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AINS 23 TEST QUESTIONS WITH ALL CORRECT ANSWERS

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AINS 23 TEST QUESTIONS WITH ALL CORRECT ANSWERS Which one of the following statements is true regarding insurance coverage for foreign operations? - Answer- Small to mid-sized businesses in the United States frequently must concern themselves with loss exposures that exist outside of the usual co...

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  • October 3, 2024
  • 13
  • 2024/2025
  • Exam (elaborations)
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AINS 23 TEST QUESTIONS WITH
ALL CORRECT ANSWERS

Which one of the following statements is true regarding insurance coverage for foreign
operations? - Answer- Small to mid-sized businesses in the United States frequently
must concern themselves with loss exposures that exist outside of the usual coverage
territory in standard U.S. coverage forms.

Fiduciary bonds are commonly required of a person who does which one of the
following? - Answer- Holds property in trust for the benefit of others

Which one of the following is a required component of the commercial property
coverage part that specifies the perils covered? - Answer- The causes of loss form is a
required component of the commercial property coverage part that specifies the perils
covered.

Which one of the following statements is correct with respect to Property Not Covered
under the Building and Personal Property Coverage Form (BPP)? - Answer- Only
contraband or property in the course of illegal transportation or trade is totally
uninsurable by endorsement or in other policies.

Under the Building and Personal Property Coverage Form (BPP), which one of the
following extensions covers loss only by fire, lightning, explosion, riot or civil commotion,
and aircraft? - Answer- Outdoor Property

Which one of the following best describes coverage for crime losses under the
commercial property policy Causes of Loss—Basic Form? - Answer- There is coverage
for building damage caused by burglars breaking in or exiting the insured's property.

If the Replacement Cost optional coverage of the Building and Personal Property
Coverage Form (BPP) is selected, tenants' improvements and betterments are -
Answer- Valued at replacement cost if the tenant actually repairs or replaces them, at its
own cost, as soon as reasonably possible after the loss.

Which one of the following best describes the Ordinance or Law Coverage endorsement
to the Building and Personal Property Coverage Form's Coverage B? - Answer- It
covers the cost to demolish the undamaged portion of a building and remove its debris
when demolition is required by the building code.

Which one of the following statements is correct with respect to coinsurance used with
commercial property policies? - Answer- The 80 percent coinsurance rate is reduced
when a policy requires a higher coinsurance percentage.

, Omega Holdings owns a building with an actual cash value of $200,000. The property is
insured under a Building and Personal Property Coverage Form (BPP) with a building
limit of $140,000, an 80 percent coinsurance clause, and a $1,000 deductible. The
policy includes a Causes of Loss—Broad Form covering the building. The building
suffers $80,000 in fire damage. Which one of the following amounts will Omega's
insurer pay? - Answer- Incorrect. The insured should have carried 80% of $200,000 or
$160,000. Instead the insured carried only $140,000. [($140,000/$160,000) x $80,000] -
$1,000 = $69,000.

Justin has a Commercial Package Policy (CPP) that has a Building and Personal
Property Coverage Form (BPP) with a Causes of Loss—Broad Form covering his
building with a $750,000 limit. A tropical storm struck Justin's building and the strong
winds tore most of the shingles from the building's roof and shattered multiple windows
on the 5th floor of the building. The rain from the storm caused water to enter Justin's
building through the foundation, which caused significant damage to the first and
second floors. Justin had equipment stored in closets on the first and second floors
which were rendered inoperable due to the water damage. The total amount of
damages was $40,000 for the windows and shingles; $110,000 for water damage to the
first and second floors; $9,000 for the equipment on the second floor; and $7,000 for the
equipment on the first floor.

How much will Justin's insurer pay for damage to the first and s - Answer- The water
damage losses to the first and second floors are not covered due to the water exclusion.

CD Services (CDS) provides e-commerce services to entities that are too small to
maintain an e-commerce program of their own. CDS relies exclusively on personal
computers to perform its activities. A fire destroys the building in which it operates,
including all of the electronic data. CDS has an Insurance Services Office (ISO)
Business Income (and Extra Expense) Coverage Form. Which one of the following
explains how CDS's business income policy will apply to the loss from the interruption of
computer operations? - Answer- Limited to $2,500 for loss of income and extra expense
due to the Interruption of Computer Operations additional coverage

Which one of the following is an option in the business income coverage form that
deletes the coinsurance clause while limiting loss payment to the lesser of (1) the
amount of loss sustained during the 120 days following the beginning of the period of
restoration or (2) the policy limit? - Answer- The Maximum Period of Indemnity coverage
option is an option that deletes the coinsurance clause while limiting loss payment to the
lesser of (1) the amount of loss sustained during the 120 days following the beginning of
the period of restoration or (2) the policy limit.

James is in the process of forming his own brokerage company which will include
several employees. James will be best protected by purchasing which one of the
following to cover the crime loss exposures of his company? - Answer- Financial
Institution Bond.

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