AINS 103 HIGH PROBABILITY EXAM
QUESTIONS AND ANSWERS 2026
◉ Categories of Commercial Property: Answer: Buildings, personal
property contained in buildings, money and securities, vehicles and
watercraft, property in the possession of others, property in transit,
floating property.
◉ Significant perils which can result in catastrophic loss: Answer:
Fire, Theft, Windstorm, Flood, Earthquake, Terrorism, Vandalism,
and War.
◉ For most businesses, what type of peril poses the greatest risk of a
large or total property loss? Answer: Fire.
◉ Almost all businesses face commercial property loss exposures
because they own or have a legal interest in what 2 kinds of
property? Answer: Real property, and personal property.
◉ Joanne owns a construction business. What kind of property are
the company forklifts considered? Answer: Personal property.
◉ Financial consequences of loss; Reduced Value: Answer: When a
loss occurs, the property's value can be reduced or eliminated.
,◉ Financial consequences of loss; Lost Income: Answer: A business
may not be able to use the property in question until it has been
repaired, restored or replaced.
◉ Financial consequences of loss; Extra Expenses: Answer:
Businesses sometimes have to pay additional costs to keep operating
after a loss.
◉ Key parts of calculating a business income loss are: Answer:
Determining the lost revenue and any continuing and extra expenses
the business incurred during the period of interruption.
◉ Continuing Expenses: Answer: Expenses that continue to be
incurred during a business interruption, such as payroll of key
employees, debt repayments, taxes, and insurance premiums.
◉ Extra Expenses: Answer: Expenses that are paid in addition to
continuing expenses for the purpose of mitigating the effects of a
business interruption, such as relocation, utilities, payroll, and
equipment.
◉ T/F: The causes of business income losses associated with
property exposures are typically the same as those for physical
damage losses. Answer: True.
, ◉ When property that a business uses to generate income becomes
damaged or stolen, what kind of loss is typically suffered? Answer:
Business income loss.
◉ What kinds of expenses constitute continuing expenses? Answer:
Payroll of key employees, debt repayments, property and payroll
taxes, rent or lease payments, and insurance premiums.
◉ What are the key parts of calculating a business income loss?
Answer: Determining the loss revenue and any continuing and extra
expenses the business incurred during the period of interruption.
◉ What kinds of expenses constitute extra expenses? Answer:
Relocation, utilities, payroll, equipment.
◉ What are the potential consequences for an organization if a court
rules that it is responsible for injury, harm, or damage to another
party? Answer: Damages, Defense costs, and reputational harm.
◉ Damages: Answer: The court may require the liable organization
to pay damages to the injured/harmed party.
◉ Defense costs: Answer: The liable organization may have to pay
legal defense costs and the cost of investigating the claim.
QUESTIONS AND ANSWERS 2026
◉ Categories of Commercial Property: Answer: Buildings, personal
property contained in buildings, money and securities, vehicles and
watercraft, property in the possession of others, property in transit,
floating property.
◉ Significant perils which can result in catastrophic loss: Answer:
Fire, Theft, Windstorm, Flood, Earthquake, Terrorism, Vandalism,
and War.
◉ For most businesses, what type of peril poses the greatest risk of a
large or total property loss? Answer: Fire.
◉ Almost all businesses face commercial property loss exposures
because they own or have a legal interest in what 2 kinds of
property? Answer: Real property, and personal property.
◉ Joanne owns a construction business. What kind of property are
the company forklifts considered? Answer: Personal property.
◉ Financial consequences of loss; Reduced Value: Answer: When a
loss occurs, the property's value can be reduced or eliminated.
,◉ Financial consequences of loss; Lost Income: Answer: A business
may not be able to use the property in question until it has been
repaired, restored or replaced.
◉ Financial consequences of loss; Extra Expenses: Answer:
Businesses sometimes have to pay additional costs to keep operating
after a loss.
◉ Key parts of calculating a business income loss are: Answer:
Determining the lost revenue and any continuing and extra expenses
the business incurred during the period of interruption.
◉ Continuing Expenses: Answer: Expenses that continue to be
incurred during a business interruption, such as payroll of key
employees, debt repayments, taxes, and insurance premiums.
◉ Extra Expenses: Answer: Expenses that are paid in addition to
continuing expenses for the purpose of mitigating the effects of a
business interruption, such as relocation, utilities, payroll, and
equipment.
◉ T/F: The causes of business income losses associated with
property exposures are typically the same as those for physical
damage losses. Answer: True.
, ◉ When property that a business uses to generate income becomes
damaged or stolen, what kind of loss is typically suffered? Answer:
Business income loss.
◉ What kinds of expenses constitute continuing expenses? Answer:
Payroll of key employees, debt repayments, property and payroll
taxes, rent or lease payments, and insurance premiums.
◉ What are the key parts of calculating a business income loss?
Answer: Determining the loss revenue and any continuing and extra
expenses the business incurred during the period of interruption.
◉ What kinds of expenses constitute extra expenses? Answer:
Relocation, utilities, payroll, equipment.
◉ What are the potential consequences for an organization if a court
rules that it is responsible for injury, harm, or damage to another
party? Answer: Damages, Defense costs, and reputational harm.
◉ Damages: Answer: The court may require the liable organization
to pay damages to the injured/harmed party.
◉ Defense costs: Answer: The liable organization may have to pay
legal defense costs and the cost of investigating the claim.
