Insurance Adjusting
Veronica needs to expand her pottery business and add an extra building to her property for the sole purpose of kiln firing her pottery. She adds Builder's Risk coverage to her commercial property policy to cover the new structure (which is yet to be completed), and finds out she must carry:
100%
The BOP provides loss of income on an "actual loss" sustained basis for up to:
12 months
Luke has been a resident Florida insurance adjuster for the past seven years. In order to keep his appointment, he must complete ________ hours of continuing education every _____ years.
20,2
Lightning strikes one of Christy's trees in her backyard and starts a fire that spreads to two other trees before firefighters are able to put it out. The fire department charges her $600 for responding to her call. Christy's DP-2 policy has a Coverage A limit of $95,000. What is the maximum amount of indemnification that Christy can expect to receive for this loss (ignoring any deductible)?
2000
In a BOP, Newly Acquired Properties coverage provides _____ of insurance for new buildings under construction or newly acquired business properties located off the insured premises.
30 days
When a company acquires a new vehicle under symbol #7, specifically described autos
30 days
According to the commercial property policy, a commercial building is considered vacant if less than ____ of the available square footage is occupied for ____ consecutive days.
31%, 60
An employee receiving income benefits under Workers' Compensation insurance cannot receive more than:
66 2/3% of the State Average Weekly Wage. ??
Direct excess coverage in the garage keeper's policy compensates for gaps in which sort of insurance?
Liability insurance
Which of the following is not a universal commercial policy exclusion?
Lightning
Which of the following is NOT one of the requirements that a "Fast Food Restaurant" business must meet in order to qualify for a BOP?
Liquor must not account for more than 25% of total annual sales.
Which of the following is not one of the requirements that a "fast food restaurant" business must meet in order to qualify for a BOP?
Liquor must not account for more then 25% of total sales
Lance slips and falls in the icy parking lot of XYZ Consulting. Under which part of Coverage A in XYZ Consulting's CGL policy would this claim be covered?
Premises Liability
All of the following are universal exclusions in a Commercial Crime policy, EXCEPT:
Theft of money or securities outside the insured premises in the care of a messenger.
Which of the following BEST describes the insurance provided by residual market insurance programs?
Usually a "last resort" form of insurance
Veronica in the process of building an extra structure for the sole purpose of kiln firing her pottery. After 40 days of waiting for it to be completed, she decided to go ahead and begin using it
Veronica has now put the building in use
Insurers often protect themselves from providing insurance to people who are already ill by inserting which type of clause into a health insurance contract?
waiting period
Lemon Insurance Co. decides not to renew Hugh's Personal Auto policy, which is set to expire on May 31. Which of the following statements is TRUE?
lemon Insurance must notify Hugh at least 45 days before the policy expires.
In dwelling policies, Coverage D pays for:
lost rental income
The DP-3 is known as the:
special Form
On January 27, 2008, Ryan was using an exercise bike purchased from NusquamCycle when the chain broke, causing him to fall and severely bruise his knee. It seemed to heal just fine, but three years later, on January 25, 2011, Ryan's knee gave out while jogging. His doctor told him that he'll need surgery and that this deterioration resulted from the earlier accident with the exercise bike. Which of the following CGL policies may cover Ryan's claim filed January 25, 2011?
A claims-made policy from Jan 31 2009-Jan 31 2011
Which characteristic would prohibit a convenience store/gas station from purchasing a BOP?
A restaurant that serves liquor
Which of the following statements regarding scheduled fidelity bonds is FALSE
All employees are bonded for the same aggregate amount.
Ark Inc. purchases a CGL policy to protect the company against lawsuits for which they might be found legally liable. Which would NOT be covered by their CGL?
An employee drives a forklift into a wall of Ark Inc.'s owned factory, causing it to collapse.
A Commercial General Liability policy could protect a business in all of the following situations, except:
An employee moving a pallet of plasma televisions
Bobby is adjusting a complicated auto claim. Which of the following is TRUE?
Because the policyholder (Jane) is 84 years old and seems to have trouble remembering what happened before the accident, Bobby should feel free to contact her 45-year-old caretaker for clarification.
Bonnie's PAP includes Comprehensive coverage. Which of the following losses could this coverage pay for?
Bonnie's car catches on fire
Which of the following may be covered under a Mechanical Breakdown Insurance policy?
Breakdown due to electrical system malfunction
In a DP-2 Broad Form, which of the following would be covered under the peril of Theft?
Broken windows caused by a burglar breaking in.
Argo Sciences Inc. wants to build a new testing laboratory for their line of chemicals
Builders Risk protection
"permanently installed fixtures" would fall under which coverage of a commercial property policy?
Building and structures
Which of the following is NOT considered "covered equipment" under equipment breakdown protection coverage form
Buried Equipment
Which of the following lines of coverage could be found in a commercial package policy
Business Auto insurance
XYZ Carpet Manufacturing's main factory burns down during the night due to faulty electrical wiring. No longer able to manufacture carpeting, XYZ Carpet faces a serious cash flow dilemma. Which insurance coverage might help pay XYZ Carpet's bills while the factory is repaired?
Business Income coverage
XYZ Computer's production building for circuit boards is struck by lightning, which results in a fire that burns down the entire facility. XYZ Computer cannot continue the production of computers until the facility is rebuilt. Which insurance coverage might indemnify XYZ Computer for lost revenue until a new facility is built?
Business Interruption
What is the most common type of Time Element Insurance?
