EXAM FX, VA PROPERTY & CASUALTY INSURANCE EXAM
LATEST 2024 ACTUAL EXAM
The members of a limited liability company are insureds under a businessowners
policy (BOP) if - ANSWER: The limited liability company is designated as the named
insured.
An endorsement added to a businessowners policy that provides coverage for direct
damage caused by utility service disruption stemming from a covered peril is called -
ANSWER: Utility Services - Direct Damage.
Which of the following would be the insured's duty in the event of a loss according
to the duties in event of occurrence, claim, or suit condition? - ANSWER: Providing
specific details regarding an occurrence
Which common policy condition prohibits the insured from changing the rights or
duties as defined under the policy to any other person or entity without the written
consent of the insurance company? - ANSWER: Transfer of rights and duties under
the policy
A company has a businessowners policy on a building with an estimated replacement
cost of $300,000. The company carries $150,000 of insurance. If a loss occurs, how
much will the insured company be paid? - ANSWER: The coinsurance formula would
apply
The businessowners policy liability coverage will pay for necessary medical expenses
of others incurred within what maximum time period? - ANSWER: 1 year
The most the insurer will pay for a loss under a businessowners policy is - ANSWER:
The limit of insurance after the deductible is paid.
Which of the following is NOT settled on an actual cash value basis while covered
under the business property coverage form? - ANSWER: Valuable papers and records
Which endorsement adds coverage for employee use of automobiles in the insured's
business and the insured's use of rented autos if no coverage is provided on a
business auto policy? - ANSWER: Hired and nonowned auto liability
Which of the following is an example of a protective safeguard in a businessowners
policy? - ANSWER: Automatic sprinkler system
A BOP (businessowners policy) is most similar to - ANSWER: Homeowners.
Jean owns a craft store. The protective safeguards endorsement of her BOP requires
the store to have a functional automatic sprinkler system. A winter storm freezes the
,pipes to the sprinkler system, causing the system to shut down. How many hours
does Jean have to restore the system before she must notify her insurer? - ANSWER:
48 hours
Frank's Steaks furnishes meat to steakhouses. An accident on the premises causes
the building to lose refrigeration for 32 hours. The state inspectors will not allow the
meat in the refrigerating units to be sold for human consumption, and Frank loses
$18,500 in disposing of the meat. What coverage under Frank's BOP policy will cover
the loss? - ANSWER: Utility service - direct damage
Which of the following is eligible for a businessowners policy? - ANSWER: A 6-story
office building with less than 100,000 square feet total area
In business income additional coverage in a businessowners policy (BOP), the waiting
period that must occur before the period of restoration may begin is - ANSWER: 72
hours.
Under the additional coverages of a businessowners policy, property removed to
protect it from loss will be covered at another location for up to - ANSWER: 30 days.
All of the following statements are true regarding employee dishonesty optional
coverage under the businessowners policy (BOP) EXCEPT - ANSWER: It provides
coverage for all employees, even those employees who were terminated in the past
90 days.
Under a businessowners policy, the inspections and surveys condition specifies all of
the following EXCEPT - ANSWER: The insurer does not have the right to inspect the
insured's property and operations.
When is a hired and nonowned auto liability endorsement available in a
businessowners policy (BOP)? - ANSWER: Only if the insured does not have
commercial auto coverage
In addition to the common policy conditions, all of the following conditions apply to
liability coverage EXCEPT - ANSWER: Employers liability.
The liability coverage of the businessowners policy is written on a - ANSWER:
Businessowners liability coverage form.
All of the following would be covered under the medical expense coverage of a
businessowners policy EXCEPT - ANSWER: Mental health counseling.
A businessowners policy is - ANSWER: A self-contained prepackaged policy.
Which of the following is defined as a covered cause of loss in businessowners
property coverage? - ANSWER: Leakage from fire-extinguishing equipment
,What is the limit for the forgery or alteration coverage in the businessowners policy?
- ANSWER: $2,500
Which of the following is NOT an optional coverage available in a businessowners
policy? - ANSWER: Workers compensation
The pollutant cleanup and removal coverage in the businessowners policy has a limit
of - ANSWER: $10,000 in any 12-month period.
Which of the following limits, shown in the declarations of a policy, applies to
medical expenses? - ANSWER: Per person
The inspections and surveys condition in a businessowners policy - ANSWER: Allows
the insurer the right to inspect the insured's premises.
According to businessowners policy Section I, which of the following is NOT a
condition to be met for the terms of the policy to apply to mortgageholders? -
ANSWER: The mortgageholder must petition the state department of insurance for
named status.
Under businessowners policy Section I, if an insurer wants to cancel a policy for any
reason except nonpayment of premium, how many days before the effective
cancellation date must the insurer notify the mortgageholder? - ANSWER: 30 days
An advertising company has its annual holiday party for employees and customers,
after which a customer who had too much to drink is involved in an automobile
accident. Occupants of the other car involved in the accident sue the company for
serving the customer too much alcohol. Will the company's businessowners policy
provide coverage? - ANSWER: Yes, none of the exclusions will apply.
