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Terms in this set (529)
Sandra has a client that manufactures a product that is place the client's coverage in the surplus lines market without three
difficult to insure. The exposure is on the state's declinations from admitted insurers.
exportable list. Consequently, Sandra can
Explanation:
a. place the client's coverage in the surplus lines market Risks on an exportable list are inherently so hard to place that the state
after getting declinations from three admitted insurers. regulator has waived the diligent search requirement. Therefore, three
b. place the client's coverage in the surplus lines market declinations are not needed to access the surplus lines market.
without three declinations from admitted insurers.
c. seek coverage for the client from an alien insurer.
d. seek coverage for the client from a foreign insurer.
The homeowners policy only provides coverage for during the policy period
bodily injury or property damage that occurs or begins:
Explanation:
a. when the insurer accepts the insured's policy The homeowners policy only provides coverage for bodily injury or property
application damage that occurs or begins during the policy period.
b. during the policy period
c. during the policy period or 30 days prior
d. during the policy period or 45 days prior
The Permitted Incidental Occupancies endorsement offices and studios
provides coverage for what types of businesses on the
homeowners policy? Explanation:
The Permitted Incidental Occupancies endorsement is used for incidental
a. offices and studios business exposures such as those of office, school, and studio exposures.
b. car dealerships
c. manufacturing plants
d. banks
,Which of the following persons is NOT an insured on a driver without the permission of the vehicle's owner
business auto policy (BAP)?
Explanation:
a. named insured The BAP does not consider a person using a covered auto as an "insured" if that
b. driver with the permission of the named insured person does not have the permission of the vehicle's owner.
c. driver without the permission of the vehicle's owner
d. party that is liable for the named insured
Which of the following statements correctly describes The endorsed policy would cover a leak from an above-ground storage tank
how a commercial general liability (CGL) policy that but it does not cover leaks from underground storage tanks.
includes the limited pollution liability extension
endorsement will respond to a leak of gasoline from a Explanation:
service station's underground storage tank? The endorsed CGL policy covers bodily injury and property damage liability
arising from pollution released from the insured's premises (including above-
a. The endorsed policy would cover a leak from an ground tanks) but does not cover pollutants that are released from an
above-ground storage tank but it does not cover leaks underground or underwater container.
from underground storage tanks.
b. The endorsed policy covers leaks from any kind of
storage tank, vessel, or container, including those that
are below ground.
c. The endorsed policy would cover a leak from an
underground storage tank but it does not cover above-
ground storage tanks.
d. The endorsed policy does not cover leaks from any
kind of storage tank, vessel, or container, whether they
are above-ground or underground.
With respect to the tort of negligence, all the following Compensatory damages is another term for punitive damages.
statements regarding the different types of damages
are correct EXCEPT: Explanation:
Compensatory damages are amounts a defendant is required to pay to
a. Special damages are awarded to an injured party for compensate an injured party for harm done by the defendant. The two types of
measurable losses. compensatory damages that can arise out of an injury are special damages and
b. Compensatory damages is another term for punitive general damages. Punitive damages are amounts a defendant is required to
damages. pay as punishment for committing a civil wrong in an egregious or deliberate
c. General damages are awarded to an injured party to manner.
compensate for pain and suffering which cannot be
measured in dollars and cents.
d. Punitive damages are amounts a defendant is
required to pay as punishment for committing a civil
wrong in a deliberate manner.
Andy is covered by a group disability plan. What will His coverage under his former employer's group disability plan ends and
happen if he leaves his company to work for a cannot be converted to an individual policy.
competitor?
Explanation:
a. He can keep his coverage under his former Most group disability plans are not portable. When an insured leaves a job,
employer's disability income plan. coverage under that employer's plan ends. In contrast, individual DI policies
b. His coverage under his former employer's group cover the insured from job to job.
disability plan ends and cannot be converted to an
individual policy.
c. His coverage under his former employer's group
disability plan ends but he may apply for a conversion
policy to continue coverage.
d. He must have a medical exam to receive continued
coverage under his former employer's plan.
