Commercial Lines - Cummulative

Question 1

A processing and servicing company would qualify for a BOP only if they have less than _____ in annual revenues.
A.
$3 million
B.
$10 million
C.
$8 million
D.
$5 million

Answer 1

A.
$3 million

A processing and servicing company would qualify for a BOP only if they have less than $3 million in annual revenues.

Question 2

All of the following are examples of court bonds, EXCEPT:

A.
Attachment bond
B.
Replevin bond
C.
Financial Guarantee bond
D.
Injunction bond

Answer 2

C.
Financial Guarantee bond

A financial guarantee bond is used by debt issuers as a way of attracting investors and is not an example of a court bond.

Question 3

All of the following are universal exclusions in a Commercial Crime policy, EXCEPT:

A.
indirect losses.
B.
theft or dishonest acts committed by the insured.
C.
theft of money or securities outside the insured premises in the care of a messenger.
D.
seizure or destruction of property by government authority.

Answer 3

C.
theft of money or securities outside the insured premises in the care of a messenger.

Question 4

Sandra has a typical BOP for her consulting business with a per occurrence limit of $300,000. One day, her building sign collapses and falls onto a group of clients, causing $200,000 in bodily injury. After this incident, how much liability coverage is left in her general aggregate limit for that policy period?

A.
$300,000
B.
$400,000
C.
$100,000
D.
$500,000

Answer 4

B.
$400,000

The general aggregate limit is set at twice the per occurrence limit, in this case, $600,000 ($300,000 x 2 = $600,000). When Sandra’s policy pays $200,000 for the covered damages, she will then have $400,000 left in her general aggregate limit ($600,000 - $200,000 = $400,000).

Question 5

A fidelity bond covers:
A.
principal and interest payable under the terms of a contract or promissory note.
B.
a self-insured business for workers’ compensation claims filed by its employees when the business cannot meet its obligations.
C.
the public from a public official’s lack of performance.
D.
an insured business for loss resulting from any dishonest acts committed by its bonded employees.

Answer 5

D.
an insured business for loss resulting from any dishonest acts committed by its bonded employees.

Question 6

Kyle operates a collision repair garage and has many vehicles in his care, some for extended periods of time. Which type of coverage protects Kyle from any liability claims which may arise if one of the cars is further damaged or destroyed while in his possession?
A.
Non-Owned Vehicle Coverage
B.
Bailee Coverage
C.
Bailment
D.
Subrogation

Answer 6

B.
Bailee Coverage

Bailee Coverage is the insurance which protects the party responsible for the possessions of another.

Question 7

Which of the following is NOT included under a typical BOP as an additional coverage at no extra charge?

A.
Pollution Clean-up
B.
Debris Removal
C.
Outdoor Signs
D.
Inflation Guard

Answer 7

C.
Outdoor Signs

There are many additional coverages included at no extra charge under a typical BOP. Outdoor Signs, however, is not one of these free additional coverages; it is an endorsement that one can add for an additional cost.

Question 8

Which of the following statements best applies to commercial crime insurance?
A.
Commercial crime insurance coverage is free additional coverage in a commercial liability policy.
B.
Commercial crime insurance is designed to only cover risks associated with employee crime.
C.
Commercial crime insurance cannot single out coverage for specific employee positions.
D.
Commercial crime insurance can protect a business from losses due to theft from employees and outsiders.

Answer 8

D.
Commercial crime insurance can protect a business from losses due to theft from employees and outsiders.

Commercial crime insurance can protect a business from losses due to theft from employees and outsiders and it can single out coverage for specific employee positions.