Business Interruption Insurance
Josh is driving through town in the company truck when he misses his turn. He decides just to make a U-turn
CGL doesnt cover autoaccidents
ABC Acoustics builds replica Neumann microphones using tube technology. When a fire takes out in the only factory that manufactures these vintage tubes, ABC Acoustics must halt production until their supplier's factory comes back online. Which commercial property insurance coverage option could indemnify ABC Acoustics from lost income due to halted production?
Contingent Business Interruption
When a fire destroys a car parts manufacturer in China, USA motors find itself without necessary parts to build its vehicles. Which commercial property insurance coverage option could indemnify USA motors from lost business due to the damages sustained by its Chinese supplier
Contingent Business Interruption
Going over the numbers, Henry notices that his annual sales revenue seems to be lower than it should be. He suspects that this may be caused by employee dishonesty, and discreetly launches an investigation into his business. He finds that a theft occurred two years ago. Which type of commercial crime coverage would be best suited to cover Henry's loss?
Discover form
Which of the following best describes who adjusters can work for?
Either insurers or claimants
Which statement BEST describes the "Follow Form" in excess liability coverage?
Excess liability insurance that "follows" the base insurance policy to the letter
Which statement BEST describes Umbrella coverage?
Excess liability insurance that can also provide additional coverages not provided by the base policy
All of the following are typical exclusions in an insurance policy, EXCEPT:
Explosions
Martin regularly travels much of the state for work, so his employer has given him a company car. Which endorsement to Martin's PAP would provide him with liability coverage for the company car?
Extended non owner
All of the following are examples of court bonds, EXCEPT
Financial Guarantee bond
Maria was in the hospital for five days, recovering from a stroke. The bill she received for her hospital stay broke down the charges for room, lab fees, meals, and nursing care. However, her insurer paid a flat daily rate and she was left responsible for paying the remaining charges. What type of insurance does Maria have?
Hospital Indemnity insurance
Coverage C - Medical Payments in a CGL policy will ONLY cover claims IF:
If the expenses are reported within one year of the occurrence.
Logan has a small plane that he enjoys flying on the weekends, but he never takes friends or passengers with him. Which of the following is TRUE?
Logan should buy Bodily Injury Excluding Passengers and Property Damage Liability, but he doesn't need to spend the money on Passenger Bodily Injury Liability.
jane owns common stock in company b but she lost her stock
Lost instrument bond
Which of the following statements about MPCI is FALSE?
MPCI is a form of crop-revenue insurance.
Celina's business is growing and she needs more space for her inventory. A week ago, a crew started work on constructing a new business on premises
Newley Acquired Property
Nick has a comprehensive individual health insurance policy that he purchased through an HMO, and Charity has a PPO plan through her employer. Which of the following statements is TRUE?
Nick was assigned a primary care physician who must coordinate his health care within a network, but Charity may choose a primary physician outside the network.
Jim has several trailers in the supply yard of his business which belong to his respective buyers. Jim's business loads the trailers and then contracts with another company to ship the goods to their final destination. One day while loading up a trailer, Jim accidentally pierced the side of a covered trailer with his forklift. The damage to the trailer would be covered by the _____________ coverage extension.
Non-owned detached Trailers
The BOP offers liability coverage on a/an __________ basis
Occurrence
James runs a window washing business and services a lot of the city's large skyscrapers. While out on a job, James accidentally knocks the wash bucket off his scaffold from seven stories up. It lands on a parked car, injuring no one, but causing $12,000 in damage to the vehicle. What type of coverage in James' Commercial General Liability policy would a claim for this damage fall under?
Operations Liability
Which of the following is NOT an example of property eligible for coverage under the Outdoor Property coverage extension in a BOP?
P
Which of the following does NOT have a per occurrence sub-limit under the General Aggregate limit of a CGL policy?
Product and completed opporations
What is one thing that an adjuster is not able to negotiate about?
Punitive damages
In a commercial property policy, Business Income Coverage would pay for which of the following expenses?
Rent
Which of the following coverage options does NOT waive the coinsurance requirement in a commercial property policy?
Replacement cost
The Write Your Own program allows private insurers to
Sell standardized NFIP policies
When a company collects a consumer's personal and financial information, the methods for that collection, as well as the ways in which the information is used and shared, are all regulated by the:
The Fair Credit Reporting Act or FCRA is a federal law that regulates how consumers' personal and financial information is collected, shared, and used by companies. The main focus of this law is to regulate credit agencies and financial institutions, but insurance companies are also affected by this law.
Retroactive Date
The date on or after which bodily injury or property damage must occur (or a personal and advertising injury offense must be committed) in order to be covered.
In the middle of the night, armed robbers break into the headquarters of Superior Industries and restrain the night guard. Then, they blow open the safe and steal the contents. Luckily, Superior Industries has a Commercial Crime policy. Which of the following would NOT be covered under Inside the Premises- Robbery and Safe Burglary of Other Property coverage?
The bundles of cash that were stored in the safe
Which of the following claims might best be settled through negotiations?
The claimant asks for $37,795; the insurer offers $31,000.
The purpose of the increased cost construction coverage in a BOP is to provide coverage for
The cost of bringing the company up to code after covered loss
Which of the following is found in the declarations page of an insurance policy?
The name of the insured party
In a commercial property policy, builders risk coverage is sold based on which of the following values
The value of the completed building
Losses caused by ______________ are always excluded in garage-keepers policy
Theft by an employee
Which statement BEST describes the additional coverages available for both commercial and residential policies?
