Exam FX, VA Property & Casualty Insurance Exam
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1. The members of a limited liability company are insureds under a busines-
sowners policy (BOP) if: The limited liability company is designated as the named
insured.
2. An endorsement added to a businessowners policy that provides coverage
for direct damage caused by utility service disruption stemming from a cov-
ered peril is called: Utility Services - Direct Damage.
3. 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?: Pro-
viding specific details regarding an occurrence
4. 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?: Transfer of rights and
duties under the policy
5. 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?: The coinsurance
formula would apply
6. The businessowners policy liability coverage will pay for necessary medical
expenses of others incurred within what maximum time period?: 1 year
7. The most the insurer will pay for a loss under a businessowners policy
is: The limit of insurance after the deductible is paid.
8. Which of the following is NOT settled on an actual cash value basis while
covered under the business property coverage form?: Valuable papers and
records
9. 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?: Hired and nonowned auto liability
10. Which of the following is an example of a protective safeguard in a busi-
nessowners policy?: Automatic sprinkler system
11. A BOP (businessowners policy) is most similar to: Homeowners.
12. 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?: 48 hours
13. Frank's Steaks furnishes meat to steakhouses. An accident on the premis-
es 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 con-
, Exam FX, VA Property & Casualty Insurance Exam
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sumption, and Frank loses $18,500 in disposing of the meat. What coverage
under Frank's BOP policy will cover the loss?: Utility service - direct damage
14. Which of the following is eligible for a businessowners policy?: A 6-story
office building with less than 100,000 square feet total area
15. In business income additional coverage in a businessowners policy (BOP),
the waiting period that must occur before the period of restoration may begin
is: 72 hours.
16. Under the additional coverages of a businessowners policy, property re-
moved to protect it from loss will be covered at another location for up to: 30
days.
17. All of the following statements are true regarding employee dishonesty
optional coverage under the businessowners policy (BOP) EXCEPT: It provides
coverage for all employees, even those employees who were terminated in the past
90 days.
18. Under a businessowners policy, the inspections and surveys condition
specifies all of the following EXCEPT: The insurer does not have the right to
inspect the insured's property and operations.
19. When is a hired and nonowned auto liability endorsement available in a
businessowners policy (BOP)?: Only if the insured does not have commercial
auto coverage
20. In addition to the common policy conditions, all of the following conditions
apply to liability coverage EXCEPT: Employers liability.
21. The liability coverage of the businessowners policy is written on a: Busi-
nessowners liability coverage form.
22. All of the following would be covered under the medical expense coverage
of a businessowners policy EXCEPT: Mental health counseling.
23. A businessowners policy is: A self-contained prepackaged policy.
24. Which of the following is defined as a covered cause of loss in busines-
sowners property coverage?: Leakage from fire-extinguishing equipment
25. What is the limit for the forgery or alteration coverage in the businessown-
ers policy?: $2,500
26. Which of the following is NOT an optional coverage available in a busines-
sowners policy?: Workers compensation
27. The pollutant cleanup and removal coverage in the businessowners policy
has a limit of: $10,000 in any 12-month period.
28. Which of the following limits, shown in the declarations of a policy, applies
to medical expenses?: Per person
29. The inspections and surveys condition in a businessowners policy: Allows
the insurer the right to inspect the insured's premises.
, Exam FX, VA Property & Casualty Insurance Exam
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30. 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 mortgage-
holders?: The mortgageholder must petition the state department of insurance for
named status.
31. Under businessowners policy Section I, if an insurer wants to cancel a pol-
icy for any reason except nonpayment of premium, how many days before the
effective cancellation date must the insurer notify the mortgageholder?: 30
days
32. 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?: Yes, none of the exclusions will apply.
33. All of the following statements are true regarding fire department service
charge additional coverage under the businessowners policy EXCEPT: This
coverage limit pays in place of the limit of insurance shown in the declarations.
34. Under a businessowners policy, an insured can cancel the policy: At any
time by mailing a written notice of cancellation.
35. Utility services - time element covers: business income or additional expense
losses arising from disruption of service caused by a covered peril.
