Comm Chp 10

Question 1

Adverse Selection

Answer 1

in general the tendency for people with the greatest probability of loss to be the ones most likely to purchase insurance

Question 2

Automatic Seasonal Increase Provision

Answer 2

automatically increasing the amount of insurance for certain time periods

Question 3

Hired and Non Owned Autos

Answer 3

for insured that owns no autos, the availability of hired and non owned autos coverage under BOP eliminates the need to obtain a separate business auto policy

Question 4

Professional Liability

Answer 4

automatically provides professional liability coverage for retail drugstores including an exception for such stores in the professional liability exclusion

Question 5

Employee Benefit Liability and Employment Practices Liability

Answer 5

cost effective options enable smaller insureds to avoid the higher minimum premiums that usually apply to stand alone policies

Question 6

Farm Property- Farm dwelling, appurtenant structures and household personal property coverage form

Answer 6

coverage a- dwelling
coverage b- other private structures appurtenant to dwelling
coverage c- household personal property
coverage d- loss of use
coverage e- scheduled farm personal property
coverage f- unscheduled farm personal property

Question 7

Property coverages avaliable in BOP

Answer 7

employee dishonesty, money and securities, forgery, interior and exterior glass, outdoor signs, mechanical breakdown, money orders, computer coverage, accounts receivable and valuable papers and records

Question 8

Which one of the following is correct with respect to the professional liability coverage available under the businessowners policy (BOP) and the Commercial General Liability (CGL) Coverage Form?

Answer 8

. An important difference between the BOP’s liability coverage and the CGL’s is the availability of optional professional liability coverage endorsements for use with BOP.

Question 9

Which one of the following is true with regard to the coverage limits in the liability section of the
businessowners policy (BOP)?

Answer 9

Maximum limits are more restricted than the CGL; few insurers offer per occurrence limits over $2 million in their BOPs.

Question 10

All of the following statements regarding Coverage E—Scheduled Farm Personal Property of the ISO
Farm Policy are true, EXCEPT:

Answer 10

80% co insurance

Question 11

Which one of the following statements is correct with respect to the liability coverage available under a businessowners policy (BOP)?

Answer 11

Both ISO and AAIS offer BOP endorsements adding employee benefit liability coverage and employment practices liability coverage.

Question 12

Which one of the following statements is correct with respect to the liability coverage available under businessowners policies (BOPs)?

Answer 12

Certain liability coverage options are not part of most BOP programs because the insureds that need them generally do not qualify for BOPs.