Sample Test Questions

Question 1

Advantages of survey

Answer 1

1. Assist broker when identifying potential losses
2. Assists brokers not to sell coverage’s client doesn’t need
3. Assists brokers in collecting info needed by insurance companies

Question 2

3 ways bailees can insure against responsibilities

Answer 2

1. Include the value of customer’s property in the amount of stock insurance provided by their commercial insurance property policy.
2. Purchase a separate policy insuring the legal liability of the bailee for loss
3. Purchase a specialized bailee’s customer’s policy

Question 3

contractor’s equipment floater==> auto extension when new tools are bought

Answer 3

these items are automatically insured subject to the following provisions:

• Coverage is only provided for newly acquires equipment which is similar to that fro which coverage is schedules under the policy
• Coverage ceases after 30 days from the date of acquisition
• The amount of insurance is limited

Question 4

Builders risk Broad form

Answer 4

This is the broadest coverage form developed by IBC for buildings in course of construction. It is modeled after the commercial building, equipment and stock–Broad form policy used to insure ongoing business operations.

Question 5

ID 3 types of Bill’s of Lading

Answer 5

1. Standard Bill of Lading
2. Valued Bill of Lading
3. Released Bill of Lading

Question 6

Five common characteristics of business interruption insurance forms
(IAPPI)

Answer 6

1) Insure against same perils as insured by the property policy;
2) Contracts of indemnity;
3) Period of indemnity is not limited by the policy period;
4) Provide payment of expenses necessarily incurred to reduce amount of loss;
5) Provide payment when access to insured’s premises is prohibited by order of civil authority.

Question 7

4 areas of crime insurance policies

Answer 7

1) Property covered
2) Perils insured
3) Location of property covered
4) Persons causing the loss

Question 8

The requirements that must be met by the insured when a Co-Insurance Clause is replaced with a Stated Amount Co-insurance Clause.

Answer 8

1) The insured must submit a statement of values to the insurer that represents 100% of the value of all property insured, verified by appraisal or other method acceptable to the insurer;
2) These values must be insured for the duration of policy period.

Question 9

The purpose of a Stated Amount Co-Insurance Clause

Answer 9

To replace the provisions of the standard co-insurance clause with the requirements of the stated amount co-insurance clause

Question 10

The difference between “Replacement Cost” and “Actual Cash Value” (ACV)

Answer 10

ACV takes depreciation into consideration, whereas Replacement Cost does not.

Question 11

6 advantages of the Broad Form policy

Answer 11

1) theft losses to stock and equipment is insured
2) water damage from rupture of overhead water lines is insured
3) impact of vehicles operated by insured or employees is covered
4) many types of collapse are insured
5) all types of smoke damage except smoke from industrial operations
6) all other losses not specifically excluded

Question 12

Inherent vice

Answer 12

Something within a commodity or other kind of property that causes its demise over time

Question 13

The four terms of the Locked Vehicle Warranty

Answer 13

1) The vehicle containing the property must be equipped with a fully enclosed body or compartment;
2) All doors are securely locked and the windows closed;
3) Access or entry to the vehicle is gained through the use of force;.
4) There must be visible signs of force used to gain entry into the body or compartment of the vehicle.