Insurance Broker Level 1 Set 7

Question 1

A Civil Authority

Answer 1

Means any person acting under the authority of any level of government with respect to the protection of persons and property in the event of an emergency.

Question 2

Business Property;

Answer 2

Is subject to a special limit of insurance for all insured losses under a homeowner package policy.

Question 3

Coverage for mass evacuation under coverage D ( additional living expenses) is applicable if;

Answer 3

the evacuation is the result of a sudden or accidental event.

Question 4

A broken window as a result of a large bird flying into it is covered;

Answer 4

Under the Homeowners broad and comprehensive forms

Question 5

A bylaw endorsement;

Answer 5

will cover only those costs actually incurred by the policy holder to comply with the minimum code requirements

Question 6

A underwriting concern with respect to rented dwellings is when

Answer 6

short term occupancies are the norm.

Question 7

A bare land condominium unit ;

Answer 7

Owner owns the lot on which a dwelling building and/or garage may be built ( or is already built). The owner has full ownership of everything within the boundaries of the lot.

Question 8

A condominium unit owners Additional Protection Coverage;

Answer 8

Provides all risk coverage for damage to the insured unit in the event that the condominium corporations policy is inadequate and will offer less than full indemnity.

Question 9

Replacement cost for farm buildings my be available if the building;

Answer 9

is no more than 15 years old and constructed off new materials.

Question 10

Four types of commercial businesses/buildings are;

Answer 10

Mercantile, non-mercantile, manufacturing or industrial, and institutional

Question 11

Five additional coverage options found on the Building, equipment and stock Broad form are;

Answer 11

1. Temporary Locations - property at an unspecified location in Canada, except while in transit, as long as such location is not owned, rented or controlled by the insured.
2. Building at newly acquired location - located within Canada, from the date of acquisition up to 30 days, unless the building is in the course of construction
3. Contents at newly acquired location - located within Canada, from the date of acquisition up to 30 days, if the building is owned, rented or controlled by the insured.
4. Property in transit - contents in the course of transit within Canada or the continental USA, until delivered
   5, Sales representative - contents while in the custody of a sales rep. - Within Canada or the continental USA and includes while in transit

Question 12

Building Maintenance supplies;

Answer 12

Are not included in the definition of equipment on the commercial building equipment and stock form.

Question 13

On a commercial building, equipment and stock policy, loss or damage to animals, fish or birds;

Answer 13

Is excluded unless the loss or damage is causes directly by theft and/or attempted theft or a named peril.

Question 14

Extensions of coverage found in the Commercial Building, Equipment and Stock broad form are;

Answer 14

1, Removal of insured property - protection from further loss or damage for a max. period of 7 days
2. Debris removal - Up to 25% of the total amount payable for the direct loss or damage to the insured property
3. Personal property of officers and employees - of loss or damage occurs on the insured premises and the insured is liable for it and responsible for insuring it,
subject to a max. limit of $250 for any one officer or employee.
4. Growing trees plants or shrubs outside the building, - must be caused by named perils, but not by theft or attempted /theft or by windstorm or hail. The max, limit is 5000 per occurrence and 500 per item.

Question 15

A peak season endorsement

Answer 15

provides an option for the insured to increase the limit of insurance for stock for the period of time required

Question 16

The boiler and machinery policy covers;

Answer 16

in addition to boilers and pressure vessels - machinery, electrical apparatuses, air conditioning units, telephone equipment, production machinery and computers.

Question 17

Surety - What is it?

Answer 17

It is a bond or agreement that guarantees the actions of a third party. It is not insurance, it is a 3 party contract. Which consist of the principal, the obligee and the surety.

Question 18

Surety - Why is it needed?

Answer 18

Bonds are needed to provide security to a party entering into a contractual agreement with another. The surety guarantees the performance of an obligation or debt that one party has to another. Funds will be provided for damages or for the completion of the work if a principle defaults on his or her obligation.

Question 19

A boiler and machinery policy may also cover;

Answer 19

printing presses, x-ray machines and mechanical and electrical equipment

Question 20

A Contractors Equipment Floater;

Answer 20

is available on an all risk basis

Question 21

Robbery is defined as;

Answer 21

The taking of property from a custodian by a person who causes or threatens bodily harm or commits an overt unlawful act witnessed by the custodian.

Question 22

Three common crime perils are;

Answer 22

Theft, robbery and burglary

Question 23

The safe burglary rider includes;

Answer 23

the taking of the safe itself from within the insureds premises.

Question 24

Four coverages provided by a business package policy are;

Answer 24

hold-up, stock and or safe burglary, employee dishonesty, and counterfeit money, forged cheques or money orders.

Question 25

An example of an extra expense recoverable under a business interruption insurance policy is;

Answer 25

The expediated shipping costs for new equipment purchased to replace production equipment destroyed in a building fire.

