Chapter 22 Surety Bonds EXAM QUESTIONS
Under Crime Insurance, losses will only be covered if they are discovered within:
1 year
Unlike property insurance policies, surety bonds:
3 party contracts
custodian
Any partners or officers, or any employee while having care and custody of property inside the premises, excluding any person while acting as a "watch-person" or "janitor"
Premises Burglary & Robbery Policy
Covers property other than money and securities.
Burglary Insurance
Covers the taking of property (other than money/securities) from inside a locked business premises after business hours by a person (other than an employee) who enters or exits the building illegally. This policy will cover the cover the items stolen as well as the damage from breaking in/ out.
Which of the following is FALSE?
Surety bonds and Insurance policies are both three party contracts
Which of the following policies include the theft of money?
TDD
TDD (Theft, Disappearance, & Destruction)
Theft of Money and Securities covers _______ but NOT employee theft
The Postal Service wants to guarantee that a contractor will be able to complete an addition to the post office according to the contract specifications. The contractor should purchase a:
a performance bond
Which will deter burglary losses?
a watchman
Employee Theft Insurance
covers any type of employee theft, including: theft of money and securities. AKA Fidelity Bond if sold by surety company
Robbery Insurance
covers the taking of property by one who does or threatens to do bodily harm
TDD Insurance
covers theft, destruction, and disappearance of money/securities UNLESS taken by employee. Only used in the Inside the Premises- Theft of Money and Securities policy
Theft of Money and Securities includes the following EXCEPT:
employee theft
Fidelity Bonds cover acts of:
employees
The insured (obligee) under a Fidelity Bond is the?
employer
In a bid bond, the contractor is the:
principal
"custodians" can be :
robbed but not burgled
Theft Insurance covers:
robbery and burglary
A bail bond will be "forfeited" if the principal:
skips town and doesn't appear on the trial date
A Performance Bond is an example of a ________ bond
surety
The indemnity agreement is designed to protect the:
surety
The party who agrees to pay the insured (obligee) for loss caused by employee embezzlement under a Fidelity bond is the:
surety
Under a bond, the party who pays the insured for default is the:
surety
The indemnity agreement allows:
the Surety to sue the Principal
Surety bond underwriters consider which of the following to be the most important issue when determining whether to issue a bond?
the applicant's moral character
An employer has just discovered that an employee has stolen $15,000. The employee's fidelity bond covers only $10,000 of the loss. Who has first claim against the employee?
the employer for the $5,000
Blanket Position is a type of:
fidelity bond
Under a crime policy, the insured who suffers a loss is required to:
file a proof of loss form
Vandalism is covered under which policy?
Building Personal Property (BPP)
Fidelity Bond
Employee Theft is also known as:
Crime Insurance is available with which policy?
Commercial Package Policy
The section of the Employee Theft form which specifies the amount of the coverage is the:
Declarations
Employee Dishonesty covers:
None of the above.
The surety agent's authority is controlled by the:
Power of attorney, power account, letter of authority from the Surety Company
Robbery or Safe Burglary of "Other Property"
The coverage form that covers money and securities due to robbery from a custodian, safe burglary, or unlawful taking inside the premises is ________________________ coverage
A commercial building was burglarized. In addition to damaging the building during the breakin, the burglars stole a computer, took cash and stock certificates, and vandalized the premises. The Inside the Premises - Robbery or Burglary of Other Property policy will pay for:
The damage plus the computer plus the stock certificates
Premises Burglary & Robbery Policy
Under Crime Insurance, Robbery or Burglary of "Other Property" is also known as:
Theft, Disappearance, & Destruction
Under Crime Insurance, TDD stands for:
Who can issue a bail bond?
a licensed surety agent
Which of the following may post a bail bond?
a licensed surety company
Bonds:
cannot exceed one year
A government official handling money may be required to have a public official bond guaranteeing that the public official won't steal money. Which of the following city officials would most likely have to post a public official bond?
city treasurer
To guarantee to the lender that a building contractor will complete the construction, the contractor should purchase which Surety Bond?
performance
To guarantee to the owner that a building contractor will complete the job, the contractor should purchase which Surety Bond?
performance
Which is true regarding a bond if there is a default on the underlying contract and the surety is obligated to pay the penal sum?
the principal is liable to the surety
