AU 61 - EXAM REVIEW
____________- Is a significant source of ignition for fires. - answer lightning
A business uses hazardous materials, but uses no design factors to contain their
spread. The local fire service should be involved in pre-fire planning for this business
because when a fire occurs at one of these sites, it is more likely the fire service
personnel will do all of the following, EXCEPT: - answer Direct its hose streams onto the
property involved in the fire
A Commercial Package Policy, whether monoline or multiline, includes which one of the
following forms? - answerCommon Policy Conditions form
A florist in a strip shopping center sustained significant damage from a fire caused by a
neighboring pizza shop's deep fryer. The fire spread to the florist before the fire
department could arrive. During the underwriting process for the florist's property
insurance, this risk would most likely have been considered by the underwriter under
which one of the following COPE elements? - answerExternal exposure
A preaction sprinkler system - answercombines elements of wet and dry sprinkler
systems
A request for a higher amount of direct loss coverage than needed should cause an
underwriter to seek more information because too much insurance might indicate -
answerA moral hazard.
A small fire occurred in a local neighborhood damaging half of Gretta's Grocery Store.
Smoke damage occurred throughout the store. Health authorities are likely to do which
one of the following with the food items in the store? - answerdestroy the food items
A wedding photographer uses his camera equipment at several dozen different
locations each year. In insurance terminology, the camera equipment is considered to
be - answercontents
Alicante Steel owns both contributing and recipient locations. It produces parts of its
products at four separate plants and assembles them at a fifth. A large loss at any one
plant might shut down all sites. Which one of the following will ensure coverage for loss
of income from direct damage at any one of the locations? - answerBlanket business
income and extra expense coverage
An applicant wants to make sure that it has enough business income insurance to
satisfy its policy's coinsurance requirement. However, it does not want to pay an
excessive premium by having too high a coverage limit. Which one of the following
, endorsements or coverage forms would its underwriter most likely suggest as a way of
addressing this concern of the applicant? - answerBusiness Income Premium
Adjustment
An insurance policy's valuation method will determine the value of the insured's property
in the event of a covered loss. Which one of the following valuation methods factors in
depreciation when determining the value of insured property? - answerActual cash
value (ACV)
Antonio Rodriguez is a guard who makes regular rounds and patrols an assigned
premise when a business is closed. At various stops, Antonio inserts a magnetic key
card into an electronic station to record the time of his visit to each station. The record
can be checked later to determine whether Antonio followed the proper route. In what
type of private fire detection system is Antonio participating? - answerClock and tape
system
Applicants for business income coverage complete which one of the following forms that
becomes the basis for determining estimates of the insured's future financial
performance? - answerA business income worksheet
Aside from determining the value of a building, there are other underwriting
considerations related to verifying commercial property values. Which one of the
following statements regarding verifying property values is true? - answerUnderground
foundations and plumbing must be given special consideration when determining
property values.
At his hobby shop, Jim Petry uses electrical sanders and planers while woodworking
and much dust is created. At the recommendation of his insurance producer, Jim is
trying to reduce the likelihood of a dust explosion. Which one of the following would be
the most effective method of attaining this result? - answerJim should use a high
efficiency particulate air (HEPA) vacuum cleaner.
Atmospheric scientists have identified which one of the following places as the
populated area of the planet subject to the most severe weather? - answernorth
america
Automatic sprinklers provide the most effective protection against loss by fire, however
underwriters should not overlook the sprinkler leakage loss exposure. Underwriting
considerations for evaluating an account for sprinkler leakage exposures include which
one of the following? - answerSusceptibility of contents to water damage
Both hurricanes and tornadoes can be classified based on wind speed and the
destruction they cause. Which one of the following correctly describes the Enhanced
Fujita Tornado Damage Scale as one of these classification methods? - answerIt
classifies tornadoes on a scale of 0 through 5 based on twenty-eight damage indicators.
____________- Is a significant source of ignition for fires. - answer lightning
A business uses hazardous materials, but uses no design factors to contain their
spread. The local fire service should be involved in pre-fire planning for this business
because when a fire occurs at one of these sites, it is more likely the fire service
personnel will do all of the following, EXCEPT: - answer Direct its hose streams onto the
property involved in the fire
A Commercial Package Policy, whether monoline or multiline, includes which one of the
following forms? - answerCommon Policy Conditions form
A florist in a strip shopping center sustained significant damage from a fire caused by a
neighboring pizza shop's deep fryer. The fire spread to the florist before the fire
department could arrive. During the underwriting process for the florist's property
insurance, this risk would most likely have been considered by the underwriter under
which one of the following COPE elements? - answerExternal exposure
A preaction sprinkler system - answercombines elements of wet and dry sprinkler
systems
A request for a higher amount of direct loss coverage than needed should cause an
underwriter to seek more information because too much insurance might indicate -
answerA moral hazard.
A small fire occurred in a local neighborhood damaging half of Gretta's Grocery Store.
Smoke damage occurred throughout the store. Health authorities are likely to do which
one of the following with the food items in the store? - answerdestroy the food items
A wedding photographer uses his camera equipment at several dozen different
locations each year. In insurance terminology, the camera equipment is considered to
be - answercontents
Alicante Steel owns both contributing and recipient locations. It produces parts of its
products at four separate plants and assembles them at a fifth. A large loss at any one
plant might shut down all sites. Which one of the following will ensure coverage for loss
of income from direct damage at any one of the locations? - answerBlanket business
income and extra expense coverage
An applicant wants to make sure that it has enough business income insurance to
satisfy its policy's coinsurance requirement. However, it does not want to pay an
excessive premium by having too high a coverage limit. Which one of the following
, endorsements or coverage forms would its underwriter most likely suggest as a way of
addressing this concern of the applicant? - answerBusiness Income Premium
Adjustment
An insurance policy's valuation method will determine the value of the insured's property
in the event of a covered loss. Which one of the following valuation methods factors in
depreciation when determining the value of insured property? - answerActual cash
value (ACV)
Antonio Rodriguez is a guard who makes regular rounds and patrols an assigned
premise when a business is closed. At various stops, Antonio inserts a magnetic key
card into an electronic station to record the time of his visit to each station. The record
can be checked later to determine whether Antonio followed the proper route. In what
type of private fire detection system is Antonio participating? - answerClock and tape
system
Applicants for business income coverage complete which one of the following forms that
becomes the basis for determining estimates of the insured's future financial
performance? - answerA business income worksheet
Aside from determining the value of a building, there are other underwriting
considerations related to verifying commercial property values. Which one of the
following statements regarding verifying property values is true? - answerUnderground
foundations and plumbing must be given special consideration when determining
property values.
At his hobby shop, Jim Petry uses electrical sanders and planers while woodworking
and much dust is created. At the recommendation of his insurance producer, Jim is
trying to reduce the likelihood of a dust explosion. Which one of the following would be
the most effective method of attaining this result? - answerJim should use a high
efficiency particulate air (HEPA) vacuum cleaner.
Atmospheric scientists have identified which one of the following places as the
populated area of the planet subject to the most severe weather? - answernorth
america
Automatic sprinklers provide the most effective protection against loss by fire, however
underwriters should not overlook the sprinkler leakage loss exposure. Underwriting
considerations for evaluating an account for sprinkler leakage exposures include which
one of the following? - answerSusceptibility of contents to water damage
Both hurricanes and tornadoes can be classified based on wind speed and the
destruction they cause. Which one of the following correctly describes the Enhanced
Fujita Tornado Damage Scale as one of these classification methods? - answerIt
classifies tornadoes on a scale of 0 through 5 based on twenty-eight damage indicators.
