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AU 62 Chapter 2 Exam Questions with All Correct Answers £11.04
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AU 62 Chapter 2 Exam Questions with All Correct Answers

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AU 62 Chapter 2 Exam Questions with All Correct Answers When an independent contractor is performing operations on a property owner's premises, the property owner sometimes requires the contractor to provide a policy that protects the owner against which one of the following? - Answer- The prop...

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  • September 23, 2024
  • 10
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers

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  • au 62
  • au 62 chapter 2 exam questions

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  • AU 62

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AU 62 Chapter 2 Exam Questions
with All Correct Answers
When an independent contractor is performing operations on a property owner's
premises, the property owner sometimes requires the contractor to provide a policy that
protects the owner against which one of the following? - Answer- The property owner
sometimes requires the contractor to provide a policy that protects the owner against
liability arising from the operations being performed by the contractor.

Fancy Dress Shop is a small specialty clothing boutique for women. Liability claims
against Fancy Dress Shop would most likely arise from its - Answer- Liability for Fancy
Dress Shop would most likely arise from its premises and operations exposure.

Which one of the following is an example of injury or damage arising from an
occurrence that would be covered by the products and completed operations liability
portion of the Commercial General Liability (CGL) Coverage Form? - Answer- A
defective gas range manufactured by the insured explodes causing injury. This would
be covered because the gas range is a product of the insured.

Underwriting Technician - Answer- A specialist in policy pricing and issuance
preparation who performs the mechanics of pricing for an insurer.

Commercial Lines Manual (CLM) - Answer- An ISO publication that includes rules and
rating procedures for several major lines of commercial insurance.

Three-step Process to assign the proper classification - Answer- 1. Determine the
insured's business operation (usually from the application)
2. Check the appropriate classication in the Classification Table for inclusions,
exclusions, and specific classification footnotes to determine whether additional
classifications are necessary.
3. Apply additional rules based on the insured's business group.

Classification Table - Answer- A table that provides the necessary rating and
classification information for general liability, fire, crime/fidelity, and package policy
classification in the CLM.

What is the principal determinant of the general liability classification for manufacturers
and processors? - Answer- End use of the insured's product

Which one of the following is one of the five classifications the Commercial Lines
Manual (CLM) uses to refine the general liability classification process? - Answer-

, Contracting or servicing is one of the five classifications the CLM uses to refine the
general liability classification process.

When classifying and pricing manufacturing or processing operations, underwriters
should follow which one of the following guidelines? - Answer- Underwriters should for
pricing purposes, exclude the value of any transfers of component parts or interim
processes within the operations of the same named insured.


Premises and operations liability exposure - Answer- Premises and operations liability
exposure is the possibility that an organization will be held liable because of bodily
injury or property damage caused by an accident that either occurs on the
organization's premises or arises out of the organization's ongoing (as opposed to
completed) operations on or off those premises. It could be caused by an accident
arising out of the products manufactured, sold, or distributed by the organization and
occurring after the products are no longer on the organizations's premises or int he
organization's physical possession or by an accident arising out of the organization's
completed work, including defective parts or materials furnished with the work.

Accidents that could lead to claims - Answer- A consumer dies because of impurities in
a medicine sold by a pharmaceutical firm.

The tenants of an apartment building are injured by smoke inhalation, and their personal
property is destroyed by a fire that resulted from faulty electrical work completed by a
contractor several hours earlier.

Personal and Advertising Injury Liability - Answer- CGL form defines this to mean any
kind of injury (such as loss of reputation, humiliation, economic loss, or even
consequential bodily injury) arising out of any of several listed offenses. Examples of the
listed offenses are false arrest, wrongful eviction, libel, slander and infringing upon
another's copyright in the insured's advertisement. It is now such a common exposure
that is is an integral part of the CGL form, but it can be omitted if the insured does not
want to buy it. This is Coverage B on the CGL form.

Medical Payments - Answer- CGL form includes Coverage C - Medical Payments,
which pays medical expenses of others in certain circumstances. Coverage C, Medical
Payments does not require the insured to be legally liable and, therefore, is not
technically liability insurance. Underwriters do not individually underwrite this loss
exposure but do consider the medical payments loss exposure as part of the premises
or operations loss exposures.

Bodily Injury and Property Damage Liablity - Answer- On CGL form, this is Coverage A -
Bodily Injury and Property Damage Liability.

Requirements for Medical Payments Coverage - Answer- To be covered, the medical
expenses (as defined in the form) must result from bodily injury because of an accident

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