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AINS QUESTIONS TO REVIEW AND ANSWERS WITH SOLUTIONS 2024
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AINS QUESTIONS TO REVIEW AND ANSWERS WITH SOLUTIONS 2024
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\AINS QUESTIONS TO REVIEW ANDANSWERS WITH SOLUTIONS 2024
Which one of the following Additional Coverages is covered under the Causes of Loss—Special Form but
not under the Causes of Loss—Broad Form?
A. "Fungus", Wet Rot, Dry Rot and Bacteria
B. Property in Transit
C. Falling Objects
D. Collapse - ANSWER B. Property in Transit
Which one of the following statements is the purpose of the No Benefit to Bailee condition of the
Commercial Property Conditions Form?
A. It relieves bailees of liability to bailors for any damage to the property they hold.
B. It reinforces the insurer's right of subrogation against the bailee.
C. It relieves bailees of liability for damage if the damage is recoverable under insurance carried by the
bailor.
D. It allows bailees to limit their liability for others' property by using contractual provisions. - ANSWER
B. It reinforces the insurer's right of subrogation against the bailee.
An insured has a Business Income (with Extra Expense) Coverage Form with a Maximum Period of
Indemnity coverage option. Following a covered loss and after the period of restoration begins, it takes
120 days to complete repairs and another 60 days for revenue to return to normal. How would the policy
provide coverage for this loss of business income?
,A. The policy would provide coverage for 120 days and 15 additional days.
B. The policy would provide coverage for 120 days and 30 additional days.
C. The policy would provide coverage for the full 180 days to return to normal operations.
D. The policy would provide coverage for 120 days. - ANSWER D. The policy would provide coverage for
120 days.
Sam's Dry Cleaners (SDC) is insured under a Business Income (and Extra Expense) Coverage Form with a
$1 million Business Income limit of insurance for the dry cleaners location, subject to option (2) Business
Income Other Than "Rental Value". None of the optional coverages of the Business Income (and Extra
Expense) are in effect and no endorsements apply to SDC's Business Income (and Extra Expense)
Coverage Form. The one year policy period shown in the declarations began on July 1, 20X1. On October
1, 20X1, SDC suffered a direct physical loss to its building and contents due to a fire. The resulting loss of
business income that SDC sustained was $800,000, including a $5,000 loss for the first 72 hours following
the physical loss.
After the period of restoration ended and SDC resumed operations at the insured premises, the dry
cleaners continued to sustain loss of business income loss for 90 days due to customers us - ANSWER C.
$820,000
ABC, Inc., is a large, national retailer that sells a variety of consumer goods. ABC carries a Commercial
Package Policy that includes Insurance Services Office's Commercial Crime Coverage Form (Loss
Sustained) with the following insuring agreements: Employee Theft; Forgery or Alteration; Inside the
Premises—Theft of Money and Securities; and Inside the Premises—Robbery or Safe Burglary of Other
Property. The limit of insurance for each one of these insuring agreements is $100,000 and the
deductible per occurrence for each one of these insuring agreements is $1,000. The policy year is 20X1.
On June 5, 20X1, a thief entered ABC through an open window while the store was closed and stole
$2,500 worth of electronic merchandise. The thief also broke into a safe causing $1,500 damage to the
safe and stole $3,000 in cash from the safe.
, Under which insuring agreement would the theft of electronic merchandise be covered? - ANSWER D.
None
Matthew Jones, the named insured under an unendorsed Business Auto Coverage Form (BACF), requires
his employees to use their own cars for business purposes. One of Matthew's employees, Paul, causes an
accident while driving his own truck for the business.
Matthew's BACF shows symbol 1 for liability coverage. Which one of the following correctly indicates
whether Paul is an insured under the policy for the accident?
A. Paul is covered because employees are considered insureds for any auto.
B. Paul is covered because Matthew has given permission for Paul to drive his own truck.
C. Paul is not covered because employees are not insured while using their own autos in the named
insured's business.
D. Paul is not covered because employees are not insureds for any use of any auto. - ANSWER C. Paul is
not covered because employees are not insured while using their own autos in the named insured's
business.
Matthew Jones, the named insured under a Business Auto Coverage Form (BACF), requires his
employees to use their own cars for business purposes. One of Matthew's employees, Paul, causes an
accident while driving his own truck for the business.
Matthew's BACF shows symbol 1 for liability coverage. Which one of the following correctly indicates
whether Mathew is an insured under the policy for Paul's use of his own truck in this situation?
A. Matthew is not an insured under the policy because Matthew is not the owner of the truck.
B. Matthew is not an insured under the policy because Matthew is not the driver of the truck.
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