Question 9

Jeremy owns a business with several machines covered under an Equipment Breakdown Protection Coverage Form with a $500,000 limit. He has three deductibles on his policy: 1) a percentage deductible of 3% per loss, 2) a minimum deductible of $500, and 3) a maximum deductible of $10,000. After experiencing a covered loss of $85,000, how much will Jeremy have to pay out of his own pocket for the loss?
A.
$2,550
B.
$10,000
C.
$500
D.
$15,000

Answer 9

A.
$2,550

First, apply the 3% percentage of loss deductible to the $85,000 loss ($85,000 x .03 = $2,550). Now, apply the minimum and maximum deductible limits to that amount. The $2,550 is more than the minimum and less than the maximum, so Jeremy will have to pay $2,550 and his insurer will cover the rest.

Question 10

Bill has experienced a loss covered under the Business Income and Extra Expense coverage in his Equipment Breakdown Protection Coverage Form. When does the period of restoration begin?
A.
Five days after repair or replacement of covered equipment
B.
72 hours after the breakdown occurred
C.
After a length of time in which Bill should have reasonably been able to repair or replace the damaged equipment
D.
At the time of the breakdown or 24 hours before Bill was notified of the breakdown, whichever is later

Answer 10

D.
At the time of the breakdown or 24 hours before Bill was notified of the breakdown, whichever is later

The period of restoration begins at the time of the breakdown or 24 hours before Bill was notified of the breakdown, whichever is later.

Question 11

Which of the following is NOT a feature of a typical Business Owners Policy?
A.
Built-in inflation protection
B.
Usually Actual Cost Valuation
C.
Extra Expense coverage
D.
Liability protection for lawsuits from accidents or products

Answer 11

B.
Usually Actual Cost Valuation

A BOP will usually include replacement cost coverage, not ACV.

Question 12

Which of the following highlights a major difference between an insurance contract and a surety bond?
A.
An insurance contract always provides the insurer with legal recourse to collect monies paid as damages to a policyholder; a surety has no legal recourse against a principal.
B.
An insurance company may check the background of a policyholder; a surety has no need to check the background of a principal.
C.
An insurance contract involves one person; a surety bond involves two parties.
D.
An insurer may cancel an insurance contract; a surety cannot cancel a surety bond.

Answer 12

D.
An insurer may cancel an insurance contract; a surety cannot cancel a surety bond.

Insurance policies are 2-party contracts, whereas suretyships have at least 3 parties. A major difference between an insurance contract and a surety bond is that an insurer may cancel an insurance contract, but a surety cannot cancel a surety bond.

Question 13

Jay’s Chip Factory makes potato chips, and it gets chip bags from Bags, Inc. One day, the bag-making machine at Bags, Inc. broke down, and thus, Jay’s Chip Factory couldn’t get the bags it needed to bag its potato chips. Jay’s Chip Factory had to shut down production temporarily while waiting on Bags, Inc. to fix their machine. Jay’s lost business income may be covered under what coverage in its Equipment Breakdown Protection Coverage Form?
A.
Contingent Business Income and Extra Expense
B.
None
C.
Business Income and Extra Expense
D.
Brands and Labels

Answer 13

A.
Contingent Business Income and Extra Expense

Contingent Business Income and Extra Expense coverage applies when the insured’s loss results from a breakdown of covered equipment at a premise the insured does not own or operate, such as a key supplier.

Question 14

Which of the following losses would be covered by Section III of a BAP?
A.
Damaged factory-installed speakers
B.
Punctured tires
C.
Stolen CDs
D.
Legal defense costs

Answer 14

A.
Damaged factory-installed speakers

Question 15

Which of the following is NOT considered “covered equipment” under an Equipment Breakdown Protection Coverage Form?
A.
Equipment that operates under internal pressure or vacuum
B.
Equipment that is buried in the ground
C.
Computer equipment
D.
Mechanical equipment that generates energy

Answer 15

B.
Equipment that is buried in the ground

Question 16

For the past three months, Company G’s building has been about 75% empty. In a run of bad luck, Company G suffered $5,000 in damage from vandalism and $10,000 in damage from an electrical fire. Ignoring any deductibles, how much indemnification is Company G likely to receive for these damages?