They add coverage for very specific losses or expenses.
Which of the following statements regarding health insurance is TRUE?
To be covered, members of an HMO must receive treatment for their medical conditions within the established network of healthcare providers.
Which of the following would NOT be considered an Instrumentality of Transportation and Communication?
Truck
Which of the following is NOT a characteristic of insurance contracts?
Universal
Coverage B of the BOP would provide indemnification for damages to all of the following except
Windows
A typical workers' compensation policy combines two basic forms of coverage. They are:
Workers' Compensation and Employers Liability ??
An insurance company might consider any of the following a risk, EXCEPT:
a high crime neighborhood.
Which of the following would be considered an insurable risk?
a high-crime area?
All of the following would be covered by the nfip general property form, except
a homeowners living room furniture
Because of the lack of a Bailee agreement, which of the following establishments would not be held liable for damages to a vehicle while in the business' care
a public parking garage
States that require all businesses to purchase workers' compensation insurance are called:
compulsory
A garage-keepers policy can provide direct excess coverage
Direct primary coverage
This agent is a salaried employee who sells insurance products for only one insurer.
Direct writer
Acme university buys liability for each of its board members, to protect them against lawsuits that might be brought against them specifically in their capacity as board members
Directors and Officers
A fire in the break room kitchen of Helen's small business spreads into the utility room, damaging the computer server. Her server is physically destroyed., along with a lot of vital information
Electric Data
Thomas works for an insurance underwriting service, and he often drives his own car when he goes to meet potential clients in their homes. Which BAP endorsement can Thomas' employer use to add coverage for Thomas' personal auto, so that he will be covered by the company's policy if he gets into an accident on company time?
Employee as Additional Insured
Which Business Auto Policy endorsement covers employees while using their personal cars for business purposes?
Employees as additional insured
Ken, an editor for a major newspaper, is fired after arriving to work late. He files suit against his employer for wrongful termination. Which type of insurance would Ken's employer need to help cover the costs of the lawsuit?
Employment Practices Liability Insurance
which of the following coverages, when added to a BOP, would cause the premium to increase
Equipment breakdown
Which of the following may be covered under an equipment breakdown protection coverage form
Equipment built to operate under internal pressure
ABC Paving owns a warehouse where they store all their pavers. Lightning strikes the warehouse, which burns to the ground and destroys the entire fleet of pavers. In order to complete the projects they are currently working on, ABC Paving has to lease four pavers from another company. What commercial insurance coverage might pay for this expense?
Extra Expense
Diana owns a manufacturing manufacturing company. One evening, a windstorm blows a tree through the side of her building
Extra expense coverage
Jane owns an aquarium supplies store and purchases a Business Owners Policy to protect her assets. Which of the following protections can Jane expect from her standard BOP with no endorsements?
Extra expense coverage
Jane owns an aquarium supplies store and purchases a business owners policy to protect her assets. which of the following protections can jane expect from her standard BOP with no endorsements?
Extra expense coverage
Robert's tomato crop production was well below the revenue guarantee this year, and Robert files a claim against his Crop-Revenue policy for the low yield. However, the adjuster denies Robert's claim after completing her inspection. What might be a reason for the denial?
Failure to use the required amount of fertilizer
Which endorsement to a garage-keepers policy would cover theft of a vehicle by someone who was pretending to take a test drive
False pretense coverage
According to the Employee Retirement Income Security Act (ERISA), an individual or corporation who exercises discretionary authority or control over the management of an employee benefit plan is called:
Fiduciary
Which of the following is not a common exclusion from aviation policies
Fire
In a typical commercial property policy, an insured building is considered "vacant" when:
For 60 days or less then 31% of its available sqft occupied
A store manager issues a customer a refund check for $1.00. One year later, an auditor going over the books discovers that the customer altered the check and cashed it for $1,000. What type of commercial crime coverage might indemnify the store owner for the loss?
Forgery or Alteration
Which one of the following statements about freight insurance is true?
Freight insurance protects the vessel owner in the event the freight costs are not paid
In a commercial property policy, Extra Expense Coverage provides indemnification to the policyholder for additional expenses incurred during which of the following time frames?
From the point of initial damage until the moment the business is up and running again
Which of the following is NOT an auto according to BAP
Front end loader
This provision in Ocean Marine insurance obligates insurers of various interests to share the cost of losses associated with a captain's decision to voluntarily sacrifice a part of the ship or its cargo.
General Average
Each insurance coverage in a commercial property insurance policy will contain a Causes of Loss form. Which of the following is NOT an example of a Causes of Loss form?
General Form
Which NFIP flood insurance form can insure residential buildings that do not meet the requirements specified by the dwelling form
General form
Which of the following homeowners policies provide coverage on an open-peril basis for personal property without endorsement?
HO-5
James was a licensed adjuster in Louisiana and Florida. His license is revoked in Louisiana. Which of the following is NOT a possible result of this revocation?
He is fined $5,000 by the FL Department of Financial Service
Thomas runs a computer repair shop. one morning he arrives to find the front glass window broken and a number of his customers computers stolen. thomas' legal liability coverage form would pay for:
His clients computer
A processing and servicing company would qualify for a BOP only if they have less than _____ in annual revenues.
$3 million
After a heavy rain, the river running through randy's farm rose so high that it flooded part of his barley crop. The flood cost $3,000 in damage to his $20,000 crop. Randy's crop insurance policy has a 5% threshold. Based on this information, how much will Randy's insurer pay him for his loss?