36. Which of the following risks is eligible for coverage under a businessown-
ers policy?: Condominiums
37. According to the businessowners policy (BOP) definitions, which of the
following does NOT mean valuable papers and records?: Securities
38. A business income coverage form would cover all of the following situ-
ations EXCEPT: A union strike of construction workers causes the repair of the
insured's building to be delayed for a period of time.
39. After a loss, an insured covered by a business property coverage is NOT
required to: Reconstruct for the insurer a timeline of activities leading up to the loss
for use in an investigation.
40. 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: During the policy period and for up to 3 years after the
termination of the policy.
41. Which of the following watercraft will NOT be covered by business liability
insurance?: Owned watercraft 53 feet long
42. 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
, Exam FX, VA Property & Casualty Insurance Exam
Study online at https://quizlet.com/_dx11ul
to Billy's businessowners policy that would provide protection against loss of
income from such events?: Utility services - time element endorsement
43. The cancellation provision in a businessowners policy specifies all of the
following EXCEPT: The method of transferring the owner's rights.
44. If the actual values exceed the limit of insurance, the businessowners poli-
cy (BOP) contains a seasonal increase provision that automatically increases
the limit of insurance for business personal property by: 25%.
45. 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: For an additional premium.
46. An endorsement is available for hired and nonowned auto on BOP liabili-
ty...
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: A
47. 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: C
48. The inland marine coverage form for outdoor signs provides "open peril"
coverage and excludes coverage for breakage only during...
A. Transportation
B. Repairing
C. Installation or dismantling
D. All of the above: D
49. Which of the following is covered under the Mail floater of a Commercial
Inland Marine policy ONLY if is sent by registered mail?
A. Currency and unsold travelers checks
B. Postage and revenue stamps
C. Money orders, checks, drafts, notes
D. Bonds, stocks, stock certificates, coupon attached bonds: A
50. Which of the following other coverages is NOT included in the basic form
dwelling policy?
A. Breakage of glass
B. Removal coverage
Study online at https://quizlet.com/_dx11ul
1. The members of a limited liability company are insureds under a busines-
sowners policy (BOP) if: The limited liability company is designated as the named
insured.
2. An endorsement added to a businessowners policy that provides coverage
for direct damage caused by utility service disruption stemming from a cov-
ered peril is called: Utility Services - Direct Damage.
3. 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?: Pro-
viding specific details regarding an occurrence
4. 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?: Transfer of rights and
duties under the policy
5. 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?: The coinsurance
formula would apply
6. The businessowners policy liability coverage will pay for necessary medical
expenses of others incurred within what maximum time period?: 1 year
7. The most the insurer will pay for a loss under a businessowners policy
is: The limit of insurance after the deductible is paid.
8. Which of the following is NOT settled on an actual cash value basis while
covered under the business property coverage form?: Valuable papers and
records
9. 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?: Hired and nonowned auto liability
10. Which of the following is an example of a protective safeguard in a busi-
nessowners policy?: Automatic sprinkler system
11. A BOP (businessowners policy) is most similar to: Homeowners.
12. 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?: 48 hours
13. Frank's Steaks furnishes meat to steakhouses. An accident on the premis-
es 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 con-
, Exam FX, VA Property & Casualty Insurance Exam
Study online at https://quizlet.com/_dx11ul
sumption, and Frank loses $18,500 in disposing of the meat. What coverage
under Frank's BOP policy will cover the loss?: Utility service - direct damage
14. Which of the following is eligible for a businessowners policy?: A 6-story
office building with less than 100,000 square feet total area
15. In business income additional coverage in a businessowners policy (BOP),
the waiting period that must occur before the period of restoration may begin
is: 72 hours.
16. Under the additional coverages of a businessowners policy, property re-
moved to protect it from loss will be covered at another location for up to: 30
days.
17. All of the following statements are true regarding employee dishonesty
optional coverage under the businessowners policy (BOP) EXCEPT: It provides
coverage for all employees, even those employees who were terminated in the past
90 days.
