Commercial Lines 101 CE Exam Questions with
Correct Answers
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Terms in this set (255)
Insurer The insurance company
Named Insured/Insured The policyholder
Financial Definition of A financial agreement involving the redistribution of
Insurance financial losses
A contractual agreement in which one party (the
Legal Definition of
insurer) agrees to compensate or indemnify another
Insurance
party (the insured) for fortuitous losses
the sharing of total losses sustained by a few
Loss Pooling
members of the insured group
Payment of Accidental or Allows the insurer to more accurately predict future
Fortuitous Losses losses
Involves the transfer of risk from the insured to the
Transfer of Risk insurer which is normally a larger entity more
financially able to absorb the loss
The act of an insurer compensating the insured for a
covered loss with the goal to put the insured back in
Indemnification
the same financial position he or she was in prior to
the loss
The basis of a claim for damages under the terms of
Loss
the policy
, Include expenses such as depreciation on a piece of
Planned Losses
factory equipment or on a commercial vehicle
Is insurance designed to Accidental losses
cover planned losses or
accidental losses?
An insurable loss that is the immediate result of a
Direct Loss
covered cause of loss (fire to an office building)
An insurable loss that is a consequential result of a
direct loss (expenses entailed in renting other
Indirect Loss
commercial property because of a fire to your office
building)
Peril The cause of the loss
Named Perils Policy The policy specifically lists the covered perils
Provides broader protection and covers any
All Risks Policy
accidental loss, subject to a host of policy exclusions
A policy provision that identifies losses that are not
Exclusion
covered
A condition or conditions that increases the
Hazard
probability of a loss
A physical condition or situation that increases the
Physical Hazard possibility of loss (outdated or frayed wiring in a
factory)
Intentional acts committed by the insured that either
create or exaggerate a loss and is measured by the
Moral Hazard
character of the insured and the circumstances
surrounding the subject of the insurance
Implies an indifference to loss simply because the
Morale Hazard existence of insurance (a way to mitigate this hazard is
to insist on high deductibles)
A substantial factor in setting events in motion that
Proximate Cause
cause a loss
Correct Answers
Save
Terms in this set (255)
Insurer The insurance company
Named Insured/Insured The policyholder
Financial Definition of A financial agreement involving the redistribution of
Insurance financial losses
A contractual agreement in which one party (the
Legal Definition of
insurer) agrees to compensate or indemnify another
Insurance
party (the insured) for fortuitous losses
the sharing of total losses sustained by a few
Loss Pooling
members of the insured group
Payment of Accidental or Allows the insurer to more accurately predict future
Fortuitous Losses losses
Involves the transfer of risk from the insured to the
Transfer of Risk insurer which is normally a larger entity more
financially able to absorb the loss
The act of an insurer compensating the insured for a
covered loss with the goal to put the insured back in
Indemnification
the same financial position he or she was in prior to
the loss
The basis of a claim for damages under the terms of
Loss
the policy
, Include expenses such as depreciation on a piece of
Planned Losses
factory equipment or on a commercial vehicle
Is insurance designed to Accidental losses
cover planned losses or
accidental losses?
An insurable loss that is the immediate result of a
Direct Loss
covered cause of loss (fire to an office building)
An insurable loss that is a consequential result of a
direct loss (expenses entailed in renting other
Indirect Loss
commercial property because of a fire to your office
building)
Peril The cause of the loss
Named Perils Policy The policy specifically lists the covered perils
Provides broader protection and covers any
All Risks Policy
accidental loss, subject to a host of policy exclusions
A policy provision that identifies losses that are not
Exclusion
covered
A condition or conditions that increases the
Hazard
probability of a loss
A physical condition or situation that increases the
Physical Hazard possibility of loss (outdated or frayed wiring in a
factory)
Intentional acts committed by the insured that either
create or exaggerate a loss and is measured by the
Moral Hazard
character of the insured and the circumstances
surrounding the subject of the insurance
Implies an indifference to loss simply because the
Morale Hazard existence of insurance (a way to mitigate this hazard is
to insist on high deductibles)
A substantial factor in setting events in motion that
Proximate Cause
cause a loss
