1. Workers compensation benefits include which one of the following?: Reha- s s s s s s s s s
sbilitation benefits s
2. When a clothing manufacturer decides to expand the sale of its clothing lin
s s s s s s s s s s s s
e by offering internet purchases, it creates new exposures not otherwise cov
s s s s s s s s s s s
ered, or not fully covered, by a traditional policy. These include: Loss or dama
s s s s s s s s s s s s s
ge caused by computer viruses.
s s s s
3. Which one of the following supply chain exposures can a business mitigate b
s s s s s s s s s s s s
y carefully wording contracts and diversifying suppliers?: Loss of supply due to e
s s s s s s s s s s s s
xternal events s
4. The commercial property coverage part of a commercial package policy co
s s s s s s s s s s
ntains one or more commercial property coverage forms. Each coverage for
s s s s s s s s s s
m typically includes all of the following, EXCEPT:: A range of covered peril
s s s s s s s s s s s s
5. Which one of the following statements best describes the Causes of Loss
s s s s s s s s s s s
—
Special Form?: The Special Form provides coverage for direct physical losses ot
s s s s s s s s s s s
her than those that are specifically excluded.
s s s s s s
6. Which one of the following best describes real property?: Tangible property th
s s s s s s s s s s s
at includes land, structures permanently attached to the land, and whatever is growin
s s s s s s s s s s s s
g on the land.
s s s
7. During a business interruption, some of the organization's expenses, called c
s s s s s s s s s s
ontinuing expenses, will continue, and other expenses, called noncontinuing ex
s s s s s s s s s
penses, will not continue. Which one of the following is an example of a continu
s s s s s s s s s s s s s s
ing expense?: Payroll of key employees
s s s s s
8. A vehicle owner had a tire store install four new wheels and tires on the vehic
s s s s s s s s s s s s s s s
le. On the way home from the store, one of the wheels came off, causing the vehi
s s s s s s s s s s s s s s s s
cle to accidentally run off the road and strike a tree.The vehicle owner sued the ti
s s s s s s s s s s s s s s s s
re store for failing to properly tighten the lug nuts on the vehicle. The loss expo
s s s s s s s s s s s s s s s
sure faced by the tire store in this case is known as: Completed operations liability
s s s s s s s s s s s s s s
.
9. Which one of the following entities would likely have the greatest completed o
s s s s s s s s s s s s
perations loss exposure?: Paul the plumber s s s s s
10. A carrier that is prevented by an accident from delivering the cargo aboard its
s s s s s s s s s s s s s
ship may face an exposure called loss of freight, which is: The compensation the c
s s s s s s s s s s s s s s s
arrier receives for transporting cargo.
s s s s
11. Which one of the following statements is correct with respect to the Build-
s s s s s s s s s s s s
sing and Personal Property Coverage Form (BPP) deductible?: If an occurrence in
s s s s s s s s s s s
volves a loss that affects more than one category of covered property and a separate l
s s s s s s s s s s s s s s s
imit of insurance applies to each category, losses to all categories are totaled and the
s s s s s s s s s s s s s s s
deductible applied to that total amount. s s s s s
1s/s20
, AINS 103 TEST s s
12. Which one of the following statements is correct with respect to the Build-
s s s s s s s s s s s s
sing and Personal Property Coverage Form (BPP)?: Due to coverage extensions, it i
s s s s s s s s s s s s
s possible for the total payment for one loss to exceed the policy limit.
s s s s s s s s s s s s s
13. Which one of the following would be considered an extra expense under th
s s s s s s s s s s s s
e Business Income (and Extra Expense) Coverage Form of the commercial pac
s s s s s s s s s s s
kage policy?: The increased cost of rent at a temporary location
s s s s s s s s s s
14. Dooley's Restaurant is insured under a commercial package policy (CPP) w s s s s s s s s s s
ith the Business Income (with Extra Expense) Coverage Form.The business suf
s s s s s s s s s s s
fered a $400,000 loss of business income when it was forced to suspend operat
s s s s s s s s s s s s s
ions after flood waters damaged the basement and first floor of the restaurant.
s s s s s s s s s s s s s
Which one of the following is an acceptable reason for the CPP insurer to deny t
s s s s s s s s s s s s s s s
he business income claim?: The policy's covered causes of loss did not include flood
s s s s s s s s s s s s s
.
