CPCU 522 (BUSINESS INSURANCE) EXAM
QUESTIONS AND ANSWERS COMPLETE RATED
A.
A cybercrime ensuring agreement covers
Verified Answer -Theft of money and securities. (A cybercrime ensuring
agreement covers theft of money and securities.
Unless it is adjusted by agreement, what do the rules of ISO's Commercial
Lines Manual establish as the basic limit for the damage to premises
rented to you under the Commercial General Liability Coverage Form?
Verified Answer -$100,000 (The Commercial Lines Manual sets the basic
limit at $100,000.
Acme Manufacturing Company is insured under two primary Commercial
General Liability (CGL) policies. Policy A has an each-occurrence limit of
$1,000,000 and Policy B has an each-occurrence limit of $2,000,000.
Acme submitted a claim for $2,400,000 arising from a single occurrence
for an incident that is covered by both policies. How much of the claim is
payable under Policy B if the loss payment is based upon contribution by
equal shares?
Verified Answer -$1,400,000 (Each policy pays an equal amount, but
Policy A limit exhausted at $1,000,000, so Policy B pays an extra
$400,000 for a total of $1,400,000.
Commercial auto liability premium tables list premiums for private
passenger autos by rating territory and by
Verified Answer -Policy limit. (Liability premium tables list premiums by
rating territory and by policy limit.
,Which one of the following is correct regarding auto values reported on the
reporting approach for physical damage coverage under the Auto Dealers
Coverage Form?
Verified Answer -Reports of values serve only as the basis for charging
premium. (Reports of values serve only as the basis for charging premium.
A commercial auto endorsement that provides coverage for individual
named insureds and their resident relatives is the
Verified Answer -Individual Named Insured endorsement. (A commercial
auto endorsement that provides coverage for individual named insureds
and their resident relatives is the Individual Named Insured endorsement.
Which one of the following statements about provisions in Part One of the
Workers Compensation and Employers Liability Insurance Policy is true?
Verified Answer -The accident causing the injury must occur during the
policy period. (The last exposure to the disease in the employment of the
insured must occur during the policy period.
A company carries a directors and officers (D&O) liability insurance policy
containing a typical definition of loss and a $1,000,000 annual aggregate
limit. The company suffers a covered loss resulting in payment of
$300,000 of indemnity, $200,000 of defense costs, and criminal fine of
$25,000. After this loss, the company's remaining annual aggregate limit
would be
Verified Answer -$500,000. (After this loss, the company's remaining
annual aggregate limit would be $500,000.
Coverage A and Coverage B of most D&O liability policies insure different
entities for the same type claims. Which one of the following is an entity
insured under these policies for claims brought against the entity or
individual?
Verified Answer -The corporation itself
, What is the unique term for the named insured in a fiduciary liability
policy?
Verified Answer -Sponsoring organization (The unique term for the named
insured in a fiduciary liability policy is sponsoring organization.
Tort liability for pollution is based on
Verified Answer -Negligence, intentional acts, or strict liability. (Tort
liability for pollution is based on negligence, intentional acts, or strict
liability.
One common difference between Underground Storage Tank (UST) policies
and Environmental Impairment Liability (EIL) policies is that UST policies
Verified Answer -Have a separate limit for defense costs. (UST policies
have a separate limit for defense costs.
A cargo ship en route for South East Asia makes a stop along the coast of
Africa. Some of the crew members contract malaria and suffer very high
fevers on the first day the boat is back in the high seas. The captain
decides to make an impromptu stop in South Africa so the crew can get
medical assistance. This unscheduled stop results in extra expenses of
$12,000 due to the unplanned deviation for medical care. Which one of the
following Protection & Indemnity (P&I) coverages will cover the
shipowner's extra expenses?
Verified Answer -Putting-in-expenses coverage (The shipowner's
Protection & Indemnity (P&I) will cover the extra expenses due to the route
deviation under the putting-in-expenses coverage.
What type of charterer agrees to be responsible for actually operating and
insuring a vessel?
Verified Answer -Bareboat (Bareboat is a type of charterer that agrees to
be responsible for actually operating and insuring a vessel.
