AINS 23 Full Practice Exam questios and
answers
1) Clarence entered into a contract bond that guarantees his insulation work will
be free from defects in materials and workmanship for a specified period of five
years after completion of the work. The type of bond used by Clarence is a -
ANSWER>>Maintenance bond.
2) Which one of the following statements is correct with respect to ocean marine
loss exposures? - ANSWER>>For cargo owners, the posibility of loss to the cargo
exists either on board a vessel or on land between the vessel and the cargo's
point of origin or destination.
3) Many of the provisions in professional liability policies resemble those found in
commercial general liability policies. However, some of the provisions differ in key
ways such as the - ANSWER>>Use of a claims made trigger.
4) Which one of the following best describes the purpose served by transit
insurance? - ANSWER>>Shippers use it because their property may be damaged in
circumstances under which a carrier has no legal obligation to pay the shipper's
loss.
5) If the Replacement Cost optional coverage of the Building and Personal
Property Coverage Form (BPP) is selected, tenants' improvements and
betterments - ANSWER>>areValued at replacement cost if the tenant actually
repairs or replaces them, at its own cost, as soon as reasonably possible after the
loss.
6) Smith Electricians has a Commercial General Liability (CGL) Coverage Form with
the following limits:
- $500,000 general aggregate
- $500,000 products-completed operations aggregate
,- $250,000 personal and advertising injury
- $250,000 each occurrence
- $100,000 damage to premises rented to you
- $10,000 medical expense
While installing new wiring at a building under construction, Smith Electricians
accidentally starts a fire that causes $400,000 damage to the building, but not to
the wiring it was installing. How much will Smith's CGL insurer pay? -
ANSWER>>$250,000
7) An environmental insurance policy that covers the loss exposures of a
contractor performing environmental remediation services on contaminated sites
is a(n) - ANSWER>>Contractors pollution liability policy
8) The Causes of Loss-Special Form provides coverage for which one of the
following scenarios? - ANSWER>>The melting of ice, sleet, or snow on the building
or structure.
9) Which one of the following is the coinsurance basis under a Business Income
Coverage Form (BIC)? - ANSWER>>The projected net income and all operating
expenses except for certain deductible items.
10) The condition of the Building and Person Property Coverage Form (BPP) that
establishes a method for the insurer and the insured to resolve disputes about
the insured property's value or amount of loss is referred to as the -
ANSWER>>Appraisal condition.
11) Which one of the following Commercial Crime Coverage Form insuring
agreements provides coverage on a full worldwide basis? - ANSWER>>Forgery or
alteration
12) Pedestrian Wilma was injured as a result of a contractor's negligence when
the contractor failed to adequately warn the public of a hazard when paving a
road. Any resulting liability claim by Wilma against the contractor would be
, considered to have arisen from the contractor's - ANSWER>>Premises and
operations liability exposure.
13) Which one of the following statements is correct with respect to Coverage G-
Barns, Outbuildings and Other Farm Structures of the ISO farm program? -
ANSWER>>Coverage G is used to insure all types of farm buildings and structures
other than the dwelling and private garages.
14) Which one of the following statements is correct with respect to the Causes of
Loss-Basic Form? - ANSWER>>It excludes loss caused by earth movement, other
than by sinkhole collapse.
15) Three exclusions apply only to the Computer Fraud insuring agreement. These
include credit card transactions, inventory shortages and - ANSWER>>Funds
transfer fraud.
16) An insurer that writes Commercial General Liability (CGL) coverage develops a
rate for which one of the following? - ANSWER>>Each business classification the
insurer is willing to write.
17) Which one of the following statements is true regarding the Property Damage
insuring agreement of the ISO Equipment Breakdown Form? - ANSWER>>Debris
removal is covered as part of the property damage limit.
18) Betty's Birdhouses constructs and sells birdhouses. Betty discovered a fungus
in the wood used to construct the birdhouses that would kill birds. Betty
withdrew her entire stock of birdhouses to avoid any claims from environmental
organizations for loss to wildlife. Does Betty's Commercial General Liability (CGL)
Coverage Form cover the cost to withdraw the birdhouses and feeders? -
ANSWER>>No, because the cost to withdraw Betty's product is excluded
19) Package modification factors for the Commercial Package Policy (CPP) often -
ANSWER>>Provide a premium discount for the insured.
answers
1) Clarence entered into a contract bond that guarantees his insulation work will
be free from defects in materials and workmanship for a specified period of five
years after completion of the work. The type of bond used by Clarence is a -
ANSWER>>Maintenance bond.
