AINS 23 ACTUAL EXAM QUESTIONS
AND CORRECT DETAILED ANSWERS
(ALREADY GRADED A+) NEWEST
VERSION
Which one of the following statements is correct with respect to limits of liability
applicable to Part Two—Employers Liability Insurance? - Answer ✔ It includes a bodily
injury by disease policy limit. The insurer has no duty to pay defense costs after it has
paid damages equaling the applicable limit of insurance.
Which one of the following statements is correct with regard to the United States
Longshore and Harbor Workers Compensation Act (LHWCA)? - Answer ✔ Workers
compensation and LHWCA exposures must be covered and rated separately. Insureds
are subject to the law just as they are with respect to workers compensation laws. They
must provide the required coverage.
If the premium applicable to a particular workers compensation insured is increased or
decreased for a future period based on that insured's loss experience for a period in the
recent past, the policy uses which one of the following types of rating plans? - Answer ✔
Experience rating
Businessowners policy (BOP) rating incorporates which one of the following variables? -
Answer ✔ The amount of the policy deductible
Which one of the following best describes the "property not covered" provisions of the
businessowners policy (BOP)? - Answer ✔ The BOP has a relatively short list of
"property not covered" because the insureds eligible for a BOP are generally lower-risk,
more homogenous types of businesses.
All of the following statements regarding Coverage E—Scheduled Farm Personal
Property of the ISO Farm Policy are true, EXCEPT - Answer ✔ Coverage E is subject to
an 80 percent coinsurance provision. FALSE
Many of the provisions in professional liability policies resemble those found in
commercial general liability policies. However, some of the provisions differ in key ways
such as the - Answer ✔ Some of the provisions of professional liability policies differ
,from the CGL in key ways such as the use of a claims-made trigger, the consent-to-
settle requirement, the duty to defend and selection of defense counsel and the use of
deductibles.
Which one of the following statements is correct regarding the maintenance of
underlying insurance condition of an umbrella liability insurance policy? - Answer ✔ The
maintenance of underlying insurance condition obligates the insured to maintain all
required underlying coverages in full force and effect during the policy period.
Which one of the following is true regarding the Terrorism Risk Insurance Program
Reauthorization Act of 2015 (TRIPRA 2015)? - Answer ✔ . TRIPRA 2015 requires all
commercial property-casualty insurers to make coverage available for terrorism losses
as defined by the act.
Officials generally required to obtain public official bonds include those whose duties
involve which one of the following? - Answer ✔ Public official bonds are often required
for officials who seize or dispose of property or are involved in other duties that could
result in the violation of the rights of others.
Merchandise held in storage or for sale, raw materials and in-process or finished goods,
including supplies used in their packing or shipping" is the Building and Personal
Property Coverage Form's (BPP) definition for which one of the following? - Answer ✔
Stock
The Business Income Agreed Value coverage option in the business income form is an
option that - Answer ✔ Suspends the coinsurance clause as long as the insured carries
an amount of business income insurance that is equal to the value agreed on by the
policyholder and the insurer.
Rachel's salon is insured under a commercial package policy that includes the Business
Income (and Extra Expense) Coverage Form. Rachel's salon sustained an actual loss of
business income at the described premises as a result of a fire damage and access to
Rachel's salon was prohibited by civil authority. Rachel decided to rent a temporary
location and rent substitute equipment while her shop was being repaired. However,
while at the temporary location, Rachel's regular customers attended other salons and
Rachel' income was below normal levels. Rachel returned to her salon once it was
repaired and her business income returned to normal. Which one of the following
insuring agreements would best apply to Rachel's claim under the Business Income
(and Extra Expense) Coverage Form? - Answer ✔ Business Income and Extra Expense
insuring agreements
Which one of these exclusions applies only to the Employee Theft insuring agreement?
- Answer ✔ Inventory Shortages
, Which one of the following statements about employers liability coverage is true? -
Answer ✔ It is provided by a stand-alone policy that contains a General Section, six
parts, and endorsements
Which one of the following statements is correct with respect to electronic data
processing equipment floaters? - Answer ✔ Many cover special perils such as
mechanical or electrical breakdown, and they may also insure covered property while it
is in transit or at unlisted locations. The definition is usually much broader and also
includes items such as mainframe computers, display terminals, disk drivers, and
imaging devices.
An insured keeps his truck in a garage. A deer gets trapped in the garage and, in an
attempt to escape, climbs on top of the truck, breaking the windshield and causing
several dents in the hood. The insured's Business Auto Coverage Form (BACF)
provides physical damage coverage for specified causes of loss with a $100 deductible
and collision with a $250 deductible. It will cost the insured $750 to replace the broken
windshield and $1,200 to repair the dents. How much, if anything, will the business auto
insurer pay for this loss? - Answer ✔ The business auto insurer will not pay for the loss
because specified causes of loss coverage lists covered perils but does not include
damage caused by animals.
Which one of the following statements about uninsured motorists insurance coverage in
most states is true? - Answer ✔ It is applicable only to bodily injury.
In determining commercial auto base premiums for zone rated autos, insurers consider
the vehicle's cost new, the type of vehicle, the chosen deductible, the geographical
zone, and - Answer ✔ In rating trucking operations for insurance purposes, base
premiums for zone rated autos depend on the vehicle's cost new, the type of vehicle,
the chosen deductible, the geographical zone, and the current age of the vehicle.
Black and White Bakery (BWB) owns a private passenger vehicle and two vans, which
are insured under an unendorsed Business Auto Coverage Form (BACF) with a
$500,000 limit of insurance for liability coverage. James, a BWB employee, was driving
his own vehicle to meet with a customer to discuss a large wedding that BWB was
catering. His vehicle is insured under a Personal Auto Policy (PAP) with a $100,000
limit of insurance for liability coverage. On his way to the meeting James went through a
stop sign and struck another vehicle, seriously injuring the driver. The other driver made
a claim against James and BWB for $60,000 in bodily injury to himself and damage to
his vehicle. The investigation determined that James was responsible for the accident.
BWB was also liable because James was driving his vehicle in the course of
employment for BWB at the time of the accident. How much, if any, will BWB's auto
insurer pay fo - Answer ✔ BWB will not pay anything since the vehicle is owned by
James and not BWB. James' PAP will provide primary coverage and BWB's BACF
would be excess. Since James' PAP has an adequate limit, BWB's insurer will pay $0.
