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CPCU 551 exam questions with correct answers
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CPCU 551 exam questions with correctanswers
Discovery |form |- |ANSWERS✔✔ |Form |that |covers |losses |discovered |during |the |policy |period
|even |though |they |may |have |occurred |before |the |policy |period.
(Compared |with |loss |sustained |form |- |ANSWERS✔✔ |re: |commercial |crime. |Loss |sustained
|is |the |most |commonly |used |of |these |two.)
Loss |sustained |form |- |ANSWERS✔✔ |Form |that |covers |losses |actually |sustained |during |the
|policy |period |and |discovered |no |later |than |one |year |after |policy |expiration.
(Compared |with |discovery |form |re: |commercial |crime. |Loss |sustained |is |the |most
|commonly |used |of |these |two.) |- |ANSWERS✔✔ |...
Employee |Theft |coverge, |Insures |an |employer |against |theft |of |its |property |by |its |own
|employees. |- |ANSWERS✔✔ |...
Theft |(definition |as |part |of |Employee |Theft |coverage) |- |ANSWERS✔✔ |The |unlawful |taking
|of |money, |securities, |or |other |property |to |the |deprivation |of |the |insured.
For |the |purposes |of |employee |theft |coverage, |theft |includes |forgery. |- |ANSWERS✔✔ |...
Unlawful |taking |(definition |as |part |of |Employee |Theft |coverage), |An |act |that |is |not
|authorized |by |law |or |is |a |violation |of |a |civil |or |criminal |law. |- |ANSWERS✔✔ |...
(Proof |of |unlawful |taking |does |not |have |to |meet |the |standards |needed |to |obtain |a |criminal
|conviction.) |- |ANSWERS✔✔ |...
,Where |employee |theft |coverage |applies, |United |States |(including |its |territories |and
|possessions), |Puerto |Rico, |and |Canada. |Coverage |also |applies |to |loss |caused |by |an
|employee |who |is |temporarily |outside |the |covered |territory |for |not |more |than |ninety
|consecutive |days. |- |ANSWERS✔✔ |...
"Employee" |as |defined |for |employee |theft |coverage |- |ANSWERS✔✔ |A |natural |person |(as
|opposed |to |a |corporation |engaged |by |the |insured) |who |is:
* |Currently |employed |by |the |insured |or |an |ex-employee |who |employment |ended |in |the |past
|30 |days
* |Compensated |by |the |insured |by |salary,w |ages, |or |commissions
* |Subject |to |the |control |and |direction |of |the |insured |- |ANSWERS✔✔ |...
This |also |includes |temps |and |leased |employees |(except |outside |the |insured's |premises),
|plus |the |insured's |corporate |directors, |managers |(if |an |LLC), |officers, |or |trustees |while
|performing |duties. |- |ANSWERS✔✔ |...
Difference |b/w |"temp" |and |"leased" |employee |- |ANSWERS✔✔ |Temps |are |persons |furnished
|to |the |insured |either |to |substitute |for |permanent |employees |who |are |on |leave |or |to |meet
|seasonal |or |short-term |work |load |conditions. |Leased |employees |are |regular |workers |who
|are |nominally |employed |by |a |labor-leasing |firm |but |subject |to |day-to-day |control |by |the
|organization |that |leases |them.
LLC |- |ANSWERS✔✔ |Limited |liability |corporation, |a |form |of |corporate |organization |that
|offers |the |limited |liability |of |a |corporation |but |avoids |the |double |taxation |to |which |regular
|corporations |are |subject.
Difference |b/w |"employee |theft" |and |"employee |dishonesty" |- |ANSWERS✔✔ |Employee
|dishonesty |forms |cover |loss |resulting |from |an |employee's |dishonest |act, |and |that |phrase
|encompasses |a |broader |range |of |offenses |than |"theft".
,What |qualifies |as |"employee |dishonesty"? |- |ANSWERS✔✔ |To |reduce |this |broad |scope |of
|coverage, |employee |dishonesty |forms |typically |require |that |the |employee |must |have |acted
|with |"manifest |intent" |(that |is, |evident |intent) |to |(1) |cause |a |loss |to |the |insured |and |(2)
|obtain |financial |benefit |for |the |employee |or |for |another |person |or |entitty |that |employee
|wants |to |receive |the |benefit. |Furthermore, |the |financial |benefit |must |be |something |other
|than |wages, |commisssions, |or |other |employee |benefits. |Sometimes |referred |to |as |a |"dual
|trigger" |or |a |"triple |trigger", |all |elements |of |manifest |intent |must |be |present |in |order |for
|employee |dishonesty |coverage |to |apply.