,Although TTU Insurance Company transacts insurance sells excess and surplus lines insurance
business in New York, the company is not an admitted
insurer. This means that TTU Explanation:
Consumers are legally permitted to purchase excess and surplus lines
a. is violating New York insurance laws. insurance from a non-admitted insurer when that coverage is not available from
b. is subject to the same state regulations as other an admitted insurer.
insurers
c. must apply for a license before being permitted to
sell insurance
d. sells excess and surplus lines insurance
Mrs. Hancock is driving from the Post Office, where she Hired and Non-owned Auto Liability
picked up the mail for her employer, to her place of
employment when she's involved in an accident. What Explanation:
endorsement on her employer's BOP will extend The Hired and Non-owned Auto Liability endorsements extend liability
liability coverage for the accident? coverage on the BOP to vehicles not owned by the insured that are used in the
business of the insured.
a. Personal and Advertising Injury Liability
b. Utility Services-Direct Damage
c. Hired and Non-owned Auto Liability
d. Protective Safeguards
Mrs. Ogden submitted a claim under her personal auto medical payments
policy for injuries she sustained in an accident. The
insurer made payment, it said, despite the fault of the Explanation:
driver. Under what coverage did the insurer make Medical payments coverage pays for necessary medical and funeral expenses,
payment for Mrs. Ogden's injuries? regardless of the negligence of the driver.
a. liability
b. uninsured motorists
c. medical payments
d. underinsured motorists
An insurance policy involves legally enforceable the insurer only
promises by which party or parties?
Explanation:
a. the policyowner only Insurance contracts are unilateral. Only the insurer makes a promise that can be
b. the insurer only enforced. It promises to pay benefits if an insured loss occurs. Policyholders
c. both the policyowner and the insurer must pay premiums to keep their policies in force, but there is no legally
d. neither the policyowner nor the insurer enforceable obligation to do so.
Before an excess lines broker is permitted to place three authorized insurers.
coverage with an unauthorized insurer, the risk must be
declined by at least Explanation:
A broker cannot place coverage with an unauthorized insurer unless the risk
a. one other unauthorized insurer. has been declined by at least three insurers authorized to do business in New
b. two insurers with offices nationwide. York.
c. three authorized insurers.
d. five insurers of any kind.
, Which of the following types of liability insurance deals employee benefits liability
with claims that involve errors or omissions in
administering a company's group health insurance Explanation:
policy and 401(k) plan? Employee benefits liability insurance responds to claims submitted because the
insured made errors or omissions when handling employee benefit plans such
a. directors & officers liability as group health and retirement plans.
b. employee benefits liability
c. errors and omissions liability
d. fiduciary liability
What is the basic principle underlying the law of large Prediction becomes more accurate as the number of exposure units increases.
numbers?
Explanation:
a. Prediction becomes more accurate as the number of As the number of exposure units increases, prediction becomes more accurate.
exposure units decreases. Applying the law of large numbers to insurance, this means that the larger the
b. Prediction becomes less accurate as the number of number of exposure units independently exposed to loss, the greater the
exposure units increases. probability that actual loss experience will equal expected loss experience.
c. Prediction becomes more accurate as the number of
exposure units increases.
d. Prediction is most accurate when the number of
exposure units stabilizes.
With respect to a comparison between surety bonds Both surety bonds and insurance involve three parties.
and insurance, all the following statements are correct
EXCEPT: Explanation:
Bonds involve a three-party relationship in which one party agrees to indemnify
a. Loss is not expected with surety bonds; some loss is a second party for the loss caused by the failure of a third party. Insurance
expected with insurance. involves a two-party relationship between the insurer and the policyowner, who
b. Both surety bonds and insurance involve three is usually also the insured. Even if the policyowner is not the insured, the
parties. insured is not a third party to the insurance contract.
c. Surety bonds are non-cancellable; insurance policies
may be cancellable.
d. Surety bonds do not permit subrogation; insurance
permits subrogation.
What is the maximum period for pre-existing limitations 6 months
or exclusions under Medicare supplement insurance
policies with grandfather status under the Affordable Explanation:
Care Act? Pre-existing exclusion periods may not exceed six months.
a. 6 months
b. 9 months
c. 12 months
d. No pre-existing period is permitted under Medicare
supplements.
Ted's home sustains hail damage when a storm strikes Protect the property from further harm.
the neighborhood. He promptly notifies his agent of
the claim. What else must Ted do to comply with policy Explanation:
conditions? The named insured must fulfill certain duties after a property insurance loss
occurs. These duties typically include giving prompt notice of loss to the agent
a. Inform his neighbors of the damage to see if they or insurer; notifying police if a theft is involved or illegal activity is suspected;
also have sustained damage. protecting property from further harm; cooperating with the insurer in the
b. Protect the property from further harm. investigation; and providing a sworn proof of loss to insurer within 60 days after
c. Report the damage to the police. the insurer requests it.
d. Assign an independent adjuster to the claim.
