnicity c) Cancelling individual coverage based on the insured's marital status d) Assigning different risk classifications to applicants based on gender identity
Discriminating in benefits and coverages based on the insured's habits and lifestyle
#41. The requirement that producers must account for all insurance funds collected, and without the expressed consent of the insurance company(ies) are not permitted to commingle those funds with their own funds, is known as a) Accepted accounting principal. b) Fiduciary responsibility. c) Premium accountability. d) Fiscal responsibility.
Discrimination.
#108. All of the following could be considered rebates if offered to an insured in the sale of insurance EXCEPT a) Stocks, securities, or bonds. b) An offer to share in commissions generated by the sale. c) Dividends from a mutual insurer. d) An offer of employment.
Dividends from a mutual insurer.
#12. Directors and officers liability insurance defends actions against a corporation or its officers and directors alleging wrongful acts. With regard to the coverage provided, wrongful acts include any of the following EXCEPT a) Breach of duty. b) Embezzlement. c) Misstatements. d) Neglect.
Embezzlement
#33. What is the purpose of the coinsurance clause found in property insurance policies? a) Encourage higher standards of care by requiring the insured to pay a portion of every loss b) Ensure that insureds do not overinsure their property c) Prevent insureds from profiting from a loss d) Encourage the insured to insure the property closer to its full value
Encourage the insured to insure the property closer to its full value
#97. What method of premium computation relates an employer's losses, payroll, and premiums to the rating bureau's classifications of operations? a) Arbitration plan b) Experience modification factor c) Workers classification factor d) Merit rating plan
Experience modification factor
#48. The requirement that producers must account for all insurance funds collected, and without the expressed consent of the insurance company(ies) are not permitted to commingle those funds with their own funds, is known as a) Fiscal responsibility. b) Accepted accounting principal. c) Fiduciary responsibility. d) Premium accountability.
Fiduciary responsibility.
#2. In addition to the coverages built into the property coverage form, insurers may offer other endorsements that can further expand the coverage provided in the policy a) For free. b) Automatically. c) As a rebate. d) For an additional premium.
For an additional premium.
The major portion of the premium for an equipment breakdown policy pays -For repairs after a loss. -For coverage for bodily injury and property damage of others. -For replacement parts. -For inspections and examinations.
For inspections and examinations.
#126. Marine insurance may be utilized to write all of the following types of risks EXCEPT a) Vessels and cargo. b) Precious stones, jewels, gold and silver. c) Bridges, tunnels and other instrumentalities of transportation. d) Furniture and fixtures.
Furniture and fixtures.
#49. The mechanism used to pay covered claims and prevent financial losses to claimants and policyowners when an insurance company becomes insolvent is a a) Hold harmless agreement. b) Guaranty Association. c) Insurance pool. d) None of the above
Guaranty Association.
#3. Which of the following homeowners forms is designed for individuals that own and reside in a condominium? a) HO-3 b) HO-4 c) HO-6 d) HO-2
HO-6
#26. An insured is involved in an auto accident in another state. The state has a financial responsibility law that specifies limits of liability higher than the limits shown in the declarations. What amount will the insured's policy pay? a) Only the limits specified in the policy b) Higher limits c) Lower limits d) The insurer will not pay for out-of-state accidents
Higher limits
#8. The policy conditions define a) The excluded perils. b) The amount of coverage. c) How parties to the contract must act following a loss. d) The basic underwriting information.
How parties to the contract must act following a loss.
#13. Persons covered under an insurance policy, whether named or not, are known as the a) Named insureds. b) First named insureds. c) Additional insureds. d) Insureds.
Insureds.
#116. What is the role of an adjuster? a) Investigate and negotiate settlement of claims on behalf of the insurer b) Inspect property on behalf of the insurer to verify that the property satisfies underwriting requirements c) Evaluate insurance applications for acceptability d) Customize insurance contracts to meet the needs of the insureds
Investigate and negotiate settlement of claims on behalf of the insurer
#18. All of the following statements describe the concept of strict liability EXCEPT a) It is imposed on defendants engaged in hazardous activities. b) Claimants may need to provide proof that a product defect caused an injury. c) It is imposed regardless of fault. d) It is applied in product liability cases.
It is imposed on defendants engaged in hazardous activities.
