Review Exam A Flashcards
What is a hazard?
a. an increase in the possibility that a loss might occur
b. the chance of loss
c. the uncertainty about whether or not a loss might occur
d. the cause of loss
a. an increase in the possibility that a loss might occur
The purpose of insurance is to:
a. transfer risk from a person, business or organization to an insurance company that agrees to pay for losses in exchange for a premium
b. eliminate risk by accumulating funds from enough individuals so the risk of loss no longer exists
c. reduce risk by transferring fund from individuals posing little moral, morale, or physical hazard to those who pose greater hazards
d. retain risk through the law of large numbers
a. transfer risk from a person, business or organization to an insurance company that agrees to pay for losses in exchange for a premium
The type of insurance company in which the policyholder is considered an owner, with the right to vote and share profits is a:
a. stock company
b. mutual company
c. reciprocal company
d. Lloyd’s association
b. mutual company
Jewel Canford’s home is insured by XYZ Insurance Company. Last year she made the final mortgage payment to FBN Mortgage company. Jewel is considering selling her home to her niece, Cynthia. Which of the following has an insurance interest in the home?
a. XYZ Insurance Company
b. FBN Mortgage Company
c. Cynthia Canford
d. Jewel Canford
d. Jewel Canford
Which one of the following is NOT an element of insurability?
a. loss must be calculable
b. risk of loss must represent a financial hardship
c. cost of insurance must be affordable
d. risk of loss is a speculative risk
D. Risk of loss is a speculative risk
The principle that states an insured should be restored to approximately the same financial position after a loss as before is known as
a. insurability
b. adhesion
c. indemnity
d. subrogation
c. indemnity
What part of an insurance policy personalizes the policy as to who and what are insured?
a. insuring agreements
b. conditions
c. exclusions
d. declarations
d. declarations
An insurance policy is prepared by the insurance company, with little or no input from the insured. This means that an insurance policy is a/an:
a. unilateral contract
b. adhesion contract
c. personal contract
d. contract of utmost good faith
b. adhesion contract
An individual who owns and lives in a condominium can obtain broad coverage for personal property in the condo under which Homeowners form?
a. HO-6
b. HO-4
c. HO-2
d. HO-3
A. HO-6
What is the purpose of the Fair Credit Reporting Act?
a. to give the consumer recourse if insurance is denied on the basis of a credit report
b. To allow the use of installment payments for insurance premiums
c. To limit the number of outside sources an underwriter may use when evaluating a risk
d. to prevent insurers from using credit reports to evaluate risks
a. to give the consumer recourse if insurance is denied on the basis of a credit report
Which of the following is a liability loss?
a. a fire destroys the insured’s building
b. a fire that was caused by the insured’s negligence burns a neighboring building. The owner of the building sues the insured.
c. as a result of a fire, the insured’s business is closed while rebuilding takes place. The insured loses three months’ of income
d. a fire damages the insured’s building. While firefighters managed to save part of the inventory from the fire, some of it was damaged by the chemicals used to extinguish the flames
b. a fire that was caused by the insured’s negligence burns a neighboring building. The owner of the building sues the insured.
What rating method involves modifying the premium based on the insured’s loss experience over a specified period of time?
a. merit rating
b. manual rating
c. judgment rating
d. experience rating
d. experience rating
Most flood insurance coverage is provided by:
a. private insurance companies
b. state-run programs
c. a federal government program
d. surplus lines insurers
c. a federal government program
Which of the following businesses could be eligible for a Businessowners policy?
a. Hometown Bank & Trust
b. Rest Easy Motel
c. Family Fun Time Amusement Park
d. Joe’s Bar and Grill
b. Rest Easy Motel
Which of the following types of benefits is generally not provided by a state’s workers compensation laws?
a. pain and suffering
b. rehabilitation
c. disability
d. medical
A. pain and suffering
Which of the following describes an insurance company doing business in a state other than the one where it is incorporated?
a. nonadmitted
b. domestic
c. foreign
d. alien
c. foreign
The purpose of a binder is to:
a. guarantee that an insurance policy will be issued provided the insured has made no misrepresentations on the application
b. provide the insurance company with the information about the insured required to decide whether or not to issue the policy
c. eliminate the need for the policy to be countersigned when it is issued
d. provide temporary protection for the insured between the time the application is made and the policy is issued or the binder expires
d. provide temporary protection for the insured between the time the application is made and the policy is issued or the binder expires
Agent Ma’Chelle is under contract with XYZ Insurance Company to represent and sell insurance only for XYZ. This is an example of what type of agency system?
