Chapter 3 Commercial Flashcards by Charlotte Cummins

How does the coverage for commercial vehicles differ from motor cars?

A) Commercial vehicles typically have higher claims frequency and larger claim sizes.
B) Commercial vehicles are only covered for third-party liability.
C) Commercial vehicle policies are exactly the same as motor car policies.
D) Commercial vehicles have fewer use limitations than motor cars.

A) Commercial vehicles typically have higher claims frequency and larger claim sizes.

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What is a common way insurers tailor policies for specific commercial vehicle risks?

A) They issue a single standard policy for all commercial vehicles.
B) They adapt a standard commercial vehicle wording by endorsement to meet specific needs (e.g., agricultural risks).
C) They only issue policies for fleet vehicles.
D) They provide only third-party fire and theft coverage for all commercial vehicles.

B) They adapt a standard commercial vehicle wording by endorsement to meet specific needs (e.g., agricultural risks).

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A fleet policy is typically used for:

A) Individual commercial vehicles.
B) Large numbers of vehicles that are rated as a fleet.
C) Hire and reward commercial vehicles.
D) Only for motor trade risks.

B) Large numbers of vehicles that are rated as a fleet.

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What is the coverage like for small commercial vehicles (e.g., car-derived vans and pick-ups)?

A) They are always insured under a commercial vehicle policy.
B) They are sometimes insured under the motor car policy, provided they are not used for hire or reward.
C) They are only insured for personal use.
D) They are always covered under a specialised commercial vehicle policy.

B) They are sometimes insured under the motor car policy, provided they are not used for hire or reward.

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Why is the third-party property damage limit for commercial vehicle policies typically lower than for motor car policies?

A) Large commercial vehicles are more likely to cause injury.
B) Commercial vehicles are more often used for off-road events.
C) Large commercial vehicles can cause substantial damage to buildings or carry hazardous substances.
D) Commercial vehicles are subject to fewer regulations than motor cars.

C) Large commercial vehicles can cause substantial damage to buildings or carry hazardous substances.

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What does legal fees coverage under commercial motor policies typically include?

A) Only fines incurred from traffic violations.
B) Cover for defending health and safety inquiries and criminal proceedings.
C) Only cover for legal fees related to accidents involving third parties.
D) Legal cover for any legal proceedings, regardless of the situation.

B) Cover for defending health and safety inquiries and criminal proceedings.

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How does the presence of hazardous goods affect the third-party property damage limit in a commercial vehicle policy?

A) The limit is automatically increased to cover hazardous goods.
B) The limit is generally lowered for vehicles carrying hazardous goods.
C) Hazardous goods are covered without any third-party liability limit.
D) The limit is the same as for non-hazardous vehicles, but additional coverage must be purchased.

B) The limit is generally lowered for vehicles carrying hazardous goods.

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What is a semi-trailer in the context of a commercial vehicle policy?

A) A trailer with a separate engine used for heavy lifting.
B) A type of motorcycle that can carry cargo.
C) A trailer partially supported by the towing vehicle, typically part of an articulated vehicle.
D) A small trailer used exclusively for personal use.

C) A trailer partially supported by the towing vehicle, typically part of an articulated vehicle.

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What is the typical third-party liability limit for commercial vehicles in case of property damage?

A) £20 million, the same as for motor car policies.
B) £5 million or less, depending on the insurer and risk.
C) £1 million for any event, regardless of vehicle size.
D) £10 million, with no flexibility.

B) £5 million or less, depending on the insurer and risk.

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Who is typically covered under a commercial motor policy during loading and unloading?

A) Anyone involved in the unloading process, including customer employees.
B) Only the driver or attendant performing the loading and unloading.
C) Only the vehicle owner and their immediate family.
D) All individuals involved, regardless of location.

B) Only the driver or attendant performing the loading and unloading.

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What happens if a third party, such as a customer’s employee, causes damage during loading or unloading beyond the limits of the road or pavement?

A) The commercial motor policy will cover the damage.
B) The incident will be covered under a public liability policy of the negligent person or their employer.
C) The customer will have to pay out-of-pocket.
D) The commercial motor policy will cover all damage regardless of location.

B) The incident will be covered under a public liability policy of the negligent person or their employer.

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Which of the following would be excluded from a commercial motor policy during loading or unloading?

A) A driver unloading cargo on a public road.
B) A driver causing injury while unloading cargo on a private property.
C) A customer’s employee unloading cargo on the road.
D) A driver or attendant unloading cargo on a pavement.

B) A driver causing injury while unloading cargo on a private property.

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What does the phrase “limits of any carriageway or thoroughfare” mean in the context of a commercial motor policy?

A) The area within a parking lot or private road.
B) Only the public road or pavement where the vehicle is located.
C) Any area within the insured’s property line.
D) Any location within the city limits.

B) Only the public road or pavement where the vehicle is located.