QUESTIONS AND ANSWERS COMPLETE RATED
A.
A cybercrime ensuring agreement covers
Verified Answer -Theft of money and securities. (A cybercrime ensuring
agreement covers theft of money and securities.
Unless it is adjusted by agreement, what do the rules of ISO's Commercial
Lines Manual establish as the basic limit for the damage to premises
rented to you under the Commercial General Liability Coverage Form?
Verified Answer -$100,000 (The Commercial Lines Manual sets the basic
limit at $100,000.
Acme Manufacturing Company is insured under two primary Commercial
General Liability (CGL) policies. Policy A has an each-occurrence limit of
$1,000,000 and Policy B has an each-occurrence limit of $2,000,000.
Acme submitted a claim for $2,400,000 arising from a single occurrence
for an incident that is covered by both policies. How much of the claim is
payable under Policy B if the loss payment is based upon contribution by
equal shares?
Verified Answer -$1,400,000 (Each policy pays an equal amount, but
Policy A limit exhausted at $1,000,000, so Policy B pays an extra
$400,000 for a total of $1,400,000.
Commercial auto liability premium tables list premiums for private
passenger autos by rating territory and by
Verified Answer -Policy limit. (Liability premium tables list premiums by
rating territory and by policy limit.
,Which one of the following is correct regarding auto values reported on the
reporting approach for physical damage coverage under the Auto Dealers
Coverage Form?
Verified Answer -Reports of values serve only as the basis for charging
premium. (Reports of values serve only as the basis for charging premium.
A commercial auto endorsement that provides coverage for individual
named insureds and their resident relatives is the
Verified Answer -Individual Named Insured endorsement. (A commercial
auto endorsement that provides coverage for individual named insureds
and their resident relatives is the Individual Named Insured endorsement.
Which one of the following statements about provisions in Part One of the
Workers Compensation and Employers Liability Insurance Policy is true?
Verified Answer -The accident causing the injury must occur during the
policy period. (The last exposure to the disease in the employment of the
insured must occur during the policy period.
A company carries a directors and officers (D&O) liability insurance policy
containing a typical definition of loss and a $1,000,000 annual aggregate
limit. The company suffers a covered loss resulting in payment of
$300,000 of indemnity, $200,000 of defense costs, and criminal fine of
$25,000. After this loss, the company's remaining annual aggregate limit
would be
Verified Answer -$500,000. (After this loss, the company's remaining
annual aggregate limit would be $500,000.
Coverage A and Coverage B of most D&O liability policies insure different
entities for the same type claims. Which one of the following is an entity
insured under these policies for claims brought against the entity or
individual?
Verified Answer -The corporation itself
, What is the unique term for the named insured in a fiduciary liability
policy?
Verified Answer -Sponsoring organization (The unique term for the named
insured in a fiduciary liability policy is sponsoring organization.
Tort liability for pollution is based on
Verified Answer -Negligence, intentional acts, or strict liability. (Tort
liability for pollution is based on negligence, intentional acts, or strict
liability.
One common difference between Underground Storage Tank (UST) policies
and Environmental Impairment Liability (EIL) policies is that UST policies
Verified Answer -Have a separate limit for defense costs. (UST policies
have a separate limit for defense costs.
A cargo ship en route for South East Asia makes a stop along the coast of
Africa. Some of the crew members contract malaria and suffer very high
fevers on the first day the boat is back in the high seas. The captain
decides to make an impromptu stop in South Africa so the crew can get
medical assistance. This unscheduled stop results in extra expenses of
$12,000 due to the unplanned deviation for medical care. Which one of the
following Protection & Indemnity (P&I) coverages will cover the
shipowner's extra expenses?
Verified Answer -Putting-in-expenses coverage (The shipowner's
Protection & Indemnity (P&I) will cover the extra expenses due to the route
deviation under the putting-in-expenses coverage.
What type of charterer agrees to be responsible for actually operating and
insuring a vessel?
Verified Answer -Bareboat (Bareboat is a type of charterer that agrees to
be responsible for actually operating and insuring a vessel.
