All Unit Tests

Question 1

The businessowners eligibility rules limit eligible risks to a max of ? in an annual sales

Answer 1

3 million

Question 2

The largest office building risk that may be eligible for a business owners policy is

Answer 2

6 stories and 100,000 square feet

Question 3

What are the two major property coverages provided under a buisnessowners policy?

Answer 3

Coverage A: Buildings

Coverage B: Business Personal Property

Question 4

Under the additional BOP coverages of the buisnessowners property coverage, property removed to protect it from loss will be covered at another location for up to

Answer 4

30 days

Question 5

The standard deductible for the BOP property coverage is

Answer 5

500

Question 6

Mechanical breakdown coverage is

A. Not available in a BOP
B. Automatically provided in a BOP
C. An optional BOP coverage that is activated by an entry in the declarations

Answer 6

C

Question 7

Which one of the following coverages is NOT included in the buisnessowners policy

A. Bodily injury liability
B. Property damage liability
C. Medical expense
D. Professional liability
E. Personal and advertising injury liability

Answer 7

D

Question 8

Which of the following would be covered under the building coverage of the buisnessowners policy?

A. Restroom fixtures
B. Photocopy machines
C. Furnishings in the insureds office
D. Carpets and floor tiles

Answer 8

A and D

Question 9

Which of the following would be covered under he business personal property coverage of the buisnessowners policy?

A. Desks, filing cabinets, and other office equipment the insured uses in her business
B. An enclosures around the front entry to a store that the insured tenant had built when he began leasing the building
C. Cans of paint that are stacked near a newly constructed outer wall prior to painting the wall
D. Fire extinguishers located at various places on the inside walls of the building

Answer 9

A and B

Question 10

Which of the following losses would be covered under the property coverage of the buisnessowners policy?

A. An insured moved inventory to another location to protect if from a tornado. Two days later, a sewer backup in the new location damaged that property.
B. An explosion at the insureds business spewed toxic chemicals onto property belonging to another company. That company’s owner sued the insured for the costs to clean up the chemicals.
C. When a tornado damaged a nearby business, authorities closed off the area for one week to clean up the damage. The insured lost business income during that period.

Answer 10

A and C

Question 11

Which of the following losses would be excluded under the property coverage of the BOP?

A. An angry employee vandalized an insureds
Building.
B. Termites damaged an insureds building.
C. Pianos in an insureds warehouse were damaged by dryness after an extremely cold winter
D. An error in design specifications for an insureds building resulted in the buildings collapse 6 months after construction was completed
E. All of the above

Answer 11

E

Question 12

The condominium association coverage form is used to insure
A. Personal property belonging to the owners of residential condominiums
B. Residential or commercial condominium associations against loss or damage to buildings, business personal property, and personal property of others in the associations control
C. The contents of a commercial condominium

Answer 12

B

Question 13

The condominium commercial unit-owners coverage form is used to insure
A. Personal property belonging to the owners of residential condominiums
B. Residential or commercial condominium associations against loss or damage to buildings, business personal property, and personal property of others in the associations control
C. The contents of a commercial condominium

Answer 13

C

Question 14

List all of the components required in a commercial property coverage part
1
2
3
4
5
6
7

Answer 14

1. Common policy declarations
2. Conditions
3. Commercial property declarations
4. Commercial property conditions
5. 1+ commercial property coverage form
6. Causes of loss form
7. Any mandatory endorsements

Question 15

COMMERCIAL PROPERTY INSURANCE

Building and personal property commercial property coverage form covers…

Answer 15

buildings, the insured’s business personal property, and the personal property of others located at the business premises

Question 16

COMMERCIAL PROPERTY INSURANCE

Builders Risk commercial property coverage form covers…

Answer 16

Buildings under construction

Question 17

COMMERCIAL PROPERTY INSURANCE

Legal Liability commercial property coverage form covers…

Answer 17

Insured for liability arising out of negligent damage to the property of others in the care, custody, or control of the insured

Question 18

COMMERCIAL PROPERTY INSURANCE

Extra Expense commercial property coverage form reimburses…

Answer 18

The insured for extra expenses required to avoid a suspension of business and continue operations

Question 19

COMMERCIAL PROPERTY INSURANCE

Condominium Association commercial property coverage form insures…

Answer 19

A condominium association against direct physical loss or damage to buildings, business, PP, and PP of others in their care while it is at the premises

Question 20

COMMERCIAL PROPERTY INSURANCE

What perils are covered in the causes of loss- basic form?

