AINS103 Practice Questions with
All Correct Answers (2024-2025
Exam)
Which one of the following statements about the BOP is true?
Select one:
A. It provides liability coverage only.
B. It provides property coverage only.
C. It is designed for large businesses.
D. It is designed for small to mid-sized business. - Answer ✔ D. It is designed for small
to mid-sized business.
Julian is the owner of The Clock Shop, a retail store selling a wide variety of clocks for
the home and office. He leases the space in a shopping center that contains three other
retail stores. The Clock Shop is covered under a businessowners policy (BOP) with a
$200,000 limit of insurance for its business personal property and a $1,000 deductible.
Julian did not purchase any optional coverages. One evening a fire broke out in one of
the neighboring stores, and spread to The Clock Shop. The Clock Shop claimed the
following damages:
Description
Amount
Damage to merchandise on display and in storage
$50,000
Damage to a computer and printer in the office area
$4,500
Damage to a personalized sign attached to the building
$900
How much will the BOP insurer pay for this loss?
Select one:
A. $49,000
B. $49,900
C. $54,000
D. $54,400 - Answer ✔ D. $54,400
Glorious Gifts is a retail store located in a shopping center along with four other retail
tenants. It is insured under a businessowners policy (BOP) with a $300,000 limit for
Personal Property and a $1,000 deductible. One day during business hours, a fire
started in the pizza shop next door and spread to Glorious Gifts. Everyone was able to
,escape safely, but Glorious Gifts suffered the following damages: $75,000 in store
merchandise, $10,000 in shelving units that had been installed, a $3,000 computer, and
$1,500 in cash. How much will the BOP insurer pay?
Select one:
A. $77,000
B. $87,000
C. $88,000
D. $88,500 - Answer ✔ B. $87,000
The Neopolitan is insured under a businessowners policy (BOP) for both building and
business personal property. Which one of the following would be covered under the
definition of a building under The Neopolitan's BOP?
Select one:
A. The land that the building sits on
B. The outdoor lighting fixtures
C. Permanently installed fixtures and improvements paid for by tenants
D. The security fence that surrounds the building - Answer ✔ B. The outdoor lighting
fixtures
The medical expense coverage under Business Section II-Liability Coverage of the ISO
businessowners policy (BOP) would cover small and reasonable medical claims for
which one of the following?
Select one:
A. Injured customers requiring hospitalization.
B. The insured's spouse
C. Employees of the insured organization
D. Volunteer workers at the insured organization - Answer ✔ D. Volunteer workers at
the insured organization
The Liquor Liability exclusion would apply to which one of the following businesses
insured by an ISO businessowners policy?
Select one:
A. An accounting office that serves beer and wine at its company picnic
B. A convenience store that sells beer
C. A bridal shop that offers champagne to the bridal party during a fitting
D. A motel that offers customers a free happy hour every Friday - Answer ✔ B. A
convenience store that sells beer
Jack, a customer at Clark's Market, sued the grocery store for damages resulting from
bodily injury he sustained when he slipped and fell while shopping in the produce area.
Jack broke his elbow and suffered a back injury. Clark's Market is insured under a
businessowners policy (BOP) with a $300,000 liability and medical expense limit of
insurance. The insurer defended Clark's Market against the suit, but the court awarded
Jack $285,000 for his injury and a prejudgment interest of $5,000. The insurer's cost of
defending the grocery store was $20,000. What is the total amount that the BOP insurer
will pay for this claim?
,Select one:
A. $290,000
B. $300,000
C. $305,000
D. $310,000. - Answer ✔ D. $310,000.
Jenn is a producer for Goshen Mutual. She is trying to determine if a new prospect, Mr.
Cooper's Café is eligible for the businessowners policy (BOP). Mr. Cooper's Café is a
small restaurant located on the first floor of an office building, serving only breakfast and
lunch. Cooking on the premises is limited to coffee makers, a grill, and microwave
appliances. It has seating for 10-15 people, and large refrigerated cases with food, beer
and wine to-go. Which one of the following factors about Mr. Cooper's Café would make
it ineligible for BOP coverage?
Select one:
A. It has seating for 15 people.
B. It sells beer and wine.
C. It is located in an office building.
D. It does some cooking on premises - Answer ✔ B. It sells beer and wine.
Which one of the following risk categories is generally eligible for coverage under a
businessowners policy (BOP)?
A. Office buildings
B. Financial institutions
C. Bars and pubs
D. Automobile dealers - Answer ✔ A. Office buildings
Which one of the following types of loss exposure is typically covered by a
businessowners policy (BOP)?
Select one:
A. Professional liability
B. Business personal property
C. Workers compensation
D. Commercial auto - Answer ✔ B. Business personal property
Rose's Flower Shop has its building and business personal property insured under a
businessowners policy (BOP). The building was struck by lightning and the resulting fire
caused significant damage to both the building and personal property. Which one of the
following would be excluded under the BOP?
Select one:
A. The part of the building that was added 5 years ago
B. The water damage caused by the firefighters
C. The cost of upgrades due to local ordinances
D. The part of the building that was struck by the lightning - Answer ✔ C. The cost of
upgrades due to local ordinances
, 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.
