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26 Cards in this Set
- Front
- Back
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Which of the following forms provides the broadest coverage under an employee theft coverage form? A) Position schedule B) Name schedule C) Individual D) Blanket position |
D) Blanket position |
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Supplementary payments on a CGL provide all the following EXCEPT A) $100 in gasoline costs by the insured driving a witness to and from court. B) Pre-judgment and post-judgment interest. C) The cost of bonds to release attachment. D) Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds. |
D) Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds. |
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Which of the following liability policies is usually written on a "claims-made" form? A) Umbrella liability B) Professional liability insurance C) Automobile liability D) Personal liability |
B) Professional liability insurance
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If an insured desires protection on property other than money and securities inside the premises from losses caused by breaking and entering after business hours, which of the following Crime Coverage forms should be purchased? A) Inside Premises -Robbery or Burglary of Other Property B) Robbery and Safe Burglary C) Extortion D) Theft, Disappearance and Destruction |
A) Inside Premises -Robbery or Burglary of Other Property |
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When a replacement auto is acquired during the policy period, what coverage will apply to it automatically under a personal auto policy? A) Physical damage coverage only B) No coverage applies automatically C) Whatever coverage applied to the vehicle being replaced D) Liability coverage only |
C) Whatever coverage applied to the vehicle being replaced |
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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 |
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A passenger in a friend's car is injured while getting into the car. Which of the following statements would apply if both the passenger and the driver had medical payments coverage under a personal auto policy? A) The driver's policy will act in excess of the passenger’s policy. B) The passenger's policy will pay. C) Both policies would share equally in the loss. D) The driver's policy will pay. |
D) The driver's policy will pay. |
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All of the following are true statements regarding the supplementary payments of a Commercial General Liability policy EXCEPT A) They pay defense costs even after the aggregate limit has been reached. B) They pay all expenses incurred by the insurer. C) They pay pre-judgment and post-judgment interest. D) They pay all reasonable costs incurred by the insured in helping investigate or defend a claim. |
A) They pay defense costs even after the aggregate limit has been reached. |
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What’s the difference between a fidelity bond and a surety bond? A) A fidelity bond guarantees something will happen; a surety bond guarantees something will not happen. B) The trigger is different. C) A fidelity bond is a court bond; the surety bond is an honesty bond. D) A surety bond guarantees something will happen; a fidelity bond guarantees something will not happen. |
D) A surety bond guarantees something will happen; a fidelity bond guarantees something will not happen. |
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In a participation plan, the insured may be eligible for which of the following? A) Guaranteed dividends B) A partial premium refund C) An increase in insurance over time D) Lower premiums |
B) A partial premium refund |
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All of the following conditions must exist for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy EXCEPT A) The injury or damage must occur away from the insured premises. B) The injury or damage must arise out of the insured's product or work. C) The injury or damage must occur after the insured has released physical possession of the product to another. D) The injury or damage must occur within 90 days after the insured's work is completed. |
D) The injury or damage must occur within 90 days after the insured's work is completed. |
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Under the claims-made CGL the supplemental extended reporting period A) Automatically provides an unlimited extension for losses that occurred during the policy period but for which a claim is not made until after policy expiration. B) Automatically extends coverage for losses that occurred during the policy period and are claimed within 60 days following policy expiration. C) Provides an unlimited extension for making claims for losses that occurred during the policy period, but the insured must pay an additional premium. D) Automatically extends coverage to include claims made within 5 years of policy expiration, provided the losses occurred during the policy period. |
C) Provides an unlimited extension for making claims for losses that occurred during the policy period, but the insured must pay an additional premium. |
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All of the following are supplemental payments included in the liability section of a personal auto policy EXCEPT A) Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident. B) Up to $200 a day for loss of earnings due to attendance at hearings or trials. C) Premiums on appeal bonds in any suit the insurer defends. D) Up to $250 for bail bonds required because of a covered accident. |
A) Up to $100 for the cost to secure the release of a vehicle from an impoundment lot following a covered accident. |
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An insurance producer fails to obtain automobile insurance for 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 provide coverage because punitive damages have been awarded. B) It will provide coverage because the damage to the client resulted from the producer's negligence. C) It will not provide coverage; such physical damage to property is not covered. D) It will not provide coverage because the property damage resulted from the client breaking the law. |
B) It will provide coverage because the damage to the client resulted from the producer's negligence. |
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What is the deductible of a personal 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. |
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One advantage of claims-made liability forms from the insurer's point of view is that A) The insurer does not pay claims years after the occurrence causing the damage. B) The insurer will always know when to expect the claim to be filed. C) It allows stacking of limits. D) It prevents stacking of limits.Incorrect! Because of the occurrence trigger, if an occurrence happened in more than one policy period, claims could be |
D) It prevents stacking of limits.