A.
$15,000
B.
$8,500
C.
$10,000
D.
$12,750

Answer 16

B.
$8,500

Company G will receive $8,500 for the damages. Since Company G’s building has been 75% vacant, the company will receive nothing for the damages resulting from vandalism. The damages resulting from electrical fire are still covered, but the settlement is reduced by 15%.

Question 17

Which of the following best describes how losses are valued under a Commercial Crime policy?
A.
Money is valued at face value; securities are set at their value on the day the loss is discovered; and other property is valued at the lesser of the cost to repair or replace.
B.
Money is valued at face value; securities are set at their value on the day the settlement is paid; and other property is valued at the lesser of the cost to repair or replace.
C.
Money is valued at face value; securities are set at their value on the day the loss is discovered; and other property is valued at actual cash value.
D.
Money is valued at face value; securities are set at their value on the day the settlement is paid; and other property is valued at replacement cost.

Answer 17

A.
Money is valued at face value; securities are set at their value on the day the loss is discovered; and other property is valued at the lesser of the cost to repair or replace.

The Valuation provision states that money is valued at its face value; securities are set at their value on the day the loss is discovered; and other property is valued at the lesser of the cost to repair or replace.

Question 18

Stan owns ABC Mattress Supply. During a storm, lightning strikes a large tree, causing it to fall through the front of his building, resulting in $23,000 in damages. Which coverage in a BOP would pay for the extraction of the tree from Stan’s store?
A.
Liability coverage
B.
Business interruption coverage
C.
Debris removal coverage
D.
Extra expense coverage

Answer 18

C.
Debris removal coverage

Debris removal coverage pays for the removal of fallen trees and other debris from an insured property, if the debris resulted from a covered loss.

Question 19

California adheres to the doctrine of _______________________________, which states that an insurer must base its coverage decision on the “leading” or “predominant” cause of loss only

A.
predominant causes of loss
B.
tyrant perils
C.
efficient proximate cause
D.
primary peril coverage

Answer 19

C.
efficient proximate cause

California adheres to the doctrine of efficient proximate cause. This means that, if an excluded peril was involved in the loss, but was not the predominant cause, then the insurer may not use this excluded peril as a reason to deny the claim under the anti-concurrent causation clause.

Question 20

Which of the following BEST describes how covered losses are settled under a typical Equipment Breakdown Protection Coverage Form?
A.
Losses are paid at replacement cost if the replacement or repair occurs within 12 months of the accident.
B.
Losses are normally paid at replacement cost, but an insured may change this with an Actual Cash Value endorsement.
C.
Losses are paid at actual cash value.
D.
Losses are normally paid at actual cash value, but an insured may change this with a Replacement Cost endorsement.

Answer 20

B.
Losses are normally paid at replacement cost, but an insured may change this with an Actual Cash Value endorsement.

Question 21

Jane’s Bakery has Equipment Breakdown Protection coverage on a large industrial oven used in producing several hundred loaves of bread a day. One day, the oven malfunctions and catches fire, rendering her business inoperable for four days. In order to fill bread orders, Jane must ship her dough to a warehouse where she found another oven to rent while her oven is repaired. Under which coverage would Jane be indemnified for the shipping and oven rental costs?
A.
Valued Business Interruption Coverage
B.
Automatic Coverage
C.
Extra Expense Coverage
D.
Supplementary Payments Coverage

Answer 21

C.
Extra Expense Coverage

Extra Expense Coverage provides indemnification for additional costs associated with maintaining normal business operations after a covered loss occurs.

