BOMI L&RM PE Flashcards
Practice Exam
Before underwriting a pollution legal liability policy, insurance underwriters and technical experts analyze all the following except:
a. the health of the insured’s employees.
b. the quantity of hazardous material being stored.
c. the quality of the management of environmental exposures
d. the quality of the physical measures being taken to control the pollutant.
a. the health of the insured’s employees.
In commercial general liability insurance, physical injury, sickness and disease sustained by a person are each known as:
a. bodily injury.
b. personal injury.
c. advertising injury.
d. individual injury.
a. bodily injury.
All of the following are generally true about commercial general liability insurance except:
a. policies usually have deductibles for claims of negligence involving bodily injury or property damage.
b. a claim or claims can arise from a single accident or repeated exposure to the same harmful conditions.
c. coverage applies only to incidents that occur during the policy period.
d. claims can be unlimited and are restricted only by the amount of court-awarded damages.
a. policies usually have deductibles for claims of negligence involving bodily injury or property damage.
Premiums that are calculated by the amount of exposure, with that exposure changing annually, are called:
a. deposit premiums.
b. minimum earned premiums.
c. earned and unearned premiums.
d. packaged premiums.
a. deposit premiums.
Under the covenant of possession, the landlord may not, without the tenant’s consent:
a. increase the rent at will.
b. evict the tenant for a default.
c. enter the property to make repairs.
d. expect the tenant to care for the property.
c. enter the property to make repairs.
As a buyer, prior to closing, you conduct due diligence for the following reasons except:
a. to determine if the asking price is reasonable and fair.
b. to assess potential environmental liability.
c. to examine the structural soundness of the building.
d. to review the survey and title reports on the property.
a. to determine if the asking price is reasonable and fair.
A temporary insurance policy that is issued before the actual policy is processed is called a(n):
a. policy endorsement.
b. declaration.
c. insurance binder.
d. certificate of insurance.
c. insurance binder.
Lee has used 1997 Cadillac. Lee had one speeding ticket 6 months ago. Kevin has an older, cheaper car. Kevin had a driving-under-the-influence violation 3 years ago. In comparing Lee and Kevin, which statement is true?
a. Lee will have higher premiums because of this driving record.
b. Kevin will have higher premiums because of his driving record.
c. Kevin will have lower premiums because his vehicle cost less when new.
d. Lee will have lower premiums because his vehicle was bought used.
b. Kevin will have higher premiums because of his driving record.
When an insurance company pays a claim to an insured for damage caused by a third party and then goes to the third party for reimbursement, this procedure is called:
a. triad settlement.
b. reinsurance.
c. subrogation.
d. coinsurance.
c. subrogation.
Because Tri-Towers Complex had 23 owners, the governance method recommended as most effective was:
a decentralized management.
b. centralized management.
c. concentrated management.
d. deconcentrated management.
b. centralized management.
A company buys some property to develop and later discovers that the property was previously used for storage of electric company transformers and old batteries. This property is possibly contaminated by:
a. lead and lead byproducts.
b. chemical fumes from cleaning materials.
c. asbestos-containing materials.
d. polychlorinated biphenyls (PCBs)
d. polychlorinated biphenyls (PCBs)
Insurance coverage that protects a business from a hit-and-run driver is called:
a. uninsured motorist insurance.
b. no-fault insurance.
c. non-owned automobile liability insurance.
d. personal injury protection insurance.
a. uninsured motorist insurance.
The responsibility for loss control is shared by several entities. Ensuring that loss control activities encompass all loss exposures identified in the risk identification process is the role of:
a. government
b. industry organizations
c. insurance companies
d. individual businesses
d. individual businesses
The obligation of the insured after the discovery of a first-party loss includes all of the following except:
a. providing written notification to the insurer.
b. submitting a damaged property list.
c. singing a waiver of subrogation.
d. resuming business operation.
c. singing a waiver of subrogation.
