Questions Flashcards
Identify the four categories that buildings may fall into
4 Marks
Residential - Homes, apartments
Mercantile - Grocery and Retail stores
Non-Mercantile - Hospitals, schools, gov buildings (institutional)
Manufacturing/Industrial - Welding shop/ Elmers manufacturing(Raw materials into finished products)
Identify four instances when subscription policies may be issued
5 Marks
- Line of business so specialized the Insurers treaty with reinsurers won’t cover it.
- Insurer doesn’t want to expose the type of risk to it’s reinsurance treaties.
- Limit doesn’t exceed net retention limit, but is beyond wat insurer is prepared to pay in any single claim.
- Broker wants to spread a good large line of business among markets.
Identify five steps of the broker’s role in the underwriting process
5 Marks
1-Complete survey (quote)
2- With quote contact interested insurers
3-Discuss with prospect quotes and insurers
4-Request binding coverage from preferred insurer
5-Review policy & deliver to client
Paul Sole of Foote’s Shoe Distributors Inc. has resisted all your efforts to add Business Interruption Insurance coverages to his policy. In his opinion, building, equipment and Stock coverages provide all the insurance he needs.
Other than physical damage to Mr. Sole’s property, provide three examples of sources of Business Interruption Insurance.
Ref Ch7-2,3
3 Marks
1- Physical damage to property
*Fire and smoke damage an office too seriously
for work to continue
2- Failure or breakdown of public utilities
*Major snowstorm causes a massive power
outage that lasts several weeks
3- Transportation related accidents
*A train spills dangerous chemicals, causing the
surrounding area to be evacuated
4- Physical damage to neighboring premises
*The anchor store of a mall has a serious fire, and
the neighboring stores see less customer traffic
5- loss caused to property of major supplier or customer.
*Special machine breaks down at a main supplier
and delays shipments for weeks
6- actions of regulatory authorities
*A tornado causes a government-mandated
evacuation of area - or- train spills dangerous chemicals causing
7- ancillary causes - strike or employee lock outs
*Construction workers strike, delaying rebuilding
project after loss.
Identify what information is required by law to appear on the declaration page of all insurance
policies.
5 Marks
1- Names of parties to the contract 2- Policy Period 3- Loss payable or payee 4-Summary of Insurance coverages and amounts for which the insurer may be liable 5- Rate and Premium charged 6- Subject matter of Insurance.
Isabelle Handy owns a small restaurant in the downtown area. You recently advised her that the local by-laws had been implemented which would affect her in the event of a serious fire loss to her building.
(Ref Ch4 -19) 3 Marks
1- By-Laws regulating rebuilding after an insured loss should be discussed with every Insured. Identify two types of changes which might be required by such by-laws.
2- What obligation, if any, is placed upon the broker by the presence of the By-laws Exclusion in the majority of commercial property insurance policies?
1- By-Laws regulating rebuilding after an insured loss should be discussed with every Insured. Identify two types of changes which might be required by such by-laws. (any two)
** -Use of improper construction materials
-Installation of automatic fire extinguishing systems.
-Installation of wheelchair ramps for disabled
-Observing of minimums/maximums
(height and floor area)
2- What obligation, if any, is placed upon the broker by the presence of the By-laws Exclusion in the majority of commercial property insurance policies?
**The broker should ask if the applicant for insurance
knows of any By-Laws which might serve to
increase the costs of reinstating property after an
insured loss.
Wayne Harris has a three-storey building in the old part of town. He is aware that should he suffer a loss to the building, he would be affected by local By-Laws.
Identify 3 exposures insured by the By-Law Endorsement.
(ref Ch4-18) 3 Marks
1- Increase in cost of construction.
2- Loss of value of the undamaged portion of the building.
3- Cost of demolition of undamaged portion of the building and associated debris removal costs.