Question 22

In the middle of the night, armed robbers break into the headquarters of Superior Industries and restrain the night guard. Then, they blow open the safe and steal the contents. Luckily, Superior Industries has a Commercial Crime policy. Which of the following would NOT be covered under Inside the Premises - Robbery and Safe Burglary of Other Property coverage?
A.
The damage to the door of the safe
B.
The damage to the front door caused by robbers breaking the glass to access the building
C.
The damage to the surrounding room from the explosion
D.
The bundles of cash that were stored in the safe

Answer 22

D.
The bundles of cash that were stored in the safe

Question 23

In a garagekeepers policy, PIP coverage is:
A.
available with an endorsement.
B.
included unless the insured declines it in writing.
C.
not available.
D.
mandatory.

Answer 23

A.
available with an endorsement.

In a garagekeepers policy, PIP coverage is available with an endorsement.

Question 24

Louisa owns an apartment building that is damaged during a severe hailstorm. Which of the following items would NOT be covered under her BOP?

A.
Damaged flowerbeds
B.
Broken windows
C.
Cracked sidewalk bench
D.
Busted landscaping lights

Answer 24

A.
Damaged flowerbeds

Land, lawns, and plants are typically excluded from coverage in a Business Owner’s Policy.

Question 25

Which characteristic would prohibit a convenience store/gas station from purchasing a BOP?
A.
The use of microwave ovens.
B.
The operation of a car wash
C.
Gasoline accounts for over 50% of sales
D.
Over 4,000 square feet of retail space

Answer 25

B.
The operation of a car wash

Question 26

Which of the following statements regarding scheduled fidelity bonds is FALSE?

A.
All employees are bonded for the same aggregate amount.
B.
Employees can be bonded for different amounts.
C.
They are applicable to only select employees or positions.
D.
A limit of liability is defined for each employee or position.

Answer 26

A.
All employees are bonded for the same aggregate amount.

Employees can be bonded for different amounts. All employees are bonded for the same aggregate amount in a blanket fidelity bond; but in a scheduled fidelity bond, a limit will be listed for each scheduled employee or position.

Question 27

Marvin just purchased a BOP for his store and selected a per occurrence limit of $300,000 for bodily injury and physical damage. This means the general aggregate limit will be ______ and the products-completed operations limit will be ______.

A.
$900,000; $1,000,000
B.
$600,000; $600,000
C.
$900,000; $600,000
D.
$600,000; $900,000

Answer 27

B.
$600,000; $600,000

The general aggregate limit and the products-completed operations limit will both be $600,000 (twice the per occurrence limit).

Question 28

Jill arrives to open the bank one morning to find the door hanging open. Upon entering the bank she sees the vault door has been blown open, most of the money has been stolen, and a large amount of money was burned when the explosive charge went off. Luckily, the bank has a Commercial Crime policy. Which of the following best describes what would be covered under Inside the Premises: Theft of Money and Securities?

A.
The stolen money and the destroyed money
B.
The stolen money and the damage to the vault
C.
The stolen money, the destroyed money, and the damage to the vault
D.
The stolen money

Answer 28

C.
The stolen money, the destroyed money, and the damage to the vault

Inside the Premises: Theft of Money & Securities coverage can cover any stolen money, or money damaged in the process. It can also cover any damage to the property as a result of the theft, so the stolen money, the destroyed money, and the damage to the vault will all be covered by the bank’s Commercial Crime policy.

Question 29

Company D suffered $120,000 in damages to its building from an earthquake. $100,000 is needed to repair the structural damage, and the other $20,000 is needed to repair damage caused by a water pipe that burst during the earthquake and flooded the building. Ignoring any deductible, how much is Company D likely to receive after it files a claim against its Commercial Property policy?

A.
$100,000 for the structural damage, but nothing for water damage.
B.
$120,000, because at least one cause of loss was covered.
C.
Nothing, because the predominate cause of all the damage was the earthquake.
D.
$20,000 for the water damage, but nothing for the structural damage.

Answer 29

C.
Nothing, because the predominate cause of all the damage was the earthquake.

Company D will not receive any money since the predominate cause of all the damage was the earthquake which is not covered under a Commercial Property policy.

