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AINS103 PRACTICE QUESTIONS, AINS 103 QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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AINS103 PRACTICE QUESTIONS, AINS 103 QUESTIONS AND ANSWERS WITH SOLUTIONS 2024
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AINS103 PRACTICE QUESTIONS, AINS103 QUESTIONS AND ANSWERS WITH
SOLUTIONS 2024
In property insurance, the term "Property in Transit" refers to which one of the following? - ANSWER
Property while being transported by trucks, cars, buses, trains, airplanes, and ships.
Extra expenses are expenses, in addition to ordinary expenses, that an organization incurs to mitigate the
effects of a business interruption. Which one of the following is an example of an extra expense? -
ANSWER Cost to rent temporary office space.
Upon entering a restaurant, a customer grasped a handrail the broke off, causing the customer to fall and
break his wrist. This is an example of which one of the following types of commercial general liability
loss? - ANSWER Premises and operations liability.
A contractor is hired to install a new concrete sidewalk in front of a store. Several weeks after the
sidewalk was installed, the concrete buckles and a passerby trips and falls on the buckled sidewalk. The
passerby sues the contractor to recover medical expenses incurred due to the fall. This commercial
liability is categorized as - ANSWER Completed operations liability.
A carrier that is prevented by an accident from delivering the cargo aboard its ship may face an exposure
called loss of freight, which is - ANSWER The compensation the carrier receives for transporting cargo.
The management of Maryland Marine Co. (MMC) must ensure that proper coverage is obtained for
work- related injuries. The employee population of MMC is a mixture of full-time and part-time
employees as well as some casual employees for one-time tasks. Much of MMC's work is done by
independent contractors and temporary employees during peak seasons. Which one of the following
statements about these persons is true? - ANSWER Many states workers compensation statutes exclude
casual labor (temporary employees).
When a clothing manufacturer decides to expand the sale of its clothing line by offering internet
purchases, it creates new exposures not otherwise covered, or not fully covered, by a traditional policy.
These include - ANSWER Loss or damage caused by computer virsuses.
,Meat Products Company (MPC) runs packing plants in three Midwest states. The company was in the
news recently because of its labor practices. The Department of Labor (DOL) investigated complaints
from five female employees that MPC discriminated against them. The DOL found the claim was true.
The Immigration and Naturalization Service (INS) found that the company employed illegal immigrants
and paid them less than the minimum wage. When this news became public, MPC's reputation was
severely harmed. This scenario illustrates which source of reputation risk - ANSWER Regulatory and legal
compliance.
Perils are an important aspect of property insurance. Which one of the following statements is correct
with respect to perils? - ANSWER A peril is the actual means by which property is damaged or destroyed
such as fire, lightning, windstorm, hail or theft.
During a business interruption, some of the organizations expenses, called continuing expenses, will
continue, and other expenses, called non-continuing expenses, will not continue. Which one of the
following is an example of a continuing expense? - ANSWER Payroll of key employees.
Which one of the following loss exposure exist when a business can be held legally liable for bodily injury
or property damaged caused by their repair or contracting work? - ANSWER Completed operations
liability.
Which one of the following entities would likely have the greatest completed operations loss exposure? -
ANSWER Paul the plumber.
Inland marine insurance is insurance that covers - ANSWER Many different classes of property that
typically involve an element of transportation on land.
Joe signs a contract with Home Builders to install the electrical wiring for a new home. He uses his own
tools and follows the specifications in the contract. Joe is burned while installing the wiring. Does Home
Builders' workers compensation policy cover Joe's injury? - ANSWER No, because Joe is not an employee
of Home Builders.
Cyber risk intellectual property loss exposures include - ANSWER Cyber extortion of trade secrets.
As part of its assessment of its cyber risk, an organization should consider whether there are any
intangible property exposures. Which one of the following would best be classified as an intangible
,property loss? - ANSWER The computer system is hacked and data including credit card numbers are
stolen.
Property insurance policies use the term "personal property" to refer to the - ANSWER Contents in and
around a building.
In business income insurance, the expenses that an organization would not have incurred if the business
interruption have not occurred are called - ANSWER Extra expenses.
Radley Contracting Company is installing new signage on the front of a building. George, a passerby
walking near the building is injured when a Radley employee accidentally drops a tool from a crane.
George likely has the ability to assert which one the following types of claim? - ANSWER Premises and
operations liability.
John purchased a new lawnmower two years ago. After significant use, the lawnmower needed
servicing. A repairman sharpened the blade but he failed to reattach it properly to the lawnmower.
When John was using the lawnmower, the blade flew off and seriously injured John's daughter. From the
standpoint of a commercial liability loss for the repair shop, this is an example of - ANSWER Completed
operations liability.
Automobile liability exposures can result from - ANSWER Hiring or borrowing an automobile.
Workers compensation benefits include which one of the following? - ANSWER Rehabilitation Benefits.
The unauthorized intrusion into a company's computer network resulting in damage to intellectual
property is best classified as which one of the following types of cyber liability exposures? - ANSWER
Intangible property.
An email was sent to a company's employee containing a harmful attachment. Several employees
opened the attachment which allowed hackers to obtain customer contact information. This cyber risk
loss is - ANSWER Damage to intangible property.
Which one of the following best describes real property? - ANSWER Tangible property that include land,
structures permanently attached to the land, and whatever is growing on the land.
, 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.
A building contractor uses lower grade materials than called for in the specifications for an office
building. A year after the building was completed, a balcony collapses, injuring several employees and
customers and causing damage to the building and contents. For the building construction company, this
is an example of - ANSWER A completed operations liability exposure.
To be covered under a workers compensation statute, an injury or disease (in most states) must meet
which one of the following requirements? - ANSWER Arise out of employees job-related injuries and
diseases.
Which one of the following supply chain exposures can a business mitigate by carefully wording
contracts and diversifying suppliers? - ANSWER Loss of supply due to external events.
Bio-Pharma was a highly regarded pharmaceutical company. That changed last year when it was
revealed that Bio-Pharma researchers had fabricated test results of the company's new hypertension
drug, a company official bribed a key regulator to get the drug approved. These revelations led to a sharp
decline in sales of all Bio-Pharma's drugs, a sharp decline in net income, and a decline in Bio-Pharma's
stock price. This scenario clearly indicates the value of a corporation's - ANSWER Reputation.
Sally is a commercial property claims adjuster. When she first assigned a claim, she reviews the
commercial property part of the policy to make sure that the property that suffered the loss matches the
description of the property insured. She also reviews the kinds and amounts of coverage provided.
Which of the following components of the commercial property part will provide Sally with this
information? - ANSWER Commercial property declarations page.
Billy owns a baseball souvenir store in Cooperstown, NY. He insured his store under a Building and
Personal Property Coverage Form (BPP) with a $275,000 limit and a $1,500 deductible. A large fire in the
store caused significant damage amounting to $310,000 in covered damages. How much would Billy's
insurer pay under his BPP? - ANSWER $275,000.
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