a. direct writer
b. exclusive/captive
c. independent
d. direct response
b. exclusive/captive
What type of insurance policy insures against all risks of loss that are not specifically excluded by the policy?
a. named peril policy
b. open peril policy
c. specified peril policy
d. binder policy
b. open peril policy
In a particular state, an insurance company must file policy forms and rates with the state insurance department and wait for official approval before using the new forms and rates. This is an example of a/an
a. use and file state
b. file and use state
c. prior approval state
d. open competition state
c. prior approval state
According to the Nationwide Definition, imports and exports are
a. eligible for Personal Inland Marine insurance
b. eligible for Commercial Inland Marine insurance
c. eligible for Ocean Marine insurance
d. not eligible for Marine Insurance
c. eligible for Ocean Marine insurance
Which Surety bond guarantees that bills for labor and materials will be paid by the contractor as they are due?
a. supply bond
b. bid bond
c. payment bond
d. performance bond
c. payment bond
Which of the following describes actual cash value?
a. replacement cost–depreciation
b. agreed amount
c. cost to repair or replace
d. market value–depreciation
a. replacement cost–depreciation
The condition that provides a means to settle the amount of a loss when the insured and the insurance company cannot agree is the
a. discovery period condition
b. assignment condition
c. subrogation condition
d. appraisal condition
d. appraisal condition
An insured purchased new furniture for $6,000. At the time of a fire loss, it had depreciated $2,000. The same furniture will cost $7,000 to replace. What is the actual cash value of the destroyed furniture?
a. $7,000
b. $8,000
c. $6,000
d. $5,000
d. $5,000
Which of the following can be insured under an unendorsed Homeowners policy?
a. Farm
b. Mobile Home
c. Dwelling that the owner rents to his cousin
d. Private residence in which the owner-occupant also maintains an office for her accounting business
d. Private residence in which the owner-occupant also maintains an office for her accounting business
The primary purpose of the Business Income coverage forms is to reimburse the insured for
a. damage to accounts receivable records
b. the costs of debris removal from property damage at the insured’s property
c. loss of income resulting from property damage at the insured’s property
d. loss due to employees’ work-related injuries
c. loss of income resulting from property damage at the insured’s property
Coverage for sums an employer becomes legally obligated to pay under common law as a result of a work-related injury to an employee is provide by
a. the Commercial General Liability policy
b. Part One–Workers Compensation section of the Workers Comp policy
c. Part Two–Employers Liability section of the Workers Comp policy
d. the Businessowners policy
c. Part Two–Employers Liability section of the Workers Comp policy
The Homeowners form that provides open peril coverage on the dwelling and broad coverage on personal property is:
a. HO-3
b. HO-4
c. HO-2
d. HO-6
a. HO-3
Which one of the following is a coverage extension that is available in the Building And Personal Property coverage form?
a. Monthly limit of indemnity
b. Business personal property
c. Property off-premises
d. Animals
c. Property off-premises
Which of the following losses to covered equipment would be covered under the Equipment Breakdown Protection coverage form?
a. damage that occurs while equipment is undergoing a pressure test
b. damage caused by a fire
c. damage resulting from a windstorm
d. damage from an explosion caused by the centrifugal force of moving parts
d. damage from an explosion caused by the centrifugal force of moving parts
In PURE contributory negligence states, when an individual is found to have contributed to his or her own loss in any way, another party
a. may not be held liable
b. may be held liable but to a reduced extent
c. may be held liable for full damages despite the other party’s negligence
d. may be held liable only in the case of vicarious liability
a. may not be held liable
Which of the following would NOT generally be included in the Supplementary Payments portion of a Liability policy?
a. loss of earnings
b. Damage to property owned by the insured
c. first aid to others at the time of an accident
d. expenses the insured incurs at the company’s request as part of an investigation or defense
b. damage to property owned by the insured
According to the cancellation condition in the Common Policy Conditions form, if the insurance company is cancelling a Commercial Package policy for nonpayment of a premium, the insured must be given at least ____ days’ notice of cancellation.
a. 30
b. 60
c. 14
d. 10
d. 10
Which of the following coverages IS included in the Homeowners policy but is NOT included in an unendorsed Dwelling policy?
