AU 61 Simulated Exam Questions
Emily is a risk analyst at EFG Company. She is presenting a cost benefit analysis with
her supervisor to senior management on ways to improve their risk control program in
the employer's warehouses. Her supervisor asked her to compile some improvements
and the reasons they will help all employees at EFG and also help management reach
their business goals. All of the following could be potential program improvements for
considering committing resources to improving risk control in the warehouses, EXCEPT:
- answer Bring in an outside team to consider increasing the size of the warehouses for
more storage.
Which one of the following statements is true for underwriters when considering the risk
of wildfires? - answer Extensive wildfires may result in government-mandated
evacuations of entire communities, resulting in tremendous business interruption losses.
Hilltop Health Club (HHC) is a fitness center that is open from 6:00 AM to 10:00 PM
seven days a week. The facility offers a full range of exercise equipment, an outdoor
obstacle course, training classes, and locker rooms with showers. HHC also has a small
snack bar with a grill offering breakfast and lunch daily. Which one of the following
would be considered a special hazard of the risk for HHC? - answerThe snack bar with
the grill.
Which one of the items below would be included in the probable maximum loss (PML)
calculation following a business interruption loss but are not included in the worksheet
calculating the coinsurance basis? - answerExtra Expenses.
Emilia works for Malvern Insurance Underwriters. She is reviewing the period of
restoration under the business income policy following a fire loss that closed an
account's headquarters due to smoke and partially collapsed the employee parking
garage. Operations were affected due to their inability to coordinate with their suppliers
for deliveries and use their headquarters. The fire occurred on March 1st and they were
able to resume normal operations on April 25th of the same year. Unfortunately, a
server malfunctioned due to corrupted software a consultant had loaded before the fire
and caused the website to remain down until May 2nd. Which one of the following
periods would represent the correct period of restoration? - answerMarch 4th to April
25th. The period of restoration begins 72 hours after the physical loss occurs and ends
when the property is (or should have been) restored to use with reasonable speed.
A large fire at Paoli Computers destroyed their facility. The underwriter on the account
contacted the agent and they agreed that Paoli had the proper amount of business
income insurance to handle the loss. Paoli was in a yearly lease with the property owner
and had 25 employees who worked in the destroyed building. They had a fleet of
vehicles to deliver products and service accounts that they were unable to use. Which
, one of the following expenses would be expected to remain relatively stable despite the
loss? - answerIncome Taxes.
Anthony is reviewing a property insurance application for Rizzo Bakery. Rizzo Bakery is
a manufacturer of artisan breads that are sold at food markets. When evaluating the fuel
load for this type of manufacturing operation, which one of the following would be a
major concern for Anthony? - answerCombustible dust.
Rose is a property underwriter considering the application of a small clothing store in a
strip mall. The stores in the strip mall are all ornate brick structures. The clothing store is
located between a bagel shop and t-shirt shop. The stores are in separate fire divisions,
and the fire department is located only a few blocks from the area, but Rose learned
that there are doorways connecting all the stores and the roof over the stores is made of
a combustible material. Which one of the following would be a reasonable way for Rose
to handle the application? - answerTreat the brick buildings as frame construction
instead of brick.
The Goshen fire department was called out to a fire at a local pharmaceutical
manufacturing plant. A pre-fire planning survey was on file and noted a number of
hazardous chemicals were used in the manufacturing process of the plant. Many of the
firefighters were familiar with the area because there is a local trout fishing contest in a
river that runs nearby. This plant has a large cement parking area and is across the
street from a local shopping district used by many in the town. When the fire department
arrived the plant was fully engulfed in flames. The Goshen Fire Department will most
likely follow which one of the following actions? - answerAllow the building to burn itself
out to protect the local waterway from contamination from the chemicals in the plant.
Which one of the following statements is true regarding the exposure to sprinkler
leakage? - answerSprinkler systems designed to protect property in unheated spaces
can defend against freezing by injecting an antifreeze solution into piping loops exposed
to subfreezing temperatures.
Phil is reviewing the property application for a high-rise apartment building. The exterior
walls, roof, and floors are all made of masonry materials with a fire-resistive rating of
two hours or more. The building has two elevators, a restaurant and retail stores on the
first floor, and four apartment units on each of the remaining floors. Which one of the
following construction classifications will Phil assign to this building? - answerFire-
resistive, because its exterior walls, roof, and floors are all made of masonry materials
with a fire-resistive rating of two hours or more. Most high-rise office and apartment
buildings are of this construction classification.