A receiver is a person who:
a. processes the various loan documents or settlement.
b. researches and approves the mortgage for a property.
c. takes action to force a defaulting borrower to pay its debts.
d. takes custody of property and applies its income to creditors’ claims
d. takes custody of property and applies its income to creditors’ claims
The party bringing legal action for a contract breach may be denied recovery for those damages if he or she has failed to:
a. file withing 30 days of injury.
b. liquidate the damages.
c. demand a maximum amount.
d. mitigate the damages.
d. mitigate the damages.
A man who trips and falls in the parking lot of your building files a claim alleging negligence on your part. This is an example of a:
a. property loss.
b. net income loss.
c. personnel loss.
d. liability loss.
d. liability loss.
Rollo Company wants to find a new agent or broker for its insurance needs. The property manager has decided to ask two agents and two brokers to analyze her company’s loss exposures and risk management programs and propose a coverage and service plan. She then selects a broker to solicit various insurance companies to obtain a proposal. This process is called:
a. conceptual competition.
b. underwriting competition.
c. uniform specifications.
d. competitive bidding.
a. conceptual competition.
The non-freehold estate that has no initially designated duration is the:
a. estate for years.
b. tenancy at will.
c. periodic tenancy.
d. life estate.
b. tenancy at will.
The pricing policy that allows the underwriter to compare a business’s losses with the statistics of similar type businesses and apply a rate is called:
a. schedule rating.
b. retrospective rating.
c. experience rating.
d. judgement rating.
c. experience rating.
The fact that you exercise control over the house you live in means that you have:
a. ownership of the property.
b. title of the property.
c. possession of the property.
d. legal tenancy of the property.
c. possession of the property.
The formal rules and regulations by which a corporation is internally governed are referred to as the:
a. bylaws.
b. charter.
c. articles of incorporation.
d. corporate agreement.
a. bylaws.
Title defects that might impair the sale of commercial property include all of the following except:
a. existing leases in the property.
b. adverse claims of other parties.
c. encroachments on an adjacent property.
d. flaws in the chain of ownership.
a. existing leases in the property.
Trade fixtures are generally considered to be:
a. removable by the tenant at lease termination.
b. items that act to reduce the base rent.
c. non-removable and belonging to the landlord.
d. owned jointly by the landlord and tenant.
a. removable by the tenant at lease termination.
In an insurance policy, the named insured and details of what is covered are stated in the:
a. exclusions
b. conditions.
c. insuring agreement.
d. declarations.
c. insuring agreement.
Under the agent’ duty to disclose information to the principal, if someone gives information to the agent, then the principal is considered to:
a. possess that knowledge as well.
b. owe the agent for the information.
c. have disclosed all knowledge to the agent.
d. have a duty to keep records of the information imparted.
a. possess that knowledge as well.
Jerome is your insurance agent, and you have reported to him that a dump truck was hauling fill materials when a stone flew off and cracked your windshield. Jerome can act as a claims adjuster if:
a. he has been property trained and certified.
b. the regular claims adjusted is unavailable.
c. the insurance company has given him draft authority.
d. the claim is a third-party claim only.
c. the insurance company has given him draft authority.
Having common expiration and inception dates for insurance policies:
a. requires the financing of premiums.
b. eases negotiation multiple policies.
c. causes difficulties in financing premiums.
d. requires extended insurance.
b. eases negotiation multiple policies.
A lease can be considered a conveyance because it:
a. creates an estate in the property.
b. involves different possessors.
c. requires periodic payments.
d. is in effect for a specific period.
a. creates an estate in the property.
An agent who owns the rights to his or her own business and, after assessing a client’s needs, may bind coverage for different insurance companies, is involved in:
a. direct selling.
b. direct writing.
c. independent agency marketing.
d. exclusive agency marketing.
c. independent agency marketing.
(Fill in the blanks) In contracting, the __ and ___ process resulting in mutual assent is called “a meeting of the minds.”
a. offer; acceptance
b. offer; a consideration
c. consideration; enforcement
d. offer; enforcement
a. offer; acceptance
Damage to office furniture, machinery, stock, equipment, and moveable fixtures is covered by:
a. building insurance.
b. extra expense insurance.
c. co-insurance.
d. business personal property insurance.
d. business personal property insurance.
