Which of the following may be covered by Electronic Data Processing coverage from under an Inland Marine policy?
Computer hardware that is specifically scheduled, Extra expense the insured incurs to continue the business following a loss, and Data processing media, including magnetic tapes or paper tapes, punch cards and discs
All of the following statements are true regarding employee dishonesty optional coverage under the businessowners policy (BOP) EXCEPT
it provides coverage for all employees, even those employees who were terminated in the past 90 days
By definition, an employee covered under the employed dishonesty option coverage
is one who is currently employed or who was terminated in the past 30 days
All of the following statements are true regarding employee dishonesty optional coverage under the businessowners policy (BOP),
Losses result from dishonest acts of any of the insured's employees, Coverage includes all property, including money and securities owned or held by the insured., It provides coverage for direct loss or damage to business personal property
Three years ago, an insured moved to an unfurnished apartment. She bought new furniture that cost $9,000. Last week, there was a fire in the apartment that destroyed the furniture. Replacement cost is $10,500. The adjuster told the insured her furniture d
$8,000, When insurance coverage is written on an actual cash value basis, losses paid are for the replacement cost (at the time of loss), minus depreciation
The type of crime policy under which coverage is triggered by a loss that happens during the policy period but is not necessarily discovered during the policy period is the
loss sustained form
The loss sustained form
is used for losses that happen during the policy period but may not have been discovered during the policy period. The loss sustained form is one of the conditions contained in the crime general provisions forms, which contain conditions and exclusions ap
All of the following statements concerning coinsurance are true, EXCEPT
the coinsurance formula also will be applied to total losses
coinsurance
it is used to help adequacy and equity in rates, the insured agrees to maintain insurance equal to some specified percentage of the value of the property, if the insurance carried is less than required, the insurance may not cover the whole loss
In the event of a total loss, the coinsurance clause ______________, and the face amount of the policy is paid
does not operate
All of the following are unfair claims settlement practices EXCEPT
suggesting negotiations in settling the claim
Unfair claims settlement practices include
refusing to pay claims without conducting a reasonable investigation, failing to adopt and implement reasonable standards for settling claims, and failing to acknowledge pertinent communication pertaining to a claim
When settling claims
negotiation can come into play
Which is not a contract bond?
litigation bond
A litigation bond
is a court bond guaranteeing that someone involved in a court case gets money due after the case is decided.
An insured's roof cost $4,000 when installed 5 years ago. It has been damaged by hail and must be replaced. The new roof will cost $6,000 at today's prices. If the roof has been depreciating at $200 per year and his policy is ACV, how much will it pay tow
$5,000, ACV is calculated as replacement cost less depreciation
ACV
is calculated as replacement cost less depreciation.
Business income coverage form
if the insured and insurer are unable to come to agreement as to the value of the loss, either party may make a written demand for an appraisal, the insured agrees to resume all or part of operations as quickly as possible, the insured is reimbursed for p
Under the provisions of the business income coverage form, all of the following are true, EXCEPT
the insured is reimbursed for the loss from the date of loss to date of restoration or policy expiration date, whichever comes first.
A business income coverage form
will pay beyond the expiration date of a policy. It will pay until the business is restored or the limits of coverage are exhausted.
A life insurance agent took 32 hours of classes while fulfilling her continuing education requirements. How many of the excess hours will carry over to her next renewal period?
6
The causes of loss found in the Standard Form Businessowners policy are identical to the causes of loss found in
Commercial Building and Business Personal Property Coverage Form, Basic causes of loss
The Standard Form of the BOP covers loss from the same perils as
the Commercial Property Basic Causes of Loss
A deli owner has a businessowners liability policy. When a customer slipped and hurt herself at the deli, the liability policy paid for medical expenses. The customer, however, now is suing the business owner because she claims there was no caution sign w
Pay to defend the policyowner in the lawsuit because liability coverage contains a duty-to-defend provision
In addition to the promise to pay all sums that the insured becomes legally obligated to pay, liability coverage includes
a promise to defend the insured in any lawsuit involving the type of liability insured under the coverage
Uninsured Motorist property damage coverage is subject to a deductible per accident of
$250
Uninsured Motorist Property Damage coverage is subject to a deductible of
$250 per accident.
Greg owns several buildings, each at a different location and insured on a separate policy. What type of coverage does Greg have?
specific
Specific insurance
provides a specific amount of coverage for each property
Blanket Insurance Policy
provides coverage for more than one property with a single limit of coverage.
