Other Coverages and Options

All of the following are parts of a personal auto policy EXCEPT 1. Garage coverage. 2. Medical payments coverage. 3. Duties after an accident or loss. 4. Liability coverage.

1. Garage coverage.

Employment practices liability insurance (EPLI) would NOT cover claims arising from A. Wrongful termination. B. Discrimination. C. Deliberate law violation. D. Sexual harassment.

C. Deliberate law violation. Claims arising because of intentional acts of the insured are not covered.

A specialized type of insurance that guarantees the faithful performance of a trustee of employee benefit plans is called A. Surety bond. B. Directors and officers insurance. C. Employee benefit plan comprehensive coverage. D. Fiduciary liability insurance.

D. Fiduciary liability insurance. Fiduciary liability insurance insures an employee benefit plan against bad acts of the plan's fiduciaries or trustees.

The declarations page of the homeowners policy provides all of the following information EXCEPT 1. A statement that earthquake damage is not covered. 2. The amount of premium charged for each coverage. 3. The insured's address. 4. What deductible amount applies to each loss covered by the policy.

1. A statement that earthquake damage is not covered.

The Commissioner can issue a surplus lines license to A. Any licensed agent or broker. B. Any authorized insurance company. C. Any unauthorized insurance company. D. Any of the above.

A. Any licensed agent or broker. The Commissioner can issue a surplus lines license to any licensed agent or broker.

Which bond is required by a court before allowing one to take the assets of another to satisfy a legal obligation? A. Injunction bond B. Attachment bond C. Bail bond D. Cost bond

B. Attachment bond An attachment bond is used to guarantee that if the action to attach property was wrong, any damage suffered will be paid.

Which bonds may be required when a person appeals to a higher court after a judgment already has been entered to guarantee that a judgment will be paid? A. Bail bonds B. Injunction bonds C. Cost bonds D. Appeal bonds

D. Appeal bonds Appeal bonds may be required when a person appeals to a higher court after a judgment already has been entered to guarantee that a judgment will be paid.

The type of professional liability coverage a medical doctor needs is A. Errors and omissions coverage. B. Druggist liability. C. Ordinance and law coverage. D. Malpractice coverage.

D. Malpractice coverage. The type of professional liability insurance written to protect those in the medical field is called medical malpractice.

An insured has $5,000 of medical coverage on a personal auto policy at the time of a covered accident. The insured and two passengers are injured. Medical treatment costs $7,000 for the insured, $4,000 for the first passenger, and $8,000 for the second passenger. How much will the policy pay under medical payments coverage? 1. $15,000 2. $5,000 maximum for the accident 3. $5,000 minus the policy deductible 4. $14,000

4. $14,000 The limit is not more than $5,000 per person, per accident.

According to the Law of Agency, a principal is represented by a/an 1. Insurer. 2. Broker. 3. Insured. 4. Agent.

4. Agent.

Which of the following would be covered under a business liability insurance policy? 1. Bodily injury resulting from environmental pollution 2. Loss of electronic data due to a burglary 3. Bodily injury to an employee covered by workers compensation insurance 4. Damage to a watercraft while on shore at the insured's premises

4. Damage to a watercraft while on shore at the insured's premises A watercraft parked or stored on the shore of an insured's premises would be covered under a business liability policy.

A BOP (businessowners policy) is most similar to )1. Auto. 2. Umbrella. 3. Cargo. 4. Homeowners.

4. Homeowners.

All of the following statements describe the concept of strict liability EXCEPT 1. Claimants may need to provide proof that a product defect caused an injury. 2. It is imposed regardless of fault. 3. It is applied in product liability cases. 4. It is imposed on defendants engaged in hazardous activities.

4. It is imposed on defendants engaged in hazardous activities.

Which of the following is NOT a duty of the employer/insured if an injury occurs at the workplace? 1. Provide immediate medical care required by the law 2. Notify the insurer at once 3. Provide the name and address of the injured worker and any witnesses to the injury 4. Make voluntary payments for treatment of the worker's injury

4. Make voluntary payments for treatment of the worker's injury

An insured unintentionally accepted forged currency during the course of regular business. Which of the following crime coverages protects against such a loss? 1. Employee theft 2. Inside the premises - theft of money or securities 3. Forgery or alteration 4. Money orders and counterfeit paper currency

4. Money orders and counterfeit paper currency Money orders and counterfeit paper currency provides coverage for loss resulting directly from the insured having accepted, in good faith, money orders issued by any post office, express company, or bank that are not paid upon presentation.

