AINS 103 EXPLORING COMMERCIAL INSURANCE
Worker's compensation benefits include which one of the following?
Rehabilitation benefits
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?
Regulatory and legal compliance
Which of the following supply chain exposures can a business mitigate by carefully
wording contracts and diversifying suppliers?
Loss of supply due to external events
Which one of the following perils would be covered under the commercial property
policy broad form but not covered under the basic form?
Damage due to weight of snow
Which of the following is a covered cause of loss under the Causes of Loss - Basic
Form?
Sprinkler leakage
Hager Incorporated insures its building and business personal property under the
Building and Personal Property Coverage Form (BPP). The company suffered a fire
loss that destroyed a significant portion of the building and damaged the fence
surrounding the building. Assuming that the building is insured for at least 80 percent of
its value, coverage extensions under the BPP would provide coverage for which one of
the following?
, Damage to the fence surrounding the building
The coinsurance basis for business income coverage is
Net income plus all operating expenses that would have been incurred in the absence
of a loss
Leslie suffered a severe burn to her hand when her microwave oven manufactured by
LH Appliances caught fire. The fire also caused damage to her kitchen cabinets. Two
years later, Leslie decided to file a suit against the manufacturer when she learned that
microwaves manufactured by LH Appliances had been found responsible for several
other fires. LH Appliances was insured by an occurrence version of the commercial
general liability (CGL) coverage form with no deductible or endorsements. Which one of
the following correctly describes how LH Appliances' CGL will apply to the claim?
The CGL will defend the insured and pay for both the bodily injury and damages to the
cabinets if found liable
Which one of these offenses would NOT be considered a personal and advertising
injury under Coverage B of the Commercial General Liability Coverage Form?
Refusing to hire a qualified job applicant because of his ethnicity
Which one of the following statements is true regarding Coverage C—Medical
Payments of the Commercial General Liability policy?
Medical payments coverage is a means of making prompt settlements
Coverage will apply under the liability insuring agreement of the Business Auto
Coverage Form (BACF) for bodily injury or property damage
Caused by an accident
Robert, a single father of two, owns a painting business. While driving his insured van
on the job, Robert is involved in a serious accident and spends several days in the
hospital. Robert incurs the following expenses.
$4,000 Lost wages
$6,000 Payment for a nanny to watch his two children
$5,000 Cost to replace the painting equipment he was hauling
Worker's compensation benefits include which one of the following?
Rehabilitation benefits
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?
Regulatory and legal compliance
Which of the following supply chain exposures can a business mitigate by carefully
wording contracts and diversifying suppliers?
Loss of supply due to external events
Which one of the following perils would be covered under the commercial property
policy broad form but not covered under the basic form?
Damage due to weight of snow
Which of the following is a covered cause of loss under the Causes of Loss - Basic
Form?
Sprinkler leakage
Hager Incorporated insures its building and business personal property under the
Building and Personal Property Coverage Form (BPP). The company suffered a fire
loss that destroyed a significant portion of the building and damaged the fence
surrounding the building. Assuming that the building is insured for at least 80 percent of
its value, coverage extensions under the BPP would provide coverage for which one of
the following?
, Damage to the fence surrounding the building
The coinsurance basis for business income coverage is
Net income plus all operating expenses that would have been incurred in the absence
of a loss
Leslie suffered a severe burn to her hand when her microwave oven manufactured by
LH Appliances caught fire. The fire also caused damage to her kitchen cabinets. Two
years later, Leslie decided to file a suit against the manufacturer when she learned that
microwaves manufactured by LH Appliances had been found responsible for several
other fires. LH Appliances was insured by an occurrence version of the commercial
general liability (CGL) coverage form with no deductible or endorsements. Which one of
the following correctly describes how LH Appliances' CGL will apply to the claim?
The CGL will defend the insured and pay for both the bodily injury and damages to the
cabinets if found liable
Which one of these offenses would NOT be considered a personal and advertising
injury under Coverage B of the Commercial General Liability Coverage Form?
Refusing to hire a qualified job applicant because of his ethnicity
Which one of the following statements is true regarding Coverage C—Medical
Payments of the Commercial General Liability policy?
Medical payments coverage is a means of making prompt settlements
Coverage will apply under the liability insuring agreement of the Business Auto
Coverage Form (BACF) for bodily injury or property damage
Caused by an accident
Robert, a single father of two, owns a painting business. While driving his insured van
on the job, Robert is involved in a serious accident and spends several days in the
hospital. Robert incurs the following expenses.
$4,000 Lost wages
$6,000 Payment for a nanny to watch his two children
$5,000 Cost to replace the painting equipment he was hauling