#22. All of the following statements describe the concept of strict liability EXCEPT a) It is applied in product liability cases. b) It is imposed on defendants engaged in hazardous activities. c) Claimants may need to provide proof that a product defect caused an injury. d) It is imposed regardless of fault.
It is imposed on defendants engaged in hazardous activities.
#41. All of the following statements describe the concept of strict liability EXCEPT a) It is applied in product liability cases. b) It is imposed on defendants engaged in hazardous activities. c) Claimants may need to provide proof that a product defect caused an injury. d) It is imposed regardless of fault.
It is imposed on defendants engaged in hazardous activities.
#53. Under the personal auto policy, liability for bodily injury resulting from the insured's use of a nonowned automobile is a) Shared on a pro rata basis. b) Provided by the insured's policy on a primary basis. c) Provided by the insured's policy on an excess basis. d) Not covered.
Provided by the insured's policy on an excess basis.
#29. An insurance producer fails to obtain automobile insurance for a client after agreeing to do so. The client is involved in an automobile accident after running a red light and is found to be at fault. The damage to the other vehicle totals $5,000. Which statement regarding the producer's errors and omissions liability policy is true? a) It will not provide coverage because the property damage resulted from the client breaking the law. b) It will provide coverage because punitive damages have been awarded. c) It will provide coverage because the damage to the client resulted from the producer's negligence. d) It will not provide coverage; such physical damage to property is not covered.
It will provide coverage because the damage to the client resulted from the producer's negligence.
#109. Which of the following employers is required to provide Workers Compensation benefits? a) Marissa Stables employs 5 workers on the farm. b) Kendall Grocery is a neighborhood convenience store with 3 employees. c) The United Church employs a pastor, a bookkeeper, and a janitor. d) Lewis is a millionaire and employs 3 full-time domestic workers at his mansion.
Kendall Grocery is a neighborhood convenience store with 3 employees.
#10. A policy condition that states if a policy is broadened with no additional premium, then the expanded coverage will be automatically applied to all policies of the same type is known as a) Limit of insurance clause. b) Liberalization clause. c) Maximum indemnity clause. d) Loss control clause.
Liberalization clause.
#100. Which of the following is NOT true concerning the fair rental value coverage provided in a dwelling policy? a) Loss or expense caused by the cancellation of a lease is covered. b) It pays for the loss of rent you would have collected less any expenses that would not have continued. c) Coverage continues until repairs are completed. d) The period of time to repair or replace is not limited by the expiration date of the policy.
Loss or expense caused by the cancellation of a lease is covered.
#42. Which program was designed to provide an additional source of earthquake insurance? a) Modified Insurance Plan b) Assigned Risk Program c) Market Assistant Program d) Joint Earthquake Insurance Board
Market Assistant Program
#10. Which of the following is a common exclusion found in Part D: Coverage for Damage to Your Auto of a PAP? a) Riot or civil commotion b) Towing and labor c) Mechanical breakdown d) Glass breakage
Mechanical breakdown
#73. All of the following would be covered under the medical expense coverage of a businessowners policy EXCEPT a) X-ray services. b) First aid when the accident occurred. c) Mental health counseling. d) Ambulance services.
Mental health counseling.
#131. On its advertisement, a company claims that it has funds in its possession that are, in fact, not available for the payment of losses or claims. The company is guilty of a) Unfair claim practice. b) Rebating. c) Misrepresentation. d) Concealment.
Misrepresentation.
#36. Which policy consists of the declarations and conditions, endorsements, and other attachments applicable to a single line of insurance? a) Insurance b) Casualty c) Commercial package d) Monoline
Monoline
#104. When is a hired and nonowned auto liability endorsement available in a businessowners policy (BOP)? a) Only if the insured does not have commercial auto coverage b) Only in addition to commercial auto coverage. c) Only if the insured has 4 or more employees. d) Never
Only if the insured does not have commercial auto coverage
#11. Rental Reimbursement is only available if the policy includes which coverage? a) Named Nonowner Coverage b) Other Than Collision Coverage c) Extended Nonowned Coverage for Named Insured d) Towing and Labor Costs
Other Than Collision Coverage
#44. Which of the following conditions is NOT necessary for becoming a non-resident producer in this state? a) Being a resident producer in good standing in the home state b) Being licensed as a resident producer c) Paying appropriate fees d) Passing the licensing examination
Passing the licensing examination
#34. A bond is written for a set limit, and the surety will be liable only for this amount of the limit. This limit is known as the a) Penalty. b) Face value. c) Stated amount. d) Limit of liability.