a. dwelling
b. other structures
c. personal property
d. liability
d. liability
Trailer Interchange coverage is part of the
a. truckers coverage form and motor carrier coverage form
b. business auto coverage form
c. garage coverage form
d. personal auto policy
a. truckers coverage form and motor carrier coverage form
Open peril coverage for both the dwelling and personal property is provided by the
a. HO-2
b. HO-3
c. HO-5
d. HO-4
c. HO-5
Under the Commercial General Liability policy, a separate Aggregate Limit applies to the
a. products-completed operations hazard
b. premises and operations hazard
c. owners and contractors protective hazard
d. contractual liability hazard
a. products-completed operations hazard
What Personal Inland Marine form is used to provide open peril coverage on a blanket basis for personal property?
a. Floater form
b. Personal Property form
c. Personal Articles form
d. Personal Effects form
b. Personal Property form
The insured’s home is covered by a DP-3. Two years ago, the insured bought the home for $58,000. Today its replacement cost is $60,000. How much Coverage A does the insured need to qualify for replacement cost coverage?
a. $60,000
b. $46,400
c. $58,000
d. $48,000
d. d. $48,000
Coverage for which of the following is excluded by a Dwelling Policy?
a improvements, alterations, or additions made by an insured at his or her own expense
b. detached garage on the insured’s premises
c. coin collection
d. Rent an insured was unable to collect because rental property was damaged
c. coin collection
Which of the following lines of insurance CANNOT be included on the Commercial Package policy?
a. Ocean Marine
b. Crime
c. Boiler and Machinery
d. Inland Marine
a. Ocean Marine
Which one of these Commercial Inland Marine forms CANNOT be included in the Commercial Inland Marine coverage part of the Commercial Package policy?
a. Commercial Articles coverage form
b. Valuable papers and records coverage form
c. parcel post policy
d. signs coverage form
c. parcel post policy
The Extra Expense coverage form provides:
a. additional money to pay for property damage losses at a covered location
b. payment for unforeseen expenses while the business is shut down following a property loss
c. coverage that will permit the insured to continue in business without interruption following a property damage loss
d. extra money for an insured whose accounts receivable records have been damaged
c. coverage that will permit the insured to continue in business without interruption following a property damage loss
The Businessowners policy:
a. gives the insured great flexibility in picking coverages that can be included in the policy
b. can be written for almost any commercial insured
c. provides a prepackaged policy of property and liability coverages for certain types of small businesses
d. provides only property coverage
c. provides prepackaged policy of property and liability coverages for certain types of small businesses
Which of the following can be covered as business personal property under the Businessowners policy?
a. airplanes
b. company cars
c. exterior building glass
d. land
c. exterior building glass
What type of Ocean Marine insurance provides physical damage coverage for the ship while it is transit?
a. cargo
b. freight
c. protection and indemnity
d. hull
d. hull
The party to a Surety bond who promises to do or not do a specific thing is the
a. obligee
b. surety
c. principal
d. custodian
c. principal
Which of the following perils is covered by the HO-2 and HO-3?
a. sudden and accidental rupture of a heating system
b. loss due to power interruption that occurs off the premises
c. flood
d. war
a. sudden and accidental rupture of a heating system
Under the Commercial General Liability coverage form, liability assumed under contract is
a. always excluded
b. excluded, except for contracts specifically defined as insured
c. covered, except for contracts specifically defined as insured
d. covered except for property leases
b. excluded, except for contracts specifically defined as insured
Who of the following would be considered an insured for Liability coverage under the Personal Auto policy?
a. The named insured’s son, who lives with the insured, while driving a neighbor’s car
b. the name insured’s neighbor while taking the named insured for a drive in the neighbor’s new car
c. the named insured’s cousin who, while visiting from another state, drives a car the named insured borrows from a neighbor
d. the named insured’s neighbor, who borrows the named insured’s car without permission
a. the named insured
Under a pure no-fault plan, each party to an auto accident
a. is reimbursed by his or her own insurance company
b. has the right to seek pain and suffering compensation
c. is reimbursed by his or her own insurance company, but could seek additional compensation if damages were higher than a certain amount
d. is reimbursed by the other party’s insurance company
a. is reimbursed by his or her own insurance company
The insured’s property insurance policy has a deductible clause. This means that:
a. the insured deducts any claim payment received from the next insurance premium
b. any losses paid to a third party are deducted from the policy limit
c. the insured must pay a certain amount for each loss incurred under the policy
d. the insured must deduct a claim payment from the policy limit
c. the insured must pay a certain amount for each loss incurred under the policy
Which one of the following coverages is not included in the Commercial Crime insuring agreements but can be added by endorsement?