Sue White of Sue’s Submarine Shop Ltd. recently hired a cashier who was recommended to her by a business associate. Three months after the cashier had been in her employ, Sue learned that she had been dismissed from her last job for stealing $1,200 from her employer. The employee dishonesty coverage provided to the business is insured by a Commercial Blanket Bond (Form A) with a limit of $10,000.
(Ref CH6-26,27) 3 Marks
A)- What effect does this “prior fraud” by Sue’s employee have on:
1-coverage for the employee
2- Coverage for other employees
B) Yesterday, Sue’s accountant confirmed her worst fears. According to the accountant, approximately $7,500 in receipts were stolen from the business by an employee(s) over the past 12 months. While the police were called in to deal with the matter, they were unable to identify the employee(s) responsible. What impact would this have on the coverage provided by this form, if any?
A)- What effect does this “prior fraud” by Sue’s employee have on:
1-coverage for the employee
**Coverage for the employee ceases to apply from
the moment the insured becomes aware of it.
2- Coverage for other employees
**Removing
B) Yesterday, Sue’s accountant confirmed her worst fears. According to the accountant, approximately $7,500 in receipts were stolen from the business by an employee(s) over the past 12 months. While the police were called in to deal with the matter, they were unable to identify the employee(s) responsible. What impact would this have on the coverage provided by this form, if any?
Sue White of Sue’s Submarine Shop Ltd. recently hired a cashier who was recommended to her by a business associate. Three months after the cashier had been in her employ, Sue learned that she had been dismissed from her last job for stealing $1,200 from her employer. The employee dishonesty coverage provided to the business is insured by a Commercial Blanket Bond (Form A) with a limit of $10,000.
(Ref CH6-26,27) 3 Marks
A)- What effect does this “prior fraud” by Sue’s employee have on:
1-coverage for the employee
2- Coverage for other employees
B) Yesterday, Sue’s accountant confirmed her worst fears. According to the accountant, approximately $7,500 in receipts were stolen from the business by an employee(s) over the past 12 months. While the police were called in to deal with the matter, they were unable to identify the employee(s) responsible. What impact would this have on the coverage provided by this form, if any?
A)- What effect does this “prior fraud” by Sue’s employee have on:
1-coverage for the employee
**Coverage for the employee ceases to apply from
the moment the insured becomes aware of it.
2- Coverage for other employees
**Removing coverage from the above employee
shall not affect the coverage provided to other
employees.
B) Yesterday, Sue’s accountant confirmed her worst fears. According to the accountant, approximately $7,500 in receipts were stolen from the business by an employee(s) over the past 12 months. While the police were called in to deal with the matter, they were unable to identify the employee(s) responsible. What impact would this have on the coverage provided by this form, if any?
**
Sue White of Sue’s Submarine Shop Ltd. recently hired a cashier who was recommended to her by a business associate. Three months after the cashier had been in her employ, Sue learned that she had been dismissed from her last job for stealing $1,200 from her employer. The employee dishonesty coverage provided to the business is insured by a Commercial Blanket Bond (Form A) with a limit of $10,000.
(Ref CH6-26,27) 3 Marks
A)- What effect does this “prior fraud” by Sue’s employee have on:
1-coverage for the employee
2- Coverage for other employees
B) Yesterday, Sue’s accountant confirmed her worst fears. According to the accountant, approximately $7,500 in receipts were stolen from the business by an employee(s) over the past 12 months. While the police were called in to deal with the matter, they were unable to identify the employee(s) responsible. What impact would this have on the coverage provided by this form, if any?
A)- What effect does this “prior fraud” by Sue’s employee have on:
1-coverage for the employee
**Coverage for the employee ceases to apply from
the moment the insured becomes aware of it.
2- Coverage for other employees
**Removing coverage from the above employee
shall not affect the coverage provided to other
employees.
B) Yesterday, Sue’s accountant confirmed her worst fears. According to the accountant, approximately $7,500 in receipts were stolen from the business by an employee(s) over the past 12 months. While the police were called in to deal with the matter, they were unable to identify the employee(s) responsible. What impact would this have on the coverage provided by this form, if any?