Verified | Latest Update 2026
Leave the first rating
Save
Students also studied
Flashcard sets Study guides
NASCLA Business Law and Managm... Comprehensive Guide to ACA Insur... Georgia Property and Casualty Insu... Co
Teacher 107 terms Teacher 46 terms Teacher 74 terms Te
rtttt444 Preview emmyfernando95 Preview gradesfavour Preview
Terms in this set (529)
Sandra has a client that manufactures a product that is place the client's coverage in the surplus lines market without three
difficult to insure. The exposure is on the state's declinations from admitted insurers.
exportable list. Consequently, Sandra can
Explanation:
a. place the client's coverage in the surplus lines market Risks on an exportable list are inherently so hard to place that the state
after getting declinations from three admitted insurers. regulator has waived the diligent search requirement. Therefore, three
b. place the client's coverage in the surplus lines market declinations are not needed to access the surplus lines market.
without three declinations from admitted insurers.
c. seek coverage for the client from an alien insurer.
d. seek coverage for the client from a foreign insurer.
The homeowners policy only provides coverage for during the policy period
bodily injury or property damage that occurs or begins:
Explanation:
a. when the insurer accepts the insured's policy The homeowners policy only provides coverage for bodily injury or property
application damage that occurs or begins during the policy period.
b. during the policy period
c. during the policy period or 30 days prior
d. during the policy period or 45 days prior
The Permitted Incidental Occupancies endorsement offices and studios
provides coverage for what types of businesses on the
homeowners policy? Explanation:
The Permitted Incidental Occupancies endorsement is used for incidental
a. offices and studios business exposures such as those of office, school, and studio exposures.
b. car dealerships
c. manufacturing plants
d. banks
,Which of the following persons is NOT an insured on a driver without the permission of the vehicle's owner
business auto policy (BAP)?
Explanation:
a. named insured The BAP does not consider a person using a covered auto as an "insured" if that
b. driver with the permission of the named insured person does not have the permission of the vehicle's owner.
c. driver without the permission of the vehicle's owner
d. party that is liable for the named insured
Which of the following statements correctly describes The endorsed policy would cover a leak from an above-ground storage tank
how a commercial general liability (CGL) policy that but it does not cover leaks from underground storage tanks.
includes the limited pollution liability extension
endorsement will respond to a leak of gasoline from a Explanation:
service station's underground storage tank? The endorsed CGL policy covers bodily injury and property damage liability
arising from pollution released from the insured's premises (including above-
a. The endorsed policy would cover a leak from an ground tanks) but does not cover pollutants that are released from an
above-ground storage tank but it does not cover leaks underground or underwater container.
from underground storage tanks.
b. The endorsed policy covers leaks from any kind of
storage tank, vessel, or container, including those that
are below ground.
c. The endorsed policy would cover a leak from an
underground storage tank but it does not cover above-
ground storage tanks.
d. The endorsed policy does not cover leaks from any
kind of storage tank, vessel, or container, whether they
are above-ground or underground.
With respect to the tort of negligence, all the following Compensatory damages is another term for punitive damages.
statements regarding the different types of damages
are correct EXCEPT: Explanation:
Compensatory damages are amounts a defendant is required to pay to
a. Special damages are awarded to an injured party for compensate an injured party for harm done by the defendant. The two types of
measurable losses. compensatory damages that can arise out of an injury are special damages and
b. Compensatory damages is another term for punitive general damages. Punitive damages are amounts a defendant is required to
damages. pay as punishment for committing a civil wrong in an egregious or deliberate
c. General damages are awarded to an injured party to manner.
compensate for pain and suffering which cannot be
measured in dollars and cents.
d. Punitive damages are amounts a defendant is
required to pay as punishment for committing a civil
wrong in a deliberate manner.
Andy is covered by a group disability plan. What will His coverage under his former employer's group disability plan ends and
happen if he leaves his company to work for a cannot be converted to an individual policy.
competitor?
Explanation:
a. He can keep his coverage under his former Most group disability plans are not portable. When an insured leaves a job,
employer's disability income plan. coverage under that employer's plan ends. In contrast, individual DI policies
b. His coverage under his former employer's group cover the insured from job to job.
disability plan ends and cannot be converted to an
individual policy.
c. His coverage under his former employer's group
disability plan ends but he may apply for a conversion
policy to continue coverage.
d. He must have a medical exam to receive continued
coverage under his former employer's plan.