$3,000
What is the most an adjuster could be fined for knowingly and illegally offering rebates?
$3500
A storm travels through town, partially destroying Wilma's business, which is covered by a commercial property policy. Wilma maintains Business Income Coverage with a $100,000 limit, and the Maximum Period of Indemnity coverage option. Wilma's business incurred the following losses:Monthly LossesMonthAmountMonth 1 $19,000Month 2 $16,000Month 3 $14,000Month 4 $11,000Month 5 $6,000How much would her policy pay for lost income?
$60,000
Lowell Construction has one contractor and one receptionist. The contractor makes $20/hr, and the receptionist makes $10/hr. The contractor worked exactly 15 hours in 2010, so he made $300. The receptionist worked 10 hours, so she made $100. Therefore, Lowell's entire payroll for 2010 was $400. Assume that, for every $100 of payroll, the WC rate for contractors is $20 and the rate for receptionists is $5. How much did Lowell Construction owe in WC premiums?
$65
Acme Boats experiences a devastating fire in their factory. They turn to their Business Income coverage to recover their loss of income due to the fire. When Acme Boats initiated the policy, they chose the Maximum Period of Indemnity coverage option with a policy limit of $150,000. Acme Boats experienced the following loss of business income in the months after the fire:Monthly Income LossesMonthAmountMonth 1 $20,000Month 2 $20,000Month 3 $15,000Month 4 $15,000Month 5 $10,000Month 6 $10,000How much money might Acme Boats be indemnified for the loss of business income? $60,000
$70,000
Which coverage in a BAP would indemnify the insured for damage caused by a tree branch falling onto a company car?
Comprehensive coverage
After a fire burns through XYZ condominiums, they have to replace most of the interior. which of the following WILL be covered under the condominium coverage form of the condo association's commercial property policy?
Computers used by the condo as a whole
All of the following are coverages in a commercial general liability policy, EXCEPT
Coverage C - prohibited substances liability
In a commercial property policy, the Building and Personal Property Form contains three coverages. Which of the following coverages is NOT a part of this form?
Coverage D - loss of use
Which of the following would NOT under medical payments/PIP coverage in a BAP?
Named Insures employees
A tree falls onto Melissa's house, damaging the roof and front porch in the amount of $11,276. An adjuster for ABC Insurance finds that the peril is covered under her policy and investigates the damages. Upon investigation, the adjuster comes up with a total for damages of $9,186. Of the following options, which course of action best describes how the adjuster will move forward with the claim?
Negotiate a settlement with the claimant.
For occurrences transpiring during the supplemental extended reporting period, what is the time limit in which a claim must be made in order to be covered by a claims-made CGL policy?
None
Which of the following accurately characterizes Aviation insurance
a small insurance pool and enormous exposure
A fidelity bond covers
an insured business for loss resulting from any dishonest acts committed by its bonded employees.
The Insurance Guaranty Association is a mechanism that covers claims in the event of:
an insurer's insolvency.
While a claim remains open, an insurer may require the adjuster to submit an interim report:
at regular set intervals, which lists any new or important information about the claim.
After an earthquake, Jake's home is still standing, but it is a little shaken. The damage is not extensive, but Jake wants to cash in on the situation, so he takes a sledgehammer to some of his extra belongings and adds them to his claim. Jake has committed:
property Insurance fraud
Inland Marine insurance protects:
property being transported
In a BOP, all of the following losses are excluded from liability coverage, EXCEPT:
property damage to premises rented by the insured.
Dwelling policies cover
property, and liability with an endorsement.
When Emma's house was burglarized, the thieves stole several pieces from her art collection. Although the pieces were only prints, Emma files a claim stating that they were originals, and therefore worth a good deal more than they really are. What has Emma committed?
soft fraud
James is in the consulting business and frequently flies from city to city to meet clients and help them improve their business practices. Most cities have adequate public transit, but sometimes it's easier to rent a car. Which coverage symbol would specifically pertain to rental cars on James' Business Auto Policy?
symbol 8
Rick and his wife were evicted for rising waters in their neighborhood. They brought along a small trailer with their belongings
the damage was not covered because it was not destroyed by the flood
In a Commercial Crime policy, a "messenger" is defined as:
the insured, a business partner, or an employee who has care or custody of insured property inside the premises, excluding anyone acting as a watchperson or janitor
Which of the following automobile components is NOT covered by a Mechanical Breakdown Insurance policy?
tires
The primary purpose behind garagekeepers insurance is
to provide insurance protection against damages to customers autos while they are in the shop
Which of the following is similar to a Business Auto Policy, but adds several policy provisions and protections specific to the trucking industry?
truckers policy
In excess liability insurance, the follow form
uses the same provisions, exclusions, and coverages as a base policy
An insurance contract is an agreement between two parties where each side promises to be truthful, factual, and honest about their respective positions. Therefore, an insurance contract is said to be a contract of:
utmost good faith.
Guaranty Associations are funded by
insurers
James owns a metal machine shop where he does contract work
Basic and Broad form
The newly acquired property extension in a commercial property policy provides ______________ in coverage for buildings under construction at the insured premises, or for any newly acquired business property off the insured premises
$250,000
Which building would fall under a General Property Form flood insurance policy?
A 15 room motel
Kyle operates an auto body repair shop where customers sometimes leave their cars in his care
Bailment
Which of the following best describes how losses are valued under a Commercial Crime policy?
Money is valued at face value; securities are set at their value on the day the loss is discovered; and other property is valued at the lesser of the cost to repair or replace.
