Property and Casualty Test quiz

A professional who wants coverage for all libaility exposures should purchase what form of liability insurance?

Commercial general and professional

which of the following risks is elidgible for coverage under a businessowners policy?

Condominiums

Which special liability coverages will provide protection to managers of a corporation for claims arising froma wrognful act committed by the manager while in an official capacity?

Directors and officers liability

An insrued has four seperate but identical policies written by different insurers to cover her $100,000 building. Each policy is written for $100,000 and each has the pro rata liability other insuracne clause. In the event if a total loss to the building, what would each insurer pay?

Each policy will pay $25,000 of the loss.

Tom's Truck Service's vehicle is stolen. The policyholder may obtain coverage for transportation expenses subject to which of the following limits?

$20 per day ; $600 maximum

under the commercial crime coverage inside the premises- robbery or safe burglary of other property, what is the special occurrence limit that applies to loss or damage to precious metals, precious and semiprecious stones, pearls, furs, manuscripts, drawings or records?

$5,000

Which of the following is a requirment for eligibility for coverage in the Texas Automobile Insurance plan?

-Applicant must be rejected by at least two insurers in the normal market -applicant must have drivers license -applicatn must be able to pay the premium

Coverage under the builders risk form ends?

-if its abandoned witout any plans to complete it or if the insureds interest in property ceases, or 60 days after building is occupied -or 90 days after construction is completed

When a mortgagee is named in a mortgagee clause attached to a fire or other direct damage policy

-the loss reimbursement will be paid to the mortgagee as their interest may appear -the mortgagee rights of recovery will not be defeated by any act or neglect of the insured -the mortgagee may bring a suit in their own name to recover damages to covered property

Within the first 60 days of coverage under a dwelling policy, how much notice is required for the cancellation of a policy?

10 days

AN insurer must acknolwedge receipt of a notice of claim within how many days?

15

Under the additonal coverages of the businessowners property forms, property removed to protect it from loss will be covered at another location for up to:

30 days

According to the loss payment condition in HO policies, losses must be paid within how many days of the insurer receiving proof of loss?

60

coverage under the biulders risk form will end in all of the following situations EXCEPT?

60 days after construction as ended

Coverge under the builders risks form will end in all of the following situations EXCEPT:

60 days after the construction has ended

What is the maximum portion of the state average weekly wage that workers compensation will pay for impairment income benefits?

70%

Under dwelling policy form, what is the maximum time limit during which multiple volcanic activites would be considered part of one occurence?

72 hours

Under workers comp, an insurance carrier will pay death benefits to the legal beneficiary in an amount equal to what portion of the employees average weekly wage?

75%

The employee theft crime policy includes a coverage extension that applies to employees temporarily outside the coverage territory for up to

90 days

an insureds accoutns receivable records have been damaged. the loss may be covered with

Accounts receivable coverage form This coverage form reimburses the insured for amounts that cant be collected from the customers due to damage to the company's records.

What is not covered in basic form dwelling policy?

Additional living expenses *may be attached by endorsement

Which of the following statements are true regarding the relationship among the amounts of insurance EXCEPT

All property losses under the basic form are settles on a replacement cost basis. *all property losses under thee basic forma re settles on an actual cash value basis.*

Which of the following would NOT be considered a source of insurability information by an insurer?

Applicants martial status *an insurer may inspect witht eh applicants written permission, the following: application form. motor vehicle records, interviews with neighbors, friends and employers, inspeciton of property and inspection of insurance history.

Which of the following losses would be covered by an unendorsed homeowners policy?

Fire or lightning

Which of the following would be named on the declarations page of a property or liabilty policy?

First named insured

What ISO list has exclusions for BOP?

ISO maintains a list of risks not eligible for consideration for a BOP. Financial institutions, auto dealers and bars and grills are specificaly excluded from coverage

Which law is the foundation of hte statistical prediction of loss upon which rates for insurance are calculated?

Law of large numbers

which of the following personal auto coverages would apy for the insureds travel expenses and loss of earnings while involved in the settlemetn process of a covered loss?

Liability Coverage

The process of determining the premium charged and how much insurance is required for a particular loss is called?

Loss valuation

Erreoneous publishing copied all the material from Angels Inc's book. The only changes made by erroneous were to rename the title and chapters, put a different cover on it, and distribute as its own. Angels Inc files a claim againt Erre. and seeks damages. Will a commercial general liability policy cover the claim?