**Coverage is provided to pay the loss where it is
clear that any of Sue’s employees were tied to
the loss.. or where the circumstances clearly
support that conclusion.
Sue White of Sue’s Submarine Shop Ltd. recently hired a cashier who was recommended to her by a business associate. Three months after the cashier had been in her employ, Sue learned that she had been dismissed from her last job for stealing $1,200 from her employer. The employee dishonesty coverage provided to the business is insured by a Commercial Blanket Bond (Form A) with a limit of $10,000.
(Ref CH6-26,27) 3 Marks
A)- What effect does this “prior fraud” by Sue’s employee have on:
1-coverage for the employee
2- Coverage for other employees
B) Yesterday, Sue’s accountant confirmed her worst fears. According to the accountant, approximately $7,500 in receipts were stolen from the business by an employee(s) over the past 12 months. While the police were called in to deal with the matter, they were unable to identify the employee(s) responsible. What impact would this have on the coverage provided by this form, if any?
A)- What effect does this “prior fraud” by Sue’s employee have on:
1-coverage for the employee
**Coverage for the employee ceases to apply from
the moment the insured becomes aware of it.
2- Coverage for other employees
**Removing coverage from the above employee
shall not affect the coverage provided to other
employees.
B) Yesterday, Sue’s accountant confirmed her worst fears. According to the accountant, approximately $7,500 in receipts were stolen from the business by an employee(s) over the past 12 months. While the police were called in to deal with the matter, they were unable to identify the employee(s) responsible. What impact would this have on the coverage provided by this form, if any?
**Coverage is provided to pay the loss where it is
clear that any of Sue’s employees were tied to
the loss.. or where the circumstances clearly
support that conclusion.
Today you received a request for insurance from the owner of a local upholstery firm. An underwriter who works for the Insurer you hope to place this business with has indicated she is reluctant to accept it, referring to it as Accommodation Business.
A) Explain what is meant by the term Accommodation Business
B) Provide four arguments you might use to convince the underwriter to accommodate you request for coverage.
A) Explain what is meant by the term Accommodation Business
**
B) Provide four arguments you might use to convince the underwriter to accommodate you request for coverage.
Today you received a request for insurance from the owner of a local upholstery firm. An underwriter who works for the Insurer you hope to place this business with has indicated she is reluctant to accept it, referring to it as Accommodation Business.
A) Explain what is meant by the term Accommodation Business
B) Provide four arguments you might use to convince the underwriter to accommodate you request for coverage.
A) Explain what is meant by the term Accommodation Business
** Accommodation business is that which is marginal
or substandard but which the insurer agrees to
accept as a favour or accommodation to the broker.
B) Provide four arguments you might use to convince the underwriter to accommodate you request for coverage.
** The broker will increase the chances of a
substandard risk being accepted when the
brokerage has:
-Low loss ratio
-Sufficient premium volume
- Good Mix of business
- Long period of service to Insurer
Today you received a request for insurance from the owner of a local upholstery firm. An underwriter who works for the Insurer you hope to place this business with has indicated she is reluctant to accept it, referring to it as Accommodation Business.
A) Explain what is meant by the term Accommodation Business
B) Provide four arguments you might use to convince the underwriter to accommodate you request for coverage.
A) Explain what is meant by the term Accommodation Business
** Accommodation business is that which is marginal
or substandard but which the insurer agrees to
accept as a favour or accommodation to the broker.
B) Provide four arguments you might use to convince the underwriter to accommodate you request for coverage.
** The broker will increase the chances of a
substandard risk being accepted when the
brokerage has:
-Low loss ratio
-Sufficient premium volume
- Good Mix of business
- Long period of service to Insurer
Many Insureds believe that the all risks coverage provided by this form means they are covered for everything. Is there anything you might do in your sales presentation that could help to eliminate this common misconception?
Make it of most importance to
