Insurance MCQ

An employer is about to start working in a new state and will hire workers who reside there. Would the employer's current standard-form workers compensation policy automatically provide coverage for this new state? Never Yes, if the new state was listed on the information page in part 3C. Other States Insurance Only if form WC0244 "New States Coverage" endorsement was attached to the policy Yes, but only for 30 days Answer: Yes, if the new state was listed on the information page in part 3C. Other States Insurance

Under the dwelling policy, what is the purpose of adding the EC (extended coverage) endorsement? It adds additional perils to the coverage. It adds broad form perils to the policy. It adds open peril coverage to the policy. It limits coverage. Answer: It adds additional perils to the coverage.

Which endorsement is necessary to cover the damage caused to a freezer by the interruption of a power source under a BOP? Non owned and Hired Auto Earthquake Utility Services - Time Element Utility Services - Direct Damage Answer: Utility Services - Direct Damage

In ocean marine insurance, what is the purpose of the IVEL clause? To provide excess hull and collision liability coverage. To cover bulk shipments. To require the insured to take all reasonable steps to protect the property from further loss. To pay for the loss of shipper's fees. Answer: To provide excess hull and collision liability coverage.

Which of the commercial causes of loss forms provide theft coverage? The Special Form only The Basic, Broad and Special Forms The Broad and Special Forms only None of the forms provide theft coverage Answer: The Special Form only

The business auto policy liability exclusion pertaining to pollution removes coverage for each of the following, EXCEPT: The cost of governmentally ordered clean-up of pollutants. The escape of pollutants while being transported by a covered auto. The escape of pollutants caused by damage to the property containing them when the damage results from the use of a covered auto. The escape of pollutants before they are accepted by the insured for movement onto a covered auto. Answer: The escape of pollutants caused by damage to the property containing them when the damage results from the use of a covered auto.

When it is known that an employee is guilty of theft or other dishonest act, how is coverage affected? Coverage will continue if the employee agrees to make complete restitution. Coverage continues until the expiration date of the coverage. Coverage is cancelled immediately. Coverage will continue if an additional premium is charged for the increased exposure. Answer: Coverage is cancelled immediately.

An initial premium charged the insured under a reporting form type of policy is called the: Estimated premium Full annual premium Deposit premium Auditable premium Answer: Deposit premium

In the ocean marine insurance policy, the term "average" means: Loss or damage. The ACV of the ship. The average value of the claim insured against by the perils of the sea . That coverage is written on a named peril basis Answer: Loss or damage.

A common carrier has signed a contract to deliver goods of the seller. The goods are to be shipped "Free on Board Destination". When does the responsibility of the seller end? When they are picked up by the carrier. When the goods to be shipped are placed on the loading dock of the seller. Not until the goods are delivered to the buyer in accordance with the contract terms. When the buyer confirms the purchase of transportation coverage. Answer: Not until the goods are delivered to the buyer in accordance with the contract terms

John does not own a vehicle and borrows a friend's car and has an accident. John carries named non-owned auto coverage. Which of the following applies to the accident? John's coverage is excess The friend's coverage is excess since John has coverage Both companies would share in the claim equally John's coverage would pay the majority of the claim Answer: John's coverage is excess

In Alabama workers compensation benefits for "temporary partial" disability and "permanent partial body" disability benefits are limited to ______ weeks of benefits. 300 200 250 500 Answer: 300

The HO-3 provides "special limits" of coverage for certain items of personal property. These do not include: Motorized land vehicles Trailers Jewelry Watercraft Answer: Motorized land vehicles .

Under the provisions of the BOP, what happens when an insured fails to advise the insurance company that the insured's sprinkler system is inoperative beyond a 48 hour period? Coverage for fire losses will be excluded Smoke damage is excluded The insured will be billed an additional premium. The policy will be cancelled by the insurer for violation of a warranty. Answer: Coverage for fire losses will be excluded

All of the following are reasons for cancellation of a commercial insurance policy, EXCEPT: Several large claims. Nonpayment of premium. Conviction of the named insured of a crime arising out of an act increasing the hazard insured against. Substantial change in the risk assumed by the insurer since the policy was issued. Answer: Several large claims.

Which of the following would be considered in establishing a rate for an employer's workers compensation premium? Number of employees Number of hours worked by the employees Remuneration Unemployed employees Answer: Remuneration

Of the following physical damage losses, which would be covered by a BAP providing comprehensive and collision coverage? The engine is damaged when water in the cooling system freezes. The insured failed to add antifreeze. A front wheel bearing burns out after 70,000 miles of use. Among other items of damage, the front tires are blown out in a high- speed head-on collision. None of the losses would be covered. Answer: Among other items of damage, the front tires are blown out in a high- speed head-on collision.

Basic benefits available under a typical workers compensation policy include which of the following? I. Medical expenses. II. Loss of income. III. Rehabilitation. IV. Pain and suffering. Answer:  I. Medical expenses. II. Loss of income. III. Rehabilitation.

The APEX Corporation purchases widgets from the Holly Company. The following statement is on the back of each invoice: "Purchaser shall hold seller harmless from liability arising out of the sale of these widgets." To cover this possible loss exposure, the APEX Corporation should obtain which of the following types of insurance? Commercial General Liability Contractual Liability Contingent Liability Contractual Liability and Contingent Liability Answer: Commercial General Liability

A CGL policy provides coverage for which of the following exposures? Contractual Liability in "insured contracts" Professional Liability Employee Injury Liability Pollution Liability Answer: Contractual Liability in "insured contracts"