,Although TTU Insurance Company transacts insurance sells excess and surplus lines insurance
business in New York, the company is not an admitted
insurer. This means that TTU Explanation:
Consumers are legally permitted to purchase excess and surplus lines
a. is violating New York insurance laws. insurance from a non-admitted insurer when that coverage is not available from
b. is subject to the same state regulations as other an admitted insurer.
insurers
c. must apply for a license before being permitted to
sell insurance
d. sells excess and surplus lines insurance
Mrs. Hancock is driving from the Post Office, where she Hired and Non-owned Auto Liability
picked up the mail for her employer, to her place of
employment when she's involved in an accident. What Explanation:
endorsement on her employer's BOP will extend The Hired and Non-owned Auto Liability endorsements extend liability
liability coverage for the accident? coverage on the BOP to vehicles not owned by the insured that are used in the
business of the insured.
a. Personal and Advertising Injury Liability
b. Utility Services-Direct Damage
c. Hired and Non-owned Auto Liability
d. Protective Safeguards
Mrs. Ogden submitted a claim under her personal auto medical payments
policy for injuries she sustained in an accident. The
insurer made payment, it said, despite the fault of the Explanation:
driver. Under what coverage did the insurer make Medical payments coverage pays for necessary medical and funeral expenses,
payment for Mrs. Ogden's injuries? regardless of the negligence of the driver.
a. liability
b. uninsured motorists
c. medical payments
d. underinsured motorists
An insurance policy involves legally enforceable the insurer only
promises by which party or parties?
Explanation:
a. the policyowner only Insurance contracts are unilateral. Only the insurer makes a promise that can be
b. the insurer only enforced. It promises to pay benefits if an insured loss occurs. Policyholders
c. both the policyowner and the insurer must pay premiums to keep their policies in force, but there is no legally
d. neither the policyowner nor the insurer enforceable obligation to do so.
Before an excess lines broker is permitted to place three authorized insurers.
coverage with an unauthorized insurer, the risk must be
declined by at least Explanation:
A broker cannot place coverage with an unauthorized insurer unless the risk
a. one other unauthorized insurer. has been declined by at least three insurers authorized to do business in New
b. two insurers with offices nationwide. York.
c. three authorized insurers.
d. five insurers of any kind.
, Which of the following types of liability insurance deals employee benefits liability
with claims that involve errors or omissions in
administering a company's group health insurance Explanation:
policy and 401(k) plan? Employee benefits liability insurance responds to claims submitted because the
insured made errors or omissions when handling employee benefit plans such
a. directors & officers liability as group health and retirement plans.
b. employee benefits liability
c. errors and omissions liability
d. fiduciary liability
What is the basic principle underlying the law of large Prediction becomes more accurate as the number of exposure units increases.
numbers?
Explanation:
a. Prediction becomes more accurate as the number of As the number of exposure units increases, prediction becomes more accurate.
exposure units decreases. Applying the law of large numbers to insurance, this means that the larger the
b. Prediction becomes less accurate as the number of number of exposure units independently exposed to loss, the greater the
exposure units increases. probability that actual loss experience will equal expected loss experience.
c. Prediction becomes more accurate as the number of
exposure units increases.
d. Prediction is most accurate when the number of
exposure units stabilizes.
With respect to a comparison between surety bonds Both surety bonds and insurance involve three parties.
and insurance, all the following statements are correct
EXCEPT: Explanation:
Bonds involve a three-party relationship in which one party agrees to indemnify
a. Loss is not expected with surety bonds; some loss is a second party for the loss caused by the failure of a third party. Insurance
expected with insurance. involves a two-party relationship between the insurer and the policyowner, who
b. Both surety bonds and insurance involve three is usually also the insured. Even if the policyowner is not the insured, the
parties. insured is not a third party to the insurance contract.
c. Surety bonds are non-cancellable; insurance policies
may be cancellable.
d. Surety bonds do not permit subrogation; insurance
permits subrogation.
What is the maximum period for pre-existing limitations 6 months
or exclusions under Medicare supplement insurance
policies with grandfather status under the Affordable Explanation:
Care Act? Pre-existing exclusion periods may not exceed six months.
a. 6 months
b. 9 months
c. 12 months
d. No pre-existing period is permitted under Medicare
supplements.
Ted's home sustains hail damage when a storm strikes Protect the property from further harm.
the neighborhood. He promptly notifies his agent of
the claim. What else must Ted do to comply with policy Explanation:
conditions? The named insured must fulfill certain duties after a property insurance loss
occurs. These duties typically include giving prompt notice of loss to the agent
a. Inform his neighbors of the damage to see if they or insurer; notifying police if a theft is involved or illegal activity is suspected;
also have sustained damage. protecting property from further harm; cooperating with the insurer in the
b. Protect the property from further harm. investigation; and providing a sworn proof of loss to insurer within 60 days after
c. Report the damage to the police. the insurer requests it.
d. Assign an independent adjuster to the claim.