Which of the following statements regarding primary care physicians is FALSE?
Preferred Provider Organizations do not allow policyholders to choose a primary care physician.
In a surety bond, the maximum amount a surety is required to pay is known as a:
penal sum
Once a claimant files a complaint to the court, the claimant will become the
plaintiff
Which commercial property causes of loss form offers open-peril (also called "all risks") coverage
Special form
Which valuation method is most common among Aviation Hull Policies
Stated Value
When Shawn purposely sets fire to Jims restaurant, Jim was covered under his commercial property policy. Which condition would allow Jims insurer to attempt to reclaim those damages from Shawn?
Subrogation
Jim has a small business and wants buy comprehensive coverage for all of the vehicles that he owns in order to protect his investments. Which coverage symbol will insure that ALL his owned automobiles are covered under comprehensive coverage?
Symbol #2
In a Business Auto policy, which symbol applies to private passenger autos owned by the insured, excluding trucks, buses, and specialty vehicles?
Symbol 3
Bob owns a garage
Symbol 30
The Royal Wedgewood Hotel is a fancy hotel located in a prime neighborhood downtown. As part of their five star service, they own several limos. What covers them
Symbol 7
Jim uses his own car to deliver pizzas for his employer, Delicioso Pizza. Which coverage symbol should Delicioso use to provide liability coverage for Jim while he is on the clock and delivering pizza for them?
Symbol 9
While going over his CGL policy, Bill pauses on the Declarations page. He finds the usual items: named insured, address, policy period, premiums, and the limits of insurance. But he also finds a retroactive date listed. This tells Bill his policy:
is a claims-made policy.
Frank owns a catering business and uses three vans for transporting food products; four passenger vehicles for his employees; and one large box truck to haul around tables and chairs, etc. Which set of coverage symbols could Frank use to cover all of his company's vehicles?
Symbols 3 and 4
In a Commercial General Liability policy, the basic extended reporting period is also known as a(n)
Tail
In January, a faulty pipe burst at Sunshine Farms, letting animal waste flow from some of their farms into the county's water supply. In September of that year, the EPA inspects Sunshine Farms' facility, discovers the animal waste pollution, and fines the company $500,000. In addition to the fine, Sunshine Farms will have to pay $300,000 in decontamination expenses and $150,000 to build an EPA-compliant waste management system for the farm. How much of this will be covered under Sunshine Farms' Pollution Cleanup and Removal insurance?
$0
Lori's property was damaged in a recent flood. The damages to her home and detached garage came to $80,000 and $15,000, respectively. Lori has a Dwelling Form flood policy with $100,000 limit. How much indemnification can Lori expect to receive for the damage to her garage?
$10,000
In Florida, every driver must have $10,000 in property damage liability coverage and $10,000 in PIP in order to operate a motor vehicle. If the driver is in a wreck and is found to be at fault, how much liability coverage must the driver have for total bodily injury per accident?
$10,000 ??
A storm travels through town, partially destroying Wilma's business. Wilma maintains Business Income coverage policy with $120,000 limit, and the Monthly Limit of Indemnity coverage option. Wilma's business incurred the following expenses:Monthly ExpensesMonthAmountMonth 1 $29,000Month 2 $36,000Month 3 $24,000Month 4 $31,000How much would her policy pay for lost income if Wilma had a monthly limit of 1/4 in place?
$113,000
A cargo ship's hull policy has a franchise deductible of $100,000. The vessel sustains $150,000 worth of damage due to a fire. How much will the insurer be responsible for?
$150,000
During a severe windstorm, a large tree in Jeff's yard was blown down and two large bushes were ripped from the ground. Jeff has an HO-3. What is the maximum amount that Jeff can receive for the replacement of the tree and bushes that were damaged by the windstorm?
$1500
Tom leaves his personal laptop at Smith & Co. so a colleague can work on a presentation. While the laptop is in the care of Smith & Co., it is destroyed by a fire in the break room. The laptop was worth $3,200. How much indemnification would Smith & Co.'s Business and Personal Property Form provide for the damaged laptop?
$2,500 sublimit
Wilson is a Florida resident who maintains a liability policy with limits of 10/20/10. Recently, he was visiting a friend in Georgia when he ran a red light and hit a BMW, causing $30,000 in property damage. The minimum liability requirement in Georgia is 25/50/25. How much will Wilson's liability insurance pay in this situation?
$25,000
Extended coverage under a commercial policy often provides coverage for damage to outdoor trees, plants, and shrubs. When covered, what is the maximum per-plant amount?
$250
The Newly Acquired Property extension in a commercial property policy provides ________ in coverage for buildings under construction at the insured premises, or for any newly acquired business property off the insured premises.
$250,000
Which of the following highlights a major difference between an insurance contract and a surety bond
. An insurer may cancel an insurance contract; a surety cannot cancel a surety bond.
Dr. Jones' current occurrence malpractice policy is in effect from July 1, 2005 through July 1, 2006. Which lawsuit would trigger this malpractice insurance policy?
.A man sues Dr. Jones on July 26, 2009 for a damaging knee surgery performed on March 3, 2006.
Helen owns a manufacturing company. She maintains a commercial property policy that includes Business Income and Extra Expense Coverage. One evening, a windstorm blows a tree through the side of the building, leaving a hole in the wall
0 hours
Under the Earthquake and Volcanic Eruption endorsement in a commercial property policy, what is the time span within which multiple earthquake or volcanic events are considered a "single occurrence" for coverage purposes?