All of the following statements are true regarding fire department service charge
additional coverage under the businessowners policy EXCEPT - ANSWER: This
coverage limit pays in place of the limit of insurance shown in the declarations.
Under a businessowners policy, an insured can cancel the policy - ANSWER: At any
time by mailing a written notice of cancellation.
Utility services - time element covers - ANSWER: business income or additional
expense losses arising from disruption of service caused by a covered peril.
Which of the following risks is eligible for coverage under a businessowners policy? -
ANSWER: Condominiums
According to the businessowners policy (BOP) definitions, which of the following
does NOT mean valuable papers and records? - ANSWER: Securities
, A business income coverage form would cover all of the following situations EXCEPT
- ANSWER: A union strike of construction workers causes the repair of the insured's
building to be delayed for a period of time.
After a loss, an insured covered by a business property coverage is NOT required to -
ANSWER: Reconstruct for the insurer a timeline of activities leading up to the loss for
use in an investigation.
Under the examinations of books and records condition, the insurance company has
the right to examine and audit the insured's books and records related to the policy -
ANSWER: During the policy period and for up to 3 years after the termination of the
policy.
Which of the following watercraft will NOT be covered by business liability
insurance? - ANSWER: Owned watercraft 53 feet long
Uncle Billy's Burger Bar was forced to close for 10 days in August when the power
company's transformer was destroyed by lightning, and Uncle Billy was without
electricity. Which of the following endorsements could be added to Billy's
businessowners policy that would provide protection against loss of income from
such events? - ANSWER: Utility services - time element endorsement
The cancellation provision in a businessowners policy specifies all of the following
EXCEPT - ANSWER: The method of transferring the owner's rights.
If the actual values exceed the limit of insurance, the businessowners policy (BOP)
contains a seasonal increase provision that automatically increases the limit of
insurance for business personal property by - ANSWER: 25%.
In addition to the coverages built into the property coverage form, insurers may
offer other endorsements that can further expand the coverage provided in the
policy - ANSWER: For an additional premium.
An endorsement is available for hired and nonowned auto on BOP liability...
A. Only if the insured does not have commercial auto coverage
B. In addition to commercial auto coverage
C. Only if the insured has 4 or more employees
D. Never - ANSWER: A
The Mail Coverage Form is always written on a reporting form basis; after the end of
each reporting period shown in the declarations, reports are due within...
A. 45 days
B. 15 days
C. 30 days
D. 31 days - ANSWER: C
LATEST 2024 ACTUAL EXAM
The members of a limited liability company are insureds under a businessowners
policy (BOP) if - ANSWER: The limited liability company is designated as the named
insured.
An endorsement added to a businessowners policy that provides coverage for direct
damage caused by utility service disruption stemming from a covered peril is called -
ANSWER: Utility Services - Direct Damage.
Which of the following would be the insured's duty in the event of a loss according
to the duties in event of occurrence, claim, or suit condition? - ANSWER: Providing
specific details regarding an occurrence
Which common policy condition prohibits the insured from changing the rights or
duties as defined under the policy to any other person or entity without the written
consent of the insurance company? - ANSWER: Transfer of rights and duties under
the policy
A company has a businessowners policy on a building with an estimated replacement
cost of $300,000. The company carries $150,000 of insurance. If a loss occurs, how
much will the insured company be paid? - ANSWER: The coinsurance formula would
apply
The businessowners policy liability coverage will pay for necessary medical expenses
of others incurred within what maximum time period? - ANSWER: 1 year
The most the insurer will pay for a loss under a businessowners policy is - ANSWER:
The limit of insurance after the deductible is paid.
Which of the following is NOT settled on an actual cash value basis while covered
under the business property coverage form? - ANSWER: Valuable papers and records
Which endorsement adds coverage for employee use of automobiles in the insured's
business and the insured's use of rented autos if no coverage is provided on a
business auto policy? - ANSWER: Hired and nonowned auto liability
Which of the following is an example of a protective safeguard in a businessowners
policy? - ANSWER: Automatic sprinkler system
A BOP (businessowners policy) is most similar to - ANSWER: Homeowners.
Jean owns a craft store. The protective safeguards endorsement of her BOP requires
the store to have a functional automatic sprinkler system. A winter storm freezes the
,pipes to the sprinkler system, causing the system to shut down. How many hours
does Jean have to restore the system before she must notify her insurer? - ANSWER:
48 hours
Frank's Steaks furnishes meat to steakhouses. An accident on the premises causes
the building to lose refrigeration for 32 hours. The state inspectors will not allow the
meat in the refrigerating units to be sold for human consumption, and Frank loses
$18,500 in disposing of the meat. What coverage under Frank's BOP policy will cover
the loss? - ANSWER: Utility service - direct damage
Which of the following is eligible for a businessowners policy? - ANSWER: A 6-story
office building with less than 100,000 square feet total area
In business income additional coverage in a businessowners policy (BOP), the waiting
period that must occur before the period of restoration may begin is - ANSWER: 72
hours.