Incorrect! Because of the occurrence trigger, if an occurrence happened in more than one policy period, claims could be |
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To perform work on a customer’s car, a mechanic in an auto shop had to put the vehicle on a service hoist. The hoist collapsed, damaging the vehicle and injuring the mechanic. In regard to the garage coverage form, which of the following statements is true? A) No coverage is applicable. B) Coverage is provided for the car on the hoist only. C) Coverage is provided for all perils. D) Coverage is provided for the bodily injuries to the mechanic. |
A) No coverage is applicable The garage coverage form does not cover property damage for a customer’s vehicle that is on a service hoist or for bodily injury. |
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A date stipulated on the declaration page of a claims-made liability form as the first date on which an incident may occur and be covered by the policy is called A) Retroactive date. B) Retrocedent date. C) Effective date. D) Retention date. |
A) Retroactive date. The retroactive date defines the earliest date that an event may occur and be covered under the policy. Any losses that occur before the retroactive date are excluded from coverage. |
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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 third passenger. How much will the policy pay under medical payments coverage? A) $5,000 maximum for the accident B) $5,000 minus the policy deductible C) $14,000 D) $15,000 |
C) $14,000 The limit is not more than $5,000 per person per accident. |
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In an auto policy, the medical payments coverage is similar to A) Accident insurance, because it has the same limits. B) Accident insurance, because it pays medical expenses regardless of fault. C) Bodily injury coverage, because it provides legal protection if the insured causes injuries to others. D) Bodily injury coverage, because it pays the insured's doctor bills. |
B) Accident insurance, because it pays medical expenses regardless of fault. Medical payments will pay for accidental bodily injury of an insured, regardless of fault or auto. It will pay medical expense of others occupying the insured auto. |
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Professional liability coverage protects the insured against legal liability resulting from A) The unprofessional conduct of an employee. B) Errors and omissions. C) Liability assumed under a contract. D) Dishonest acts. |
B) Errors and omissions. Professional liability in fields other than medical is classified as errors and omission insurance. It covers liability arising out of the failure to use due care and the degree of skill expected of a person in a particular profession. |
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A date stipulated on the declaration page of a claims-made liability form as the first date on which an incident may occur and be covered by the policy is called A) Retention date. B) Retroactive date. C) Retrocedent date. D) Effective date. |
B) Retroactive date. The retroactive date defines the earliest date that an event may occur and be covered under the policy. Any losses that occur before the retroactive date are excluded from coverage. |
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In the personal auto policy, owned trailers being towed by an insured auto are automatically covered for A) Collision coverage. B) Uninsured motorists coverage. C) Towing coverage. D) Comprehensive (other-than-collision) coverage. |
B) Uninsured motorists coverage. Trailers, while being towed by an insured auto, are covered automatically for BI/PD and U/M under Part A of a personal auto policy. |
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Under the limits of insurance provision found in the Physical Damage Coverage Form in a Commercial Auto policy, how much will an insurer pay to repair or replace a covered auto? A) The greater of the replacement cost value or the cost to repair or replace a covered auto B) The lesser of the actual cash value or the cost to repair or replace a covered auto C) The greater of the actual cash value or the cost to repair or replace a covered auto D) The lesser of the replacement cost value or the cost to repair or replace a covered auto |
B) The lesser of the actual cash value or the cost to repair or replace a covered auto The "limits of insurance" provision of the physical damage coverage states that the insurer will pay the lesser of the actual cash value or the cost to repair or replace a covered auto. This is the same as the provision found in the Business Auto Coverage Form. |
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Which of the following is a common exclusion found in Part D: Coverage for Damage to Your Auto of a PAP? A) Mechanical breakdown B) Glass breakage C) Riot or civil commotion D) Towing and labor |
A) Mechanical breakdown Damage due to wear and tear, freezing, mechanical or electrical breakdown, and road damage to tires is a common exclusion to the physical damage coverage section. |
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Which of the following statements is true regarding the premium computation for workers compensation insurance? A) The premium is set at the beginning of the policy period and will not change. B) A premium auditor has the right to examine the insured’s compensation records at the end of the policy period to determine the actual premium basis. C) The premium base for workers compensation insurance varies by the type of industry in which the insured is involved. D) The insured pays a guaranteed premium based on an estimated value of the annual income received. |
B) A premium auditor has the right to examine the insured’s compensation records at the end of the policy period to determine the actual premium basis. Because the initial premium calculation is based on estimated payrolls, a premium auditor may inspect actual payrolls paid to ensure that adequate premiums are being paid. |