a. Theft of Money and Securities
b. Computer Fraud
c. Extortion
d. Employee Dishonesty
c. Extortion
An additional loss that results from a direct loss to property is called a/an:
a. proximate loss
b. liability loss
c. punitive loss
d. indirect/consequential loss
d. indirect/consequential loss
Which one of the following is NOT one of the components of a Commercial Package policy?
a. coverage parts
b. common policy conditions
c. common policy declarations
d. causes of loss form
d. causes of loss form
In the Commercial Crime forms, new employees and additional premises obtained through a consolidation or merger:
a. are automatically covered until the end of the policy period
b. are only covered if the insured provides immediate notification to the insurer
c. are automatically covered for 90 days
d. cannot be covered under the current policy but can be added at the next policy effective date
c. are automatically covered for 90 days
Under the claims-made Commercial General Liability coverage form, the first date that a loss may occur and still be covered under the policy is
a. retroactive date
b. policy expiration date
c. extended reporting period inception date
d. policy inception date
a. retroactive date
Assume the following items were stolen from the insured’s home. Which one of these losses would be fully covered under Coverage C of the Homeowners policy, assuming the loss was for the full value of the property described?
a. an antique gun valued at $5,000
b. a $2,000 laptop computer the insured uses for her in-home accounting business
c. a $3,000 mink stole
d. a $2,000 ruby and diamond ring
b. a $2,000 laptop computer the insured uses for her in-home accounting business
The insured, Lefty’s Bar, wants coverage for liability arising out of selling and serving alcoholic beverages. Such coverage can be provided by purchasing:
a. a liquor liability coverage form
b. an unendorsed CGL coverage form with the Amendment of Liquor Liability Exclusion endorsement attached
d. a Businessowners policy
a. a Liquor Liability coverage form
Both the structure and the contents of a mobile home can be insured by purchasing
a. an unendorsed HO-3
b. a Businessowners policy
c. an unendorsed DP-3
d. either a Mobile Home package policy or an HO-2 or HO-3 with the Mobile Homeowners endorsement
d. either a Mobile Home package policy or an HO-2 or HO-3 with the Mobile Homeowners endorsement
Which one of the following losses would be paid under part D of the Personal Auto policy?
a. A permanently installed tape player was damaged when thieves attempted to remove it from the car
b. an awning attached to the insured’s camper trailer was destroyed by hail
c. the insured’s pick up truck was contaminated by radioactive materials and had to be destroyed
d. the insured collided with a telephone pole while he was using the car as a taxi to earn extra money
a. a permanently installed tape player was damaged when thieves attempted to remove it from the car
An agent who needs liability coverage for his or her professional liability exposure can obtain it by purchasing:
a. an unendorsed CGL coverage form
b. an unendorsed Homeowners policy
c. an unendorsed Dwelling policy
d. Errors and Omissions insurance
d. Errors and Omissions insurance
What is the difference between the loss sustained and discovery versions of the Commercial Crime coverage forms?
a. property covered
b. eligibility
c. coverage trigger
d. perils covered
c. coverage trigger
In ALL states, an UNENDORSED Personal Auto policy’s Uninsured Motorists coverage applies to what type of loss caused by an uninsured motorist?
a. property damage
b. bodily injury
c. personal injury
d. comprehensive
b. bodily injury
Each of the following is a primary coverage provided under the commercial general liability policy EXCEPT:
a. pollution liability
b. bodily injury and property damage liability
c. personal and advertising injury
d. medical payments
a. pollution liability
Under the Commercial Package policy, who may cancel the policy in writing and make changes to the policy with the consent of the insurer?
a. first named insured
b. last named insured
c. any named insured
d. any insured
a. first named insured
Which part of the Workers Compensation And Employers Liability policy pays all compensation and other benefits required by the state’s Workers Compensation law?
a. Part Two–Employers Liability
b. Part One–Workers Compensation
c. Part Four–Your Duties If Injury Occurs
d. Either Part One or Part Two, depending on the type of loss
b. Part One–Workers Compensation
Which one of the following accidents would NOT be covered under the Uninsured Motorists coverage of the Personal Auto policy?
a. an accident in which a hit-and-run driver hits the insured’s covered auto
b. an accident with a motorist who has less Liability insurance than required by the state’s financial responsibility law
c. an accident with a driver who carries the minimum liability limits required by law, but whose insurance is not adequate to cover the damages
d. an accident with an at-fault driver whose insurance company declines coverage
c. an accident with a driver who carries the minimum liability limits required by law, but whose insurance is not adequate to cover the damages
In the Business Auto coverage form, employers that want to cover employees’ use of their own cars in the employer’s business should opt to have liability coverage apply to which of the following groups of autos?
