Question 1

Holiday DeCor Company is insured by a commercial general liability policy (CGL).Holiday DeCor rented a storage facility for one month to store some excess inventory.While visiting the storage facility,a Holiday DeCor employee discarded a cigarette.The resulting fire severely damaged the storage facility.Which statement is true regarding coverage of this damage under the CGL?

Accepted Answer

A)  There is no coverage as the damage occurred at a rented premises.
B)  There is no coverage because property damage liability is excluded.
C)  The damage is covered under the fire legal liability coverage.
D)  There is no coverage because an employee of Holiday DeCor caused the loss. C

Question 2

Which of the following is (are)covered under an unendorsed Commercial General Liability Policy?
I.False arrest of a customer wrongly accused of shoplifting
II.Publication of material that violates an individual's right to privacy

Accepted Answer

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

Question 3

Which of the following statements about physicians,surgeons,and dentists liability insurance is true?

Accepted Answer

A)  Liability coverage is restricted to accidental acts.
B)  The policy eliminates the need for medical practitioners to purchase general liability insurance.
C)  The insurer must obtain the consent of medical practitioners before the insurer can settle claims.
D)  The policy covers the physician for the negligent acts of an employee. D

Question 4

The general liability policy covers bodily injury or property damage caused by "an accident,including continuous repeated exposure to substantially the same general harmful conditions." This cause is loss is called a(n)

Accepted Answer

A)  occurrence.
B)  accident.
C)  event.
D)  incident.

Question 5

Which of the following losses would be covered under a Commercial General Liability Policy that has no endorsements?
I.The named insured rented a building and an employee of the named insured negligently started a fire at the rented building.
II.The cost to recall defective products

Accepted Answer

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

Question 6

A-1 Electrical Service is an electrical contractor that employs 14 electricians.A-1 faces many loss exposures.One general liability exposure arises out of faulty work that A-1 electricians may perform for customers at their homes or businesses.This liability exposure is known as

Accepted Answer

A)  premises and operations liability.
B)  products liability.
C)  completed operations liability.
D)  contingent liability.

Question 7

All of the following statements about liability coverage under the businessowners policy are true EXCEPT

Accepted Answer

A)  Liability arising out of personal injury is covered as part of the insuring agreement.
B)  Medical payments coverage is provided.
C)  Employees acting within the scope of their employment are excluded from coverage.
D)  Coverage is included for the legal costs of defending the insured.

Question 8

HRC Company purchased an unendorsed ISO Commercial General Liability (CGL)policy.Which of the following claims would be covered under the CGL?

Accepted Answer

A)  workers compensation liability
B)  liability arising from intentional acts
C)  personal and advertising injury liability
D)  professional liability

Question 9

Jenkins Company purchased a commercial umbrella policy with a $10 million limit and a $100,000 self-insured retention.The insurer required Jenkins Company to carry a $1 million per-occurrence limit on its general liability policy and a $1 million per-occurrence limit on its business auto policy.Jenkins purchased these required limits.A Jenkins driver was negligent while operating a company vehicle and killed another motorist.The court ruled that Jenkins must pay $5 million.How much of this amount will be paid by the umbrella policy?

Accepted Answer

A)  $1.0 million
B)  $3.9 million
C)  $4.0 million
D)  $5.0 million

Question 10

The Commercial General Liability (CGL)Policy covers liability arising out of which of the following loss exposures?
I.Bodily injury of an employee of the insured arising out of and in the course of employment
II.Bodily injury of a customer injured by a defective product manufactured by the insured

Accepted Answer

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

Question 11

ABC Company purchased an ISO Commercial General Liability Policy.The agent who sold ABC the coverage noted that the coverage trigger in this policy was different from the trigger in the previous policy.The new policy covers only those claims which are first reported during the policy period,provided the event occurred after a retroactive date.This type of policy is known as

Accepted Answer

A)  extended reporting coverage.
B)  claims-made coverage.
C)  accident only coverage.
D)  occurrence coverage.

Question 12

Which of the following is (are)covered under a claims-made policy?
I.Claims arising out of occurrences which take place during the policy period,regardless of when the claim is made
II.Claims first reported during the policy period,provided the event occurred after a retroactive date stated in the policy

Accepted Answer

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

Question 13

Some directors and officers (D&O)liability policies include an insuring agreement that covers the legal liability of a corporation arising out of the acts of directors and officers.This coverage for the organization is called

Accepted Answer

A)  blanket coverage.
B)  corporate reimbursement coverage.
C)  personal liability of directors and officers coverage.
D)  entity coverage.

