Question 1

Which of the following is covered under the building and personal property coverage form?

Accepted Answer

A) the insured's stock and inventory when located inside the insured building 
B) vehicles owned by the insured 
C) aircraft and watercraft owned by the insured 
D) a manufacturing building owned by a key customer or key supplier of the insured. 
A) the insured's stock and inventory when located inside the insured building 
B) vehicles owned by the insured 
C) aircraft and watercraft owned by the insured 
D) a manufacturing building owned by a key customer or key supplier of the insured.

Question 2

One inland marine coverage form is the accounts receivable coverage form.In which of the following cases would the purchaser of this form (the insured)be indemnified through the coverage?

Accepted Answer

A) if the insured cannot pay amounts owed because the purchaser has become insolvent 
B) if the insured cannot pay amounts owed because the purchaser has suffered an insured physical damage loss 
C) if the insured cannot collect accounts receivable because of the destruction of records 
D) if the insured cannot collect accounts receivable because the purchaser extended credit to poor credit risks 
A) if the insured cannot pay amounts owed because the purchaser has become insolvent 
B) if the insured cannot pay amounts owed because the purchaser has suffered an insured physical damage loss 
C) if the insured cannot collect accounts receivable because of the destruction of records 
D) if the insured cannot collect accounts receivable because the purchaser extended credit to poor credit risks

Question 3

Reimbursement for spoilage of frozen food caused by failure of a refrigeration unit at a frozen foods processor can be covered under

Accepted Answer

A) equipment breakdown insurance. 
B) extra expense insurance. 
C) builders risk insurance. 
D) difference in conditions insurance. 
A) equipment breakdown insurance. 
B) extra expense insurance. 
C) builders risk insurance. 
D) difference in conditions insurance.

Question 4

Which of the following perils is not included in the causes-of-loss basic form of the ISO commercial package policy?

Accepted Answer

A) fire 
B) lightning 
C) explosion 
D) flood 
A) fire 
B) lightning 
C) explosion 
D) flood

Question 5

All of the following are extensions of coverage under the building and personal property coverage form EXCEPT

Accepted Answer

A) newly acquired or constructed property. 
B) valuable papers and records. 
C) personal property temporarily off the premises. 
D) currency and securities. 
A) newly acquired or constructed property. 
B) valuable papers and records. 
C) personal property temporarily off the premises. 
D) currency and securities.

Question 6

All of the following statements about inland marine forms are true EXCEPT

Accepted Answer

A) A mail coverage form covers securities in transit by first-class mail,registered or certified mail,or express mail. 
B) A commercial articles coverage form is used to insure photographic equipment and musical instruments. 
C) A jewelers block coverage form is used by individuals to insure jewelry limited in coverage by the homeowners form. 
D) The signs coverage form covers neon,mechanical,and electrical signs. 
A) A mail coverage form covers securities in transit by first-class mail,registered or certified mail,or express mail. 
B) A commercial articles coverage form is used to insure photographic equipment and musical instruments. 
C) A jewelers block coverage form is used by individuals to insure jewelry limited in coverage by the homeowners form. 
D) The signs coverage form covers neon,mechanical,and electrical signs.

Question 7

Which of the following statements about the causes-of-loss special form of the ISO commercial package policy is (are)true?
I.The causes-of-loss special form insures against direct physical loss.
II.The causes-of-loss special form excludes loss caused by earthquake.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 8

John Jones is risk manager of Alpha-2-Omega Company.John wants coverage for "direct physical loss" ("open perils" coverage)under the business and personal property (BPP)coverage form.Which causes-of-loss form should he select?

Accepted Answer

A) special form 
B) basic form 
C) standard form 
D) broad form 
A) special form 
B) basic form 
C) standard form 
D) broad form

Question 9

Which of the following statements about the businessowners policy is (are)true?
I.It is designed to meet the insurance needs of large manufacturing firms.
II.It is a package policy designed to meet the basic property and liability needs of an insured in a single contract.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 10

Renee is risk manager of XYZ Company.She purchased a Commercial Package Policy for her company and added one of the optional coverages.This option suspends the coinsurance clause and substitutes a new agreement covering any loss in the same proportion that the limit of insurance purchased bears to a value specified in the declarations.This provision is known as

Accepted Answer

A) waiver of inventory coverage. 
B) inflation guard coverage. 
C) agreed value coverage. 
D) replacement cost coverage. 
A) waiver of inventory coverage. 
B) inflation guard coverage. 
C) agreed value coverage. 
D) replacement cost coverage.

Question 11

Which of the following statements about the extra expense coverage form is (are)true?
I.It provides coverage for the increased cost that must be paid to continue operations during a period of restoration.
II.It provides coverage for lost business income if a key customer or key supplier experiences a loss.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 12

Which of the following statements about the building and personal property coverage form is (are)true?
I.A limited amount of coverage is provided for pollutant cleanup and removal at the described premises if the release or discharge of the pollutant results from a covered cause of loss.
II.Fire department service charges are specifically excluded because they are a normal cost of doing business.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 13

Which of the following statements about the provisions of the building and personal property coverage form is (are)true?
I.A separate deductible must be satisfied for each building damaged in the same occurrence.
II.Under the replacement cost option,there is no deduction for depreciation.

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Question 14

Which of the following statements about the ISO businessowners policy is true?

Accepted Answer

A) The current form is written on a named-perils basis,but an "open-perils" (all risks)endorsement is available. 
B) It provides business income and extra expense coverage as an additional coverage. 
C) The policy covers business personal property but does not cover buildings. 
D) The policy is designed to meet the special needs of large businesses. 
A) The current form is written on a named-perils basis,but an "open-perils" (all risks)endorsement is available. 
B) It provides business income and extra expense coverage as an additional coverage. 
C) The policy covers business personal property but does not cover buildings. 
D) The policy is designed to meet the special needs of large businesses.