Which of the following watercraft will be covered under Section II - Liability Coverage of a businessowners policy? 1. Nonowned watercraft used to carry property for a fee2. Owned watercraft while at sea3. Any watercraft owned by the insured4. Nonowned watercraft less than 51 feet long

4. Nonowned watercraft less than 51 feet long

All of the following situations would be covered under a professional liability policy EXCEPT 1. Failure of a doctor to render the quality of care that is customary in the medical field. 2. An accountant's error that inflated a bid and caused a client to lose a major account. 3. Negligence of an architect who designed an unsafe building. 4. The failure of an attorney to properly defend a client due to his personal dislike of the client.

4. The failure of an attorney to properly defend a client due to his personal dislike of the client.

In a farm policy, any cost incurred by the insurer for the investigation or defense of a claim will be paid by 1. The insured. 2. The DOI. 3. The NAIC. 4. The insurer.

4. The insurer.

How much coverage can be available for watercraft damage in the homeowners policy? 1. Unlimited amount 2. No more than $1,000 3. Homeowners policies do not cover watercraft. 4. Up to $1,500

4. Up to $1,500

A notice of nonrenewal of an auto insurance policy must contain A. The specific reason for the nonrenewal. B. The effective date of the nonrenewal. C. A summary of the loss experience of the policy that is not renewed. D. None of the above.

A. The specific reason for the nonrenewal. Nonrenewal is termination of insurance on the expiration date of the policy. Nonrenewal notices must give the specific reason for the nonrenewal.

When does a business need to purchase a liquor liability policy? A. When it entertains customers or employees at events where liquor is served B. When it is in the business of manufacturing, distributing, serving, or furnishing alcoholic beverages C. When employees consume alcoholic beverages D. When it does not have a general liability policy

B. When it is in the business of manufacturing, distributing, serving, or furnishing alcoholic beverages Homeowners and general liability policies provide host liquor liability coverage to insureds that entertain guests, employees, or organizations at events where liquor is served, but those in the business of manufacturing, distributing, selling, serving, or furnishing alcoholic beverages need to purchase liquor liability coverage.

A public official bond guarantees which of the following? A. Public safety and protection against code violations B. Officers and directors of publicly held corporations will perform their duties honestly and faithfully. C. The government entity will be able to collect its revenues. D. Elected officials will perform their duties honestly.

D. Elected officials will perform their duties honestly. Public officials may be held liable for misuse of public funds and damage to the public may result if the official fails to fulfill obligations. Public official bonds, which are often a condition of being eligible to hold public office, guarantee any damages to the public will be paid.

In the event of cancellation of an auto insurance policy, the insurer must give written notice of cancellation to the named insured at least 1. 10 days prior to the effective date of cancellation. 2. 20 days prior to the effective date of cancellation. 3. 25 days prior to the effective date of cancellation. 4. 5 days prior to the effective date of cancellation.

1. 10 days prior to the effective date of cancellation.

The medical payments coverage in a personal auto policy will pay reasonable medical expenses for all of the following EXCEPT 1. The insured is injured while exiting a friend's mobile home. 2. The insured is injured by a motor vehicle while crossing the street. 3. The insured's child sustains injuries when the car she is in accidentally rolls down a hill. 4. A friend is injured while driving the insured's vehicle with permission.

1. The insured is injured while exiting a friend's mobile home.

An agent is presumed to have exceeded the occasional exchange of business if the agent places more than how many insurance risks per calendar year with all insurers? 1. 15 2. 25 3. 5 4. 10

2. 25

An intermediary must notify the Commissioner of a change of residence address within how many days of the change? 1. 20 2. 30 3. 5 4. 10

2. 30

An agent is selling a client a Variable Life Insurance policy and as an inducement shows the client a projection based upon shares or dividends paid on a similar policy. This is 1. Defamation. 2. Unacceptable business practice. 3. Misrepresentation. 4. Twisting.

3. Misrepresentation.

An agent who includes a statement or omits a statement which, when taken in context of the whole presentation, may tend to mislead or deceive the persons addressed has committed 1. Twisting. 2. Coercion. 3. Misrepresentation. 4. Defamation.

3. Misrepresentation.

What is the difference between a court of law and a court of equity? A. Remedy B. Only a court of law decrees an injunction C. A court of equity is decided by a jury D. Cases more than $1 million are handled by a court of law

A. Remedy The remedy by a jury in a court of law is monetary. The remedy by the judge in a court of equity is an injunction or decree instructing someone to do something or not do something.

Which bonds guarantee that the recipients of permits will comply with the ordinances associated with the use of such permits? A. Nature of fidelity bonds B. License and permit bonds C. Judicial bonds D. Injunction bonds

B. License and permit bonds License and permit bonds guarantee that the recipients of permits will comply with the ordinances associated with the use of such permits.

A municipality can protect itself against the construction or repair of properties that do not conform to the building codes established by ordinance by requiring the contractors to obtain A. Bid bonds. B. License and permit bonds. C. Fidelity bonds. D. Performance bonds.