2) Which one of the following statements is correct with respect to ocean marine
loss exposures? - ANSWER>>For cargo owners, the posibility of loss to the cargo
exists either on board a vessel or on land between the vessel and the cargo's
point of origin or destination.
3) Many of the provisions in professional liability policies resemble those found in
commercial general liability policies. However, some of the provisions differ in key
ways such as the - ANSWER>>Use of a claims made trigger.
4) Which one of the following best describes the purpose served by transit
insurance? - ANSWER>>Shippers use it because their property may be damaged in
circumstances under which a carrier has no legal obligation to pay the shipper's
loss.
5) If the Replacement Cost optional coverage of the Building and Personal
Property Coverage Form (BPP) is selected, tenants' improvements and
betterments - ANSWER>>areValued at replacement cost if the tenant actually
repairs or replaces them, at its own cost, as soon as reasonably possible after the
loss.
6) Smith Electricians has a Commercial General Liability (CGL) Coverage Form with
the following limits:
- $500,000 general aggregate
- $500,000 products-completed operations aggregate
,- $250,000 personal and advertising injury
- $250,000 each occurrence
- $100,000 damage to premises rented to you
- $10,000 medical expense
While installing new wiring at a building under construction, Smith Electricians
accidentally starts a fire that causes $400,000 damage to the building, but not to
the wiring it was installing. How much will Smith's CGL insurer pay? -
ANSWER>>$250,000
7) An environmental insurance policy that covers the loss exposures of a
contractor performing environmental remediation services on contaminated sites
is a(n) - ANSWER>>Contractors pollution liability policy
8) The Causes of Loss-Special Form provides coverage for which one of the
following scenarios? - ANSWER>>The melting of ice, sleet, or snow on the building
or structure.
9) Which one of the following is the coinsurance basis under a Business Income
Coverage Form (BIC)? - ANSWER>>The projected net income and all operating
expenses except for certain deductible items.
10) The condition of the Building and Person Property Coverage Form (BPP) that
establishes a method for the insurer and the insured to resolve disputes about
the insured property's value or amount of loss is referred to as the -
ANSWER>>Appraisal condition.
11) Which one of the following Commercial Crime Coverage Form insuring
agreements provides coverage on a full worldwide basis? - ANSWER>>Forgery or
alteration
12) Pedestrian Wilma was injured as a result of a contractor's negligence when
the contractor failed to adequately warn the public of a hazard when paving a
road. Any resulting liability claim by Wilma against the contractor would be
, considered to have arisen from the contractor's - ANSWER>>Premises and
operations liability exposure.
13) Which one of the following statements is correct with respect to Coverage G-
Barns, Outbuildings and Other Farm Structures of the ISO farm program? -
ANSWER>>Coverage G is used to insure all types of farm buildings and structures
other than the dwelling and private garages.
14) Which one of the following statements is correct with respect to the Causes of
Loss-Basic Form? - ANSWER>>It excludes loss caused by earth movement, other
than by sinkhole collapse.
15) Three exclusions apply only to the Computer Fraud insuring agreement. These
include credit card transactions, inventory shortages and - ANSWER>>Funds
transfer fraud.
16) An insurer that writes Commercial General Liability (CGL) coverage develops a
rate for which one of the following? - ANSWER>>Each business classification the
insurer is willing to write.
17) Which one of the following statements is true regarding the Property Damage
insuring agreement of the ISO Equipment Breakdown Form? - ANSWER>>Debris
removal is covered as part of the property damage limit.
18) Betty's Birdhouses constructs and sells birdhouses. Betty discovered a fungus
in the wood used to construct the birdhouses that would kill birds. Betty
withdrew her entire stock of birdhouses to avoid any claims from environmental
organizations for loss to wildlife. Does Betty's Commercial General Liability (CGL)
Coverage Form cover the cost to withdraw the birdhouses and feeders? -
ANSWER>>No, because the cost to withdraw Betty's product is excluded
19) Package modification factors for the Commercial Package Policy (CPP) often -
ANSWER>>Provide a premium discount for the insured.