Question 15

Which ocean marine coverage provides comprehensive liability insurance for property damage caused by the ship to piers and docks,damage to the ship's cargo,and injury to the passengers or crew?

Accepted Answer

A) collision liability clause 
B) hull insurance 
C) freight insurance 
D) protection and indemnity insurance 
A) collision liability clause 
B) hull insurance 
C) freight insurance 
D) protection and indemnity insurance

Question 16

XYZ,Inc.would suffer serious financial consequences if either of its two major customers were shut down and could not purchase XYZ products.Which of the following types of consequential loss protection would provide protection against this exposure?

Accepted Answer

A) leasehold interest 
B) extra expense 
C) marine insurance 
D) business income from dependent properties 
A) leasehold interest 
B) extra expense 
C) marine insurance 
D) business income from dependent properties

Question 17

Inter-Ocean Transfer owns 12 large cargo ships which transport goods.Inter-Ocean Transfer can obtain physical damage insurance on these vessels by purchasing

Accepted Answer

A) hull insurance. 
B) cargo insurance. 
C) protection and indemnity insurance. 
D) freight insurance. 
A) hull insurance. 
B) cargo insurance. 
C) protection and indemnity insurance. 
D) freight insurance.

Question 18

An Inter-Ocean Transfer cargo ship was forced to jettison some cargo in heavy seas.The various interests in the voyage at the time the property was jettisoned were   If $400,000 worth of iron ore was jettisoned,for how much of this amount would Inter-Ocean Transfer be responsible under general average?

Accepted Answer

A) nothing 
B) $160,000 
C) $200,000 
D) $400,000 
A) nothing 
B) $160,000 
C) $200,000 
D) $400,000

Question 19

Which of the following statements about the business income coverage form is true?

Accepted Answer

A) Business income is defined as gross earnings before taxes. 
B) Payroll is excluded unless it is specifically added. 
C) The form covers loss of business income and extra expenses incurred during restoration. 
D) The form can be used by a manufacturing operation only. 
A) Business income is defined as gross earnings before taxes. 
B) Payroll is excluded unless it is specifically added. 
C) The form covers loss of business income and extra expenses incurred during restoration. 
D) The form can be used by a manufacturing operation only.

Question 20

The exterior walls,the roof,and the plumbing,heating and air conditioning systems of a residential condominium can be insured through the purchase of which of the following forms?
I.Condominium association coverage form
II.Condominium commercial unit-owners coverage form

Accepted Answer

A) I only 
B) II only 
C) both I and II 
D) neither I nor II 
A) I only 
B) II only 
C) both I and II 
D) neither I nor II

Exam 25: Commercial Property Insurance

Which of the following is covered under the building and personal property coverage form?

One inland marine coverage form is the accounts receivable coverage form.In which of the following cases would the purchaser of this form (the insured)be indemnified through the coverage?

Reimbursement for spoilage of frozen food caused by failure of a refrigeration unit at a frozen foods processor can be covered under

Which of the following perils is not included in the causes-of-loss basic form of the ISO commercial package policy?

All of the following are extensions of coverage under the building and personal property coverage form EXCEPT

All of the following statements about inland marine forms are true EXCEPT

Which of the following statements about the causes-of-loss special form of the ISO commercial package policy is (are)true? I.The causes-of-loss special form insures against direct physical loss. II.The causes-of-loss special form excludes loss caused by earthquake.

John Jones is risk manager of Alpha-2-Omega Company.John wants coverage for "direct physical loss" ("open perils" coverage)under the business and personal property (BPP)coverage form.Which causes-of-loss form should he select?

Which of the following statements about the businessowners policy is (are)true? I.It is designed to meet the insurance needs of large manufacturing firms. II.It is a package policy designed to meet the basic property and liability needs of an insured in a single contract.

Which of the following statements about the provisions of the building and personal property coverage form is (are)true? I.A separate deductible must be satisfied for each building damaged in the same occurrence. II.Under the replacement cost option,there is no deduction for depreciation.

Which of the following statements about the ISO businessowners policy is true?

Which ocean marine coverage provides comprehensive liability insurance for property damage caused by the ship to piers and docks,damage to the ship's cargo,and injury to the passengers or crew?

XYZ,Inc.would suffer serious financial consequences if either of its two major customers were shut down and could not purchase XYZ products.Which of the following types of consequential loss protection would provide protection against this exposure?

Inter-Ocean Transfer owns 12 large cargo ships which transport goods.Inter-Ocean Transfer can obtain physical damage insurance on these vessels by purchasing

Which of the following statements about the business income coverage form is true?

The exterior walls,the roof,and the plumbing,heating and air conditioning systems of a residential condominium can be insured through the purchase of which of the following forms? I.Condominium association coverage form II.Condominium commercial unit-owners coverage form

Risk and Its Treatment

Insurance and Risk

Introduction to Risk Management

Advanced Topics in Risk Management

Types of Insurers and Marketing Systems

Insurance Company Operations

Financial Operations of Insurers

Government Regulation of Insurance

Fundamental Legal Principles

Analysis of Insurance Contracts

Life Insurance

Life Insurance Contractual Provisions

Buying Life Insurance

Annuities and Individual Retirement Accounts

Health-Care Reform; Individual Health Insurance Coverages

Employee Benefits: Group Life and Health Insurance

Employee Benefits: Retirement Plans

Social Insurance

The Liability Risk

Homeowners Insurance,section I

Homeowners Insurance,section II

Auto Insurance

Auto Insurance and Society

Other Property and Liability Insurance Coverages

Commercial Liability Insurance

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