Chapter 5-8 AJ

A carrier that is prevented by an accident from delivering the cargo aboard its ship may face an exposure called loss of freight, which is

The compensation the carrier receives for transporting cargo

Which one of the following statements is true regarding the rating of ocean marine insurance?

Judgment rating for ocean marine insurance is influenced by many factors, including the product
being shipped and the type of packing.

Which one of the following statements is correct with respect to electronic data processing equipment floaters?

Many cover special perils such as mechanical or electrical breakdown, and they may also insure covered property while it is in transit or at unlisted locations.

Which one of the following best describes an advantage to insurers of nonfiled compared with filed classes of inland marine insurance?

Nonfiled classes allow for the customization of policy provisions and rates for individual insureds.

For the owners of oceangoing cargo, the possibility of loss to the cargo while it is in the course of transit exists

Either aboard the vessel or on land between the vessel and the cargo's point of origin or destination.

Which one of the following filed inland marine policies covers merchandise that is being held for sale and can be used to cover the dealer's interest and/or a lender's interest?

Floor Plan Coverage Form

Which one of the following types of commercial property would most likely be insured using a "nonfiled" class of inland marine business?

The equipment used by a contractor

Which one of the following would be covered under the filed inland marine Valuable Papers and Records Coverage Form?

An architect's blueprints and plans

Which one of the following can be added to a builders risk policy to cover various incidental expenses that might result from a physical loss to a building project, such as additional interest, advertising expenses, or real estate taxes?

Soft costs coverage

Which one of the following ocean marine insurance policies or clauses covers an insured shipowner'sliability for injuries to the passengers on board a ship into which the insured ship collided?

Protection and indemnity (P&I) insurance

Which one of the following statements is correct with respect to contractors equipment floaters?

A large contractor may obtain blanket coverage applying to all equipment, whether owned, rented, or borrowed by the contractor.

What ocean marine insurance policy or clause covers the damage to an insured's ship if the insured ship collides with an object in the harbor?

Hull insurance policy

Which one of the following best describes the property covered by the filed inland marine Equipment Dealers Coverage Form?

The stock in trade of dealers that sell agricultural or construction equipment and customers'
equipment in the insured's care, custody, or control

Which one of the following is a purpose for buying difference in conditions (DIC) insurance?

It provides coverage for flood and earthquake exposures not covered by basic policies.

Judgment rating is used to rate

One-of-a-kind risks.

Ocean marine hull insurance policies usually cover on a specified perils basis rather than an "all-risks" basis. One of the specified causes of loss is "barratry." Which one of the following best describes the meaning of the term "barratry"?

Serious misconduct by the vessel's master or crew that is contrary to the owner's interest, such as a fraudulent or criminal act that causes damage to the vessel

Which one of the following ocean marine policies or clauses covers an insured shipowner's liability for damage to a docking pier struck by the insured vessel?

Protection and indemnity (P&I) insurance

Which one of the following ocean marine insurance policies or clauses covers a shipowner's liability for damage to the cargo on another ship if the insured ship runs into the other ship?

Collision liability clause

Which one of the following statements is true about judgment rating in ocean marine insurance?

Each insurer writing ocean marine insurance develops its own ocean marine rates, guided by the judgment of its underwriters

Rates for the traditionally nonfiled classes of inland marine insurance

Have become standardized to an extent for policies that are widely written.

An importer needs protection for its cargo not only while on board an oceangoing vessel, but also while it's being shipped by truck both to the vessel from the point of origin and from the vessel to the final destination. Which one of the following ocean

Warehouse to warehouse clause

What ocean marine insurance policy or clause covers an insured shipowner's liability for damage to cargo of others being transported by the insured on the ship?

Protection and indemnity (P&I) insurance

Which one of the following statements is correct with respect to motor truck cargo liability insurance?

Some policies limit coverage to losses caused by specified perils

A filed jewelers block coverage form is designed to meet the needs of

Small retail jewelers

Which one of the following ocean marine insurance policies or clauses covers the insured shipowner's liability for injuries to crew members of the insured ship in the event it collides with another vessel?