If a tenant alleges sick building syndrome (SBS) and files a suit for injuries based on exposure to pollution conditions in the insured building, what kind of exposure is being covered by the pollution legal liability insurance?
a. claims for on-site cleanup of unknown pre-existing conditions triggered by discovery or a third-party claim.
b. third-party claims for bodily injury caused by on-site pollution.
c. claims for on-site cleanup of new conditions triggered by discovery or a third-party claim.
d. third-party claims for off-site bodily injury resulting from on-site conditions.
b. third-party claims for bodily injury caused by on-site pollution.
Claims adjusters hired by the insured to assist with large, complex, or difficult claims are called:
a. independent claims adjusters.
b. public claims adjusters.
c. national firm adjusters.
d. insurance company staff adjusters.
b. public claims adjusters.
During the period of a tenant’s lease, the landlord can ordinarily be held liable for:
a. nondisclosure of previously concealed dangerous conditions.
b. the inspection and repair of the leased premises
c. conditions that develop and cause injuries in the space.
d. the condition of the premises at the end of the lease period.
a. nondisclosure of previously concealed dangerous conditions.
A new property owner has just discovered soil contamination undisclosed by the previous owner. The new owner’s current pollution legal liability insurance will generally cover:
a. a Phase II Environmental Assessment.
b. liability of the previous owner.
c. cleanup of a pre-existing condition.
d. nothing.
c. cleanup of a pre-existing condition.
The responsibility for helping a business implement and monitor a loss control program rests with:
a. government.
b. industry organizations.
c. insurance companies.
d. individual businesses.
c. insurance companies.
If a parcel of land would be cut off from any access to public way, an easement may be implied by:
a. necessity.
b. reservations.
d. prescription.
d. scop of use.
a. necessity.
Who is likely to experience the greatest increase in his premium?
a. Rob for driving km/h over the speed limit and getting ticketed.
b. Bill for amassing 10 parking tickets.
c. Vince for getting a ticket for driving under the influence of alcohol.
d. Dave for being hit while backing out of a parking space,
c. Vince for getting a ticket for driving under the influence of alcohol.
Insurance purchased to cover the cost of temporarily relocating or paying the overtime wages for regular employees during the period of restoration of the business’s permanent location is called:
a. loss of profits insurance.
b. business interruption insurance.
c. business personal property insurance.
d. extra expense insurance.
d. extra expense insurance.
If a management firm attempts to handle a claim by itself, it can:
a. be covered as the insurer’s adjuster.
b. increase the amount of the claim.
c. void insurance coverage for the claim.
d. expedite the settlement of the claim.
c. void insurance coverage for the claim.
Legal constructive eviction occurs after all of the following actions except:
a. the LL deprives the TT of the use and enjoyment of the premises.
b. the LL gives the TT notice of default and a chance to cure it.
c. the TT vacates the premises.
d. the TT terminates the lease.
b. the LL gives the TT notice of default and a chance to cure it.
In most property forms, a provision that ensures that buildings are insured to their proper values is the:
a. business personal property provision.
b. agreed-amount provision.
c. replacement cash value provision.
d. co-insurance provision.
d. co-insurance provision.
When an independent contractor is hired, the employer’s liability for the independent contractors’ injuries on the job is:
a. in effect if the injury occurred on the job.
b. non-existent unless the employer meddles in the job.
c. debateable and fixed by a court of law.
d. covered by workers’ compensation insurance.
b. non-existent unless the employer meddles in the job.
Having all your insurance policies expire on the same date will:
a. increase your deductibles.
b. require extended insurance.
c. cause difficulties in financing premiums.
d. ease obtaining competitive proposals.
d. ease obtaining competitive proposals.
A commercial or industrial property that is abandoned, underutilized, or has actual or perceived environmental problems is referred to as a(n):
a. toxic dump.
b. brownfield.
c. empty hazard.
d. urban blight.
b. brownfield.