Answer 20

Fire
Explosion
Windstorm/hail

Aircraft/vehicles
Riot/civil commotion
Vandalism

Smoke
Sprinkler leakage
Sinkhole collapse
Volcano

Question 21

COMMERCIAL PROPERTY INSURANCE
Under the earthquake and volcanic eruption endorsement, all earthquake shocks or volcanic eruptions that occur within a certain number of hours constitute a single earthquake or volcanic eruption. What is that period?
A. 24 hours
B. 40 hours
C. 72 hours
D. 168 hours

Answer 21

D

Question 22

COMMERCIAL PROPERTY INSURANCE
Which causes of loss form provides open peril coverage?
A. Basic
B. Broad
C. Special
D. Both basic and broad

Answer 22

C

Question 23

COMMERCIAL PROPERTY INSURANCE
Which commercial property causes of loss forms cover collapse?
A. Basic
B. Broad
C. Special
D. All of the above

Answer 23

B and C

Question 24

COMMERCIAL PROPERTY INSURANCE
Loss caused by sprinkler leakage is covered under which commercial property causes of loss forms?
A. Basic
B. Broad
C. Special
D. All of the above

Answer 24

D

Question 25

COMMERCIAL PROPERTY INSURANCE | The causes of loss- broad form covers...

Answer 25

All the perils in the basic form, plus falling objects, weight of snow, ice, or sleet; and water damage

Question 26

COMMERCIAL PROPERTY INSURANCE Which commercial property coverage endorsement would be appropriate for an insured A. Whose property values fluctuate regularly? B. That needs coverage for perishable stock? C. That wants coverage for increased costs due to building regulations or demolition laws?

Answer 26

A. Value reporting endorsement B. Spoilage endorsement C. Ordinance or law coverage endorsement

Question 27

COMMERCIAL PROPERTY INSURANCE | List the three types of coverages provided by the building and personal property coverage form

Answer 27

Building Business personal property Personal property of others

Question 28

COMMERCIAL PROPERTY INSURANCE Which of the following would be covered under the building coverage of the building and personal property coverage form? A. Inventory stored at the insured's warehouse B. An addition to the insured's store on which construction has just begun C. Fire extinguishers located in the insured's factory

Answer 28

B and C

Question 29

COMMERCIAL PROPERTY INSURANCE Fire department service charges are A. Paid in addition to the limit of insurance B. Deducted from the limit of insurance

Answer 29

A

Question 30

``` COMMERCIAL PROPERTY INSURANCE Which of the following property would be excluded under the building and personal property coverage form? A. Lawn B. Driveway C. Private company jet D. Animals held for sale E. Cost of excavation F. Vehicles manufactured by the insured ```

Answer 30

A, B, C, E

Question 31

COMMERCIAL PROPERTY INSURANCE The insured buys an office building next door to her insured business. Is the new building covered under her existing building and personal property coverage form? A. No. The insured must purchase a separate policy for the new building. B. Yes. Up to $250,000 coverage is available under the newly acquired or constructed property coverage extension.

Answer 31

B

Question 32

COMMERCIAL PROPERTY INSURANCE For a loss to be covered under the personal effects and property of others coverage extension in the building and personal property coverage form, the insured must A. Meet the coinsurance requirement B. Have purchased coverage for personal property of others C. Both A and B

Answer 32

A

Question 33

COMMERCIAL PROPERTY INSURANCE According to the loss payment condition in the building and personal property coverage form, if the insured has complied with all of the terms of the coverage part and has reached agreement with the company on the amount of the loss, the insurer will pay the loss A. As soon as possible after it receives the sworn statement of loss B. Within 30 days after it receives the sworn statement of loss

Answer 33

B

Question 34

COMMERCIAL PROPERTY INSURANCE When are losses under the building and personal property coverage form paid at replacement or repair cost? A. Always B. Never C. If the insured meets the coinsurance requirements and costs are $2,500 or less

Answer 34

C

Question 35