Protection and indemnity (P&I) policy

When freight is guaranteed, the party primarily exposed to the loss of freight is the

Shipper

Which one of the following inland marine forms is designed to cover photographic equipment and musical instruments used commercially by photographers, motion picture producers, professional musicians, and others?

Commercial Articles Coverage Form

The basic types of ocean marine insurance include which one of the following?

Protection and indemnity (P&I) insurance

The filed classes of inland marine business are those for which the

Policy forms and/or rates must be filed with the state insurance department.

What ocean marine insurance policy or clause, if any, covers damage to the insured vessel caused by serious misconduct by the members of the crew contrary to the owner's interest?

Hull insurance policy

The Random Bookstore (Random) is covered by an unendorsed Commercial General Liability (CGL) Coverage Form. A customer in the store tripped over her untied shoelace and fell, breaking her right arm. Which one of the following is a reason Random's insurer

The insured must be legally obligated before the insurer has the duty of paying

Which one of the following is true of the supplementary payments in the Commercial General Liability (CGL) Coverage Form?

The obligation to pay these supplementary payments ends when the limit of insurance is
exhausted

Which one of the following is an example of injury or damage arising from an occurrence that would be covered by the products and completed operations liability portion of the Commercial General Liability (CGL) Coverage Form?

A defective gas range manufactured by the insured explodes causing injury

Chuckie's chicken distributor researches the benefits of consuming chicken versus consuming beef. In November 2011, Chuckie's publishes a brochure outlining the potential health hazards of consuming beef and explaining why chicken is a healthier alternati

Material published prior to the policy period

International Toys (IT) manufactures toys in South Carolina and sells them to stores around the world. A customer in Europe is injured when one of the toys malfunctions and severs the customer's hand. The customer files suit in the United States. If IT is

Yes, because the toys were manufactured in the United States

The Business Auto Coverage form has no provision for what is known as "bobtailing." The motor carrier's coverage form does provide coverage for bobtailing. Which of the following activities is considered "bobtailing" as it relates to an owner-operator's l

Operating a power unit without a trailer

BBC Manufacturing (BBC) has an unendorsed Commercial General Liability (CGL) Coverage Form. BBC has expanded its sales outside the United States. Due to injuries from alleged defective products of BBC, lawsuits are brought in Europe, Mexico, Canada and Pu

There is coverage and defense for Canada and Puerto Rico, since these are covered territories.

Dale's Dive Shop rents a twenty-foot boat for an employee outing. While Dale is driving the boat on a lake, he accidentally injures a swimmer. Does Dale's Commercial General Liability (CGL) Coverage Form cover the swimmer's bodily injury?

Yes, because this watercraft qualifies as an exception to the watercraft exclusion

The supplementary payments section of the Commercial General Liability (CGL) Coverage Form describes which one of the following?

Specific items to be paid in addition to damages.

Morgan Company is involved in a lawsuit that is covered under its unendorsed Commercial General Liability (CGL) Coverage Form. Which one of the following would be covered under the supplementary payments section of the CGL policy?

Post judgment interest awarded by the judge

Which one of the following statements is true regarding Coverage C�Medical Payments of the Commercial General Liability policy?

Medical payments coverage is a means of making prompt settlements.

Fancy Dress Shop is a small specialty clothing boutique for women. Liability claims against Fancy Dress Shop would most likely arise from its

Premises and operations exposure

Which one of the following claims would be covered under Coverage B - Personal and Advertising Injury Liability of the Commercial General Liability Coverage Form (CGL)?

A store manager accuses a young man of shoplifting, apprehends him, and locks him in a storage room until the police arrive. When it is discovered that the young man is innocent, he files a claim against the store.

Lucy, the owner of Lucy's Flower Shop, was delivering a vase of flowers to a customer, Mrs. White. When Mrs. White opened her front door, her dog ran outside, knocking the flowers from Lucy's hands, and causing the vase to shatter and injure Mrs. White. A

No, because the medical expenses must be incurred and reported to the insurer within one year after the date of the accident.

