AINS103 Exploring Commercial Insurance Latest
Update 2024-2025 Actual Exam 250 Questions
and 100% Verified Correct Answers Verified by
Professor
10 key sources of big data - CORRECT ANSWER: i. The Internet of Things (IoT)
ii. Smart Products
iii. Telematics Devices
iv. Insurers own loss exposure/pricing data
v. Regulators
vi. Government organizations
vii. Industry Associations
viii. Agents and brokers
ix. The internet
x. Social media
6 types of businesses eligible for BOP protection - CORRECT ANSWER: Apartment
buildings (they may not be able to exceed a certain number of floors or units. Permitted
occupancies may include offices and eligible wholesaler, retail, service, processing, and
contractor businesses), office buildings (they may not be able to exceed a certain
number of floors or total floor area. Permitted occupancies might include eligible
wholesaler, retail, service, processing, and contractor businesses), contractors
(contractors may only be eligible up to a certain amount of receipts and payroll. General
contractors and hazardous trades are usually ineligible), main street businesses (this
category includes retail, wholesale, service, or processing buildings that do not exceed
a specified total floor area and their personal property), restaurants (BOPs are often
available for fast-food restaurants and restaurants with limited-cooking facilities that do
not exceed a certain total floor area and seating capacity. Restrictions on sale of beer,
wine, and liquor apply), motels (there may be a limit of three stories in height. Integrated
bars and seasonal operations are usually ineligible).
A cell phone manufacture's management is concerned to learn of the possibility that its
largest supplier will soon merge with one of the manufactures top competitors. Identify
,the manufactures supply chain exposures - CORRECT ANSWER: Loss of supply due to
external events and supply sourcing.
A CGL coverage form may include one or more of these insuring agreements -
CORRECT ANSWER: Coverage A - Bodily Injury and Property Damage Liability,
Coverage B - Personal and Advertising Injury Liability, and Coverage C- Medical
Payments (these coverages also include supplementary payments that may arise as the
insurer investigates the occurrence such as if the insured must miss work to testify at
trial).
A client that wants to adopt ERM must first develop a framework made up of these
components: - CORRECT ANSWER: a. Leadership and accountability - senior
management should lead the way in integrating ERM and establishing accountability.
b. Alignment - The organization's ERM approach must be aligned with its strategic
objectives.
c. Allocation of resources - Resources needed to implement ERM must be properly
allocated throughout the organization.
d. Communication - The purpose and importance of ERM must be communicated and
reported throughout the organization.
A dry cleaner is destroyed by a fire that started in a neighboring building. While the
owner has no legal liability for the loss of clothing, she realizes the dry cleaners
reputation may depend on its ability to reimburse customers. Which inland marine policy
would address her concerns? - CORRECT ANSWER: A bailees' customers' policy,
which covers both the legal liability exposure and the goodwill exposure through a
single policy, is the best choice in this situation.
A hotel's compressor motor short-circuited, causing a partial loss of air-conditioning
during a July convention and resulting in a 50% loss of occupancy in the hotel. What
damages other than the physical loss might the hotel suffer? - CORRECT ANSWER:
The hotel would suffer not only physical damage, but also significant business income
loss.
A small- to midsize -business owner who has purchased a BOP would still need an
additional policy to cover which one of the following loss exposures? - CORRECT
ANSWER: Workers compensation
,Additionally, BOPs often provide coverage for these loss exposures: - CORRECT
ANSWER: a. Employee dishonesty
b. Theft of money and securities
c. Forgery and alteration
d. Equipment breakdown
Advantages of the BOP - CORRECT ANSWER: A BOP provides an insurance business
with the property and liability coverage, they will likely need in a single policy so that
insurance do not have to individually select each one. This improves the quality of
coverage. It means fewer coverage gaps and duplicate coverages and with only one
business policy, insurance pay only one premium and have a one renewal date. For
insurers, BOP's provide an opportunity to reduce administrative costs such as billing
and underwriting by packaging several coverages into one policy. Packaging policies
also allows an insurer to reduce adverse selection, which is the tendency of those most
likely to experience loss to be the most likely to purchase insurance.
Reducing cost and adverse selection often allows an insurer to offer lower premiums to
remain more competitive in the market.
Adverse Selection - CORRECT ANSWER: The tendency of those most likely to
experience loss to be the most likely to purchase insurance.
Aggregate Limit - CORRECT ANSWER: The maximum amount an insurer will pay for all
covered losses during the covered policy period.
Air-Conditioning and Refrigeration Systems Loss Exposures - CORRECT ANSWER:
Includes equipment that is susceptible to breakdown, such as motors, compressors,
fans, switchboards, coils, and pipes.
An insurer wants to increase the number of fraudulent claims its able to identify. Which
of these is likely the most accurate and cost-effective way for the insurer to meet this
goal? - CORRECT ANSWER: Invest in data mining to look for patterns of fraud.
, An ocean marine carrier is involved in an accident that prevents the carrier from
delivering its cargo. As a result the carrier will lose compensation that the shipper would
have otherwise paid the carrier. What type of loss exposure do you think this is an
example of? - CORRECT ANSWER: Loss of Freight.
Analyzing Supply Chain Risk - CORRECT ANSWER: As organizations increasingly rely
on upstream suppliers and downstream distributors to conduct business, the more
valuable producers who can help them evaluate their supply chain risk become. One
way a producer can help clients identify supply chain risk is by using flowcharts.
Individual entries on a flowchart, including the process involved and the means by which
products move from one process to the next can help identify loss exposures. Flowchart
may be what informs a client that a critical raw material comes from only one overseas
supplier, which exposes the client to a number of risks that could lead to a business
interruption. Property loss, transportation risks, regulatory/trade risks, and business
interruptions. Looking at the process visually can help the client develop appropriate risk
management techniques such as finding an additional supplier.
Annual Transit Policy - CORRECT ANSWER: Policy that covers all shipments made or
received by the insured throughout a one-year policy period.
Artificial Intelligence (AI) - CORRECT ANSWER: Computer processing or output that
simulates human reasoning or knowledge
Aubree was employed by a temporary employment agency and assigned to a
department store during a busy shopping period. While lifting a box, she strained her
back and required medical care and rehabilitation. She lost a months wages. Which
employers workers compensation policy, if any, will provide benefits for Aubree's injury?
- CORRECT ANSWER: The employment agency.
Auto Liability Loss Exposures - CORRECT ANSWER: Stem from the potential for an
organization to be held legally responsible for bodily injury or property damage that
results from the ownership, maintenance, or use of autos.
Auto medical payments coverage pays - CORRECT ANSWER: Small bodily injury
claims resulting from an auto accident, regardless of fault.
