CIC COMMERCIAL MULTILINE EXAM STUDY
GUIDE 2026 – COMPLETE CONCEPT REVIEW &
PRACTICE MATERIALS (LATEST EDITION)
Principles & Common Elements
1. The primary goal of an insurance contract is to:
a) Guarantee the insured will not suffer a loss.
b) Transfer the risk of financial loss from the insured to the insurer. ✓
c) Eliminate all hazards present in a business operation.
d) Serve as an investment vehicle for the insured's capital.
2. Which of the following is a characteristic of a contract of adhesion?
a) Both parties negotiate the terms equally.
b) The contract is prepared by one party and accepted or rejected by the other. ✓
c) It requires consideration only from the insurer.
d) It is always a bilateral contract.
3. A representation in an insurance application is considered to be:
a) A warranty that must be literally true.
b) A fraudulent statement if later found to be inaccurate.
c) A statement believed to be true at the time it is made. ✓
d) Legally inconsequential to the policy.
4. The principle of indemnity means that:
a) The insured should be restored to the same financial position as before the loss. ✓
b) The insured always receives the full replacement cost.
c) The insurer must pay regardless of fault.
d) The insured can profit from a covered loss.
5. Which insurance principle states that a loss should be borne by the party who caused it?
a) Subrogation ✓
b) Utmost good faith
c) Proximate cause
d) Insurable interest
Commercial Property (Building & Personal Property Coverage Form - BPP)
,6. Under the BPP, which of the following is considered "Business Personal Property"?
a) The insured's building listed in the declarations.
b) Furniture, fixtures, machinery, and equipment owned by the insured and used in the
business. ✓
c) Tenants' improvements to the building.
d) The land on which the building stands.
7. The optional BPP coverage that pays the full cost to repair or replace damaged property
without a deduction for depreciation is called:
a) Functional Replacement Cost
b) Ordinance or Law Coverage
c) Replacement Cost Coverage ✓
d) Agreed Value Coverage
8. Under the Causes of Loss forms, which peril is generally covered under the Basic form
but excluded under the Broad form?
a) Fire
b) Windstorm
c) Weight of ice, snow, or sleet
d) Water damage from plumbing leakage (after 14 days) ✓
9. Which of the following is a key difference between the Broad and Special Causes of Loss
forms?
a) The Broad form is "named perils" for both building and personal property.
b) The Special form is "risks of direct physical loss" unless excluded. ✓
c) The Special form excludes theft.
d) The Broad form includes collapse coverage.
10. The coinsurance clause is designed to encourage the insured to:
a) Carry a deductible proportional to the loss.
b) Insure the property closer to its full value at the time of loss. ✓
c) Use multiple insurers for a single risk.
d) Avoid filing small claims.
11. If a building insured for $400,000 under an 80% coinsurance clause suffers a $100,000
loss, and its actual value at the time of loss is $800,000, what will the insurer pay?
(Ignore deductible)
a) $100,000
b) $62,500 ✓
c) $80,000
, d) $50,000
*(Calculation: Did insured meet coinsurance? Required: $800,000 x 80% = $640,000.
Actual: $400,000. They did not. Payment = (Amount Carried / Amount Required) x Loss =
($400,000 / $640,000) x $100,000 = $62,500)*
Business Income & Extra Expense
12. The purpose of Business Income (and Extra Expense) coverage is to replace:
a) The market share lost due to a covered loss.
b) Net income that would have been earned and normal operating expenses that
continue during a suspension of operations. ✓
c) The cost of repairing damaged property.
d) Permanent losses due to customer attrition.
13. The "period of restoration" for Business Income coverage ends on the date when:
a) Repairs to the property are completed.
b) The property is actually repaired, rebuilt, or replaced with reasonable speed.
c) The property should be repaired, rebuilt, or replaced with reasonable speed and
similar quality.
d) The property is restored to its pre-loss operational capability, whether at the original
or a new location. ✓
14. Which Business Income form is designed for a business that must continue operating
almost immediately after a direct physical loss?
a) Business Income with Extra Expense ✓
b) Business Income without Extra Expense
c) Extra Expense Only
d) Extended Period of Indemnity
Commercial Crime
15. Under the Employee Theft coverage form, who qualifies as an "employee"?
a) Only salaried workers.
b) Anyone you compensate directly via your payroll. ✓
c) Independent contractors and leased workers.
d) Members of the board of directors.
