AINS 103 ACTUAL UPDATED QUESTIONS AND ANSWERS
GUARANTEE A+
✔✔The Paoli Power Shop has its building and business personal property insured
under a businessowners policy (BOP). Torrential rainstorms caused a nearby river to
overflow its banks and flood the area. The flood caused significant water damage to
both the building and personal property. Which one of the following would be true under
the BOP? - ✔✔The water damage would not be covered.
Like all policies, the BOP property policy specifies causes of loss that limit or exclude
coverage to include flooding.
✔✔Which one of the following is an example of intangible property exposed to theft
resulting from a cyber attack? - ✔✔Trade secrets.
✔✔Lawn Chemical Company applies fertilizer and weed killer to lawns and shrubs.
Which one of the following is a liability loss exposure to which Lawn Chemical Company
likely has a significant exposure? - ✔✔Completed operations liability.
✔✔Which one of the following exposures would be best suited for businessowners
policy (BOP)? - ✔✔An insured is considering upgrades to the furniture in the lobby of
his business and making computers with wi-fi available to customers while they wait.
✔✔Danforth Grocery Store specializes in fresh produce and is open 24 hours year-
round. The store has contracts with suppliers to deliver produce and foods by 5:00 a.m.
daily, so the parking area at the rear of the store is congested from 4:30 a.m. to 5:30
a.m. Customer traffic is heaviest from 7:00 a.m. to 9:00 a.m. and again from 3:00 p.m.
to 6:00 p.m. The store has had six slip-and-fall claims from customers in the past year.
Danforth Grocery Store is most exposed to which one of the following types of liability
loss? - ✔✔Premises liability.
✔✔The Random Bookstore (Random) is covered by an unendorsed Commercial
General Liability (CGL) Coverage Form. A customer in the store tripped over her untied
shoelace and fell, breaking her right arm. Which one of the following is a reason
Random's insurer might refuse to pay any damages under Random's CGL policy? -
✔✔The insured must be legally obligated before the insurer has the duty of paying.
✔✔Ava is Regional Manager for Goshen Mutual. She is looking over the past auto
losses for Disposal Inc. She is tracking the experience of their drivers, the location of
accidents, and the severity of the injury to their employees and the public. She is trying
to determine the frequency and severity of the auto exposure for Disposal and to use
the future models to suggest where Disposal allocates their loss prevention resources.
Which one of the following forms of analysis is Ava using to help Disposal address their
auto exposure? - ✔✔Predictive Modeling.
, ✔✔The Jackson Motor Company (JMC) is a commercial trucking company that
provides shipment services for a number of manufacturers throughout the US. It has a
good safety record, but believes that it needs insurance to protect it from its possible
legal liability for damage to the cargo of its customers during shipment by its vehicles.
Which one of the following inland marine insurance policies is most appropriate for
JMC? - ✔✔Motor truck cargo liability policy.
✔✔An animal damaged the interior of an insured's automobile while it was parked with
the windows down. Which one of the following types of physical damage coverage
under the Business Auto Coverage Form (BACF) would cover this loss? -
✔✔Comprehensive coverage applies to any peril except collision or overturn or a peril
specifically excluded.
✔✔In order for an insurer to be obligated to pay damages under a businessowners
policy (BOP) for a liability claim three conditions must be met. All of the following are
conditions for a liability claim under the BOP, EXCEPT: - ✔✔The insured must have
known about the incident before the policy went into effect.
✔✔A company owns land that is used as a softball diamond and recreational park for
hosting employee picnics. Once a year the company also allows a non-profit
organization to hold a softball game on these premises. During this year's softball game,
the director of the non-profit was injured when a softball hit him in the head. He asked
the company that owns the land to pay for his trip to the emergency room. The
company's unendorsed Commercial General Liability policy: - ✔✔Does not cover the
director's injuries sustained because they happened during an athletic event.
✔✔Once a risk manager has started the risk management process and has completed
a scan of the environment, which one of the following is the next step in the enterprise
risk management (ERM) process? - ✔✔Identify risks.
✔✔Which one of the following policies would respond to a furnace explosion? -
✔✔Commercial property policy.
✔✔Considering the claims process, which one of the following data analysis methods
begins with data analysis of claims activity logs to identify steps taken for claims and the
timing of them? - ✔✔Process mining.
✔✔Jones Retail has a Business Income (and Extra Expense) Coverage Form with a
$100,000 limit and a 50 percent coinsurance clause. At the time of a $40,000 covered
business income loss, Jones estimates its net income plus all operating expenses
(minus certain deductible items) for the one-year policy period to be $400,000. How
much will the insurer pay? - ✔✔The insurer will pay $20,000. [$100,000/($400,000 x
50%)] x $40,000 = $20,000
GUARANTEE A+
✔✔The Paoli Power Shop has its building and business personal property insured
under a businessowners policy (BOP). Torrential rainstorms caused a nearby river to
overflow its banks and flood the area. The flood caused significant water damage to
both the building and personal property. Which one of the following would be true under
the BOP? - ✔✔The water damage would not be covered.