15. Lucy's Bakery is insured under a commercial package policy with the B
s s s s s s s s s s s
usiness Income (and Extra Expense) Coverage Form. A fire loss caused sig
s s s s s s s s s s s
nificant damage to the building. When Lucy learned that it would take 9 mon
s s s s s s s s s s s s s
ths to repair the building, she decided to temporarily relocate to a
s s s s s s s s s s s
nearby rental location. All of the following would be considered covered extra ex
s s s s s s s s s s s s
penses under the Business Income (and Extra Expense) Coverage Form, EXC
s s s s s s s s s s
EPT:: The salary of the assistant baker and cake decorator
s s s s s s s s s
16. Richard's Clothing Store has a $500,000 Business Income (and Extra Expen s s s s s s s s s s
se) Coverage Form on which there is an 80 percent coinsurance clause. A fire sw
s s s s s s s s s s s s s s
ept through the store. Richard's Clothing Store estimates that its net income pl
s s s s s s s s s s s s
us all operating expenses for the policy period would have been
s s s s s s s s s s
$1,875,000. The estimated business income loss is $300,000. How much will the
s s s s s s s s s s s
insurer pay?: $100,000 s s
17. Suzanne is a commercial lines underwriter. Which one of the following co s s s s s s s s s s s
mponents of the general liability coverage forms would she use to tailor the f
s s s s s s s s s s s s s
orm to meet the specialized needs of an insured?: Endorsements
s s s s s s s s s
18. Under Coverage A of the commercial general liability coverage form (CGL), pr
s s s s s s s s s s s
operty damage would include all of the following, EXCEPT:: Infringement of copy
s s s s s s s s s s s
right
19. Leslie suffered a severe burn to her hand when her microwave oven manuf
s s s s s s s s s s s s
actured by LH Appliances caught fire. The fire also caused damage to her kitch
s s s s s s s s s s s s s
en cabinets. Two years later, Leslie decided to file a suit against the manufactur
s s s s s s s s s s s s s
er when she learned that microwaves manufactured by LH Appli-
s s s s s s s s s
sances had been found responsible for several other fires. LH Appliances was in
s s s s s s s s s s s s
sured by an occurrence version of the commercial general liability (CGL) cover
s s s s s s s s s s s
age form with no deductible or endorsements.Which one of the following
s s s s s s s s s s s
2s/s20
, AINS 103 TEST s s
correctly describes how LH Appliances' CGL will apply to the claim?: The CGL wil
s s s s s s s s s s s s s
l defend the insured, and pay both for both the bodily injury and damages to the cabine
s s s s s s s s s s s s s s s s
ts if found liable.
s s s
20. Chuckie's chicken distributor researches the benefits of consuming chick- s s s s s s s s
sen versus consuming beef. In November 2011, Chuckie's publishes a brochure o
s s s s s s s s s s s
utlining the potential health hazards of consuming beef and explaining why chi
s s s s s s s s s s s
cken is a healthier alternative. Chuckie continues to publish and distribute the s
s s s s s s s s s s s s
ame brochure for six months. In March 2012, several beef distributors file a suit a
s s s s s s s s s s s s s s
gainst Chuckie's for personal and advertising injury. Which one of the followin
s s s s s s s s s s s
g exclusions would apply to this claim under Coverage B of Chuckie's Commerc
s s s s s s s s s s s s
ial General Liability Coverage Form (CGL) with a policy period of January 2012
s s s s s s s s s s s s s
- January 2013?: Material published prior to the policy period
s s s s s s s s s
21. Which one of the following claims would be covered under Coverage B— s s s s s s s s s s s
Personal and Advertising Injury Liability of the Commercial General Liabil-s s s s s s s s s
sity Coverage Form (CGL)?: A store manager accuses a young man of shoplifting, a
s s s s s s s s s s s s s
pprehends him, and locks him in a storage room until the police arrive. When it is disco
s s s s s s s s s s s s s s s s
vered that the young man is innocent, he files a claim against the store.
s s s s s s s s s s s s s
22. Shady Stories, a tabloid newspaper, prints a false story about a local politi- s s s s s s s s s s s s
scian. Shady knows the story is false but thinks it will sell a lot of papers. The pol
s s s s s s s s s s s s s s s s s
itician claims damages from Shady. Shady's Commercial General Liability (CG
s s s s s s s s s
L) Coverage Form excludes coverage for this loss because the claim arose out of
s s s s s s s s s s s s s s
which one of the following?: Written material that was known to be false
s s s s s s s s s s s s
23. Austin cut his finger while working at a jobsite for Walsh Builders. He had to s s s s s s s s s s s s s s s
go to a hospital, where he received 5 stitches and a tetanus vaccine. When he re
s s s s s s s s s s s s s s s
ceived the hospital bill for $990, Austin made a claim under Coverage C—
s s s s s s s s s s s s
Medical Payments of Walsh Builders' CGL policy. Which one of the fol-
s s s s s s s s s s s
slowing reasons would the CGL insurer use for denying Austin's claim?: He is e
s s s s s s s s s s s s s
ntitled to workers compensation benefits. s s s s
24. Which one of the following statements is true regarding Coverage C—Med- s s s s s s s s s s
sical Payments of the Commercial General Liability policy?: Medical payments c
s s s s s s s s s s
overage is a means of making prompt settlements. s s s s s s s
25. JG Painting is insured under a monoline commercial auto policy. The bus
s s s s s s s s s s s
iness is located in Pennsylvania, but also does work in New Jersey and Delaw
s s s s s s s s s s s s s
are. Which one of the following would be used to add PIP insurance coverage
s s s s s s s s s s s s s
sto an auto policy?: Endorsements
s s s s
26. The Morlyn Corporation has a Business Auto Coverage Form (BACF) that p
s s s s s s s s s s s
rovides liability coverage for any auto. In addition to the named insured, which
s s s s s s s s s s s s s
one of the following would also be an insured under Morlyn's BACF
s s s s s s s s s s s
3s/s20
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