``` COMMERCIAL PROPERTY INSURANCE Which of the following have special loss valuation requirements under the building and personal property coverage form? A. Buildings B. Furniture and fixtures C. Glass D. Valuable papers and records E. Exterior signs ```

Answer 35

C and D

Question 36

COMMERCIAL PROPERTY INSURANCE Which of the following losses would be excluded under the personal property coverage form if the insured building was vacant for more than 60 days before the loss occurred? A. Attempted theft B. Sprinkler leakage when the insured had protected the system against freezing C. Vandalism D. Glass breakage

Answer 36

A, C, and D

Question 37

COMMERCIAL PROPERTY INSURANCE Which of the following would be covered under the builders risk coverage form? A. Builder under construction B. Foundation of the building under construction C. Fixtures, machinery, and equipment used to service the building if they will become a permanent part of the building and are located within 100 feet of the building D. All of the above

Answer 37

D

Question 38

COMMERCIAL PROPERTY INSURANCE A partially constructed duplex is destroyed in a fire. Would the amount paid under the builders risk coverage form be reduced because the duplex was vacant at the time of loss? Yes/no? Why?

Answer 38

No- building under construction are not considered vacant

Question 39

COMMERCIAL PROPERTY INSURANCE | What is included in the definition of business income?

Answer 39

The definition of business income includes net income that would have been earned if the loss had not occurred and the cost of continuing normal operations

Question 40

COMMERCIAL PROPERTY INSURANCE | Which business income coverage form covers expenses the insured incurs to reduce loss?

Answer 40

The business income without extra expense coverage form

Question 41

COMMERCIAL PROPERTY INSURANCE | Which business income coverage form covers money spent to avoid or minimize a business shutdown?

Answer 41

The business income with extra expense coverage form

Question 42

COMMERCIAL PROPERTY INSURANCE | Why would some insureds select extra expense coverage instead of business income coverage?

Answer 42

Because the nature of some businesses requires that they spend whatever amounts are necessary to keep the business operating and avoid a shutdown

Question 43

``` COMMERCIAL PROPERTY INSURANCE The limit of insurance on the insured's extra expense coverage form is $200,000, with percentages of 40/80/100 shown in the declarations. What is the maximum amount the insured could receive when the period of restoration is A. Less than 30 days? $_____ B. Between 32 and 60 days? $_____ C. More than 60 days? $_____ ```

Answer 43

A. $80,000 B. $160,000 C. $200,000

Question 44

COMMERCIAL PROPERTY INSURANCE The insured's business is covered under a building and personal property coverage form with the broad causes of loss form. Years of water damage from a leaky foundation have caused the basement walls in the insured's building to bulge. The building is still standing and being used in the insured's operations. Would the costs to repair these walls be covered under the collapse addition coverage? Yes/no? Why?

Answer 44

No- the building is not in a state of collapse

Question 45

``` COMMERCIAL PROPERTY INSURANCE Which of the following perils/additional coverages are included in the causes of loss-broad form? A. Collapse B. Weight of ice, snow, or sleet C. War D. Nuclear hazard E. Falling objects F. Water damage ```

Answer 45

A, B, E, F

Question 46

``` OCEAN AND INLAND MARINE INSURANCE Match the type of ocean marine insurance with the description of the coverage it provides 1. Hull 2. Cargo 3. Freight 4. Protection and indemnity ``` A. Covers the ship itself while in transit over water B. Covers goods being shipped overseas C. Covers watercraft liability exposures D. Covers loss of shipping costs

Answer 46

1A 2B 3D 4C

Question 47

Identify each of the following as examples of perils of the sea, jettison, of barratry 1. When a ship becomes stranded on a reef near a remote island, the ship's master decides to throw several thousand pounds of cargo overboard to lighten the load. 2. When a ship filled with valuable ores disappears, it's owner assumes it has been lost at sea. Much later, the surprised owner is informed by international police that the crew was arrested for smuggling the ship and its cargo onto a South Pacific island. 3. A ship capsizes and sinks when it is struck by a tidal wave.

Answer 47

1. Jettison 2. Barratry 3. Perils of the sea