Like all policies, the BOP property policy specifies causes of loss that limit or exclude
coverage to include flooding.
✔✔Which one of the following is an example of intangible property exposed to theft
resulting from a cyber attack? - ✔✔Trade secrets.
✔✔Lawn Chemical Company applies fertilizer and weed killer to lawns and shrubs.
Which one of the following is a liability loss exposure to which Lawn Chemical Company
likely has a significant exposure? - ✔✔Completed operations liability.
✔✔Which one of the following exposures would be best suited for businessowners
policy (BOP)? - ✔✔An insured is considering upgrades to the furniture in the lobby of
his business and making computers with wi-fi available to customers while they wait.
✔✔Danforth Grocery Store specializes in fresh produce and is open 24 hours year-
round. The store has contracts with suppliers to deliver produce and foods by 5:00 a.m.
daily, so the parking area at the rear of the store is congested from 4:30 a.m. to 5:30
a.m. Customer traffic is heaviest from 7:00 a.m. to 9:00 a.m. and again from 3:00 p.m.
to 6:00 p.m. The store has had six slip-and-fall claims from customers in the past year.
Danforth Grocery Store is most exposed to which one of the following types of liability
loss? - ✔✔Premises liability.
✔✔The Random Bookstore (Random) is covered by an unendorsed Commercial
General Liability (CGL) Coverage Form. A customer in the store tripped over her untied
shoelace and fell, breaking her right arm. Which one of the following is a reason
Random's insurer might refuse to pay any damages under Random's CGL policy? -
✔✔The insured must be legally obligated before the insurer has the duty of paying.
✔✔Ava is Regional Manager for Goshen Mutual. She is looking over the past auto
losses for Disposal Inc. She is tracking the experience of their drivers, the location of
accidents, and the severity of the injury to their employees and the public. She is trying
to determine the frequency and severity of the auto exposure for Disposal and to use
the future models to suggest where Disposal allocates their loss prevention resources.
Which one of the following forms of analysis is Ava using to help Disposal address their
auto exposure? - ✔✔Predictive Modeling.
, ✔✔The Jackson Motor Company (JMC) is a commercial trucking company that
provides shipment services for a number of manufacturers throughout the US. It has a
good safety record, but believes that it needs insurance to protect it from its possible
legal liability for damage to the cargo of its customers during shipment by its vehicles.
Which one of the following inland marine insurance policies is most appropriate for
JMC? - ✔✔Motor truck cargo liability policy.
✔✔An animal damaged the interior of an insured's automobile while it was parked with
the windows down. Which one of the following types of physical damage coverage
under the Business Auto Coverage Form (BACF) would cover this loss? -
✔✔Comprehensive coverage applies to any peril except collision or overturn or a peril
specifically excluded.
✔✔In order for an insurer to be obligated to pay damages under a businessowners
policy (BOP) for a liability claim three conditions must be met. All of the following are
conditions for a liability claim under the BOP, EXCEPT: - ✔✔The insured must have
known about the incident before the policy went into effect.
✔✔A company owns land that is used as a softball diamond and recreational park for
hosting employee picnics. Once a year the company also allows a non-profit
organization to hold a softball game on these premises. During this year's softball game,
the director of the non-profit was injured when a softball hit him in the head. He asked
the company that owns the land to pay for his trip to the emergency room. The
company's unendorsed Commercial General Liability policy: - ✔✔Does not cover the
director's injuries sustained because they happened during an athletic event.
✔✔Once a risk manager has started the risk management process and has completed
a scan of the environment, which one of the following is the next step in the enterprise
risk management (ERM) process? - ✔✔Identify risks.
✔✔Which one of the following policies would respond to a furnace explosion? -
✔✔Commercial property policy.
✔✔Considering the claims process, which one of the following data analysis methods
begins with data analysis of claims activity logs to identify steps taken for claims and the
timing of them? - ✔✔Process mining.
✔✔Jones Retail has a Business Income (and Extra Expense) Coverage Form with a
$100,000 limit and a 50 percent coinsurance clause. At the time of a $40,000 covered
business income loss, Jones estimates its net income plus all operating expenses
(minus certain deductible items) for the one-year policy period to be $400,000. How
much will the insurer pay? - ✔✔The insurer will pay $20,000. [$100,000/($400,000 x
50%)] x $40,000 = $20,000