No, bc the claim resuls from copyright infringment and is not an advertisment.

Under a welling policy which of the following clauses applies if an insured has lost one of two matching silver candlesticks?

Pair of set

Transportation Expenses

Pays for the cost of transportation expenses incurred as a result of a covered collision or other than collision loss or theft No deductible applies and the limit of coverage is up to $20 per day, or a total of $600.

Auto Symbols used with business auto coverage

Symbol 1- any auto, including owned, leased, hired or borrowed autos (used only for liability) Symbol 2- owned autos only Symbol 3- owned private passengers autos only Symbol 4- owned autos, other than private passengers autos only Symbol 5- owned autos subject to no-fault Symbol 6- owned autos subject to a compulsory uninsured motorists law Symbol 7- specifically described in autos only Symbol 8- hired autos only (leased, hired, rented, borrowed other than from employees, partners or members of an LLC) Symbol 9- non owned autos only Symbol 19- mobile equipment subject to compulsory, financial responsibility or other motor vehicle insurance law only

what symbol is used in business auto coverage?

Symbol 9- nonowned autos only

an apartment occupants personal property would be insured udner which homeowners form?

Tenant Broad Form HO-4

Claims result from

a loss by a peril insured against, in an insurance policy

What is material misrepresentation?

a statement by the applicatn that upon discovery would affect the underwriting decision of the insurance company

which part of an insurance policy covers claims-related expenses, reasonable expenses incurred by an insured to protect damaged property from further loss, or defense expenses?

additional coverage

a person who is not named as an insured on the declerations page of the policy but is protected by the polciy is called what?

additional insured (usually added by endorsement)

an insurer agency could purchase an erros and ommison insurance policy which would provide protection in the event of any of the following events EXCEPT:

agency loses commision income from policies that were not issued by the insurer

Which would NOT be covered by the inside the premises- robbery or safe burglary or other property coverage?

an employee is caught stealing cash from the register

Vacancy constitutes

an insured structure in which no people have been living or working and not contents have been stored for the period of time required in the policy. (60 days)

The crime of forced entry into the premises of another by a person or persons with felonious intent is defined as a

burglary

Other-than -collision

caused by a falling object would be covered

Strict Liability

commonly applied in product liability cases. Business is then liable for defective products, regardless of fault or negligence

Dwelling Policy forms

contain several general exclusions that define the actual extent of coverage provided. Found in all three dwelling forms: basic, broad, special

All of the following are supplemental payments found in liabilty policies EXCEPT?

costs the insured incurred in hiring an attroney

Tenant Broad Form ( HO-4)

covers what the insured owns, their contents and has no coverage for the apartment

What is the term for the amount of a loss that the insured must cover out of pocket, and the insurer will only pay for the additional amount of the loss above this limit? In liability insurance this is called: retention

deductible

a beauty parlor burns to the ground. what type of loss is this to the owner?

direct loss

what is excluded by the inside the premises- robbery or safe burglary of other property coverage?

dishonest or criminal acts of an employee opr representative

what is the purpose of the coinsurance clause found in property insuracne policies?

encourage the insured to insure the property closer to its full value

which of the following is true of dwelling policy?

exclusions apply to all three policy forms

What type of compensatory damages are for intangible elements that cannot be specifically measured in terms of dollars?

general

The only way an insurer can cancel a policy midterm is:

if there has been a misrepresentation of a material fact or if the risk has changed substantially from when it was first insured.

Which of the following occupations would NOT directly help to qualify someone for the office of the Commisioner of Insurance?

insurance agent

General Compensatory are for

intangible elements that cannot be specifically measured in terms of dollars

Rental Reimbursement

is an endorsement only available if the policy includes other than collsion coverage. this endorsement will reimburse the isnured for rental charges incurred because the covered auto is out of use because of a covered loss.

In insurance, the offer:

is usually made by the applicant in the form of the appllication

All of the following explain the concept of strict liabilty EXCEPT?

it is imposed on defendants engaged in hazardous activites

A health care provider wants to provide professional libalility insurace for its employees. Unfortuantely, the prodiver has earched unsuccesfully for an insurance carrier that can provide this insurance. Which of the following will most likely be able to provide this insurance?

joint underwriting association

A special limit of $5,000 per occurence applies to:

loss or damage to precious metals, precious and semiprecious stones, pearls, furs, manuscripts, drawing or records

Four essential elements to all legal contracts are:

offer and acceptance, consideration, competent parties and legal purpose

What insuracne policy provision defines how the policy will respond if there is more than one policy written on the same risk?

other insurance

Rental reimbursement endorsement is available only if an auto policy has what type of coverage?

other than collision coverage

A meteorite hits the insured's car, causing damage. Under which of the following coverages in a personal auto policy would this loss be paid?

other-than-collison

Supplemental payments:

pay the insuracne companies expenses and will not pay expenses incurred by the insured inless incurred at the insurers request.