Under the additional coverages of a businessowners policy, property removed to
protect it from loss will be covered at another location for up to - ANSWER: 30 days.
All of the following statements are true regarding employee dishonesty optional
coverage under the businessowners policy (BOP) EXCEPT - ANSWER: It provides
coverage for all employees, even those employees who were terminated in the past
90 days.
Under a businessowners policy, the inspections and surveys condition specifies all of
the following EXCEPT - ANSWER: The insurer does not have the right to inspect the
insured's property and operations.
When is a hired and nonowned auto liability endorsement available in a
businessowners policy (BOP)? - ANSWER: Only if the insured does not have
commercial auto coverage
In addition to the common policy conditions, all of the following conditions apply to
liability coverage EXCEPT - ANSWER: Employers liability.
The liability coverage of the businessowners policy is written on a - ANSWER:
Businessowners liability coverage form.
All of the following would be covered under the medical expense coverage of a
businessowners policy EXCEPT - ANSWER: Mental health counseling.
A businessowners policy is - ANSWER: A self-contained prepackaged policy.
Which of the following is defined as a covered cause of loss in businessowners
property coverage? - ANSWER: Leakage from fire-extinguishing equipment
,What is the limit for the forgery or alteration coverage in the businessowners policy?
- ANSWER: $2,500
Which of the following is NOT an optional coverage available in a businessowners
policy? - ANSWER: Workers compensation
The pollutant cleanup and removal coverage in the businessowners policy has a limit
of - ANSWER: $10,000 in any 12-month period.
Which of the following limits, shown in the declarations of a policy, applies to
medical expenses? - ANSWER: Per person
The inspections and surveys condition in a businessowners policy - ANSWER: Allows
the insurer the right to inspect the insured's premises.
According to businessowners policy Section I, which of the following is NOT a
condition to be met for the terms of the policy to apply to mortgageholders? -
ANSWER: The mortgageholder must petition the state department of insurance for
named status.
Under businessowners policy Section I, if an insurer wants to cancel a policy for any
reason except nonpayment of premium, how many days before the effective
cancellation date must the insurer notify the mortgageholder? - ANSWER: 30 days
An advertising company has its annual holiday party for employees and customers,
after which a customer who had too much to drink is involved in an automobile
accident. Occupants of the other car involved in the accident sue the company for
serving the customer too much alcohol. Will the company's businessowners policy
provide coverage? - ANSWER: Yes, none of the exclusions will apply.
All of the following statements are true regarding fire department service charge
additional coverage under the businessowners policy EXCEPT - ANSWER: This
coverage limit pays in place of the limit of insurance shown in the declarations.
Under a businessowners policy, an insured can cancel the policy - ANSWER: At any
time by mailing a written notice of cancellation.
Utility services - time element covers - ANSWER: business income or additional
expense losses arising from disruption of service caused by a covered peril.
Which of the following risks is eligible for coverage under a businessowners policy? -
ANSWER: Condominiums
According to the businessowners policy (BOP) definitions, which of the following
does NOT mean valuable papers and records? - ANSWER: Securities
, A business income coverage form would cover all of the following situations EXCEPT
- ANSWER: A union strike of construction workers causes the repair of the insured's
building to be delayed for a period of time.
After a loss, an insured covered by a business property coverage is NOT required to -
ANSWER: Reconstruct for the insurer a timeline of activities leading up to the loss for
use in an investigation.
Under the examinations of books and records condition, the insurance company has
the right to examine and audit the insured's books and records related to the policy -
ANSWER: During the policy period and for up to 3 years after the termination of the
policy.
Which of the following watercraft will NOT be covered by business liability
insurance? - ANSWER: Owned watercraft 53 feet long
Uncle Billy's Burger Bar was forced to close for 10 days in August when the power
company's transformer was destroyed by lightning, and Uncle Billy was without
electricity. Which of the following endorsements could be added to Billy's
businessowners policy that would provide protection against loss of income from
such events? - ANSWER: Utility services - time element endorsement
The cancellation provision in a businessowners policy specifies all of the following
EXCEPT - ANSWER: The method of transferring the owner's rights.
If the actual values exceed the limit of insurance, the businessowners policy (BOP)
contains a seasonal increase provision that automatically increases the limit of
insurance for business personal property by - ANSWER: 25%.
In addition to the coverages built into the property coverage form, insurers may
offer other endorsements that can further expand the coverage provided in the
policy - ANSWER: For an additional premium.
An endorsement is available for hired and nonowned auto on BOP liability...
A. Only if the insured does not have commercial auto coverage
B. In addition to commercial auto coverage
C. Only if the insured has 4 or more employees
D. Never - ANSWER: A
The Mail Coverage Form is always written on a reporting form basis; after the end of
each reporting period shown in the declarations, reports are due within...
A. 45 days
B. 15 days
C. 30 days
D. 31 days - ANSWER: C