Under a Commercial General Liability (CGL) policy, an insured is found to be legally liable to pay medical expenses as well as loss of earnings to a claimant. This describes which one of the following types of damages?

Special damages

Which one of the following statements about interest that accrues on the amount of a judgment before the actual entry of the judgment by the court is true?

It is called prejudgment interest.

Betty's Birdhouses constructs and sells birdhouses. Betty discovered a fungus in the wood used to construct the birdhouses that would kill birds. Betty withdrew her entire stock of birdhouses to avoid any claims from environmental organizations for loss t

No, because the cost to withdraw Betty's product is excluded

Bill and some friends went to Joe's Bar and Grill for a few drinks after work. On his way home, Bill struck and injured a pedestrian. Bill was ticketed and convicted of driving while intoxicated (driving under the influence). The pedestrian sued Joe's Bar

A Liquor Liability Coverage Form

Nathan's Furniture Store delivers a sofa to a customer. While placing the sofa in the living room, the delivery person breaks the customer's coffee table. The delivery person admits that the accident was his fault and the customer requests that a claim be

No, because Coverage B does not respond to liability claims for property damage

John Smith owns a bookstore that is covered under an unendorsed Commercial General Liability (CGL) Coverage Form. A customer falls in the store resulting in a covered lawsuit against Smith. Smith is asked to testify in court by the defense attorney; Smith

Cover the lost earnings up to $250.

The Commercial General Liability (CGL) Coverage B�Personal and Advertising Injury Liability provides coverage for which one of the following?

False arrest

John, a store owner, has an unendorsed Commercial General Liability (CGL) Coverage Form. A customer has sued John alleging he was injured when John restrained him and a scuffle ensued. John claims he used reasonable force to restrain the customer from dam

Coverage and defense applies as John was using reasonable force to protect his property

Under the Commercial General Liability (CGL) Coverage Form, medical payments coverage applies to which one of the following?

A volunteer worker of the named insured.

An insured plumbing contractor is installing copper water lines in a new building for a general contractor. While soldering a connection, the plumber causes a fire that damages the building, including the copper water lines. The plumber is covered under a

Coverage applies to the building damage but excludes the damage to the copper water lines being installed by the plumber.

Internet blogger Tom operates a public interest group on the Internet. In posting his opinions, Tom falsely accused the governor of his state of criminal behavior. Tom's Commercial General Liability (CGL) Coverage Form will most likely exclude coverage fo

Electronic chatrooms or bulletin boards exclusion

Northern Company (Northern) uses a large forklift in its operations. The forklift is subject to the state compulsory auto insurance law and has a license tag. In the process of moving some items on Northern's premises, the operator loses control of the fo

No coverage applies under the CGL Coverage Form because the forklift is considered to be an
"auto," and coverage would be provided by a commercial auto policy

A contractor was hired by a railroad to work on a bridge adjacent to railroad tracks. Which one of the following types of insurance coverage would best respond to claims against the railroad arising out of the contractor's work?

A Railroad Protective Liability Coverage Form purchased by the contractor

XYZ contractor, covered under an unendorsed Commercial General Liability (CGL) Coverage Form, is installing kitchen cabinets in a customer's home. The contractor manufactured the cabinets. While the contractor is fastening a cabinet, it falls and injures

Premises and operations liability applies because the contractor was in the process of installing
the cabinets

Shady Stories, a tabloid newspaper, prints a false story about a local politician. Shady knows the story is false but thinks it will sell a lot of papers. The politician claims damages from Shady. Shady's Commercial General Liability (CGL) Coverage Form e

Written material that was known to be false

Carl's Cabinets sells and installs cabinets in apartment buildings. After installation but before an apartment is occupied, two of the cabinets are damaged when they fall from the wall as a result of improper installation. Carl's Commercial General Liabil

Damage to Your Work