Lucy, a commercial property underwriter, was reviewing the application for a business in
the service industry. She was concerned about the fire and explosion potential due to
the use of steam and pressured equipment, and other heat producing equipment. Lucy
was also concerned about the need for proper ventilation due to the use of flammable
solvents and potential accumulation of lint. Which one of the following types of service
Emily is a risk analyst at EFG Company. She is presenting a cost benefit analysis with
her supervisor to senior management on ways to improve their risk control program in
the employer's warehouses. Her supervisor asked her to compile some improvements
and the reasons they will help all employees at EFG and also help management reach
their business goals. All of the following could be potential program improvements for
considering committing resources to improving risk control in the warehouses, EXCEPT:
- answer Bring in an outside team to consider increasing the size of the warehouses for
more storage.
Which one of the following statements is true for underwriters when considering the risk
of wildfires? - answer Extensive wildfires may result in government-mandated
evacuations of entire communities, resulting in tremendous business interruption losses.
Hilltop Health Club (HHC) is a fitness center that is open from 6:00 AM to 10:00 PM
seven days a week. The facility offers a full range of exercise equipment, an outdoor
obstacle course, training classes, and locker rooms with showers. HHC also has a small
snack bar with a grill offering breakfast and lunch daily. Which one of the following
would be considered a special hazard of the risk for HHC? - answerThe snack bar with
the grill.
Which one of the items below would be included in the probable maximum loss (PML)
calculation following a business interruption loss but are not included in the worksheet
calculating the coinsurance basis? - answerExtra Expenses.
Emilia works for Malvern Insurance Underwriters. She is reviewing the period of
restoration under the business income policy following a fire loss that closed an
account's headquarters due to smoke and partially collapsed the employee parking
garage. Operations were affected due to their inability to coordinate with their suppliers
for deliveries and use their headquarters. The fire occurred on March 1st and they were
able to resume normal operations on April 25th of the same year. Unfortunately, a
server malfunctioned due to corrupted software a consultant had loaded before the fire
and caused the website to remain down until May 2nd. Which one of the following
periods would represent the correct period of restoration? - answerMarch 4th to April
25th. The period of restoration begins 72 hours after the physical loss occurs and ends
when the property is (or should have been) restored to use with reasonable speed.
A large fire at Paoli Computers destroyed their facility. The underwriter on the account
contacted the agent and they agreed that Paoli had the proper amount of business
income insurance to handle the loss. Paoli was in a yearly lease with the property owner
and had 25 employees who worked in the destroyed building. They had a fleet of
vehicles to deliver products and service accounts that they were unable to use. Which
, one of the following expenses would be expected to remain relatively stable despite the
loss? - answerIncome Taxes.
Anthony is reviewing a property insurance application for Rizzo Bakery. Rizzo Bakery is
a manufacturer of artisan breads that are sold at food markets. When evaluating the fuel
load for this type of manufacturing operation, which one of the following would be a
major concern for Anthony? - answerCombustible dust.
Rose is a property underwriter considering the application of a small clothing store in a
strip mall. The stores in the strip mall are all ornate brick structures. The clothing store is
located between a bagel shop and t-shirt shop. The stores are in separate fire divisions,
and the fire department is located only a few blocks from the area, but Rose learned
that there are doorways connecting all the stores and the roof over the stores is made of
a combustible material. Which one of the following would be a reasonable way for Rose
to handle the application? - answerTreat the brick buildings as frame construction
instead of brick.
The Goshen fire department was called out to a fire at a local pharmaceutical
manufacturing plant. A pre-fire planning survey was on file and noted a number of
hazardous chemicals were used in the manufacturing process of the plant. Many of the
firefighters were familiar with the area because there is a local trout fishing contest in a
river that runs nearby. This plant has a large cement parking area and is across the
street from a local shopping district used by many in the town. When the fire department
arrived the plant was fully engulfed in flames. The Goshen Fire Department will most
likely follow which one of the following actions? - answerAllow the building to burn itself
out to protect the local waterway from contamination from the chemicals in the plant.
Which one of the following statements is true regarding the exposure to sprinkler
leakage? - answerSprinkler systems designed to protect property in unheated spaces
can defend against freezing by injecting an antifreeze solution into piping loops exposed
to subfreezing temperatures.
Phil is reviewing the property application for a high-rise apartment building. The exterior
walls, roof, and floors are all made of masonry materials with a fire-resistive rating of
two hours or more. The building has two elevators, a restaurant and retail stores on the
first floor, and four apartment units on each of the remaining floors. Which one of the
following construction classifications will Phil assign to this building? - answerFire-
resistive, because its exterior walls, roof, and floors are all made of masonry materials
with a fire-resistive rating of two hours or more. Most high-rise office and apartment
buildings are of this construction classification.
Lucy, a commercial property underwriter, was reviewing the application for a business in
the service industry. She was concerned about the fire and explosion potential due to
the use of steam and pressured equipment, and other heat producing equipment. Lucy
was also concerned about the need for proper ventilation due to the use of flammable
solvents and potential accumulation of lint. Which one of the following types of service