Penalty.
#15. An insured has a liability policy that sets the amount for all claims that arise from a single incident at $50,000. Which type of limit of liability does this insured's policy have? a) Per occurrence b) Per person c) Aggregate d) Split
Per occurrence
#29. What type of coverage is Coverage E in homeowners policies? a) Loss of use b) Personal property c) Personal liability d) Additional coverage
Personal liability
#24. If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT a) Uninsured motorist. b) No-fault medical payments. c) Liability. d) Physical damage.
Physical damage.
#67. If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a personal auto policy would apply to all coverages EXCEPT a) No-fault medical payments. b) Liability. c) Physical damage. d) Uninsured motorist.
Physical damage.
#3. The party to a surety or fidelity bond who promises to fulfill the obligation is the a) Principal. b) Custodian. c) Surety. d) Obligee.
Principal
#23. Which of the following liability policies is usually written on a "claims-made" form? a) Automobile liability b) Personal liability c) Umbrella liability d) Professional liability insurance
Professional liability insurance
#44. The purpose of insurance regulation is to a) Make insurance statutes uniform between states. b) Keep producers honest. c) Make insurance companies pay taxes. d) Promote the public welfare.
Promote the public welfare.
#38. While an insured was towing a utility trailer with his auto, the trailer came loose and ran into a store front. What part of the insured's auto policy would pay for the damage to the store? a) Property damage liability b) Collision coverage c) Other-than-collision coverage d) This loss would not be covered.
Property damage liability
#124. A producer in another state wants to become a producer in Arkansas. The other state gives the same privileges to Arkansas producers wanting to be licensed in that state as it does its own producers. Arkansas therefore extends the privileges of its producers to the prospective producer of the other state. What is this called? a) Fair exchange b) Equanimity c) Equal privilege d) Reciprocity
Reciprocity
#16. The Federal Fair Credit Reporting Act a) Regulates telemarketing. b) Prevents money laundering. c) Regulates consumer reports. d) Protects customer privacy.
Regulates consumer reports.
#20. The Federal Fair Credit Reporting Act a) Regulates telemarketing. b) Prevents money laundering. c) Regulates consumer reports. d) Protects customer privacy.
Regulates consumer reports.
#27. Which method of loss valuation is contrary to the basic concept of indemnity? a) Market value b) Agreed value c) Replacement cost d) Functional replacement cost
Replacement cost
#28. In a personal umbrella policy, the amount paid by the insured for certain losses not covered under the primary coverage is called a) Self-insured retention. b) Stop-loss. c) Coinsurance. d) Participation requirement.
Self-insured retention.
#14. Payment for medical expenses, loss of wages, funeral expenses, or the cost to repair or replace damaged property are known as what type of compensatory damages? a) Normal b) General c) Special d) Tort
Special
#14. An insured owns several buildings, each at a different location and insured on a separate policy. What type of coverage does the insured have? a) Schedule b) Blanket c) Special d) Specific
Specific
#10. Which situation would NOT be covered by the basic Causes of Loss form under a commercial property policy? a) The automatic fire protective sprinkler system inside New Realities Book Shop leaks, causing damage to the store. b) Gordon's Motorcycle Heaven is damaged by the sudden sinking of land created by the action of water on limestone. c) The Surf Side Club Waterfront Restaurant is damaged when flood waters rise and seep into the restaurant. d) Piccolo Pete's Café has its door broken by vandals trying to get inside.
The Surf Side Club Waterfront Restaurant is damaged when flood waters rise and seep into the restaurant.
#30. A company has a businessowners policy on a building with an estimated replacement cost of $300,000. The company carries $150,000 of insurance. If a loss occurs, how much will the insured company be paid? a) Up to $300,000 for the loss b) Up to $150,000 for the loss c) The coinsurance formula would apply d) Nothing, because the company failed to carry the required insurance amount
The coinsurance formula would apply
#59. A passenger in a friend's car is injured while getting into the car. Which of the following statements would apply if both the passenger and the driver had medical payments coverage under a personal auto policy? a) Both policies will share equally in the loss. b) The driver's policy would be primary. c) The driver's policy will act in excess of the passenger's policy. d) The passenger's policy would be primary.