Question 26

Personal Liability Insurance will protect private individuals against liability;

Answer 26

arising from actions any where in the world that result in bodily injury or property damage to others

• assumed under contract as an occupier of rented premises
• arising out of the ownership, use, or occupancy of a defined premises

Question 27

A special assessment is;

Answer 27

a financial contribution, often a lump sum payment, imposed by a condominium corporation which must be paid by condominium unit owners in addition to their usual condominium fees.

Question 28

Business use of premises is an exclusion that applies;

Answer 28

to all coverage sections of a personal liability policy

Question 29

Under an umbrella policy, a self-insured retention is;

Answer 29

defined as the amount of the loss that is payable by the insured.

Question 30

Occurrence Based Policy

Answer 30

The policy will respond if the loss or damage occurs during the policy term.

Question 31

Claims Made Policy

Answer 31

The policy will only cover claims made during the term of the contract

Question 32

Personal and advertising injury means injury including consequential bodily injury arising out of the following offenses;

Answer 32

• false arrest, detention or imprisonment
• malicious prosecution
• wrongful eviction from, wrongful entry into, or the invasion of the right of private occupancy of a room, dwelling or premises that a person occupies.
• oral or written publication, of any manner of material that slanders a person or organization or disparages their goods or services
• Oral or written publication, in any manner, that violates a persons right or privacy.
• The use of another persons advertising idea in the insureds advertisement
• ## infringing on another persons copyright

Question 33

A CGL coverage for personal and advertising injury does not provide coverage for;

Answer 33

business activities such as advertising, publishing or broadcasting done by or for the insured.

Question 34

Tenants’ legal liability coverage under the CGL policy;

Answer 34

applies to property damage to premises leased by the insured, arising out of the insured’s negligence.

Question 35

Property damage arising out of the fumes from a hostile fire;

Answer 35

is not excluded on a CGL pollution policy

Question 36

The Canadian Currency Clause condition;

Answer 36

Is mandatory in a CGL policy in Alberta

Question 37

The insured’s work in a CGL policy is defined as;

Answer 37

• work performed by the insured
• work performed on behalf of the insured
• materials or parts furnished in connection with work performed by the insured

Question 38

Emergency assistant benefits provided on a travel insurance policy;

Answer 38

• are often contracted to a private assistance company

Question 39

Travel Accident insurance provides coverage up to the stated limits for;

Answer 39

The loss of sight in both eyes

Question 40

Insurance Brokers Association of Canada

Answer 40

Primary objective is to raise the standing of independent brokers by providing them with professional development opportunities,

Question 41

Insurance Institute of Canada

Answer 41

The primary objective is to provide education and professional development opportunities to individuals employed in the property and casualty insurance industry

Question 42

Claims handling is an activity in which;

Answer 42

The Insurance Bureau of Canada is not involved

Question 43

The administration of the Canadian inter-company Arbitration Agreement is provided by;

Answer 43

The Canadian Insurance Claims Managers Association

Question 44

Intact Insurance

Answer 44

is not a member of the

Canadian Association of Direct Relationship Insurers

Question 45

Free form Endorsement

Answer 45

a non-standard endorsement drafted

Question 46

Free form Endorsement

Answer 46

a non-standard endorsement drafted to address particular circumstances of a risk

Question 47

Hard Market

Answer 47

Prices increase due to increase in demand creating less supply

Question 48

Loss Ratio

Answer 48

is the relationship between incurred losses and earned premium over a specified period, expressed as a percentage

Question 49

Manuscript Policy

Answer 49

policy wording that is customized to fit the needs of a unique risk

Question 50

Multiple-Limit Policy

Answer 50

A policy which shows a separate limit of insurance for each coverage provided

Question 51

Actuary

Answer 51

One who is responsible for ratemaking

Question 52

Adverse Selection

Answer 52

occurs when a greater number of insureds with high risk exposures want to purchase insurance in higher amounts, and those with low risk exposures do not purchase insurance at all or purchase insurance in smaller amounts

Question 53

Appeal Bond

Answer 53

a bond filed with the court by the party against whom a judgement has been rendered, and such decision is being appealed. It is a guarantee that the judgement will be paid if the appeal is not successful

Question 54

Cross- Liability

Answer 54

means that each named insured will be treated as if they had a separate policy. it provides coverage when one insured brings an action against another insured.

Question 55

Direct Compensation Property Damage

Answer 55

means that the insurer will indemnify their own insured for the damage to their vehicle, including resulting loss of use, to the extent the insured is not responsible for the accident

Question 56

Executor Bond

Answer 56

a bond which guarantees the faithful performance of an executor in the performance of their duties

Question 57

Proportional Reinsurance

Answer 57

a reinsurance arrangement in which the proportion on risk ceded and premium transferred to a reinsurer is the same

Question 58

Rateable Proportion

Answer 58

the proportion of an insurance policy limit bears to the total limit of all insurance policies

Question 59

Residual Market

Answer 59

a market which provides coverage for high risks that have difficulty obtaining insurance coverage

Question 60

Soft Market

Answer 60

occurs when the competition is brisk and prices decrease. Supply exceeds demand