"Securities" |definition |for |employee |theft |coverage |- |ANSWERS✔✔ |Negoitiable |adn
|nonegotiable |instruments |or |contracts |representing |eithe |rmoney |or |other |property.
|(Stocks, |bonds, |tokens, |tickets, |stamps |in |current |use, |etc.)
"Other |property" |definition |for |employee |theft |coverage |- |ANSWERS✔✔ |All |tangible
|property, |other |than |money |and |securities, |which |has |intrinsic |value.
Does |not |include |computer |programs, |electronic |data, |or |any |other |specifically |excluded
|property. |Also |does |not |include |intangibles |such |as |copyrights, |patents, |intellectual
|property, |etc. |- |ANSWERS✔✔ |...
"Occurrence" |in |the |context |of |employee |theft |- |ANSWERS✔✔ |(1) |An |individual |act
(2) |The |combined |total |of |all |separate |acts |whether |or |not |related; |or
(3) |A |series |of |acts |whether |or |not |related;
committed |by |an |"employee" |acting |alone |or |in |collusion |with |other |persons. |-
|ANSWERS✔✔ |...
For |example, |if |a |bookkeeper |fo |a |small |insruance |agency |embezzled |$190K |by |stealing |cash
|receipts |or |inserting |her |name |as |payee |on |customers' |checks |during |100 |separate
|incidents, |each |for |less |than |$10,000, |and |the |limit |of |insurance |was |$10,000, |the |court
|would |likely |side |with |the |interpretation |that |the |theft |constituted |a |single |series |of |acts
|and |that |the |$10,000 |limit |was |the |most |the |insured |was |liable |to |pay. |- |ANSWERS✔✔ |...
, Termination |as |to |Any |Employee |condition |(employee |theft) |- |ANSWERS✔✔ |Provides
|automatic |termination |of |employee |theft |coverage |with |respect |to |any |employee |who |has
|committed |a |dishonest |act |as |soon |as |the |act |is |known |to |the |insured |or |any |partner, |officer,
|director, |etc. |not |in |collusion |with |the |employee. |Also, |the |condition |gives |the |insurer |the
|right |to |cancel |coverage |with |respect |to |any |employee |by |providing |30 |days' |advance |notice
|to |the |insured.
Employee |Benefit |Plans |condition |(employee |theft) |- |ANSWERS✔✔ |Eliminates |the |need |to
|attach |the |Employee |Retirement |Income |Security |Act |of |1974 |(ERISA) |compliance
|endorsement |to |the |policy |to |satisfy |the |fidelity |bonding |requirement |of |ERISA.
"Forgery" |definition |- |ANSWERS✔✔ |The |signing |of |the |name |of |another |person |or
|organization |with |intent |to |deceive; |it |does |not |mean |a |signature |which |consists |in |whole
|or |in |part |of |one's |own |name |signed |with |or |without |authority, |in |any |capacity, |for |any
|purpose.
"Disappearance |and |destruction" |for |commercial |crime |insurance |- |ANSWERS✔✔ |The
|addition |of |the |words |'disappearance |and |distruction' |increases |the |scope |of |the |coverage
|to |include |losses |even |when |they |do |not |result |from |an |unlawful |act. |For |example, |coverage
|is |provided |for |money |and |securities |that |are |destroyed |in |a |fire. |Disappearance |is |covered
|regardless |of |whether |it |is |mysterious |or |whether |theft |appears |to |be |the |cause |of |the
|disappearance.
Robbery |- |ANSWERS✔✔ |The |unlawful |taking |of |property |from |the |care |and |custody |of |a
|person |by |one |who |has |caused |or |threatened |to |cause |that |person |bodily |harm; |includes
|situations |in |which |the |thief |commits |an |obviously |unlawful |act |that |is |witnessed |by |the
|custodian |of |the |stolen |property |(such |as |an |observed |"smash |and |grab" |theft |from |a |shop
|window)
Custodian |- |ANSWERS✔✔ |A |person |who |has |care |and |custody |of |property |inside |the
|premises, |excluding |any |person |while |acting |as |a |"watchperson" |or |janitor.
Safe |Burglary |- |ANSWERS✔✔ |The |unlawful |taking |of |property |from |within |a |locked |safe |or
|vault |by |a |person |unlawfully |entering |the |safe |or |vault |as |evidenced |by |marks |of |forcible
|entry |upon |its |exterior;
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