Question 30

In a BOP, Newly Acquired Properties coverage provides _____ of insurance for new buildings under construction or newly acquired business properties located off the insured premises.
A.
14 days
B.
60 days
C.
4 days
D.
30 days

Answer 30

D.
30 days

Newly Acquired Properties coverage provides 30 days of insurance for new buildings under construction at the insured premises, or for any newly acquired business properties located off the insured premises.

Question 31

Rosalina owns a motel that is covered by a BOP with a named-peril endorsement. When a nearby mob of rioters wanders onto her property, they break several windows, some outdoor light fixtures, and an outside bench. Some rioters even manage to cause damage in the lobby, damaging a portion of the lobby’s flooring, destroying a loveseat, and damaging a printer and two telephones. Which of these items is covered under coverage A of her business owners policy?

A.
The windows, flooring, bench, and loveseat
B.
None; the named-peril endorsement does not cover riots
C.
The windows, light fixtures, and flooring
D.
The windows, light fixtures, flooring, and bench

Answer 31

C.
The windows, light fixtures, and flooring

Riot and civil commotion is one of the covered perils under the BOP named-peril endorsement. Under section I of a BOP, coverage A protects buildings and structures, flooring, and outdoor fixtures. Coverage B protects furniture, office equipment and other personal property owned and used by the business.

Question 32

All of the following are typically excluded from liability coverage in a BOP, except:
A.
Damage to premises rented by the insured
B.
Property damage to the insured’s products
C.
Contractual liability
D.
Employee injuries

Answer 32

A.
Damage to premises rented by the insured

Question 33

Company B rents the third floor of a five-story office building that’s owned by Company F. Although the third floor is fully occupied by Company B, the rest of the building has been vacant for six months. When the building’s sprinkler system malfunctions, Company B’s floor suffers $20,000 in water damage and the rest of the building suffers an additional $30,000. Ignoring any deductibles, how will the two companies’ commercial policies respond to the losses?

A.
Neither company will receive any indemnification.
B.
Company B will receive $17,000, and Company F will receive $25,500.
C.
Company F will receive $50,000 to cover the entire loss to the whole building.
D.
Company B will receive $20,000, and Company F will receive nothing.

Answer 33

D.
Company B will receive $20,000, and Company F will receive nothing.

Since Company B fully occupies the third floor, it will receive the amount necessary to cover the damages. However, since Company F’s floors are vacant, it will not receive any amount of coverage.

Question 34

Which Business Auto Policy endorsement covers employees while using their personal cars for business purposes?
A.
Mobile Equipment
B.
Drive Other Car
C.
Employee as Additional Insured
D.
Individual Named Insured

Answer 34

C.
Employee as Additional Insured

The Drive Other Car endorsement names specific people who are covered, with their spouses, for the use of cars that they do not own and that are not covered under the BAP. Employee as Additional Insured covers employees while driving their own car for business purposes.

Question 35

Which of the following statements about the Accounts Receivable coverage extension in a BOP is TRUE?
A.
It only provides coverage if the loss occurred on the insured premises.
B.
It provides coverage for lost income resulting from having to write off accounts receivable due to nonpayment by the insured’s customers.
C.
It provides coverage for money the insured expects to collect, but cannot because of damage to accounting records caused by a covered peril.
D.
It provides coverage for the insured’s lost business income resulting from a covered loss suffered by a major customer.

Answer 35

C.
It provides coverage for money the insured expects to collect, but cannot because of damage to accounting records caused by a covered peril.

Accounts Receivable gives coverage for accounts receivable that the insured cannot collect because of damage or destruction to accounting records held on or off the insured premises, if they are damaged or destroyed by a covered peril.

Question 36

If EZ Laundromat selects a per occurrence limit of $500,000 for bodily injury and physical damage on its BOP, this means the general aggregate limit will be:

A.
$150,000.
B.
$900,000.
C.
$1,000,000.
D.
$500,000.

Answer 36

C.
$1,000,000.

The general aggregate limit will be $1,000,000 (twice the per occurrence limit).

