Arkansas P&C Exam. 103 Questions with
100% Correct Answers | Verified | Updated
2024.
The major portion of the premium for an equipment breakdown policy pays
-For repairs after a loss.
-For coverage for bodily injury and property damage of others.
-For replacement parts.
-For inspections and examinations.
For inspections and examinations.
#3.
The party to a surety or fidelity bond who promises to fulfill the obligation is the
a)
Principal.
b)
Custodian.
c)
Surety.
d)
Obligee.
Principal
#4.
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of
the following insurance principles has the insurer violated?
a)
Adhesion
b)
Consideration
c)
Good faith
d)
Representation
Consideration
#10.
A commercial property special form covers property in transit up to
a)
Full replacement cost.
b)
,$5,000.
c)
ACV.
d)
$500.
$5,000.
#12.
Directors and officers liability insurance defends actions against a corporation or its officers and
directors alleging wrongful acts. With regard to the coverage provided, wrongful acts include any of
the following EXCEPT
a)
Breach of duty.
b)
Embezzlement.
c)
Misstatements.
d)
Neglect.
Embezzlement
#15.
An individual's construction company leaves mobile equipment and construction machinery on the job
site until the project is completed. What could this individual use to insure it?
a)
Bailee's customers form
b)
Builders risk form
c)
General property form
d)
Contractors equipment floater
Contractors equipment floater
#18.
All of the following statements describe the concept of strict liability EXCEPT
a)
It is imposed on defendants engaged in hazardous activities.
b)
Claimants may need to provide proof that a product defect caused an injury.
c)
It is imposed regardless of fault.
d)
It is applied in product liability cases.
,It is imposed on defendants engaged in hazardous activities.
#22.
The business income coverage form covers consequential loss of business income that occurs when a
business must suspend operations because of a direct loss. Which of the following terms best
describes the nature of this type of coverage?
a)
Occurrence
b)
Direct damage
c)
Time element
d)
Claims made
Time element
#24.
If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a
personal auto policy would apply to all coverages EXCEPT
a)
Uninsured motorist.
b)
No-fault medical payments.
c)
Liability.
d)
Physical damage.
Physical damage.
#27.
Which method of loss valuation is contrary to the basic concept of indemnity?
a)
Market value
b)
Agreed value
c)
Replacement cost
d)
Functional replacement cost
Replacement cost
#29.
When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by
the underlying policy, it usually only pays
, a)
The amount specified in the policy under the additional coverage provisions.
b)
The amount in excess of the underlying policy deductible.
c)
A percentage of the loss as described on the declarations.
d)
The excess over the self-insured retention.
The excess over the self-insured retention.
#34.
A bond is written for a set limit, and the surety will be liable only for this amount of the limit. This
limit is known as the
a)
Penalty.
b)
Face value.
c)
Stated amount.
d)
Limit of liability.
Penalty.
#35.
An insured owns a building that is valued at $400,000. To comply with the 80% coinsurance provision
of his insurance policy, how much should he insure the property for?
a)
100% of the market value
b)
$400,000
c)
$32,000
d)
80% of the property's replacement cost or more
80% of the property's replacement cost or more
#40.
Which would NOT be covered by the inside the premises - robbery or safe burglary of other property
coverage?
a)
An employee is caught stealing cash from the register.
b)
Two men break a window during an attempted robbery.
c)
100% Correct Answers | Verified | Updated
2024.
The major portion of the premium for an equipment breakdown policy pays
-For repairs after a loss.
-For coverage for bodily injury and property damage of others.
-For replacement parts.
-For inspections and examinations.
For inspections and examinations.
#3.
The party to a surety or fidelity bond who promises to fulfill the obligation is the
a)
Principal.
b)
Custodian.
c)
Surety.
d)
Obligee.
Principal
#4.
An insurer neglects to pay a legitimate claim that is covered under the terms of the policy. Which of
the following insurance principles has the insurer violated?
a)
Adhesion
b)
Consideration
c)
Good faith
d)
Representation
Consideration
#10.
A commercial property special form covers property in transit up to
a)
Full replacement cost.
b)
,$5,000.
c)
ACV.
d)
$500.
$5,000.
#12.
Directors and officers liability insurance defends actions against a corporation or its officers and
directors alleging wrongful acts. With regard to the coverage provided, wrongful acts include any of
the following EXCEPT
a)
Breach of duty.
b)
Embezzlement.
c)
Misstatements.
d)
Neglect.
Embezzlement
#15.
An individual's construction company leaves mobile equipment and construction machinery on the job
site until the project is completed. What could this individual use to insure it?
a)
Bailee's customers form
b)
Builders risk form
c)
General property form
d)
Contractors equipment floater
Contractors equipment floater
#18.
All of the following statements describe the concept of strict liability EXCEPT
a)
It is imposed on defendants engaged in hazardous activities.
b)
Claimants may need to provide proof that a product defect caused an injury.
c)
It is imposed regardless of fault.
d)
It is applied in product liability cases.
,It is imposed on defendants engaged in hazardous activities.
#22.
The business income coverage form covers consequential loss of business income that occurs when a
business must suspend operations because of a direct loss. Which of the following terms best
describes the nature of this type of coverage?
a)
Occurrence
b)
Direct damage
c)
Time element
d)
Claims made
Time element
#24.
If a person is using an auto with the belief that he is entitled to do so, subrogation rights under a
personal auto policy would apply to all coverages EXCEPT
a)
Uninsured motorist.
b)
No-fault medical payments.
c)
Liability.
d)
Physical damage.
Physical damage.
#27.
Which method of loss valuation is contrary to the basic concept of indemnity?
a)
Market value
b)
Agreed value
c)
Replacement cost
d)
Functional replacement cost
Replacement cost
#29.
When an umbrella policy is broader than underlying insurance and it pays a loss that is not covered by
the underlying policy, it usually only pays
, a)
The amount specified in the policy under the additional coverage provisions.
b)
The amount in excess of the underlying policy deductible.
c)
A percentage of the loss as described on the declarations.
d)
The excess over the self-insured retention.
The excess over the self-insured retention.
#34.
A bond is written for a set limit, and the surety will be liable only for this amount of the limit. This
limit is known as the
a)
Penalty.
b)
Face value.
c)
Stated amount.
d)
Limit of liability.
Penalty.
#35.
An insured owns a building that is valued at $400,000. To comply with the 80% coinsurance provision
of his insurance policy, how much should he insure the property for?
a)
100% of the market value
b)
$400,000
c)
$32,000
d)
80% of the property's replacement cost or more
80% of the property's replacement cost or more
#40.
Which would NOT be covered by the inside the premises - robbery or safe burglary of other property
coverage?
a)
An employee is caught stealing cash from the register.
b)
Two men break a window during an attempted robbery.
c)