168 hours (7 days)
If an insurer receives an inquiry from the Office of Insurance Regulation regarding a claim, it must respond appropriately within _______ days.
21
A Florida company that is assigned to "Tier 2" for coverage under FWCJUA must pay:
50%
In a CGL policy, the basic extended reporting period provides extended coverage for an "occurrence" transpiring within _____ days of the end of the policy period.
60
In the business and personal property form of a commercial property, coverage A- building and structures coverage would apply to which of the following features of a commercial enterprise?
A 40-ton printing machine affixed to a factory floor
Which of the following is NOT one of the differences between a BAP and a truckers policy?
A BAP uses coverage symbols to designate covered autos.
Which of the following is true concerning a business owners policy?
A BOP offer liability insurance
Which of the following statements regarding Commercial Package Policies (CPP) is TRUE?
A CPP is an elective-based policy.
Jack has been appointed to manage Margaret's financial estate, but Margaret requires Jack to be bonded. What kind of bond might Jack seek
A Fiduciary bond
What is a base flood
A base flood that has a 1% chance of being equal or exceeding in any given year
Kelly Supply purchases a claims-made CGL policy with a policy period of March 15, 2005 to March 15, 2006. The retroactive date is established as January 1, 2001. Which of the following events would trigger Kelly Supply's policy to respond?
A claim filed on May 10, 2005, for an injury suffered on March 1, 2004
Which of the following is NOT eligible for Dwelling coverage?
A mobile home on a permanent foundation??
A fire burns down Jenny's Hardware, leaving virtually nothing salvageable. Which of the following items would NOT be covered under Coverage B of the Building and Personal Property Coverage Form in her commercial property policy?
A paint mixer permanently affixed to the floor
In which of the following cases would mechanical breakdown insurance not apply?
A rock strikes and shatters Horace's windshield
Which of the following losses would not be covered under the Hull coverage of an ocean marine policy
A ship wanders into a war zone
When is a self-insured retention applied in an umbrella policy?
A. There are no self-insured retentions in umbrella policies. ???
Acme Construction is in charge of building a new subdivision in the city, and hires Jim's Masonry to lay the foundations. As part of the deal, Jim's Masonry is required to purchase Owners & Contractors Protective Liability to protect Acme Construction in the event Jim makes a mistake that results in a liability claim. Who retains ultimate control over the policy?
Acme Construction
Acme Construction is in charge of building a new subdivision in the city, and hires Jim's Masonry to lay the foundations. As part of the deal, Jim's Masonry is required to purchase Owners & Contractors Protective Liability to protect Acme Construction in the event Jim makes a mistake that results in a liability claim. Who will be listed as the named insured on this policy?
Acme Construction
Under a BAP, a total loss is settled according to:
Actual Cash Value
Andrew's friend Mario asked for a ride from Detroit to Cleveland, and Andrew decided to take Mario in his plane. Getting out of the plane, Mario trips and falls into the propeller and ends up losing 3 fingers on his right hand. Mario also signed a form agreeing to release Andrew from further liability in exchange for a sum of money. Which of the following is FALSE?
After Mario has received his monetary sum to indemnify him for the loss of his fingers, he can sue Andrew because of recurring back pain.
Grace owns a high-end tea shop and, to improve the ambiance, has purchased some old antique furniture and statues
Agreed Value
In the Business Auto Policy, what does the symbol #2 mean?
Any Owned Vehicle
Bill has experienced a loss covered under the Business Income and Extra Expense coverage in his Equipment Breakdown Protection Coverage Form. When does the period of restoration begin?
At the time of the breakdown or 24 hours before Bill was notified of the breakdown, whichever is later
A CGL can protect businesses from claims arising out of all of the following, EXCEPT:
Auto accidents
In a garagekeepers policy, PIP coverage is:
Available with endorsement
A windstorm cuts the power supply of a wholesale butcher. To keep his inventory from spoiling, the butcher immediately runs to the store and rents generators to keep his freezers working. Which of the following statements is TRUE?
Business Interruption coverage will indemnify the butcher for the cost of the rentals, but only if he succeeds in preserving his inventory.
Which of the following endorsements is mandatory for all Florida residential property policies?
Catastrophic ground cover collapse
Which of the following will not appear on the declaration page of a commercial property policy?
Covered perils
Which of the following situations does NOT involve an insurable risk?
Dale just bought 30 shares of a hot new startup company online.
All of the following are typically excluded from liability coverage in a BOP, except:
Damage to premises rented by the insured is cover in a BOP
Which of the following losses would be covered by Section III of a BAP?
Damaged factory-installed speakers
After a tornado completely destroys the roof and windows of Calah's business building, she finds that there are new codes in place requiring thicker shingles and reinforced window frames. Calah insured her business using a replacement cost policy. Which commercial property coverage can help Calah with the added costs of bringing her building up to code?
Increased Construction Costs
John purchased some business property a few years ago. In the past two years the property value has grown 4% each year
Inflation Guard
Which of the following is a feature typically found in a Business Owners Policy?
Inflation Guard for buildings and structures
Residual market insurance programs are funded by:
Insurers and their policyholders.
Which of the following statements does NOT apply to the Standard Fire Policy?
It automatically covers wind and vandalism
Which of the following is NOT true about a scheduled payment release?
It can't be used with Workers' Compensation claims
Which of the following statements about multi-peril crop insurance is false?
