Study 1

Question 1

Define fortuitous

Answer 1

A sudden and accidental event

Question 2

What is the difference between named perils and all risk policies

Answer 2

Named perils is defined by the perils listed, and all risk is defined by the exclusions listed.

Question 3

Define contra proferentem

Answer 3

legal term that provides that any ambiguity in a contract must be interpreted against the person who drew the contract because that person had the opportunity to make it clear

Question 4

Define property insurance

Answer 4

First party insurance that indemnifies the owner or user of the property for its loss or its ability to produce income when the loss is covered by an insured peril

Question 5

Define indemnity

Answer 5

To put the jnsured back into the same financial position or as close to before a loss.

Question 6

Define insurable interest

Answer 6

Someone who benefits from the ongoing existence of the property or be prejudiced by its loss

Question 7

Define contract

Answer 7

• A contract is an agreement or promise between two or more persons or parties that is intended to be legally enforceable

Question 8

What are the key components of a contact

Answer 8

Agreement • Between legally capable parties for • Consideration (such as money) & • Demonstrating intent to • Do something legal

Question 9

What are the 3 additional principles to an insurance contract

Answer 9

Indemnity • Insurable interest • Utmost good faith – uberrimae fidei?

Question 10

Define Utmost good faith uberrimae fidei

Answer 10

To act with high standard of honesty and disclose facts that a reasonable ought to know are material or relevant

Question 11

What does a commercial policy cover

Answer 11

Buildings
Stocks
Equipment

Question 12

Within the commercial property, what insurance classes can also be provided

Answer 12

• Inland Marine Insurance
• Aviation Insurance
• Crop Insurance

Question 13

What does a builders risk policy cover

Answer 13

Loss or damage to property while under construction

Question 14

Besides damage to builders risk what else does it cover

Answer 14

Loss or damage to crops
Also applied to loss or damage to equipment and fixtures used during construction or renovation

Question 15

Finish the sentence “earth quake and flood is usually exlcuded on most policies unless…”

Answer 15

Additional endorsement is added for Additional premium