Question 37

In a Business Auto policy, which symbol applies to private passenger autos owned by the insured, excluding trucks, buses, and specialty vehicles?
A.
Symbol 3
B.
Symbol 9
C.
Symbol 1
D.
Symbol 7

Answer 37

A.
Symbol 3

The symbol 3 means Owned Private Passenger Autos Only. It applies to private passenger cars that the insured owns, but excludes trucks, buses, and specialty vehicles.

Question 38

All of the following causes of loss are excluded from coverage in an Equipment Breakdown Protection Coverage Form, EXCEPT:

A.
mechanical failure.
B.
electrical testing.
C.
hail.
D.
combustion explosion.

Answer 38

A.
mechanical failure.

Damage caused by combustion explosion, hail, or electrical testing is excluded in Equipment Breakdown coverage. Accidental mechanical failure, electrical failure, and pressure failure of vacuum equipment all fall under the definition of breakdown and thus are covered.

Question 39

The BOP provides loss of income on an “actual loss” sustained basis for up to:
A.
24 months
B.
6 months
C.
18 months
D.
12 months

Answer 39

D.
12 months

Business income coverage can last for up to 12 months

Question 40

Which of the following claims may be covered under an Equipment Breakdown Protection Coverage Form?
A.
Hazardous material remediation was needed after a mechanical breakdown of the exhaust system’s turbine caused ammonia to be released into the factory, contaminating the entire area.
B.
A severe hail storm damaged a company’s air conditioning units.
C.
While adjusting a pressurized boiler, an employee accidentally set the calibrations to incorrect levels, which damaged the boiler to the point of needing repair.
D.
A self-propelled machine used to transport heavy objects within the factory experienced a malfunction in its computer program, causing it to run into a wall, which damaged it to the point of needing repair.

Answer 40

A.
Hazardous material remediation was needed after a mechanical breakdown of the exhaust system’s turbine caused ammonia to be released into the factory, contaminating the entire area.

Since hail is a covered peril under a commercial property policy, it is exlcuded in an Equipment Breakdown Protection Coverage Form. However, The Equipment Breakdown Protection Coverage Form will pay for losses related to ammonia contamination and cleanup of hazardous substances after a covered loss.

Question 41

Oscar owns an appliance repair shop that is covered by a BOP with the extension for personal effects. When he arrives to open his shop one morning, he finds that the window has been smashed, and his office printer and desk telephone have been stolen, along with his personal laptop that he left on his desk. Which of these items is covered under Oscar’s policy?

A.
Window, printer, and telephone
B.
Window only
C.
Window, printer, telephone, and personal laptop
D.
None of the damages are covered

Answer 41

A.
Window, printer, and telephone

The broken window is covered under coverage A - buildings and structures, and the office printer and desk telephone are covered under coverage B - business personal property. The personal laptop would normally be covered by the personal effects extension, but theft is not a covered peril under this extension.

Question 42

Sam’s Dry Cleaners’ power shuts off due to a lightning strike at the supplying power station just down the street. For three days the business cannot operate due to the damage incurred at the power station. Which endorsement would cover Sam’s Dry Cleaners for the loss of business?
A.
Utility Services - Time Element
B.
Ordinance or Law
C.
Mechanical Breakdown
D.
Protective Safeguards

Answer 42

A.
Utility Services - Time Element

Mechanical Breakdown indemnifies the policyholder for repairs and replacement of machinery, and may also include business income coverage. However, the Utility Time Element endorsement would cover Sam’s Dry Cleaners’ lost business income and extra expenses due to loss of utilities.