18. Under a businessowners policy, the inspections and surveys condition
specifies all of the following EXCEPT: The insurer does not have the right to
inspect the insured's property and operations.
19. When is a hired and nonowned auto liability endorsement available in a
businessowners policy (BOP)?: Only if the insured does not have commercial
auto coverage
20. In addition to the common policy conditions, all of the following conditions
apply to liability coverage EXCEPT: Employers liability.
21. The liability coverage of the businessowners policy is written on a: Busi-
nessowners liability coverage form.
22. All of the following would be covered under the medical expense coverage
of a businessowners policy EXCEPT: Mental health counseling.
23. A businessowners policy is: A self-contained prepackaged policy.
24. Which of the following is defined as a covered cause of loss in busines-
sowners property coverage?: Leakage from fire-extinguishing equipment
25. What is the limit for the forgery or alteration coverage in the businessown-
ers policy?: $2,500
26. Which of the following is NOT an optional coverage available in a busines-
sowners policy?: Workers compensation
27. The pollutant cleanup and removal coverage in the businessowners policy
has a limit of: $10,000 in any 12-month period.
28. Which of the following limits, shown in the declarations of a policy, applies
to medical expenses?: Per person
29. The inspections and surveys condition in a businessowners policy: Allows
the insurer the right to inspect the insured's premises.
, Exam FX, VA Property & Casualty Insurance Exam
Study online at https://quizlet.com/_dx11ul
30. 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 mortgage-
holders?: The mortgageholder must petition the state department of insurance for
named status.
31. Under businessowners policy Section I, if an insurer wants to cancel a pol-
icy for any reason except nonpayment of premium, how many days before the
effective cancellation date must the insurer notify the mortgageholder?: 30
days
32. 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?: Yes, none of the exclusions will apply.
33. All of the following statements are true regarding fire department service
charge additional coverage under the businessowners policy EXCEPT: This
coverage limit pays in place of the limit of insurance shown in the declarations.
34. Under a businessowners policy, an insured can cancel the policy: At any
time by mailing a written notice of cancellation.
35. Utility services - time element covers: business income or additional expense
losses arising from disruption of service caused by a covered peril.
36. Which of the following risks is eligible for coverage under a businessown-
ers policy?: Condominiums
37. According to the businessowners policy (BOP) definitions, which of the
following does NOT mean valuable papers and records?: Securities
38. A business income coverage form would cover all of the following situ-
ations EXCEPT: A union strike of construction workers causes the repair of the
insured's building to be delayed for a period of time.
39. After a loss, an insured covered by a business property coverage is NOT
required to: Reconstruct for the insurer a timeline of activities leading up to the loss
for use in an investigation.
40. 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: During the policy period and for up to 3 years after the
termination of the policy.
41. Which of the following watercraft will NOT be covered by business liability
insurance?: Owned watercraft 53 feet long
42. 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
, Exam FX, VA Property & Casualty Insurance Exam
Study online at https://quizlet.com/_dx11ul
to Billy's businessowners policy that would provide protection against loss of
income from such events?: Utility services - time element endorsement
43. The cancellation provision in a businessowners policy specifies all of the
following EXCEPT: The method of transferring the owner's rights.
44. If the actual values exceed the limit of insurance, the businessowners poli-
cy (BOP) contains a seasonal increase provision that automatically increases
the limit of insurance for business personal property by: 25%.
45. 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: For an additional premium.
46. An endorsement is available for hired and nonowned auto on BOP liabili-
ty...
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: A
47. 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: C
48. The inland marine coverage form for outdoor signs provides "open peril"
coverage and excludes coverage for breakage only during...
A. Transportation
B. Repairing
C. Installation or dismantling
D. All of the above: D
49. Which of the following is covered under the Mail floater of a Commercial
Inland Marine policy ONLY if is sent by registered mail?
A. Currency and unsold travelers checks
B. Postage and revenue stamps
C. Money orders, checks, drafts, notes
D. Bonds, stocks, stock certificates, coupon attached bonds: A
50. Which of the following other coverages is NOT included in the basic form
dwelling policy?
A. Breakage of glass
B. Removal coverage