It covers losses from poor farming practices
Which of the following is not true about Business Income Coverage, an additional coverage in a Business Owners Policy?
It is added by endorsement and increases the premium.
Which of the following statements about Crop-Hail insurance is FALSE?
It is generally available from private insurers. ??
Which of the following statements about the Standard Flood Insurance Policy is FALSE?
It is subject to state courts
Which of the following is NOT a requirement for a legally binding contract?
It must be a notarized document.
Which of the following statements about the Accounts Receivable coverage extension in a BOP is TRUE?
It provides coverage for money that insured expects to collect but cannot because of damages to accounting records caused by covered peril
Jimmy's Burger Barn has a pure claims-made policy that is about to expire, but a customer just filed a liability claim against the company. If Jimmy's wants to have insurance pay for the damages, it must do which of the following?
Jimmy's Burger Barn must report the claim as soon as possible, even if that means it makes the report after the policy expires.
Tom needs some extra hands to help him lay a concrete foundation. He contacts XYZ Labor to hire some experienced concrete workers who can help him complete the job. Tom will pay XYZ Labor directly and let them handle payroll, taxes, etc. Once they finish with the foundation, Tom won't need their services any longer and XYZ will move on to the next client. Under Tom's CGL policy, which of the following best describes the type of worker Tom is looking for?
Leased workers
Mackey Manufacturing signs a five-year lease at a new location, only to have the building burn down one year into their new lease. Now they have to lease a new property, and the rental prices have increased, so the company now has to pay higher rental costs. Which commercial property coverage form would indemnify Mackey Manufacturing for the difference in lease costs?
Leasehold Interest Coverage Form
Phil runs a locomotive repair business, which is insured under a commercial property policy. One night, some blasting powder is accidentally ignited and blows a crowbar through one of the engines. No one is hurt, but the locomotive is severely damaged. Which coverage option may help cover the cost of repairing the engine from this unfortunate event?
Legal Liability Coverage
Under a business auto policy, symbol 1 for "any auto" usually applies to what type of insurance coverage
Liability
An equipment breakdown endorsement would indemnify the insured for losses related to:
Malfunctioning refrigerator systems
Jason crashes his single-engine plane while Jim and Barbara are on board. Jim has a broken leg and Barbara has a concussion. Jason has a broken wrist. Which coverage in Jason's aviation insurance policy could cover Jim's broken leg?
Medical payments
Which endorsement to the BAP would cover a forklift
Mobile equipment
Wilma works for a professional cleaning service. While cleaning a ceiling fan at a customer's home, she leans too far forward, upsets the step stool, and falls. In an effort to prevent her fall, Wilma grabs the ceiling fan, but just ends up pulling the fan down and leaving a gaping hole in the ceiling. The damage Wilma caused would fall under what coverage in her company's Commercial General Liability policy?
Operations liability
When a gas line explodes close to Georgia's business, it destroys most of her landscaping, leveling trees and uprooting shrubs. Which coverage extension could help cover the cost of replacing these plants?
Outdoor property
ABC Paving would like to purchase comprehensive coverage for all the passenger vehicles in their fleet of 87 cars. They don't feel it's necessary to get this coverage for their 4 tractors and 8 pavers. How would a business auto policy most likely apply this comprehensive coverage?
Owned private passenger autos only
ABC Construction recently won a bid to reconstruct the town park. After a few months of work, ABC Construction realizes they won't make any money on the project and walk away, leaving the park half-finished. Luckily, the town had required ABC Construction to hold a surety bond from Parker Sureties, who can now step in to finance the completion of the job. Which of the following statements is TRUE?
Parker Sureties can seek recompense from ABC Construction.
In Ocean Marine insurance, this clause appropriates the loss to one company, rather than spreading the loss among all cargo owners.
Particular Average
Who can purchase flood insurance through the NFIP
People who are living in participating communities
Which of the following terms refers to the time elapsed between a coverage loss to a commercial building and the return of full business operations of the same building?
Period of restoration
Which of the following is NOT true of Personal Injury Protection?
Pip is usually secondary coverage
After a loss, the insured farmer will typically have to do all of the following, EXCEPT
Plant a new crop within 72 hours
Shelly has been suffering from chronic headaches for over a year. She is sure that there is something medically wrong, despite what the doctors in her network have told her. So, she decides to visit a doctor that her friend recommended, even though he charges more and is not in Shelly's approved network. Shelly's insurer paid for the cost of the appointment up to the amount she would have reasonably been charged by an in-network physician, and Shelly was responsible for paying the remaining balance. Which type of health insurance plan does Shelly have?
Preferred Provider Organization
James is expecting a very important client to arrive in an hour so he decides to sweep and wash the floor. James finishes the job in time and goes to look over his bid for the contract one more time. James comes back out to the lobby to find his potential client laid out on the floor, having slipped and fallen. Which type of commercial general liability coverage would indemnify James' client for his injuries? Product Liability
Premises Liability
Jim own's a small boutique. Jim forgot to turn off the automatic lawn sprinklers during the frigid winter weather
Premises Liability
ABC Motors produces luxury cars, but lately some of their automobiles have been shipped out with faulty accelerators that stick. One such car was sold to an elderly man who was pulling into a parking space when his car engine suddenly revved to 4,000 RPMs, crashing into a parked car. The resulting damage would fall under what coverage in ABC Motors' Commercial General Liability policy?