a. hired
b. miscellaneous
c. owned
d. nonowned
d. nonowned
The Personal Auto policy’s Medical Payments coverage would NOT provide protection for which one of the following?
a. The insured
b. Passengers in the insured’s car
c. The insured’s family members
d. Occupants of a car that was struck by the insured
d. Occupants of a car that was struck by the insured
The authority specifically given to an agent, either orally or in writing by the principal, is called:
a. apparent authority
b. reasonable authority
c. express authority
d. implied authority
c. express authority
In Liability policies, Supplementary Payments are:
a. subject to the overall policy limit of liability
b. only available by endorsement
c. payable in addition to the policy limit of liability
d. subject to a flat limit of 10% of the overall policy limit
c. payable in addition to the policy limit of liability
Which of the following covers a carrier for liability for loss to cargo while it is being transported in a truck?
a. truckers coverage form
b. motor truck cargo policy
c. motor carrier coverage form
d. trip transit policy
b. motor truck cargo policy
In a monopolistic state, an employer purchases Workers Compensation insurance from:
a. a state fund
b. a private insurance company
c. either a state fund or a private insurance company
d. the federal government
a. a state fund
The insured has two separate Dwelling policies that cover the same property: Policy A for $30,000 and policy for $60,000. The insured has a $12,000 loss. If both policies use the pro rata method to handle other insurance, how much will policy B pay for this loss?
a. $12,000
b. $8,000
c. $0
d. $6,000
b. $8,000
Which one of the following lists all the required elements for establishing a charge of negligence?
a. legal duty owed, deliberate attempt to cause harm, damages
b. breach of reasonable person rule and proximate degree of care
c. legal duty owed, breach of legal duty owed, proximate cause, damages
d. legal duty owed, proximate cause, intervening cause, damages
c. legal duty owed, breach of legal duty owed, proximate cause, damages
In Liability policies, Supplementary Payments are
a. subject to the overall policy limit of liability
b. only available by endorsement
c. payable in addition to the policy limit of liability
d. subject to a flat limit of 10% of the overall policy limit
c. payable in addition to the policy limit of liability
Carl’s home sustains a $50,000 damage in an electrical fire. The home is insured under a Homeowners policy for $75,000. At the time of the loss, the home’s replacement cost is $125,000. How much will Carl’s Homeowners policy pay for this loss?
a. $75,000
b. $37,500
c. $50,000
d. $125,000
b. $37,500
Which one of these Homeowners endorsements is used to schedule separate coverage for one or more of nine categories of personal property?
a. Scheduled Personal Property
b. Personal Articles
c. Personal Effects
d. Personal Property
a. Scheduled Personal Property
The insured has a $1,000,000 Personal Umbrella policy with a retention limit of $1,000. The insured suffers a $15,000 loss that is excluded by the underlying policy, but not the Umbrella. How much of this loss would be paid under the umbrella?
a. $0
b. $15,000
c. $16,000
d. $14,000
d. $14,000
Which of the following would be covered under the building coverage of the Building and Personal Property coverage form?
a. land
b. indoor furniture
c. fixtures
d. inventory
c. fixtures
All of the following reduce the general aggregate limit in the CGL EXCEPT the
a. medical expense limit
b. personal and advertising injury limit
c. per occurrence limit
d. products-completed operations limit
d. products-completed operations limit
The Physical Damage section of the Personal Auto Policy excludes:
a. theft of the entire auto
b. earthquake
c. mechanical breakdown
d. flood
c. mechanical breakdown
The insured has a Personal Auto policy with all cars insured by one company. He sells one of the cars and buys a new one to replace it. Must the insured take an action for the Liability portion of his current policy to apply the replacement vehicle?
a. Yes, the insured must notify the company within 30 days to have Liability coverage apply to the replacement vehicle
b. Yes, the insured must contact his agent to have a new policy issued
c. No, the insured does not have to do anything; Liability coverage for a replacement vehicle is automatic
d. Yes, the insured must sign a notarized form proving he is still insurable
c. no, the insured does not have to do anything; Liability coverage for a replacement vehicle is automatic
Under the Business Auto coverage form, the insured’s liability arising out of which of the following situations would be covered?