B. License and permit bonds. License and permit bonds guarantee that the recipients of permits will comply with the ordinances associated with the use of such permits.

Which of the following is true about a fiduciary? A. Must be sanctioned by a financial institution B. Must be court-appointed C. Must be a lawyer D. Must be an accountant

B. Must be court-appointed A fiduciary is a court-appointed individual who handles someone's business affairs due to lack of competence.

Which of the following statements is true concerning a bonded contractor who defaults on a construction performance contract? A. The contractor will lose his license to operate in the state. B. The principal has no obligation to complete any remaining work or to pay for the expenses. C. The obligee may engage another contractor and then seek reimbursement from the surety. D. The surety may cancel the bond and avoid paying any losses or expenses.

C. The obligee may engage another contractor and then seek reimbursement from the surety. The bonding company would have to see that the job was completed and then seek recovery for its expenses from the bonded contractor (principal).

An insurance agency could purchase an errors and omission insurance policy which would provide protection in the event of any of the following events EXCEPT A. The agency negligently fails to offer an increased limit of coverage or benefit under a policy. B. The agency is sued by an insured for giving incorrect advice. C. The agency negligently fails to renew a policy causing a client to suffer a financial loss. D. The agency loses commission income from policies that were not issued by the insurer.

D. The agency loses commission income from policies that were not issued by the insurer. Errors and omissions insurance protects an insured against actions claiming the insured has failed to act in a professional manner. It does not cover claims arising out of criminal wrongs.

An automobile liability insurance policy that is purchased to satisfy the requirements of the Wisconsin Financial Responsibility Law must contain all of the following coverages, EXCEPT 1. Liability insurance for property damage. 2. Medical payments. 3. Uninsured motorist coverage. 4. Liability insurance for bodily injury.

b)Medical payments. Medical payments is an optional coverage that provides for payments to an insured, injured in an auto accident, regardless of fault. It is not required by Wisconsin FRL

In an auto insurance policy, what does the first limit represent in split liability limits? 1. Bodily injury to 1 injured persons in a single accident 2. Bodily injury to all injured persons in a single accident 3. Bodily injury to two persons injured in a single accident 4. Property damage in a single accident

1. Bodily injury to 1 injured persons in a single accident

The liability coverage of the businessowners policy is written on a 1. Businessowners liability coverage form. 2. Policyowners liability coverage form. 3. Aggregate liability coverage form. 4. Homeowners liability coverage form.

1. Businessowners liability coverage form.

An automobile that is owned by multiple individuals who are not spouses or otherwise in the same household may be insured under a personal auto policy if 1. Separate policies are written for each individual involved. 2. A joint ownership coverage endorsement is added. 3. A miscellaneous-type vehicle endorsement is added. 4. An extended ownership endorsement is added.

2. A joint ownership coverage endorsement is added.

A professional who wants coverage for all liability exposures should purchase what form of liability insurance? 1. Employee benefits 2. Commercial general and professional 3. Directors and officers 4. Fiduciary and employment practices

2. Commercial general and professional

In addition to the common policy conditions, all of the following conditions apply to liability coverage EXCEPT 1. Bankruptcy. 2. Employers liability. 3. Separation of insured. 4. Legal action against insurer.

2. Employers liability. The following conditions apply to the liability coverage in addition to the common policy conditions: bankruptcy, duties in event of occurrence, claim or suit, legal action against the insurer, and separation of insured. Employers liability is an exclusion.

Who must be a member of the Wisconsin Compensation Rating and Inspection Bureau? 1. All mutual insurance companies 2. Every insurer in the state that writes Workers Compensation or Employers Liability insurance 3. All admitted insurers 4. All stock insurance companies

2. Every insurer in the state that writes Workers Compensation or Employers Liability insurance

Under what circumstance may an insurer cancel or refuse to renew an insurance policy based upon the past criminal record of the insured? 1. Only with the written consent of the Commissioner 2. Only upon conviction of an offense directly related to the risk insured 3. Only upon conviction of an offense for which the insured had been previously convicted in the past 5 years 4. By giving the insured 45 days prior written notice of the refusal or cancellation along with the specific reason

2. Only upon conviction of an offense directly related to the risk insured An insurer may cancel or refuse to renew a policy of a person convicted of an offense directly related to the risk insured.

The Federal Fair Credit Reporting Act 1. Prevents money laundering. 2. Regulates consumer reports. 3. Protects customer privacy. 4. Regulates telemarketing.