16. The crime coverage form that protects against loss of money and securities inside the
premises from theft, disappearance, or destruction is:
a) Employee Theft
b) Forgery or Alteration
, c) Theft, Disappearance, and Destruction ✓
d) Computer Fraud
17. Under the standard Commercial Crime policy, coverage for Employee Theft applies:
a) Only to acts discovered during the policy period.
b) Only to acts committed during the policy period.
c) To losses discovered during the policy period or within 60 days after its termination,
regardless of when the act occurred. ✓
d) To losses discovered up to one year after the policy terminates.
18. What is the purpose of the "cancelation of employee benefits" exclusion in an Employee
Theft policy?
a) To exclude theft of benefit plan funds.
b) To exclude losses resulting from termination of employee benefits. ✓
c) To require the insured to cancel benefits for a dishonest employee.
d) To cover theft by employees of benefit funds.
Commercial Auto
19. Which symbol under Business Auto Coverage Form Liability Coverage indicates "Any
Auto"?
a) Symbol 1
b) Symbol 7 ✓
c) Symbol 8
d) Symbol 9
20. "Hired Auto" physical damage coverage (Symbol 8) applies to:
a) Autos you own.
b) Autos you hire, rent, or borrow for short-term use. ✓
c) Autos you lease under a long-term contract.
d) Non-owned autos used by employees on company business.
21. Under the Business Auto Policy, who is an "insured" for a covered "owned" auto?
a) Only the named insured corporation.
b) The named insured, any employee while using the auto, and anyone liable for the
conduct of an insured. ✓
c) Only persons listed as drivers on the declarations.
d) The named insured and any family members.
22. The coverage that pays for damage to a covered auto caused by a collision with another
object or by overturn is:
GUIDE 2026 – COMPLETE CONCEPT REVIEW &
PRACTICE MATERIALS (LATEST EDITION)
Principles & Common Elements
1. The primary goal of an insurance contract is to:
a) Guarantee the insured will not suffer a loss.
b) Transfer the risk of financial loss from the insured to the insurer. ✓
c) Eliminate all hazards present in a business operation.
d) Serve as an investment vehicle for the insured's capital.
2. Which of the following is a characteristic of a contract of adhesion?
a) Both parties negotiate the terms equally.
b) The contract is prepared by one party and accepted or rejected by the other. ✓
c) It requires consideration only from the insurer.
d) It is always a bilateral contract.
3. A representation in an insurance application is considered to be:
a) A warranty that must be literally true.
b) A fraudulent statement if later found to be inaccurate.
c) A statement believed to be true at the time it is made. ✓
d) Legally inconsequential to the policy.
4. The principle of indemnity means that:
a) The insured should be restored to the same financial position as before the loss. ✓
b) The insured always receives the full replacement cost.
c) The insurer must pay regardless of fault.
d) The insured can profit from a covered loss.
5. Which insurance principle states that a loss should be borne by the party who caused it?
a) Subrogation ✓
b) Utmost good faith
c) Proximate cause
d) Insurable interest
Commercial Property (Building & Personal Property Coverage Form - BPP)
,6. Under the BPP, which of the following is considered "Business Personal Property"?
a) The insured's building listed in the declarations.
b) Furniture, fixtures, machinery, and equipment owned by the insured and used in the
business. ✓
c) Tenants' improvements to the building.
d) The land on which the building stands.