a. bodily injury due to the insured’s operation of mobile equipment
b. damage to property in the insured’s custody
c. damage to property in the insured’s custody
d. injury to an employee of the insured while the employee is working for the insured
b. bodily injury resulting from loading or unloading a covered auto
Under the Commercial Property coverage part, the Causes of Loss-Broad form insures against
a. all risks of direct physical loss unless specifically excluded
b. a list of basic named perils only
c. the perils in the Causes of Loss–Basic form and additional perils
d. earthquake only
c. the perils in the Causes of Loss
Which of the following is a correct definition of coinsurance?
a. two or more policies that apply to the same property
b. a requirement that the insured carry insurance equal to a specified percentage of the property’s value to qualify for replacement cost coverage under the policy
c. two or more buildings that are covered under a single policy
d. a condition that allows the insurer to take action against a third party for reimbursement of loss settlements made with the insured
b. a requirement that the insured carry insurance equal to a specified percentage of the property’s value to qualify for replacement cost coverage under the policy
Which one of the following statements concerning the Farm coverage part is NOT correct?
a. it provides both property and liability insurance
b. it covers the farmer’s business and personal loss exposures
c. it can be included in the Commercial Package policy
d. it covers the farmer’s growing crops
d. it covers the farmers growing crops
Which Commercial Property coverage form covers damage to the property of others in the insured’s care, custody or control for which the insured is legally liable?
a. Builders Risk coverage form
b. Extra Expense coverage form
c. Legal Liability coverage form
d. All Commercial Property coverage forms provide this type of coveage
c. legal liability coverage form
Which of the following losses would be paid under the Business Auto coverage form’s Comprehensive coverage?
a. a covered auto was stolen and never recovered
b. the grillwork on a covered auto gradually corroded due to continuous exposure to salt air
c. a covered auto was damaged when it was hit by a car that ran a stop sign
d. a covered auto skidded on icy pavement and overturned
a. a covered auto was stolen and never recovered
The owner of a parking lot wants coverage for her liability for damage to vehicles left in her custody. She needs:
a. Business Auto coverage
b. Garage Liability coverage
c. Garagekeepers coverage
d. both Garage Liability and Garagekeepers coverage
c. Garagekeepers coverage
The Causes of Loss–Special form of the Commercial Property coverage part insures against
a. all risks of direct physical loss unless specifically excluded
b. a list of basic named perils only
c. earthquake only
d. all risks of loss to the insured building and specified causes of loss to business personal property
a. all risk of direct physical loss unless specifically excluded
Nicole has a Personal Auto policy with limits of 10/20/10 for Liability coverage. She causes an accident that results in $12,000 bodily injury damages to the other driver and $5,000 in property damage to the other driver’s car. How much would Nicole’s policy pay for both the BI and the PD losses?
a. $15,000
b. $17,000
c. $10,000
d. $12,000
a. $15,000
Under the Workers Compensation system, who is responsible for the expenses resulting from work-related injuries and occupational disease?
a. the employee
b. the employer, regardless of whether it was at fault for the injury or disease
c. the employer, but only if it was at fault for the injury or disease
d. the employee and employer in equal shares
b. the employer, regardless of whether it was at fault for the injury or disease
A Basic Dwelling policy automatically provides coverage against fire, lightning and
a. windstorm
b. internal explosion
c. falling objects
d. riot
b. internal explosion
An insured who needs coverage for medical instruments while they are on and off the premises could obtain it by purchasing the
a. Physicians and Surgeons Equipment coverage form
b. Malpractice policy
c. personal effects form
d. commercial general liability coverage form
a. Physicians and Surgeons Equipment coverage form
Widget Enterprises wants property insurance for a new warehouse it is building. Widget also wants the policy’s limit of insurance to gradually increase as the value of the building under construction increases. Which Commercial Property coverage form would best fit Widget’s needs?
a. Building and personal Property coverage
b. Business Income coverage form
c. Builders Risk Reporting form
d. Businessowners coverage form
c. Builders Risk Reporting form
When applying for Homeowners insurance, Mr. Applebee tells his agent that the home is used strictly as a residence. Actually, he manufactures fireworks in the basement of the home. What will happen if the insurance company discovers Mr. Applebee’s misrepresentation after the policy is issued?
a. It will void the policy because Mr. Applebee misrepresented a material fact.
b. It must wait until the policy’s expiration date to cancel the coverage
c. Nothing. Mr. Applebee did not misrepresent a material fact
d. Nothing. A policy cannot be voided on the basis of a misrepresentation of a material fact
a. it will void the policy because Mr. Applebee misrepresented a material fact