Question 14

Which of the following statements about workers compensation insurance is (are)true?
I.Under the workers compensation part of the policy,the insurer agrees to pay the benefits required by the workers compensation law of any state listed in the policy declarations.
II.The employers liability part of the policy provides workers compensation benefits when employees are working in states other than those listed in the policy declarations.

Accepted Answer

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

Question 15

Which of the following statements regarding employer liability insurance under the workers compensation insurance coverage form is (are)true?
I.Employer liability insurance covers an employee injury that occurs on the job but may not be considered work-related.
II.If an injured employee sues a negligent third-party,and the third-party sues the employer for contributory negligence,the lawsuit is covered under employer liability insurance.

Accepted Answer

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

Question 16

Executives of a Fortune 500 firm blocked an acquisition attempt by a larger company.When the stockholders learned they could have made large profits had the acquisition not been blocked,they filed a lawsuit against the executives of the firm.What type of liability insurance protects the executives of the organization against such suits?

Accepted Answer

A)  dram shop liability insurance
B)  directors and officers liability insurance
C)  employers liability insurance
D)  employment related practices liability insurance

Question 17

Which of the following statements is true concerning the ISO employment-related practices liability form?

Accepted Answer

A)  Coverage is provided without a co-payment provision.
B)  Legal defense costs are included as part of the policy limit.
C)  Wrongful termination is excluded from coverage.
D)  Liability to employees is excluded from coverage.

Question 18

All of the following statements about aviation insurance are true EXCEPT

Accepted Answer

A)  Physical damage coverage can be written on an "all-risks" basis.
B)  Liability coverage also applies to bodily injury arising out of the premises where the aircraft is stored.
C)  Liability coverage applies to liability arising out of a workers compensation law.
D)  Aviation insurance is a highly-specialized market with relatively few insurers.

Question 19

Which of the following exposures is covered under a Commercial General Liability Policy with no endorsements?

Accepted Answer

A)  liability arising out of seepage of pollutants
B)  employment-related practices liability
C)  personal injury liability
D)  aircraft liability

Question 20

One general liability loss exposure develops as a result of a written or oral agreement to assume the legal liability of another party.A lease that specifies that the building owner is held harmless for liability arising out of use of the building is an example.This liability loss exposure is

Accepted Answer

A)  premises and operations liability.
B)  contractual liability.
C)  products and completed operations liability.
D)  contingent liability.

Exam 26: Commercial Liability Insurance

Which of the following is (are) covered under an unendorsed Commercial General Liability Policy? I.False arrest of a customer wrongly accused of shoplifting II.Publication of material that violates an individual's right to privacy

Which of the following statements about physicians,surgeons,and dentists liability insurance is true?

The general liability policy covers bodily injury or property damage caused by "an accident,including continuous repeated exposure to substantially the same general harmful conditions." This cause is loss is called a(n)

Which of the following losses would be covered under a Commercial General Liability Policy that has no endorsements? I.The named insured rented a building and an employee of the named insured negligently started a fire at the rented building. II.The cost to recall defective products

A-1 Electrical Service is an electrical contractor that employs 14 electricians.A-1 faces many loss exposures.One general liability exposure arises out of faulty work that A-1 electricians may perform for customers at their homes or businesses.This liability exposure is known as

All of the following statements about liability coverage under the businessowners policy are true EXCEPT

HRC Company purchased an unendorsed ISO Commercial General Liability (CGL) policy.Which of the following claims would be covered under the CGL?

The Commercial General Liability (CGL) Policy covers liability arising out of which of the following loss exposures? I.Bodily injury of an employee of the insured arising out of and in the course of employment II.Bodily injury of a customer injured by a defective product manufactured by the insured

Some directors and officers (D&O) liability policies include an insuring agreement that covers the legal liability of a corporation arising out of the acts of directors and officers.This coverage for the organization is called

Which of the following statements is true concerning the ISO employment-related practices liability form?

All of the following statements about aviation insurance are true EXCEPT

Which of the following exposures is covered under a Commercial General Liability Policy with no endorsements?

One general liability loss exposure develops as a result of a written or oral agreement to assume the legal liability of another party.A lease that specifies that the building owner is held harmless for liability arising out of use of the building is an example.This liability loss exposure is