2. Regulates consumer reports.

Which of the following protects consumers against the circulation of inaccurate or obsolete personal or financial information? 1. Consumer Privacy Act 2. The Fair Credit Reporting Act 3. Unfair Trade Practices Law 4. The Guaranty Association

2. The Fair Credit Reporting Act

Which of the following losses would be covered under the property damage liability coverage of a personal auto policy? 1. A passenger in the insured's vehicle is injured following an accident caused by the insured. 2. The insured damages a rented garage when he failed to stop in time. 3. A temporary substitute vehicle is damaged while the insured is driving it. 4. The insured's vehicle is damaged when it collides with a deer.

2. The insured damages a rented garage when he failed to stop in time.

Under the business auto coverage form, mobile equipment is covered for liability insurance 1. When coverage is written as Symbol 1. 2. When being carried or towed by a covered auto. 3. On an excess basis .4. When listed on the declarations.

2. When being carried or towed by a covered auto. Liability coverage is automatically provided on mobile equipment while being carried or towed by a vehicle insured as a covered auto. (There is a business auto endorsement that will provide auto coverages to mobile equipment upon payment of additional premiums.)

Which of the following best describes an inadequate rate in all classes of insurance? 1. A rate that is much higher than a similar rate from another insurer. 2. A rate that is unreasonably high for the insurance provided 3. A rate that is unreasonably low for the insurance provided 4. A rate that is much lower than a similar rate from another insurer

3. A rate that is unreasonably low for the insurance provided

In insurance, an offer is usually made when 1. The agent hands the policy to the policyholder. 2. An agent explains a policy to a potential applicant. 3. An applicant submits an application to the insurer. 4. The insurer approves the application and receives the initial premium.

3. An applicant submits an application to the insurer.

Which of the following would be considered an insured under a business auto coverage form? 1. Anyone using a covered auto while working in a business of selling, servicing, repairing, or parking autos if it is not the named insured's business 2. A partner of the named insured for any covered auto owned by that person or a member of his or her household 3. Anyone while using, with permission, a covered auto owned by the named insured 4. The owner or anyone else from whom the named insured hires or borrows a covered auto

3. Anyone while using, with permission, a covered auto owned by the named insured

.A producer has taken an individual's application and issued him a binder. When must the insurer issue the individual's policy? 1. Within 180 days 2. Within 30 days 3. As soon as reasonably possible 4. Within 90 days

3. As soon as reasonably possible

Which of the following describes the transfer of a legal right or interest in an insurance policy? 1. Obligation 2. Legal purpose 3. Assignment 4. Abandonment

3. Assignment

Which of the following does the term proximate cause refer to? 1. Duty of the defendant to act 2. Reason for filing a lawsuit 3. Negligence that leads to an injury 4. Injury that leads to monetary compensation

3. Negligence that leads to an injury

A customer was injured in a supermarket parking lot when a grocery cart rolled into the customer's leg. Coverage for this claim would be provided under 1. Workers compensation. 2. Product liability. 3. Premises and operations. 4. Completed operations.

3. Premises and operations.

Every auto liability policy issued in Wisconsin must extend coverage to any person using the insured motor vehicle to the same extent and in the same manner as to the policyholder, so long as 1. The other person has a valid Wisconsin driver's license. 2. The other person is not in violation of any Wisconsin traffic regulations. 3. The vehicle is used for the purposes described in the policy. 4. None of the above.

3. The vehicle is used for the purposes described in the policy.

What documentation grants express authority to an agent? 1. Agent's insurance license 2. Fiduciary contract 3. State provisions 4. Agent's contract with the principal

4. Agent's contract with the principal

A license applicant's trustworthiness and competence will be determined by all of the following EXCEPT 1. Misrepresentations in the application process. 2. Criminal record. 3. Regulatory actions. 4. Personal testimonies from previous co-workers and managers.

4. Personal testimonies from previous co-workers and managers.

Which of the following policy components specifies the maximum amount an insured may collect for a loss? 1. Declarations 2. Loss estimation 3. Conditions 4. Policy limits

4. Policy limits

Carl's application for a life policy was rejected because of information disclosed in an inspection report. Carl reviewed the consumer reporting agency's file and found they had incorrect information concerning his personal life. Carl can legally require the reporting agency to 1. To cease and desist. 2. Delete the incorrect information. 3. Provide him with a written apology. 4. Reinvestigate.

4. Reinvestigate.

Workers compensation statutes require employers to meet capital reserves requirements sufficient to pay any claims that might arise. Employers can meet such obligations through all of the following EXCEPT 1. Self-insurance plans. 2. Assigned risk plans. 3. Competitive state funds. 4. Second injury funds programs.

4. Second injury funds programs. Second injury funds are a method by which employers manage the risks associated with the hiring of previously injured potential employees.

