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AINS 103: Practice Quiz-All Chapters ( 2024 Edition )
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AINS 103: Practice Quiz-All Chapters ( 2024Edition )
For most businesses, which peril poses the greatest risk of a large or
total property loss? - Correct Answers ✅For most businesses, fire
poses the greatest risk of a large or total property loss.
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? - Correct
Answers ✅Cost to rent temporary office space.
An electrical contractor was hired to install a new 100-amp fuse box in
the Smith's home. During installation, the contractor inadvertently left
a small screwdriver in a duct space behind the panel. Three weeks later,
the screwdriver caused an electrical short which led to a fire. Which
one of the following loss exposures best categorizes the electrical
contractor's legal liability exposure for the fire damages? - Correct
Answers ✅Completed operations liability.
Upon entering a restaurant, a customer grasped a handrail that 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?
- Correct Answers ✅Premises and operations liability.
Inland marine insurance is insurance that covers: - Correct Answers
✅Many different classes of property that typically involve an element
of transportation on land.
,AINS 103: Practice Quiz-All Chapters ( 2024
Edition )
Workers compensation benefits include which one of the following? -
Correct Answers ✅Rehabilitation benefits.
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,
and a company official bribed a key regulator to get the drug approved.
These revelations led to a sharp decline in sales of all of 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...? - Correct Answers ✅Reputation.
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: - Correct Answers ✅Loss or damage caused by computer
viruses.
Sally is a commercial property claims adjuster. When she is 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
amount of coverage provided. Which one of the following components
of the commercial property part will provide Sally with this
information? - Correct Answers ✅The commercial property
,AINS 103: Practice Quiz-All Chapters ( 2024
Edition )
declarations page contains information such as a description of the
property insured, the kinds and amounts of coverage provided, and any
optional coverages, among other information.
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? - Correct Answers
✅$275,000. $310,000 - $1,500 = $308,500, which exceeds the BPP
limit. The insurer will pay $275,000. The deductible is subtracted from
the loss, not the limit.
Which one of the following is one of the covered causes of loss in the
commercial property policy Causes of Loss—Basic form? - Correct
Answers ✅Explosion is a covered cause of loss under the basic
form. All the others are additional causes of loss covered by the broad
form (and they are also covered under the special form).
Which one of the following is correct with respect to the Increased Cost
of Construction additional coverage of the Building and Personal
Property Coverage Form (BPP)? - Correct Answers ✅It provides a
small amount of insurance to cover the increased cost to comply with
ordinances or laws regulating the repair, rebuilding, or replacement of
covered buildings.
, AINS 103: Practice Quiz-All Chapters ( 2024
Edition )
Which one of the following would be considered an extra expense
under the Business Income (and Extra Expense) Coverage Form of the
commercial package policy? - Correct Answers ✅The increased
cost of rent at a temporary location.
Dooley's Restaurant is insured under a commercial package policy (CPP)
with the Business Income (with Extra Expense) Coverage Form. The
business suffered a $400,000 loss of business income when it was
forced to suspend operations after flood waters damaged the
basement and first floor of the restaurant. Which one of the following
is an acceptable reason for the CPP insurer to deny the business income
claim? - Correct Answers ✅The policy's covered causes of loss did
not include flood.
Which one of the following would be covered under the Extra Expense
insuring agreement of the Business Income (and Extra Expense)
Coverage Form? - Correct Answers ✅Costs to move to a
temporary location.
Richard's Clothing Store has a $500,000 Business Income (and Extra
Expense) Coverage Form on which there is an 80 percent coinsurance
clause. A fire swept through the store. Richard's Clothing Store
estimates that its net income plus all operating expenses for the policy
period would have been $1,875,000. The estimated business income
loss is $300,000. How much will the insurer pay? - Correct Answers
✅$100,000. The coinsurance factor would be the amount of insurance
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