ARKANSAS P&C EXAM 2024-2025 QUESTIONS
WITH COMPLETE ANSWERS
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. - CORRECT ANSWER 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. - CORRECT ANSWER 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
,ARKANSAS P&C EXAM 2024-2025 QUESTIONS
WITH COMPLETE ANSWERS
c)
Good faith
d)
Representation - CORRECT ANSWER Consideration
#10.
A commercial property special form covers property in transit up to
a)
Full replacement cost.
b)
$5,000.
c)
ACV.
d)
$500. - CORRECT ANSWER $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)
,ARKANSAS P&C EXAM 2024-2025 QUESTIONS
WITH COMPLETE ANSWERS
Misstatements.
d)
Neglect. - CORRECT ANSWER 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 - CORRECT ANSWER 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.
, ARKANSAS P&C EXAM 2024-2025 QUESTIONS
WITH COMPLETE ANSWERS
d)
It is applied in product liability cases. - CORRECT ANSWER 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 - CORRECT ANSWER 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)
WITH COMPLETE ANSWERS
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. - CORRECT ANSWER 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. - CORRECT ANSWER 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
,ARKANSAS P&C EXAM 2024-2025 QUESTIONS
WITH COMPLETE ANSWERS
c)
Good faith
d)
Representation - CORRECT ANSWER Consideration
#10.
A commercial property special form covers property in transit up to
a)
Full replacement cost.
b)
$5,000.
c)
ACV.
d)
$500. - CORRECT ANSWER $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)
,ARKANSAS P&C EXAM 2024-2025 QUESTIONS
WITH COMPLETE ANSWERS
Misstatements.
d)
Neglect. - CORRECT ANSWER 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 - CORRECT ANSWER 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.
, ARKANSAS P&C EXAM 2024-2025 QUESTIONS
WITH COMPLETE ANSWERS
d)
It is applied in product liability cases. - CORRECT ANSWER 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 - CORRECT ANSWER 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)