Local sportscaster Fred Fillmore states on the air during a news telecast that the local pro football coach has a lousy record, which is untrue. This is an example of 1. No tort at all - freedom of speech. 2. Invasion of privacy. 3. Libel. 4. Slander.

4. Slander.

The common policy condition is a modular part combined with other parts to create the contract. The common policy condition section contains provisions that are applicable to all lines of coverage that may be included in the policy. Which of the following provisions would be found in the common policy conditions section of the policy? 1. Prior to the insurer making inspections, surveys, and reports relating to the insurance, approval from the insured must be obtained. 2. Requests for any changes in the policy from the insured may be made by the second named insured. 3. The insurer is granted the right to audit books and records of the insured relating to the policy for a period of up to 5 years after the end of the policy. 4. The first named insured may cancel the policy at any time by giving written notice to the insurer.

4. The first named insured may cancel the policy at any time by giving written notice to the insurer.

The voluntary compensation endorsement in a workers compensation policy provides that the insurer will pay statutory benefits to the insured person in exchange for what? 1. The insured person must use the physician of the insurer's choosing. 2. The insured person must pay a deductible before medical care is received. 3. The insured person may file only one claim per year. 4. The insured person must release the employer and the insurer from further liability.

4. The insured person must release the employer and the insurer from further liability. This endorsement provides that the insurer will pay statutory benefits to the insured person in exchange for the injured worker releasing the employer and the insurer from further liability.

If an insurance premium is paid by the policyowner to the agent, and the agent fails to remit that premium to the insurer, which of the following statements is true? 1. The premium will be taken out of the Guaranty Association funds. 2. The agent's license will be automatically revoked. 3. The policy will lapse since the premium was not received by the insurer. 4. The policy will not lapse since payment to the agent is the same as a payment to the insurer.

4. The policy will not lapse since payment to the agent is the same as a payment to the insurer. Since the agent is a representative of the insurer, payment to the agent represents payment to the company. After a hearing, the agent's license could be revoked for engaging in such acts.

Which of the following IS considered a work-related injury/occupational disease under Workers Compensation law? 1. Greg is injured in a car accident while driving to work at 7:45 one morning. 2. Mary falls down a flight of stairs at her office building; at the hospital, it is discovered that she is intoxicated. 3. Mike works for Ace Construction Company. He is walking through the job site without a hard hat and is struck on the head by a falling brick. 4. Tom works as a painter in an auto body shop. The chemicals from the paint aggravate Tom's asthma to the point that he must be hospitalized for several days.

4. Tom works as a painter in an auto body shop. The chemicals from the paint aggravate Tom's asthma to the point that he must be hospitalized for several days.

Which of the following special liability coverages will provide protection to managers of a corporation for claims arising from a wrongful act committed by the manager while in an official capacity? A. Directors and officers liability B. Employment practices liability C. Errors and omissions insurance D. Malpractice insurance

A. Directors and officers liability Directors and officers liability policies will pay those damages that the corporation or nonprofit entity would, under the law, be required to reimburse the individual director or officer for judgments arising from actions alleging wrongful acts.

What is the deductible of a commercial liability umbrella policy called? A. The SIR B. The PIL C. The CGL D. The CPP

A. The SIR The self-insured retention (SIR) is an initial part of a loss the insured pays before the umbrella pays if no other policy covers the loss.

Which surety bond guarantees that bills for labor and materials will be paid by the contractor as they are due? A. Bid bond B. Payment bond C. Performance bond D. Supply bond

B. Payment bond Sometimes called labor and materials bonds, payment bonds are frequently included as part of a performance bond.

Section I of a boatowners policy covers A. Death. B. Physical damage. C. Liability. D. Medical payments.

B. Physical damage. Section I of a boatowners policy covers physical damage.

In what court are bonds involving a fiduciary filed? A. Appellate court B. Probate court C. Court of equity D. District Court

B. Probate court The probate court has jurisdiction over the fiduciary on behalf of the ward or estate.

Which of the following statements would be correct if an insured failed to maintain the underlying limits as required by a personal umbrella policy? A. The insured would have to pay the self-insured retention limit. B. The insured would be responsible for the amount required as underlying limits in the event of a claim. C. It would have no effect on the umbrella policy. D. The policy will be cancelled.

B. The insured would be responsible for the amount required as underlying limits in the event of a claim. The amount of insurance required as underlying limits in other policies is treated as a deductible amount to the umbrella for that particular exposure, so if underlying limits are not maintained, it is the insured's responsibility.

When an employee benefit plan pays the premium for a fiduciary liability policy, what provision must be included in that policy? A. Designated beneficiary B. Waiver of premium C. Surety bond D. Subrogation

D. Subrogation If the premiums are paid from the fund, the policy must allow for subrogation against the individual trustees involved in any loss.

