AINS 103 EXAM QUESTIONS AND SOLUTIONS
2026
◉ 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.
,◉ Perils are an important aspect of property insurance. Which one
of the following statements is correct with respect to perils? Answer:
A peril is the actual means by which property is damaged or
destroyed such as fire, lightning, windstorm, hail or theft.
◉ During a business interruption, some of the organizations
expenses, called continuing expenses, will continue, and other
expenses, called non-continuing expenses, will not continue. Which
one of the following is an example of a continuing expense? Answer:
Payroll of key employees.
◉ Which one of the following loss exposure exist when a business
can be held legally liable for bodily injury or property damaged
caused by their repair or contracting work? Answer: Completed
operations liability.
◉ Which one of the following entities would likely have the greatest
completed operations loss exposure? Answer: Paul the plumber.
◉ Inland marine insurance is insurance that covers Answer: Many
different classes of property that typically involve an element of
transportation on land.
◉ Joe signs a contract with Home Builders to install the electrical
wiring for a new home. He uses his own tools and follows the
specifications in the contract. Joe is burned while installing the
, wiring. Does Home Builders' workers compensation policy cover
Joe's injury? Answer: No, because Joe is not an employee of Home
Builders.
◉ Cyber risk intellectual property loss exposures include Answer:
Cyber extortion of trade secrets.
◉ As part of its assessment of its cyber risk, an organization should
consider whether there are any intangible property exposures.
Which one of the following would best be classified as an intangible
property loss? Answer: The computer system is hacked and data
including credit card numbers are stolen.
◉ Property insurance policies use the term "personal property" to
refer to the Answer: Contents in and around a building.
◉ In business income insurance, the expenses that an organization
would not have incurred if the business interruption have not
occurred are called Answer: Extra expenses.
◉ Radley Contracting Company is installing new signage on the
front of a building. George, a passerby walking near the building is
injured when a Radley employee accidentally drops a tool from a
crane. George likely has the ability to assert which one the following
types of claim? Answer: Premises and operations liability.
2026
◉ 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.
,◉ Perils are an important aspect of property insurance. Which one
of the following statements is correct with respect to perils? Answer:
A peril is the actual means by which property is damaged or
destroyed such as fire, lightning, windstorm, hail or theft.
◉ During a business interruption, some of the organizations
expenses, called continuing expenses, will continue, and other
expenses, called non-continuing expenses, will not continue. Which
one of the following is an example of a continuing expense? Answer:
Payroll of key employees.
◉ Which one of the following loss exposure exist when a business
can be held legally liable for bodily injury or property damaged
caused by their repair or contracting work? Answer: Completed
operations liability.
◉ Which one of the following entities would likely have the greatest
completed operations loss exposure? Answer: Paul the plumber.
◉ Inland marine insurance is insurance that covers Answer: Many
different classes of property that typically involve an element of
transportation on land.
◉ Joe signs a contract with Home Builders to install the electrical
wiring for a new home. He uses his own tools and follows the
specifications in the contract. Joe is burned while installing the
, wiring. Does Home Builders' workers compensation policy cover
Joe's injury? Answer: No, because Joe is not an employee of Home
Builders.
◉ Cyber risk intellectual property loss exposures include Answer:
Cyber extortion of trade secrets.
◉ As part of its assessment of its cyber risk, an organization should
consider whether there are any intangible property exposures.
Which one of the following would best be classified as an intangible
property loss? Answer: The computer system is hacked and data
including credit card numbers are stolen.
◉ Property insurance policies use the term "personal property" to
refer to the Answer: Contents in and around a building.
◉ In business income insurance, the expenses that an organization
would not have incurred if the business interruption have not
occurred are called Answer: Extra expenses.
◉ Radley Contracting Company is installing new signage on the
front of a building. George, a passerby walking near the building is
injured when a Radley employee accidentally drops a tool from a
crane. George likely has the ability to assert which one the following
types of claim? Answer: Premises and operations liability.