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If a customer’s employee causes damage while unloading cargo from a vehicle beyond the road or pavement, what would typically cover the risk?

A) The commercial motor policy.
B) The public liability policy of the negligent person or their employer.
C) The driver’s personal insurance.
D) The vehicle owner’s business insurance.

B) The public liability policy of the negligent person or their employer.

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Which of the following is typically covered under a goods-carrying vehicle policy regarding non-drivers?

A) All persons using the vehicle, regardless of their role.
B) Non-driving use, such as loading and unloading, but only for certain persons (e.g., driver or attendant).
C) Only the policyholder’s family members.
D) Passengers, for their liability to others.

B) Non-driving use, such as loading and unloading, but only for certain persons (e.g., driver or attendant).

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Under most goods-carrying vehicle policies, indemnity is not provided to passengers if:

A) They are related to the driver.
B) They know the driver does not hold a valid licence or is disqualified.
C) They are on a business trip with the driver.
D) They are sitting in the passenger seat.

B) They know the driver does not hold a valid licence or is disqualified.

Which of the following is excluded from coverage under a typical goods-carrying vehicle policy for third-party property damage?

A) Property carried in the vehicle (e.g., tools, goods).
B) Property in the insured’s custody or control.
C) The insured vehicle itself.
D) All of the above

D) All of the above.

Which of the following statements is true regarding indemnity for employers under a goods-carrying vehicle policy?

A) The policy provides indemnity to the employer for liability.
B) The policy provides indemnity to the principal, but not the employer.
C) The policy provides indemnity to the employer for accidents in the workplace.
D) The policy provides indemnity to all employees but not directors.

B) The policy provides indemnity to the principal, but not the employer.

If goods are being carried by a goods-carrying vehicle, which policy should cover loss or damage to the goods?

A) The commercial motor policy.
B) The goods in transit policy.
C) The personal insurance of the driver.
D) The employer’s liability policy.

B) The goods in transit policy.

What is typically excluded in the purpose of use clause of a goods-carrying vehicle policy?

A) Social and domestic purposes.
B) Use for the policyholder’s business.
C) Use for hire or reward.
D) Use for transporting the policyholder’s own goods.

C) Use for hire or reward.

If a vehicle is hired out with the owner’s driver, which of the following statements is true?

A) The hirer’s third-party liability is always covered by their own insurance.
B) The vehicle owner (policyholder) typically provides insurance coverage, but the hirer may still have liability.
C) The hirer is not liable for any third-party damage or injury.
D) The policyholder’s insurance does not cover any liabilities when a driver is involved.

B) The vehicle owner (policyholder) typically provides insurance coverage, but the hirer may still have liability.

If a vehicle is hired out without a driver and used solely for the hirer’s business, what is typically required?

A) The policyholder’s insurance automatically covers the hirer’s negligence.
B) An additional premium is required to extend coverage to the hirer for their negligence or that of their employees.
C) The hirer is fully responsible for insurance and does not need additional coverage.
D) No premium is needed, as the hirer is automatically covered under the policyholder’s insurance.

B) An additional premium is required to extend coverage to the hirer for their negligence or that of their employees.

When hiring a vehicle with the owner’s driver, who is liable for third-party damage?

A) The owner of the vehicle (policyholder) is fully liable for all damage.
B) The hirer is fully liable, and the policyholder is not involved.
C) The vehicle owner’s insurance may cover the hirer’s third-party liability.
D) The hirer’s own insurance will cover their liability, regardless of who is driving.

C) The vehicle owner’s insurance may cover the hirer’s third-party liability.

If a vehicle is hired out without a driver, why does the policyholder need to pay an additional premium? A) Because the hirer controls how the vehicle is used, and the owner has less control over risks. B) Because the policyholder is no longer liable for any risks associated with the hire. C) Because the hirer is automatically covered under the owner’s insurance. D) Because the hirer’s business is covered under the same terms as the policyholder’s.

A) Because the hirer controls how the vehicle is used, and the owner has less control over risks.

When is indemnity to the principal typically provided in a commercial vehicle policy? A) When the insured is using the vehicle for personal use only. B) When the insured’s vehicle is used in connection with a contract involving the principal, and the principal incurs liability. C) When the insured’s vehicle is used for charity events. D) When the insured has a history of claims against the principal.

B) When the insured’s vehicle is used in connection with a contract involving the principal, and the principal incurs liability.

In a scenario where the insured’s driver damages a valuable ornament while delivering goods to a customer of the principal, who is typically responsible for the claim? A) The insured (vehicle owner) is not responsible. B) The principal would be responsible since the goods are associated with them. C) The customer is responsible for the ornament’s damage. D) The driver is personally liable for the damage.

B) The principal would be responsible since the goods are associated with them.

If damage occurs due to poor packaging by the principal, who is responsible for the claim under extended indemnity to the principal? A) The insured (driver) would be liable for all damages. B) The principal would be responsible for the claim due to their negligence in packaging. C) The driver’s insurer would not cover this, as it is the principal’s fault. D) Both the insured and principal share liability equally.