The driver's policy would be primary.
#29. When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays a) The amount specified in the policy under the additional coverage provisions. b) The amount in excess of the underlying policy deductible. c) A percentage of the loss as described on the declarations. d) The excess over the self-insured retention.
The excess over the self-insured retention.
#84. When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by the underlying policy, it usually only pays a) A percentage of the loss as described on the declarations. b) The excess over the self-insured retention. c) The amount specified in the policy under the additional coverage provisions. d) The amount in excess of the underlying policy deductible.
The excess over the self-insured retention.
#24. With respect to commercial auto policies, the Garage Coverage Form provides liability protection for all of the following EXCEPT a) The insured's business products and work performed. b) The insured's business income losses due to personal injury. c) The insured's business premises. d) The insured's business autos.
The insured's business income losses due to personal injury.
#51. Under a businessowners policy, the inspections and surveys condition specifies all of the following EXCEPT a) The insurer does not guarantee that the insured is meeting all required safety regulations. b) The insurer does not have the right to inspect the insured's property and operations. c) The insurer does not make safety inspections for the insured. d) The insurer does not guarantee that conditions are safe or healthful.
The insurer does not have the right to inspect the insured's property and operations.
#48. All of the following are true regarding physical damage coverage EXCEPT a) The limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle. b) Losses to nonowned autos will be covered the same as the broadest coverage available for any covered auto, except nonowned trailers are limited to $1,500. c) The policy will pay up to $20 per day up to a maximum of $600 for rental transportation. d) The insurer will pay for direct and accidental loss to a covered auto minus any applicable deductible.
The limit of liability is the greater of the actual cash value of the vehicle at the time of loss or the amount necessary to repair or replace the vehicle.
#19. The business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of a direct loss. Which of the following terms best describes the nature of this type of coverage? a) Occurrence b) Direct damage c) Time element d) Claims made
Time element
#22. The business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of a direct loss. Which of the following terms best describes the nature of this type of coverage? a) Occurrence b) Direct damage c) Time element d) Claims made
Time element
#117. Which of the following situations is NOT justification for canceling an auto policy? a) Homicide or assault arising out of the use of an automobile b) Fraud c) Two moving traffic violations in the previous three years d) A DWI conviction during the policy period
Two moving traffic violations in the previous three years
#40. An insured is a member of the neighborhood association, and has become liable for damage to a third party. Each member of the association has been assessed a portion of the loss equal to $2,000. How much will the Loss Assessment additional coverage of the insured's homeowners liability policy pay? a) $2,000 b) Nothing c) Up to $500 d) Up to $1,000
Up to $1,000
#87. A small restaurant was forced to close for 10 days in August when the power company's transformer was destroyed by lightning, and the restaurant was without electricity. Which of the following endorsements could be added to the businessowners policy that would provide protection against loss of income from such events? a) Utility services - time element endorsement b) Utility services-direct damage endorsement c) Named peril endorsement d) Protective safeguards endorsement
Utility services - time element endorsement
#19. Liability imposed on one party as a result of the actions of another person is known as a) Strict liability. b) Absolute liability. c) Vicarious liability. d) Comparative negligence.
Vicarious liability.
#98. Which of the following is a statement that is guaranteed to be true, and if untrue, may breach an insurance contract? a) Representation b) Warranty c) Concealment d) Indemnity
Warranty
#31. Both the broad theft and limited theft endorsements on the dwelling program exclude all of the following types of property EXCEPT a) Credit cards. b) Motor vehicles licensed for the road. c) Aircraft. d) Watercraft.
Watercraft.
#3. A commercial package policy (CPP) allows the insured to select the coverage needed and customize the policy to meet the needs of the insured's business. In a CPP, the business owner may select from all of the following types of coverage EXCEPT a) Boiler and machinery coverage b) General liability coverage c) Workers compensation coverage d) Crime coverage
Workers compensation coverage
#26. All of the following are factors in rating workers compensation insurance EXCEPT a) Payroll. b) Loss experience. c) Job classification. d) Sales.
sales