7. The optional BPP coverage that pays the full cost to repair or replace damaged property
without a deduction for depreciation is called:
a) Functional Replacement Cost
b) Ordinance or Law Coverage
c) Replacement Cost Coverage ✓
d) Agreed Value Coverage
8. Under the Causes of Loss forms, which peril is generally covered under the Basic form
but excluded under the Broad form?
a) Fire
b) Windstorm
c) Weight of ice, snow, or sleet
d) Water damage from plumbing leakage (after 14 days) ✓
9. Which of the following is a key difference between the Broad and Special Causes of Loss
forms?
a) The Broad form is "named perils" for both building and personal property.
b) The Special form is "risks of direct physical loss" unless excluded. ✓
c) The Special form excludes theft.
d) The Broad form includes collapse coverage.
10. The coinsurance clause is designed to encourage the insured to:
a) Carry a deductible proportional to the loss.
b) Insure the property closer to its full value at the time of loss. ✓
c) Use multiple insurers for a single risk.
d) Avoid filing small claims.
11. If a building insured for $400,000 under an 80% coinsurance clause suffers a $100,000
loss, and its actual value at the time of loss is $800,000, what will the insurer pay?
(Ignore deductible)
a) $100,000
b) $62,500 ✓
c) $80,000
, d) $50,000
*(Calculation: Did insured meet coinsurance? Required: $800,000 x 80% = $640,000.
Actual: $400,000. They did not. Payment = (Amount Carried / Amount Required) x Loss =
($400,000 / $640,000) x $100,000 = $62,500)*
Business Income & Extra Expense
12. The purpose of Business Income (and Extra Expense) coverage is to replace:
a) The market share lost due to a covered loss.
b) Net income that would have been earned and normal operating expenses that
continue during a suspension of operations. ✓
c) The cost of repairing damaged property.
d) Permanent losses due to customer attrition.
13. The "period of restoration" for Business Income coverage ends on the date when:
a) Repairs to the property are completed.
b) The property is actually repaired, rebuilt, or replaced with reasonable speed.
c) The property should be repaired, rebuilt, or replaced with reasonable speed and
similar quality.
d) The property is restored to its pre-loss operational capability, whether at the original
or a new location. ✓
14. Which Business Income form is designed for a business that must continue operating
almost immediately after a direct physical loss?
a) Business Income with Extra Expense ✓
b) Business Income without Extra Expense
c) Extra Expense Only
d) Extended Period of Indemnity
Commercial Crime
15. Under the Employee Theft coverage form, who qualifies as an "employee"?
a) Only salaried workers.
b) Anyone you compensate directly via your payroll. ✓
c) Independent contractors and leased workers.
d) Members of the board of directors.
16. The crime coverage form that protects against loss of money and securities inside the
premises from theft, disappearance, or destruction is:
a) Employee Theft
b) Forgery or Alteration
, c) Theft, Disappearance, and Destruction ✓
d) Computer Fraud
17. Under the standard Commercial Crime policy, coverage for Employee Theft applies:
a) Only to acts discovered during the policy period.
b) Only to acts committed during the policy period.
c) To losses discovered during the policy period or within 60 days after its termination,
regardless of when the act occurred. ✓
d) To losses discovered up to one year after the policy terminates.
18. What is the purpose of the "cancelation of employee benefits" exclusion in an Employee
Theft policy?
a) To exclude theft of benefit plan funds.
b) To exclude losses resulting from termination of employee benefits. ✓
c) To require the insured to cancel benefits for a dishonest employee.
d) To cover theft by employees of benefit funds.
Commercial Auto
19. Which symbol under Business Auto Coverage Form Liability Coverage indicates "Any
Auto"?
a) Symbol 1
b) Symbol 7 ✓
c) Symbol 8
d) Symbol 9
20. "Hired Auto" physical damage coverage (Symbol 8) applies to:
a) Autos you own.
b) Autos you hire, rent, or borrow for short-term use. ✓
c) Autos you lease under a long-term contract.
d) Non-owned autos used by employees on company business.
21. Under the Business Auto Policy, who is an "insured" for a covered "owned" auto?
a) Only the named insured corporation.
b) The named insured, any employee while using the auto, and anyone liable for the
conduct of an insured. ✓
c) Only persons listed as drivers on the declarations.
d) The named insured and any family members.
22. The coverage that pays for damage to a covered auto caused by a collision with another
object or by overturn is:
