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Samantha's 2015 Book > Review Exam B > Flashcards

Review Exam B Flashcards

1
Q

All of the following are parts of an insurance contract EXCEPT

a. floater
b. insuring agreement
c. conditions
d. exclusions

A

a. floater

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2
Q

The Dwelling Special form provides:

a. open peril coverage on the dwelling and personal property
b. open peril coverage on personal property
c. named peril coverage on the dwelling and personal property
d. open peril coverage on the building and named peril coverage on personal property

A

d. Open peril coverage on the building and name peril coverage on personal property

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3
Q

In which of the following would you have insurable interest?

a. the house you own but have rented to tenant
b. the car on which you are still paying
c. Both A and B
d. Neither A nor B

A

c. Both A and B

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4
Q

In a liability loss, the person to whom the insured caused damage is referred to as the

a. first party
b. second party
c. third party
d. fourth party

A

c. third party

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5
Q

Which one of the following is NOT a possible defense against negligence?

a. statute of limitations
b. doctrine of reasonable expectations
c. intervening cause
d. comparative negligence

A

b. doctrine of reasonable expectations

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6
Q

Of the four coverages provided under Section I of the Homeowners policy, which one provides coverage against an indirect loss?

a. Coverage A–Dwelling
b. Coverage B–Other Structures
c. Coverage C–Personal Property
d. Coverage D–Loss of Use

A

D. Coverage D–Loss of Use

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7
Q

Which of these losses would be covered under the Personal Auto policy’s liability coverage?

a. Will falls asleep at the wheel of his car and strikes and injures a pedestrian.
b. Becca breaks a rented carpet cleaning machine while trying to get it out of the back seat of her car.
c. Yvonne rides her all-terrain vehicle through her neighbor’s yard and damages the yard.
d. In a fit of temper, Mike throws his golf clubs through the windshield of his neighbor’s car.

A

a. Will falls asleep at the wheel of his car and strikes and injures a pedestrian.

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8
Q

The insurance contract is considered a contract of indemnity because

a. an insured may collect no more than the limit of liability stated in the Declarations
b. an insured may collect no more than the amount required to restore him or her to the same financial condition that existed prior to the loss
c. an insured may collect up to 10% more than his or her insurable interest
d. in cases of total loss, an insured can collect the appraised value of the property

A

b. an insured may collect no more than the amount required to restore him or her to the same financial condition that existed prior to the loss

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9
Q

The Builders Risk Reporting form insures a building under construction for

a. its completed value
b. 10% of its completed value during the entire construction period
c. an amount that increases at intervals to correspond with the increasing value of the building
d. its completed value, but at a reduced rate

A

c. an amount that increases at intervals to correspond with the increasing value of the building

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10
Q

If a homeowner wants the maximum protection for home and contents, which form should be purchased?

a. HO-4
b. HO-2
c. HO-8
d. HO-5

A

d. HO-5

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11
Q

Insurance is a means of

a. eliminating risk
b. transferring risk
c. avoiding risk
d. retaining risk

A

b. transferring risk

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12
Q

The Commercial Inland Marine transportation form used to insure a carrier’s liability for damage to cargo it is transporting is the

a. Trip Transit policy
b. Motor Truck Cargo policy
c. Annual Transit policy
d. Motor Carrier coverage form

A

b. Motor Truck Cargo policy

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13
Q

The Commercial General Liability coverage part can be used to insure against all of the following EXCEPT

a. auto liability
b. premises liability
c. products liability
d. completed operations liability

A

a. auto liability

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14
Q

Which of the following is NOT one of the required elements of a legal contract?

a. offer and acceptance
b. competent parties
c. legal purpose
d. written instrument

A

d. written instrument

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15
Q

With the exception of rowboats and canoes and property belonging to guests or servants, the DP-1 form covers personal property off premises

a. only while it is in the United States
b. for up to the full amount of coverage that applies to personal property on the premises
c. as describe in both A and B
d. anywhere in the world for up to 10% of the Coverage C amount

A

d. anywhere in the world for up to 10% of the Coverage C amount

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16
Q

Under the Business Auto coverage form, the nonowned auto category represents:

a. autos owned by the insured but furnished to the employee
b. autos owned by employees but driven in the insured’s business
c. customers’ auto
d. autos hired by the insured

A

b. autos owned by employees but driven in the insured’s business

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17
Q

Bid bonds, Payment bonds and Performance bonds are all examples of

a. Contract bonds
b. Fiduciary bonds
c. Labor bonds
d. Judicial bonds

A

a. Contract bonds

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18
Q

In states that have competitive Workers Compensation funds,

a. the employer must purchase insurance from a private insurer
b. the employer must purchase insurance from the state
c. the employer may purchase insurance from either the state or a private insurer
d. the employer is expected to self insure

A

c. the employer may purchase insurance from either the state or a private insurer

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19
Q

Which of the following is an insurable risk?

a. wear and tear on a valuable oriental rug
b. theft of a paperback book
c. Hail damage to the roof of a car
d. all of the above

A

c. hail damage to the roof of a car

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20
Q

The action which, in a natural and continuous sequence, produces a loss is known as the

a. proximal cause
b. primal causation
c. approximate cause
d. proximate cause

A

d. proximate cause

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21
Q

Which Personal Inland Marine form provides open peril coverage on a blanket basis for most kinds of property found in a typical home?

a. personal articles floater
b. personal property floater
c. schedules personal property endorsement
d. personal effects floater

A

b. personal property floater

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22
Q

Which of these losses would be covered under the Personal Auto policy’s Physical Damage coverage?

a. State officials confiscated the insured’s auto after it failed to meet the state’s auto emissions standards
b. The on-board computer system used to monitor the operation of the insured auto was destroyed in a fire
c. An awning attached to the insured’s camper trailer was ruined in a windstorm
d. Vandals damaged a custom mural painted on the insured’s van

A

b. The on-board computer system used to monitor the operation of the insured auto was destroyed in a fire

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23
Q

Which of the elements of a legal contract does an insurance premium payment represent?

a. Consideration
b. Acceptance
c. Legal instrument
d. Offer

A

a. Consideration

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24
Q

The CGL claims-made coverage form may contain a retroactive date. This date is the date

a. the policy takes effect
b. the policy expires
c. by which a claim must be made to cover
d. before which the claims-made form will not cover a claim

A

d. before which the claims-made form will not cover a claim

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25
Q

In MOST states, Workers Compensation laws are

a. elective
b. monopolistic
c. compulsory
d. competitive

A

c. compulsory

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26
Q

In the Equipment Breakdown Protection coverage form, coverage for business income, spoilage damage and utility interruption is

a. provided if the insured has selected these coverages in the Declarations
b. automatically provided by the policy
c. available only by adding endorsements to the policy
d. available only by purchasing specialized coverage forms

A

a. provided if the insured has selected these coverages in the Declarations

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27
Q

A peril is

a. the uncertainty of loss
b. the cause of loss
c. something that increases the chance of loss
d. the result of a loss

A

b. the cause of loss

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28
Q

A nonexclusive agent

a. represents only direct writers
b. works for a solicitor
c. represents more than one insurance company
d. is a captive agent

A

c. represents more than one insurance company

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29
Q

Which of the following losses would NOT be recoverable under the Liability coverage of the Homeowners policy?

a. the named insured’s son damages the family’s garage with his car
b. a delivery man trips over a toy left on the porch of the insured’s dwelling
c. the named insured’s dog damages the front screen door of a neighbor’s house
d. the named insured’s small daughter hits a friend with a stick, severely injuring the other party’s eye

A

a. the named insured’s son damages the family’s garage with his car

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30
Q

Which of the following policies is specifically designed to cover business property?

a. dwelling policy
b. extended coverage endorsement
c. commercial property coverage part
d. vandalism and malicious mischief endorsement

A

c. commercial property coverage part

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31
Q

All of the following are time element coverages EXCEPT

a. Business Income coverage form
b. Business Income From Dependent Properties form
c. Extra Expense coverage form
d. Valuable Papers coverage form

A

d. valuable papers coverage form

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32
Q

A binder

a. is always a written agreement
b. guarantees that a policy will be issued
c. may only be issued by the insurance company
d. none of the above

A

d. none of the above

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33
Q

Which Dwelling forms include the Glass Or Safety Glazing Material other coverage?

a. DP-1
b. DP-2 and DP-3
c. DP-3 only
d. DP-1 and DP-2

A

b. DP-2 and DP-3

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34
Q

Ocean Marine Protection and Indemnity insurance provides:

a. physical damage coverage for the ship’s hull
b. property coverage for goods in transit over water
c. marine liability coverage
d. protection against the loss of shipping costs

A

c. marine liability coverage

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35
Q

The Workers Compensation policy provides coverage for

a. amounts the employer is required to pay under state Workers Comp laws
b. amounts for which the employer becomes legally obligated to pay for an employee’s work-related injuries
c. Both A and B
d. Neither A nor B

A

C. Both A and B

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36
Q

The tendency for people with a great-than-average exposure to loss to purchase insurance is called

a. the law of large numbers
b. subrogation
c. a morale hazard
d. adverse selection

A

d. adverse selection

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37
Q

It will cost Gary $5,000 to put a new roof on his home to replace a roof destroyed in a windstorm. Assume that the original roof, which Gary paid $3,500 for 10 years ago, depreciated $300 per year. What was the actual cash value of the roof that was destroyed?

a. $5,000
b. $3,500
c. $2,000
d. $500

A

c. $2,000

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38
Q

Flood insurance

a. is available through any insurance company
b. must be purchase directly from the federal government
c. is available from the federal government or private companies who are reimbursed for losses by the government
d. is not available

A

c. is available from the federal government or private companies who are reimbursed for losses by the government

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39
Q

In prior approval states, the rates and policy forms insurance companies use must be approved by

a. a rating bureau
b. the insurance department of the state where they will be used
c. the federal government
d. the Better Business Bureau

A

b. the insurance department of the state where they will be used

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40
Q

The Fair Credit Reporting Act applies to applicants who are rejected for insurance overage on the basis of

a. a police report
b. a credit report
c. a tax audit
d. all of the above

A

b. a credit report

41
Q

Which one of the following is NOT a category of the Nationwide Definition?

a. Excess liability
b. Exports
c. Instrumentalities of transportation
d. Commercial Property floater risks

A

a. excess liability

42
Q

Medical benefits under the Workers Compensation policy are

a. subject to at $100,000 limit per injury
b. paid for up to three years after the injury occurred
c. not subject to time or dollar limits unless they are specified in the state law
d. not paid unless the employer was liable for the employee’s injury

A

c. not subject to time or dollar limits unless they are specified in the state law

43
Q

Negligence is

a. an unintentional tort
b. a criminal act
c. an intentional tort
d. a proximate cause

A

a. an unintentional tort

44
Q

If a homeowners insured carries an amount of insurance on his home equal to at least 80% of the replacement cost of the dwelling, then what is the rule of indemnification that applies if the home is destroyed?

a. the insured may be indemnified for the replacement value of the property , up to the policy limits
b. the insured will be indemnified 80% of the replacement cost
c. the insured is indemnified for the actual cash value of the loss
d. the insured is indemnified for 80% of the actual cash value of the loss

A

a. the insured may be indemnified for the replacement value of the property, up to the policy limits

45
Q

Which Commercial Crime insuring agreement includes coverage for defense costs?

a. forgery or alteration
b. computer fraud
c. all crime coverages
d. none of the crime coverages

A

a. forgery or alteration

46
Q

The Inside The Premises-Robbery or Safe Burglary insuring agreement in the Commercial Crime policy covers

a. loss of money from robbery of a custodian
b. loss of other property from robbery of a custodian
c. loss of money from a safe burglary
d. all of the above

A

b. loss of other property from robbery of a custodian

47
Q

All of the following are ways of funding Workers Compensation benefits EXCEPT

a. private insurance
b. an employee tax
c. a monopolistic or competitive state fund
d. self insurance

A

b. an employee tax

48
Q

Individuals who are appointed by the court to manage the property of another might require what kind of bond?

a. License and permit bond
b. court bond
c. fiduciary bond
d. performance bond

A

b. fiduciary bond

49
Q

A business can obtain coverage for liability arising out of discrimination and sexual harassment by purchasing

a. Commercial General Liability insurance
b. Difference in Conditions insurance
c. Workers Compensation insurance
d. Employment Practices liability insurance

A

d. employment practices liability insurance

50
Q

The Dwelling Basic form automatically provides coverage against fire, lightning and

a. hail
b. smoke
c. internal explosion
d. windstorm

A

c. internal explosion

51
Q

All of the following are Extended Coverage perils EXCEPT

a. aircraft
b. riot
c. hail
d. fire

A

d. fire

52
Q

Additional Living Expense coverage that is included under the Broad and Special Dwelling forms protects the insured against

a. depreciation on the house
b. extra living costs incurred when the home becomes uninhabitable due to damage by a peril insured against
c. smoke damage to personal property
d. loss of rental income that occurs when rental property becomes uninhabitable because of damage caused by a peril insured against

A

b. extra living costs incurred when the home becomes uninhabitable due to damage by a peril insured against

53
Q

An Assigned Risk Plan for Auto insurance does which of the following:

a. Makes insurance available for drivers who are unable to obtain it through normal channels
b. provides free auto insurance to those who cannot afford it
c. both a and b
d. neither a nor b

A

a. makes insurance available for drivers who are unable to obtain it through normal channels

54
Q

The Personal Auto policy’s Comprehensive Physical Damage coverage covers which of the following:

a. Damage caused by hitting an animal
b. theft
c. flood
d. all of the above

A

d. all of the above

55
Q

A Commercial Package policy must include

a. Commercial Causes of Loss form and Common Policy Conditions
b. Common Policy Declarations, Common Policy Conditions, two or more coverage forms
c. Common Policy Conditions and Commercial Property coverage part
d. Common Policy Declarations, Common Policy Conditions, Special Commercial Conditions

A

b. Common Policy Declarations, Common Policy Conditions, two or more coverage forms

56
Q

A hardware store is insured under a Business Income coverage form with the Special Causes of Loss form. Which of the following losses would be covered?

a. income lost when another hardware store opens down the street
b. income lost when the store closes for a week while the owner is in the hospital
c. income lost when the store closes for a week while damage from a burst water pipe is repaired
d. income lost when the store closes for a week to repair damage caused by an earthquake

A

c. income lost when the store closes for a week while damage from a burst water pipe is repaired

57
Q

Garagekeepers coverage insures against

a. physical damage to the insured’s own autos
b. liability for bodily injury to customers while on the premises
c. liability for damage to autos of others that are in the care, custody or control of the insured
d. medical expenses

A

c. liability for damage to autos of others that are in the care, custody or control of the insured

58
Q

The Employee Theft insuring agreement in the Commercial Crime policy covers loss of what type of property?

a. money
b. securities
c. property other than money and securities
d. all of the above

A

d. all of the above

59
Q

In Fidelity bonds, the party to whom the promise is made and for whose protection the bond is written is

a. obligee
b. surety
c. principal
d. bonder

A

a. obligee

60
Q

An insured’s home is covered by the DP-3 form. The policy provides $20,000 in coverage on a $50,000 home. When high winds destroy the roof, it is determine it will cost the insured $2000 to replace it. Assuming the actual cash value of the roof is $750, how much would the insured collect for this loss?

a. $2,000
b. $750
c. $1,000
d. $1,600

A

c. $1,000

61
Q

All of the following are areas of law under which a person can be found liable for injury or damage to another EXCEPT

a. negligence
b. assumption of risk
c. absolute liability
d. vicarious liability

A

b. assumption of risk

62
Q

The right to request an appraisal belongs to

a. the insured
b. the insurance company
c. Both A and B
d. Neither A nor B

A

c. both a and b

63
Q

Which Personal Auto coverage reimburses the insured without regard to fault, regardless of whether or not the state is subject to no-fault laws?

a. Property Damage Liability coverage
b. Bodily Injury Liability coverage
c. Both A and B
d. Medical Payments coverage

A

d. Medical Payments coverage

64
Q

All of the following must be included in a Commercial Property policy written under the Commercial Package policy program EXCEPT:

a. Value Reporting Form
b. Causes of Loss form
c. one or more Commercial Property coverage forms
d. Commercial Property Conditions form

A

a. Value Reporting Form

65
Q

If a building insured under the Building And Personal Property coverage form was vacant for three months

a. there would be no coverage for either a vandalism or a fire loss
b. both vandalism and fire losses would be covered, subject to at 15% penalty
c. a vandalism loss would not be covered , a fire loss would be covered, subject to a 15% penalty
d. a vandalism loss would be covered subject to a 15% penalty; a fire loss would be covered in full

A

c. a vandalism loss would not be covered, a fire loss would be covered, subject to a 15% penalty

66
Q

Coverage for products and completed operations is provided under which of the following contracts?

a. Occurrence CGL
b. Claims-made CGL
c. Both A and B
d. Neither A nor B

A

c. Both A and B

67
Q

Who of the following would have coverage for liquor liability losses under the Commercial General Liability policy? Assume there are no endorsements attached to the policy.

a. an advertising agency that serves liquor at a holiday party
b. a convenience store that sells beer and wine
c. both a and b
d. neither a nor b

A

a. an advertising agency that serves liquor at a holiday party

68
Q 
In Surety bonding, which party seeks and pays for the bond?
a. Obligee
b. Principal
c. Surety
D. Fiduciary
A

b. Principal

69
Q

A Surety bond is

a. a two-party contract
b. a three-party contract
c. a four-party contract
d. not considered a contract

A

b. a three party contract

70
Q

An insurance agent who needs insurance for his or her professional liability exposure should purchase

a. a CGL with a Professional Liability endorsement
b. an Employment Practices Liability endorsement
c. the standard CGL, which includes coverage for professional liability
d. an Errors and Omissions policy

A

d. an Errors and Omissions policy

71
Q

On what basis are losses to dwellings and other structures paid under the DP-2 and DP-3?

a. actual cash value
b. replacement cost
c. stated value
d. valued policy

A

b. replacement cost

72
Q

The insured has a $1 million Personal Umbrella policy with a $5,000 retention limit. For a $7,000 loss not covered by an underlying contract but covered under the Umbrella, the insurance company would pay

a. $5,000
b. $7,000
c. $2,000
d. nothing

A

c. $2,000

73
Q

In Ocean Marine insurance, a general average loss is

a. any loss that is not total
b. a loss in which the property is not completely destroyed, but the cost of salvage or repair would exceed the value of the property
c. a partial loss arising from a sacrifice of cargo to save remaining property
d. a partial loss that does not arise from jettison

A

c. a partial loss arising from a sacrifice of cargo to save remaining property

74
Q

A company that frequently rents autos and trucks for uses in the business should include which symbol in the Business Auto policy Declarations?

a. 8
b. 2
c. 9
d. 5

A

a. 8

75
Q

The Owners And Contractors protective form covers the insured for liability

a. arising out of products or completed operations
b. arising out of the insured’s premises
c. arising out of contractual liability
d. arising out of the operations of independent contractors or subcontractors

A

d. arising out of the operations of independent contractors or subcontractors

76
Q

In Crime insurance, the taking of property by stealth is included in the definition of

a. burglary
b. theft
c. robbery
d. forgery

A

b. theft

77
Q

All of the following can be covered under the Farm coverage part of the Commercial Package policy EXCEPT

a. farm buildings
b. crops
c. personal liability
d. household personal property

A

b. crops

78
Q

Which of the following coverages are included in the Dwelling policy? Assume there are no endorsements attached to the policy.

a. Property coverage for homes, other structures and personal property
b. Fair rental value coverage
c. Liability coverage
d. Both A and B

A

d. Both A and B

79
Q

Under the Personal Auto policy, who of the following is an insured for Liability coverage?

a. The named insured and family members for the use of any auto
b. anyone who uses the insured’s covered auto with the named insured’s permission
c. anyone who is riding with the insured at the time of the accident
d. Both A and B

A

d. both A and B

80
Q

The named insured on a Commercial General Liability policy is Sassy Department Store. Which of the following loses would be paid under the policy’s Medical Payments coverage?

a. a mannequin tips over and injures the store owner
b. a mannequin tips over and injures a store employee
c. a mannequin tips over and injures a customer
d. all of the above

A

c. a mannequin tips over and injures a customer

81
Q

An insured needs Liability, Property, and Medical Payments coverage for a 30-foot speedboat, with a 75 hp engine. This boat could be covered under a

a. Homeowners policy with no endorsements
b. Homeowners policy that includes the Watercraft endorsement
c. Boatowners or Watercraft Package policy
d. Personal Inland Marine form

A

c. Boatowners or Watercraft Package policy

82
Q

Who of the following would have a need for the Personal Inland Marine Personal Property form?

a. a condominium or apartment dweller who cannot obtain open peril coverage for personal property under the HO-4 or HO-6
b. an insured who needs additional insurance for valuable personal property
c. an insured who needs to insure her personal belongings while traveling
d. an insured who owns a small boat that cannot be covered under the Homeowners policy

A

a. a condominium or apartment dweller who cannot obtain open peril coverage for personal property under the HO-4 or HO-6

83
Q

A mutual insurance company is owned by

a. its stockholders
b. its policyholders
c. the insurance department in the state where it is incorporated
d. the federal government

A

b. its policyholders

84
Q

An insurance policy is considered a unilateral contract because

a. the policy does not provide any benefit to the insured unless a claim is paid
b. the insurance company is the only party that is legally obligated to perform under the insurance contract
c. the insured must comply with certain conditions in the policy for a claim to be paid
d. the insurance company writes the policy provisions, with little or no input from the insured

A

b. the insurance company is the only party that is legally obligated to perform under the insurance contract

85
Q

An insurance policy has a $25,000 per occurrence limit. If the insured has a $5,000 covered loss during the policy period, how much coverage is available for other covered losses that occur during the remainder of the policy period?

a. $25,000
b. $30,000
c. $20,000
d. $5,000

A

a. $25,000

86
Q

Lightning damages several valuable trees on the insured’s property. This loss is

a. excluded in all Homeowners forms
b. covered for up to 5% of the Coverage A limit in the HO-2, HO-3, HO-5, and HO-8 and up to 10% of the Coverage C limit in the HO-4 and HO-6, with a maximum of $500 per tree
c. covered in the HO-3 only for up to 5% of the Coverage A limit or maximum of $500 per tree
d. covered in all Homeowners forms, with no limit on the amount of coverage provided

A

b. covered for up to 5% of the Coverage A limit in the HO-2, HO-3, HO-5, and HO-8 and up to 10% of the Coverage C limit in the HO-4 and HO-6, with a maximum of $500 per tree

87
Q

Who of the following would be covered under the Medical Expenses coverage of the Businessowners policy?

a. a tenant of the insured who fell off the roof of the rented building
b. an employee of the insured who was injured in a fall off a stepladder in the insured’s store
c. a marathon runner who was injured while running past the insured’s premises
d. a customer who was injured while shopping in the insured’s store

A

d. a customer who was injured while shopping in the insured’s store

88
Q

Under the CGL, the products-completed operations hazard is subject to

a. a products completed operations aggregate limit
b. a per occurrence limit
c. the general aggregate limit
d. both A and B

A

d. both A and B

89
Q

A morale hazard

a. is the tendency for people with a higher-than-average risk of loss to seek insurance coverage
b. arises through an individual’s carelessness or irresponsible actions
c. is the tendency to create a loss on purpose to collect from the insurance company
d. arises from the condition, occupancy or use of the property itself

A

b. arises through an individual’s carelessness or irresponsible actions

90
Q

Which of the following losses would be covered by a Flood policy?

a. Water backs up through a sewer system and flood’s the insured’s bathroom
b. A tornado blows out all the windows in the insured’s home, and the house is flooded when it rains the next day
c. Heavy rains cause a lake to overflow and flood the basement and first floor of a house
d. The insured incurs additional living expenses when flooding forces her to evacuate her home

A

c. Heavy rains cause a lake to overflow and flood the basement and first floor of a house

91
Q

FAIR Plans prohibit the insurance company from

a. rejecting a risk solely because of environmental hazards
b. charging higher rates due to environmental hazards
c. requiring the insured to make improvements to property
d. all of the above

A

a. charging higher rates due to environmental hazards

92
Q

What is the primary difference between a Commercial Package policy and a Businessowners policy?

a. With a CPP, the insured can pick and choose the coverages included in the policy
b. the eligibility requirements for a Businessowners policy are less stringent than the CPPs.
c. The CPP is specifically designed for small businesses
d. There are fewer coverage options in the CPP

A

a. With a CPP, the insured can pick and choose the coverages included in the policy

93
Q

Furniture that is destroyed when a building burns down is an example of what kind of loss?

a. direct
b. indirect
c. consequential
d. residential

A

a. direct

94
Q

Each of the following business occupancies would be permitted in a dwelling insured under a Dwelling form EXCEPT:

a. a photographic studio
b. a beauty shop run by the insured and her daughter
c. a small shop carrying merchandise for sale
d. a professional office providing services to clients

A

c. a small shop carrying merchandise for sale

95
Q

What constitutes an agreement to enter into a valid contract?

a. an unconditional and unilateral promise to perform a duty
b. an exchange of consideration
c. an exercise of utmost good faith in disclosing all pertinent information
d. a specific offer by one party and acceptance by the other

A

d. a specific offer by one party and acceptance by another

96
Q

The Business Income coverage form applies to

a. loss of revenue while operations are suspended due to property damage
b. loss of income as the result of destruction of accounts receivable records
c. loss of cash receipts because of burglary or robbery
d. loss of money because of employee dishonesty

A

a. loss of revenue while operations are suspended due to property damage

97
Q

Under the Building and Personal property coverage form, what obligation, if any, does an insurer have to a mortgagee in the even the company wishes to cancel the policy?

a. the company has no obligation
b. the company must give the mortgagee 10 days written notice of cancellation in all cases
c. the company must notify the insured, who is then responsible for advising the mortgagee
d. the company must give the mortgagee 10 days written notice for cancellation due to nonpayment of premium and 30 days notice if cancellation is for any other reason

A

d. the company must give the mortgagee 10 days written notice for cancellation due to nonpayment of premium and 30 days if cancellation is for any other reason

98
Q

Under the Business Auto coverage form, which of the following is NOT considered to be mobile equipment?

a. forklift
b. farm machinery
c. self-propelled snow plow
d. bulldozer

A

c. self-propelled snow plow

99
Q

Each of the following kinds of property may be covered under a Building and Personal Property coverage form EXCEPT

a. permanently installed fixtures and machinery
b. the insured’s stock held for sale
c. an insured tenant’s use interest in improvements and betterments
d. account records and evidence of debt

A

d. account records and evidence of debt

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