An insured invites his neighbors out for a day on the water in his boat powered with a 150 hp outboard motor. While attempting to tie the boat to dock, his neighbor's hand is broken when caught between the boat and dock. What coverage would apply to the broken hand? A. The insured's outboard boat and motor policy B. Homeowners personal liability coverage C. Homeowners property coverage D. The insured's boatowners policy

D. The insured's boatowners policy Outboard boat and motor policies are property coverage only. Homeowners liability does not apply to outboards with more than 25 hp. Boatowners policies contain property, liability, and medical payments coverage.

To be effective, a notice of cancellation must be filed with a)Transportation Department. b)Commissioner of Insurance. c)Wisconsin Highway Patrol. d)Secretary of State.

d) Secretary of State. Notices of cancellation must be filed with the Secretary of State.

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? 1. Property damage liability 2. Collision coverage 3. Other-than-collision coverage 4. This loss would not be covered.

1. Property damage liability The auto policy provides liability coverage to a trailer being towed by a covered auto.

Which of the following damages is the most subjective when determining compensation? 1. Punitive damages 2. Tort damages 3. Special damages 4. General damages

1. Punitive damages

Which of the following persons may be covered under farm Coverage J? 1. Resident employees 2. First named insured 3. Additional insureds 4. Farm employees

1. Resident employees Farm employees are excluded from this coverage. However, resident employees are included. Furthermore, this coverage applies only to persons who are not insureds.

Which of the following symbols is available to an insured with vehicles subject to no-fault coverage? 1. Symbol 5 2. Symbol 6 3. Symbol 7 4. Symbol 9

1. Symbol 5 Symbol 5 covers owned autos subject to no-fault coverage.

Which one of the following symbols used in business auto coverage is correctly described? 1. Symbol 9 - nonowned autos only 2. Symbol 1 - owned auto only 3. Symbol 2 - owned autos subject to no-fault 4. Symbol 7 - hired autos only

1. Symbol 9 - nonowned autos only Symbol 1 is used for any auto, Symbol 2 is used for owned autos only, and Symbol 7 is used for specifically described autos only.

Shipbuilders and repairers are covered by the 1. U.S. Longshore and Harbor Workers Compensation Act. 2. Jones Act. 3. States' workers compensation laws 4. Federal Employers Liability Act.

1. U.S. Longshore and Harbor Workers Compensation Act.

Which of the following is the correct formula for computing a loss ratio? 1. Loss adjusting expenses - incurred expenses 2. (Incurred losses + loss adjusting expense)/earned premium 3. (Incurred expenses + loss adjusting expenses)/earned premium 4. (Incurred losses - loss adjusting expense)/earned premium

2. (Incurred losses + loss adjusting expense)/earned premium

All of the following would be defined as an insured contract under a CGL coverage form EXCEPT 1. Property leases. 2. Railroad indemnification agreement. 3. Elevator maintenance agreements. 4. Sidetrack agreements.

2. Railroad indemnification agreement.

What is the maximum amount an employers liability insurable policy would pay for the bodily injury of an employee in any one accident? 1. $10,000 2. $50,000 3. $100,000 4. $500,000

3. $100,000

An insured driver has a personal auto policy with a medical payments coverage limit of $20,000. If the driver sustains $20,000 in bodily injuries and a passenger sustains $25,000 in injuries, how much would the policy pay each injured person? 1. $5,000 2. $10,000 3. $20,000 4. $25,000

3. $20,000

The businessowners policy liability coverage will pay for necessary medical expenses of others incurred within what maximum time limit? 1. 90 days 2. 6 months 3. 1 year 4. 3 years

3. 1 year

For medical payments to be covered under Coverage C of a CGL policy, incurred expenses must be reported to the insurer within 1. 60 days of the accident. 2. 60 days of the billing date. 3. 1 year of the accident. 4. 1 year of the billing date.

3. 1 year of the accident.

Within how many days of cancellation of a claims-made policy may an insured request claim and occurrence information from the insurer? 1. 10 days 2. 30 days 3. 60 days 4. 180 days

3. 60 days

A banker is ready to close on a customer's loan. The bank is prepared to offer the loan but only if the customer purchases an insurance policy from the bank in the amount of the loan. This is an example of 1. Defamation. 2. Twisting. 3. Coercion. 4. Loading.