Personal liability for a corporation’s shareholders is:
a. high,
b. variable.
c. slight.
d. non-existent.
d non-existent.
The last step in the risk management process is to:
a. monitor loss exposures.
b. identify loss exposures.
c. measure loss exposures.
d. implement loss reduction.
a. monitor loss exposures.
In contrast to licensees, people who are considered to be invitees are present on a property:
a. for business that benefits the possessor.
b. to bring something to the possessor.
c. as part of the general public.
d. for a longer period of time.
a. for business that benefits the possessor.
To satisfy the statute of frauds, a signed contract for the sale of land must include all of the following except:
a. the identity of both buyer and seller.
b. a description of the property.
c. an indication of the intent to sell the property.
d. the identity of the attorneys acting for both sides.
d. the identity of the attorneys acting for both sides.
Strict liability extends to all of the following situations except:
a. captive wild animals.
b. ultrahazardous activities.
c. product liability.
d. negligence.
d. negligence.
All of the following are defences to negligence except:
a. contributory negligence.
b. proximate cause.
c. comparative negligence.
d. assumption risk.
b. proximate cause.
In proving an intentional tort, the plaintiff must always show the:
a. plaintiff suffered grievous harm.
b. defendant was responsible for a wilful action:
c. defendant intended to harm the plaintiff or a third person.
d. plaintiff was not contributorily negligent.
b. defendant was responsible for a wilful action:
A customer is dissatisfied with a construction company that fails to live up to terms of a contract. The customer sues the construction company. In court a breach of contract is shown, but no actual damage is proven. The court awards a small sum to the plaintiff. This judgement is an example of:
a. punitive damages.
b. liability coverage.
d. compensatory damages.
d. nominal damages.
d. nominal damages.
A TT is injured because a security guard is negligent in the line of duty. The TT can recover damages from:
a. only the employee (the guard)
b. only the guard’s employer
c. either the employee or employer
d. neither unless intent is established.
c. either the employee or employer
A civil lawsuit generally involves all of the following expect a:
a. possible jail sentence for the defendant.
b. private plaintiff.
c request for monetary damages.
d. wrongful act or omission.
a. possible jail sentence for the defendant.
A duty of care is breached if a person is subjected to an injury that is:
a. life-threatening.
b. foreseeable.
c. recoverable.
d. knew about the danger.
b. foreseeable.
Under premises liability, the person who is held accountable for an injury to a person entering a property is the one who:
a. is in possession and control of the property.
b. acted as a leasing agent for the property.
c. constructed the building.
d. knew about the danger.
a. is in possession and control of the property.
To satisfy the statute of frauds, an agreement forming a general partnership to trade or otherwise deal with real estate:
a. must always be in writing
b. must be in writing if the partnership is to last over a year.
c. does not need to be in writing.
d. must be in writing if the partnership engages in the sale of land.
c. does not need to be in writing.
What happens to a contract offer if the offeror dies?
a. the death terminates the power of the offeree dies.
b. the offer may be transferred to a third party.
c. a representative may sign the offer.
d. the offeree may change the consideration.
a. the death terminates the power of the offeree dies.
Mark and Beth have a contract in which Beth will provide furniture for Mark’s office for $43,000. She delivers the furniture in the agreed-upon time frame, and he pays her for this. This is an example of contractual duties discharged via:
a. performance.
b. tender.
c. accord and satisfaction.
d. novation.
a. performance.
In terms of contracts, “mistake” refers to:
a. a belief of the contracting parties that is not in accord with existing facts.
b. a poorly drafted contract.
c. a negligent act that overcomes free will.
d. bad judgement shown by one or more parties related to a contract.
a. a belief of the contracting parties that is not in accord with existing facts.
If an amendment to a contract is not accepted:
a. the entire contract is terminated.
b. a counteroffer must be made.
c. the terms of the original contract still pertain.
d. the contract is temporarily suspended.
c. the terms of the original contract still pertain.