Which of the following best describes business income?
net profit or loss that would have incurred, plus normal operating expenses, including payroll, that continues during the suspension
Business income
means the sum of net profit or loss that would have incurred, and normal operating expenses, including payroll, that continues during the suspension.
In insurance, an offer is usually made when
the application is submitted
In insurance, the offer is usually made by the applicant in the form of the application. Acceptance occurs
when the underwriter approves the application, provided it's accompanied by the initial premium. Otherwise, acceptance occurs when the insurer receives payment, after the application has been approved.
Which one of the following lists all the required elements for establishing a charge of negligence?
legal duty owed, breach of legal duty owed, proximate cause, damages
Negligence
is failure to do what a reasonable and prudent person would do under the same circumstances. Four elements must be present for negligent liability to exist; legal duty owed, breach of legal duty owed, proximate cause, damages
Which of the following is NOT settled on an actual cash value basis while covered under the business property coverage form?
valuable papers and records
Valuable papers and records under the business property coverage form are valued
at the cost of blank materials for reproducing the records and labor to copy the records.
The business income coverage form covers consequential loss of business income that occurs when a business must suspend operations because of a direct loss. Which of the following terms best describes the nature of this type of coverage?
time element
The business income coverage form covers the consequential loss of business income that occurs when a business must suspend operations because of a direct loss. These forms are also called
time element forms because of the direct relation of the time a business is unable to operate to the amount of the loss.
strict liability
is applied in product liability cases, claimants may need to provide proof that a product defect caused an injury, is imposed regardless of fault
All of the following statements describe the concept of strict liability EXCEPT
it is imposed on defendants engaged in hazardous activities.
Strict liability
is commonly applied in product liability cases. The business is then liable for defective products, regardless of fault or negligence.
Which of the following is a statutory defense?
comparative negligence
Many states, by statute, require that damages be apportioned based
upon the degree of negligence of each party in an accident
Employee theft coverage may be written on any of these forms
blanket coverage, name schedule coverage, or position schedule coverage.
Which of the following is included under the physical damage coverage of a personal auto policy?
sound reproduction equipment permanently installed in the covered auto
Sound reproduction equipment is covered under the physical damage coverage of a personal auto
if installed by the manufacturer or installed later where the manufacturer would have installed the equipment
Which of the following describes contributory negligence?
any degree of negligence by the injured party may bar recovery
In states that have contributory negligence laws, the defendant must ______ have been at fault for an accident and the claimant free of fault if the claimant is to be successful in collecting damages
100%
Burglary is defined as
taking of property from within the premises leaving visible signs of forced entry
Signs of forced entry or exit to closed premises
must be present for burglary coverage to apply
The major portion of the premium for an equipment breakdown policy pays
for inspections and examinations
Inspecting the machinery to be insured
is critical to the underwriting of equipment breakdown coverage. Finding flaws that could lead to losses and requiring corrective action is the purpose.
In commercial policies, who has control of the policy?
first named insured
The first named insured
has control of a commercial policy, is the only insured who may cancel it or request changes to it and is responsible for paying the premiums and reporting losses.
Which of the following personal auto coverages would pay for the insured's travel expenses and loss of earnings while involved in the settlement process of a covered loss?
liability coverage
Supplementary payments, found in Part A - Liabilityof personal auto coverage
include expenses incurred by the insured at the insurer's request, including $200 per day for attending trials or hearings
An insured is looking over his businessowners policy and wants to know exactly what "coverage territory" and "mobile equipment" mean. He can find the definitions of these terms in the
business liability coverage form
The business liability coverage form in a BOP
contains definitions of advertising injury, bodily injury, coverage territory, insured contract, mobile equipment, personal injury, products completed operations hazard, insured product, and other terms - all of which are similar or the same as those disc
BOP standard form includes without requesting coverage extensions
Preservation of Property, Fire department service charge, Debris Removal.
All of the following coverages are included in the BOP standard form without requesting coverage extensions, EXCEPT
Outdoor property.
Outdoor property
is a coverage extension available under the BOP. The BOP extension applies to damage to outdoors fences, antennas, signs (not attached to building), trees, shrubs, and plants caused by the perils fire, lightning, explosion, aircraft or riot commotion. The
Which of the following is NOT an element of negligence?
unbroken chain
There are four essential elements of negligence
duty, breach, injury, and unbroken chain
Libel
is a type of intentional tort
What is the purpose of the regulation on aftermarket crash parts?
to provide disclosure to consumers regarding the use and costs of those parts
The purpose of regulation on aftermarket crash parts law is
to regular the use of aftermarket crash parts by requiring disclosures