3. Coercion

What is the primary advantage of Workers Compensation for the employee? 1. Compensation only if the employee is at fault 2. A definite means of compensation for employers 3. Compensation regardless of fault 4. Compensation only if the employer is at fault

3. Compensation regardless of fault

Under the Commercial General Liability form, which of the following coverages provides protection for bodily injury and property damage suffered by third parties? 1. Coverage C 2. All coverages 3. Coverage A 4. Coverage B

3. Coverage A

How often must individual agents pay their licensing fees? 1. Every 6 months 2. Annually 3. Every 2 years 4. Every 5 years

3. Every 2 years

Which of the following personal auto coverages would pay for the insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss? 1. Comprehensive coverage 2. Collision coverage 3. Liability coverage 4. Medical payments

3. Liability coverage

All of the following would be covered under the medical expense coverage of a businessowners policy EXCEPT 1. X-ray services. 2. First aid when the accident occurred. 3. Mental health counseling. 4. Ambulance services.

3. Mental health counseling.

.Which coverage would a business owner need in a crime policy to cover money that may be stolen from a messenger? 1. Commercial general liability 2. Safe burglary 3. Outside the premises 4. Fidelity bond

3. Outside the premises Outside the premises (theft, disappearance, and destruction) coverage covers outside loss of money and securities.

What type of information would be found in a policy's insuring agreement? 1. Policy limits 2. Insurer's address 3. Renewal dates 4. Location of premises

3. Renewal dates An Insuring Agreement establishes the obligation of the insurance company to provide the insurance coverages as stated in the policy. The insuring agreement lists the parties to the contract, effective and renewal dates, the description of coverage provided, and perils (among other things). Location of premises, policy limits, supplemental representations, and insurer's name and address can all be found in the Declarations.

What is the purpose of the miscellaneous type vehicle endorsement in personal auto policies? 1. To provide coverage for hit-and-run accidents 2. To extend coverage to motorized vehicles rented for recreation 3. To expand the definition of a covered auto to include various motorized vehicles 4. To limit coverage to various motorized vehicles only

3. To expand the definition of a covered auto to include various motorized vehicles

Which of the following would NOT be covered under the supplementary payments provided under Coverage A - Bodily Injury and Property Damage of a CGL policy? 1. Up to $250 for bail bonds2. Interest accrued on any judgement3. Up to $500 a day for loss of income4. Court costs against the insured

3. Up to $500 a day for loss of income

An insurer terminates an agent's appointment. Within how many days of termination must the intermediary be notified? 1. 20 2. 30 3. 10 4. 15

4. 15

A workers compensation policy cannot be cancelled prior to its expiration date unless a notice of policy cancellation has been sent to the insured at least how many days in advance? 1. 10 days 2. 15 days 3. 20 days 4. 30 days

4. 30 days

In the event an insurer intends not to renew a commercial general liability policy, the insurer must notify the insured within 1. 10 days. 2. 20 days. 3. 30 days. 4. 60 days.

4. 60 days.

What type of law requires employers to provide workers compensation coverage to employees? 1. Labor 2. Civil 3. Elective 4. Compulsory

4. Compulsory

Which of the following provisions requires an insurer to receive an insured's approval, prior to paying out a professional liability policy claim? 1. Claimant approval2. Legal action provision3. Transfer of right of recovery4. Consent to settle a loss

4. Consent to settle a loss

Which provision requires that an insured protects property from further damage following a loss? 1. Notice of claim 2. Severability 3. Legal action 4. Duties after loss

4. Duties after loss

Which of the following perils would NOT be covered under a BOP form? 1. Riot, sprinkler leakage, or sinkhole collapse 2. Fire or lightning 3. Tornado 4. Earth movement, power failure, and flood

4. Earth movement, power failure, and flood

Which of the following would NOT be used by an insurer when determining the premium rate of a workers compensation policy? 1. Claims experience 2. Risk exposure 3. Payroll 4. Employment types

4. Employment types

The voluntary compensation endorsement in workers compensation coverage provides statutory coverage for which types of employees? 1. Factory workers 2. Police officers 3. Public school teachers 4. Farm workers

4. Farm workers

Faulty wiring in a home is an example of a 1. Loss. 2. Peril. 3. Risk. 4. Hazard.

4. Hazard.

If an insured is involved in an accident in another state where limits of liability are higher than those of the insured's home state, the insured's auto policy will pay 1. Only the difference between each state's limits.2. Nothing.3. Limits set by the insured's home state.4. Limits set by the state in which the accident occurs.

4. Limits by the state the accident happened in.

The primary purpose of a surety bond is to 1. Eliminate the possibility of loss. 2. Secure a line of credit of a contractor. 3. Pay employer losses. 4. Make sure obligations are fulfilled.

4. Make sure obligations are fulfilled.

Which of the following options is available for eligible person who cannot obtain automobile coverage through the voluntary market? 1. AAA Auto Club coverage 2. Uninsured Motorist coverage 3. The Wisconsin Insurance Guaranty Association 4. The Wisconsin Auto Insurance Plan

4. The Wisconsin Auto Insurance Plan

Financial Responsibility Law requires that operators of motor vehicle show proof 1. Payment of past accidents involving auto accidents. 2. Ownership of a motor vehicle. 3. A valid driver's license. 4. The ability to respond to damages in future accidents.