Question 43

The anti-concurrent causation (ACC) clause states that:

A.
the insurer will NOT cover any loss caused by an excluded peril, even if a covered peril also contributed to the loss
B.
the insurer will NOT cover losses caused by excluded perils unless the excluded peril came about because of a covered peril
C.
the insurer will NOT deny coverage for losses caused by covered perils, even if an excluded peril contributed to the loss as well
D.
the insurer will NOT cover losses that are also covered by a concurrent policy

Answer 43

C.
the insurer will NOT deny coverage for losses caused by covered perils, even if an excluded peril contributed to the loss as well

The ACC clause states that, in a commercial property policy, the insurer will not pay for any loss caused directly or indirectly by the listed excluded perils. And, such a loss “is excluded regardless of any other cause or event that contributes concurrently or in any sequence to the loss.”

Question 44

Under the Terrorism Risk Insurance Act (TRIA), all insurers must provide their commercial policyholders coverage for certified acts of terrorism, UNLESS:

A.
the insured rejects this coverage with a terrorism exclusion endorsement.
B.
the insured refuses to watch the anti-terrorism educational video.
C.
the insured has less than $3 million worth of coverage.
D.
the insured fails to pass the security and safety measurements test.

Answer 44

A.
the insured rejects this coverage with a terrorism exclusion endorsement.

Question 45

Which endorsement to a garage-keepers policy would cover the theft of a vehicle by someone who was pretending to take it for a test-drive?
A.
Drive Other Car Coverage
B.
Theft Coverage
C.
Collision Coverage
D.
False Pretense Coverage

Answer 45

D.
False Pretense Coverage

False Pretense coverage protects the insured against the loss of cars when people steal them through a trick or scheme.

Question 46

ABC Construction recently won a bid to reconstruct the town park. After a few months of work, ABC Construction realizes they won’t make any money on the project and walk away, leaving the park half-finished. Luckily, the town had required ABC Construction to hold a surety bond from Parker Sureties, who can now step in to finance the completion of the job. Which of the following statements is TRUE?
A.
Parker Sureties will not be able to seek recompense from ABC Construction.
B.
Parker Sureties will have to pay half the remaining costs for completing the park.
C.
Parker Sureties can seek recompense from ABC Construction.
D.
Parker Sureties will have to pay 75% the remaining costs for completing the park.

Answer 46

C.
Parker Sureties can seek recompense from ABC Construction.

As the surety, Parker Sureties is responsible for the entire cost of completing the project, since ABC Construction defaulted. But, luckily, the surety is able to seek reimbursement of costs plus legal fees from the principal.

Question 47

Company K rents a warehouse to store Christmas decorations and supplies, but the building is left unoccupied during the off-season from February to October. Which endorsement can Company K purchase to insure that the building is covered for losses that may occur during the summer months when the building is vacant?

A.
Buildings Under Construction Endorsement
B.
Unfortunate Timing Endorsement
C.
Unoccupied Building Endorsement
D.
Vacancy Permit Endorsement

Answer 47

D.
Vacancy Permit Endorsement

In situations where the owner expects his building to be at least 70% vacant, he may have the option to add a Vacancy Permit to his policy to preserve his coverage for losses that would otherwise be excluded or reduced under the vacancy condition.

Question 48

Which of the following is NOT one of the differences between a BAP and a truckers policy?
A.
Liability coverage in a truckers policy includes coverage for people who hire out or lend their cars to the insured for business purposes.
B.
A BAP typically excludes businesses that transport the property of others.
C.
A BAP uses coverage symbols to designate covered autos.
D.
A truckers policy includes trailer interchange coverage.

Answer 48

C.
A BAP uses coverage symbols to designate covered autos.

Both the BAP and Truckers policy use coverage symbols to designate covered autos.

Question 49

In a surety bond, the maximum amount a surety is required to pay is known as a:
A.
contract fee.
B.
maximum allowance.
C.
penal sum.
D.
top rate.

Answer 49

C.
penal sum.

In a surety bond, the maximum amount a surety is required to pay is known as a penal sum.