B) The principal would be responsible for the claim due to their negligence in packaging.

When indemnifying the principal under a commercial vehicle policy, what is typically required from the insurer? A) The principal handles the claims process independently. B) The driver’s insurers must have full control over the handling of any claims. C) The principal chooses how the claim is resolved, with no involvement from the driver’s insurer. D) The insured (vehicle owner) directly handles the claim with the principal.

B) The driver’s insurers must have full control over the handling of any claims.

When does cross liabilities apply in a commercial vehicle policy? A) When the insured is the only entity involved in the claim. B) When the policyholder is a group of companies, and one member causes injury or damage to another member. C) When the insured is engaged in international business. D) When multiple employees of the insured are involved in the claim.

B) When the policyholder is a group of companies, and one member causes injury or damage to another member.

If a skip is left on the roadside, what additional cover is required? A) Only third-party liability insurance for the skip. B) Public liability insurance, which must be validated by the local authority. C) No additional cover is required, as the motor policy covers the skip. D) Goods-in-transit cover is sufficient for any damage to property caused by the skip.

B) Public liability insurance, which must be validated by the local authority.

Which of the following is true regarding trailer insurance under a commercial vehicle policy? A) Trailers are automatically covered under the policy, regardless of attachment. B) Coverage for trailers must be specifically added to the policy and may not apply if detached. C) Goods-in-transit cover will automatically apply to the goods on trailers, both attached and detached. D) Trailer registration is required only if the trailer exceeds 500kg.

B) Coverage for trailers must be specifically added to the policy and may not apply if detached.

According to the Trailer Registration Regulations 2018, which of the following is true? A) Trailers over 500kg must be registered with DVLA before traveling abroad. B) Trailers must have a Trailer Registration Certificate to travel to countries that have ratified the Vienna Convention. C) The regulations apply only to trailers over 2,000kg. D) The UK’s EU status does not affect the trailer registration process.

B) Trailers must have a Trailer Registration Certificate to travel to countries that have ratified the Vienna Convention.

Which of the following is true regarding unauthorized movement of vehicles in a commercial vehicle policy? A) The insured is always liable for damage to the moved vehicle, regardless of authorization. B) Cover for liability to third parties, including damage to the moved vehicle, is available if requested. C) Only authorized movements of vehicles are covered under the policy. D) Unauthorized movement of vehicles is never covered under commercial vehicle policies.

B) Cover for liability to third parties, including damage to the moved vehicle, is available if requested.

Under a commercial vehicle policy, when can cover be provided for unlicensed drivers? A) Only when the driver has held a valid license at some point in the past. B) When driving on public roads. C) When driving off-road or within private property, where a driving license is not legally required. D) The policy excludes cover for all unlicensed drivers, regardless of circumstances.

C) When driving off-road or within private property, where a driving license is not legally required.

Which of the following is typically not covered under a commercial vehicle policy? A) Accessories and spare parts while on the vehicle. B) Windscreen damage, subject to a financial limit. C) Personal belongings in the vehicle. D) Sheets and ropes used to secure a load, with proper security precautions.

C) Personal belongings in the vehicle.

Which benefit is not typically included in a standard commercial vehicle policy? A) Coverage for personal belongings. B) Coverage for medical expenses and personal accident for the driver. C) Laid-up vehicle concession for vehicles not in use. D) None of the above.

A) Coverage for personal belongings.

Which of the following is typically excluded under a commercial vehicle policy? A) Bodily injury caused by an accident involving the insured vehicle. B) Death or illness caused by food poisoning from goods supplied by the insured. C) Damage to property caused by the insured vehicle. D) Injury resulting from the insured vehicle's driver’s negligence.

B) Death or illness caused by food poisoning from goods supplied by the insured.

Which scenario would require separate insurance outside of the standard commercial vehicle policy? A) A van carrying fresh produce for a catering business. B) A vehicle transporting goods to be delivered to customers. C) A mobile shop providing food and drinks to customers at various locations. D) A delivery van carrying general household goods.

C) A mobile shop providing food and drinks to customers at various locations.

What happens when the third-party property damage (TPPD) limit is exceeded under a commercial vehicle policy? A) The insurer will continue to pay claims for the full amount. B) The policyholder is required to meet any additional claims beyond the indemnity limit. C) The policy is void and the insurer stops covering claims. D) The insurer pays the additional claims without requiring the policyholder to contribute.

B) The policyholder is required to meet any additional claims beyond the indemnity limit.

Under some commercial vehicle policies, in the event that the TPPD limit is reached, who gets paid first? A) The driver’s claim is paid first. B) Claims from any other party (e.g., employees) are paid first. C) The policyholder’s claims are settled first, followed by others. D) Claims are paid based on the order they are filed.

C) The policyholder’s claims are settled first, followed by others.