Product liability
National Flood Insurance Program
Provides flood insurance to those who live in a community complying with NFIP standards
In a commercial property policy, the monthly indemnity coverage option for business income insurance
Requires the insured to parcel the stated policy limit into a fractional maximum amount
Rise & Shine Light Bulb Co. has a claims-made & reported policy that is about to expire, but a customer just filed a liability claim against the company. If Rise & Shine wants to have insurance pay for the damages, it must do which of the following?
Rise & Shine must report the claim before its policy expires.
Amy needs more floor space in her antique furniture store, so she buys a storage building 3 miles away. She is worried about keeping the furniture in the storage building safe, so she puts in an alarm system and smoke detectors. By purchasing the alarm system and smoke detectors, Amy is practicing:
Risk reduction
While driving the company car, Lloyd is distracted and rear-ends the car in front of him. Which section of the BAP policy would cover the damage Lloyd caused to the other car?
Section II
cost, insurance, and freight would be purchased by the __________________ of goods.
Seller
A winter storm has left alot of snow and ice on the roof of Helen's business. The weight is to much for the roof to bare and gives way, bringing with it a torrent of melting snow cascading down the interior of helens warehouse. Her commercial property policy covers the damage, even though weight of ice and snow is not specifically listed as covered peril. Therefore, which type of
Special form
Law and Ordinance, also known as Code Upgrade Coverage, covers which of the following expenses?
The cost of repairs or upgrades done to meet new building codes
In a CGL policy, the premises liability hazard applies to claims arising from an occurrence on
The premises own or rented by the insured
Jill arrives to open the bank one morning to find the door hanging open. Upon entering the bank she sees the vault door has been blown open, most of the money has been stolen, and a large amount of money was burned when the explosive charge went off. Luckily, the bank has a Commercial Crime policy. Which of the following best describes what would be covered under Inside the Premises: Theft of Money and Securities?
The stolen money, the destroyed money, and the damage to the vault
All of the following statements are true of the Named Peril Endorsement in a BOP, except:
Theft is a covered peril
Which of the following is NOT a feature of a typical Business Owners Policy?
Usually Actual Cost Valuation
Sam's Dry Cleaners' power shuts off due to a lightning strike at the supplying power station just down the street. For three days the business cannot operate due to the damage incurred at the power station. Which endorsement would cover Sam's Dry Cleaners for the loss of business?
Utility services
Matt, a real estate developer, must submit a report to his insurer every 30 days listing the value of all his properties over the past month. In turn, the insurer adjusts Matt's premiums based on the values he submits. Which optional coverage does Matt subscribe to?
Value Reporting
Greg owns a construction business and has been really swamped lately. His friend Chuck is looking to become a claims adjuster, but doesn't have very much construction experience, so chuck offers to help greg on the weekends for free.
Volunteer worker
Which of the following perils is excluded from coverage in a national flood insurance program policy
Water main break
Which of the following perils is excluded from coverage in a National Flood Insurance Program policy?
Water-main breakage
In the business and personal property form of a commercial property, coverage B- business personal property coverage applies to all of the following except
commercial floors
When Louise goes online and fills out phony applications with XYZ Auto Insurance in order to print the temporary insurance cards and sell them for a profit on the black market, she is:
commiting hard fraud
Cyril recently purchased a machining shop
concealment, misrepresentation, fraud
In a BOP, the purpose of Supplementary Payments in conjunction with liability coverage is to:
cover costs associated with defending and investigating a claim against the insured.
Due to decreased demand, the market price of beets dropped dramatically during the recent growing season. Consequently, Michelle's crop of beets did not make as much money as she was expecting this year, based on her production history and the harvest-time futures price. However, Michelle is insured for this type of situation. What kind of insurance does she have?
crop-revenue
When handling a Business Interruption claim, the adjuster must do all of the following EXCEPT:
determine the waiting period that applies to each indirect loss being claimed.
An injured employee's PPI rating (or Impairment rating) is NOT:
determined by a doctor. ?
Which section of an insurance policy is designed to OMIT certain risks from coverage?
exclusions
An individual has ________________ to file a lawsuit for False Arrest in Florida.
four years
In an Aviation policy, which of the following is only covered through an endorsement?
hi-jacking
Strict liability
holds a person liable for his actions regardless of how much care he demonstrates.
Bill holds a hull policy for his cargo ship which sails between China and the United States, transporting wooden toys. On voyage (i) his vessel is damaged by pirates. On voyage (ii) the vessel is damaged by striking employees. On voyage (iii) the vessel is destroyed when it strays into a war zone and is struck by a missile. Bill's losses will be covered by his hull coverage for which of these voyages?
i. only
The Department of Financial Services can discipline an adjuster who doesn't follow Florida insurance law by doing all of the following, EXCEPT:
imposing prison sentence
After a loss covered under a dwelling policy, Ordinance or Law coverage pays for:
increased repair costs due to laws or codes.
A company that wishes to obtain Workers Compensation insurance through FWCJUA must prove that:
it has been denied coverage by at least two insurers in the voluntary market.
All of the following may be considered beneficial characteristics of a commercial package policy
it is a single policy that covers personal and business needs
If a claimant has a history of similar claims, that could mean:
it is important to investigate for fraud.
If an insurer is unwilling to pay what the claimant is asking, the adjuster must:
negotiate a settlement.
When an insurer decides to not renew an existing commercial property policy, it is obliged to follow the Cancellation and Nonrenewal condition of supplying notice to the policyholder 45 days in advance. If the insurer fails to meet this deadline, it must:
offer the same premium rates and policy coverage as before for an additional 30 days.