A building isnured with commercial property insurance has been vacant 90 days. which of the following is NOT true?

payment for unnamed perils is reduced by 25%

A bond is written for a set limit, and the surety will be liable only for this amount of the limit. This limit is known as the

penalty

what professional liability form provides form coverage for liabiltiy arising out of malpractice, error or mistakes made in rendering professional services?

physicians, surgeons and dentists malpractice

The party to a surety or fidelity bond who promises to fulfill the obligation is the

principal

Loss valuation

process of determining appropraite monetary value to a particular loss and resulting repaair or replacement.

Crunchy Flakes Cereal Company shipped some of its product in faulty containers that caused spoilage. This resulted in some consumers becoming ill. If the company is sued for this event, it would be an example of a

product liability claim

under the coverage of which of the following liability policies may an isnrued require the insurer to defend a claim?

professional liability

The Grahm-Leach-Bliley Act was passed to

protect private customer info filed with a financial institution

What is 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.

What does the principal do?

purchases the bond and promises to perform.

Factors Determining actual cash value

replacement cost for property of like and kind quality minus depreicaiton

In case of a loss, the indemnity provision in insurance policies

restores an insured person to the same financial state as before the loss

For insuracne purposes, when an insured loses property to another because the perosn used threat of voilence to gain property, it is defiend as:

robbery

when the amount of insurance written in a property policy is not subject to any coinsurance provision and that amount is paid in the even of a covered loss, the coverage is said to be written as:

stated amountn

Insurance procured from an unauthorized insurer is called

surplus lines insurance

umbrella policy

the amout of insuracne required as udnerlying limits in other policies is treated as a deductible amount to the umbrella for that particular exposure, so if underlying limits are not maintained, its the insureds responsibility

Negligence may be defined as

the failure to use reasonable and product care

under what circumstances would an insurer be allowed to cancel a dwelling policy midterm?

the insured knowliongly lied about the year the property was constructed

If the audit shows that the initial (deposit) premium to the insured was too high (the exposures were over-estimated) then

the insured will receive a return premium

Which of the following is most likely to occur if it is determined by the audit that the deposit premium was too high?

the insured will receive a return premium

With respected to commercial auto policies, the Garage Coverage Form provides liability protection for all the following EXCEPT:

the insureds business income losses due to personal injury

with respect to commercial auto policies, the garage Coverage form provides liability protection for all of the following EXCEPT?

the insureds business income losses due to primary due to personal injury.

The members of a limited liability company are insureds under a business owners policy (BOP) if..

the limited liability company is designated as the named insured

If the named insured is designated as a limited liability company..

the named insured and members are also insureds, BUT only with respect to their conduct of the business. Managers are insureds but only with respect to their duties as managers

Which of the following statements is true concerning a bonded contractor who defautls on a construction performance contract?

the obligee may engage another contractor and then seek reimbursement from the surety *the bonded contractor would have to see that the job was completed and thens eek recovery for expenses from the bonded contractor (principal)

When a direct chain of events resulting from a negligent act causes injury or damage, that act is considered to be

the proximate cause

a specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean?

there is no coverage

The proximate cause of a chain of events resulting in injury is one that is sufficiently related:

to an injury that the courts determine it is in fact the cause of that injury

The preservation of property clause extends the policy

to protect covered property while it is being moved and for up to 30 days at the new location.

What common policy condition prohibits the isnured from changing the rights or the duties as defined under the polciy to any other person or entity without the written consent of the insurance company?

transer of rights and dtuies under the policy

An insured's 9-year-old son threw a ball, accidentally breaking a neighbor's plate glass window. The insured was found legally liable for the cost of replacing the window. This is an example of

vicarious liability

Liability imposed on one party as a result of the actions of another person is known as

vicarious liability

In forming an insurance contract, when does acceptance usually occur?

when an insureds underwriter approves coverage