4. The ability to respond to damages in future accidents.

A professional who wants coverage for all liability exposures should purchase what form of liability insurance? A. Commercial general and professional B. Directors and officers C. Fiduciary and employment practices D. Employee benefits

A. Commercial general and professional Commercial general liability excludes professional liability, and professional liability does not cover premises liability.

What is another name for liquor liability insurance? A. Dram shop insurance B. Third-party liability insurance C. Errors & omissions insurance D. Intoxicants and narcotics insurance

A. Dram shop insurance Liquor liability is also known as dram shop liability, and refers to the exposure that bars, restaurants and other similar establishments face due to the selling, distributing, manufacturing, or serving of alcoholic beverages.

Which of the following statements is NOT true regarding a personal umbrella liability policy? A. It provides errors and omissions coverage for an agency. B. It may cover certain exposures not provided under the primary layer. C. It may require the payment of a self-insured retention. D. It provides excess liability coverage over underlying personal liability.

A. It provides errors and omissions coverage for an agency. Personal umbrella policies cover the personal exposure of the insured. Errors and omissions coverage is provided only in a professional liability policy.

The form of payment bond that protects an owner contracting for work against liens from subcontractors, suppliers, or laborers who are not paid for their services and materials by the general contractor is called A. Labor and material bond. B. Performance bond. C. Supply bond. D. Completion bond.

A. Labor and material bond. A labor and material bond would cover the cost of retiring any mechanic's lien placed on the property after the job was completed.

An individual has started a construction business and plans to specialize in remodeling and rewiring residential properties. Because the city where he is located and where he plans to operate the business has building codes, he will need to obtain a A. License and permit bond. B. Bid bond. C. Performance bond. D. Completion bond.

A. License and permit bond. A license and permit bond would guarantee the city that permit recipients would comply with the laws, regulations, and ordinances associated with the use of any permit issued by the city.

Auto liability policies issued in Wisconsin must contain a provision to provide coverage for medical payments for the protection of all persons using the insured vehicle from losses resulting in bodily injury or death, in an amount of at least 1. $1,000. 2. $5,000. 3. $25,000. 4. $50,000.

1. $1,000.

What is the basic limit for towing and labor costs if added as an endorsement on a personal auto policy? 1. $25 2. $50 3. $100 4. $200

1. $25

The owner of a small business applies for a fire insurance policy with limits equal to 100% of the property's value. The owner has huge unsold inventories and a large personal gambling debt. From an underwriting standpoint, this might indicate 1. A moral hazard. 2. A peril. 3. A speculative risk. 4. A pure risk.

1. A moral hazard. A moral hazard exists when an insured could stand to gain financially by incurring a loss.

Which of the following would be considered an uninsured vehicle? 1. A vehicle fleeing a hit-and-run accident 2. A vehicle owned by a self-insurer 3. A government owned vehicle 4. A vehicle operated by an insured's family member

1. A vehicle fleeing a hit-and-run accident

Which of the following endorsements to a PAP would cover a named insured while driving a company vehicle? 1. Extended nonowned coverage 2. Rented recreational vehicle 3. Joint ownership 4. Miscellaneous type vehicle

1. Extended nonowned coverage

CGL Coverage B (Personal and Advertising Injury) will cover 1. Inadvertent injury to others caused in the course of advertising the insured's product. 2. The failure of goods to conform to advertised quality or performance. 3. Oral or written publication of material the insured knows is false. 4. An offense committed by an insured whose business is advertising.

1. Inadvertent injury to others caused in the course of advertising the insured's product.

No insurer may engage in discriminatory practices with respect to a motor vehicle insurance policy. Consideration of which of the following in cancellation, refusal to renew or issuing a policy would not be considered to be discriminatory? 1. Insured's driving record 2. Insured's marital status 3. Insured's occupation 4. Insured's age

1. Insured's driving record

Which of the following is NOT included in the definition of an "auto" under a commercial auto policy? 1. Mobile equipment 2. A land motor vehicle 3. A trailer 4. A semitrailer

1. Mobile equipment

Which of the following is NOT covered under Uninsured Motorist Coverage? 1. Property damage 2. Bodily injury to the policyholders spouse 3. Bodily injury to the policyholder 4. Bodily injury to occupants of the policyholder's auto

1. Property damage

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.

C. It will provide coverage because the damage to the client resulted from the producer's negligence. Errors and omissions coverage protects insurance producers and brokers from financial losses they may suffer if an insured sues to recover his or her financial loss due to the producer giving incorrect advice or not informing the insured of important issues.