Casualty Insurance Exam Test
Questions and All Correct Answers.
Employee theft coverage may be written as - Answer a) Blanket coverage.
b) Name schedule coverage.
c) Position schedule coverage.
d) Any of the above.
Employee theft may be written as any of the above forms.
An insured is applying for a casualty insurance policy. One of the conditions of the policy allows
the insurance company to inspect the insured's books at the end of the policy term to make
sure sufficient premium has been collected for the exposure she plans to insure. Which
condition is part of the insured's policy? - Answer *a) Deposit premium audit
b) Excess liability coverage
c) Contract Bond
d) Errors and Omissions insurance
Deposit premium audit is a condition that allows an insurer to inspect the insured's books at the
end of the policy term to make sure sufficient payment has been collected for the exposure.
Which of the following would be named on the declarations page of a property or liability
policy? - Answer a) Additional insureds
*b) First named insured
c) Beneficiaries
d) All insureds
First named insured is the individual whose name appears first on the policy's declaration.
All of the following are true statements regarding the supplementary payments of a commercial
general liability policy EXCEPT - Answer a) They pay pre-judgment and post-judgment
interest.
b) They pay all reasonable costs incurred by the insured in helping to investigate or defend a
claim.
*c) They pay defense costs even after the aggregate limit has been reached.
d) They pay all expenses incurred by the insurer.
, Once the aggregate has been reached, the insurer will not be responsible for paying further
claims; therefore, the insurer no longer pays to defend.
What is the deductible of a personal liability umbrella policy called? - Answer a) The PIL
b) The CGL
c) The CPP
d) The SIR
The self-insured retention (SIR) is an initial part of a loss the insured pays before the umbrella
pays if no other policy covers the loss.
Which of the following statements is true regarding the commercial general liability policy's
Coverage C - Medical Payments? - Answer a) The coverage is liability insurance because it
pays only if the insured is legally liable.
b) The coverage provides high limits of insurance for bodily injury losses.
*c) The coverage is considered good will because payments are made without regard to fault.
d) The coverage applies to bodily injury to the named insured.
Coverage C - Medical Payments provides necessary medical, surgical, ambulance, hospital,
nursing or funeral expenses for injuries to third parties. Payments will be paid without regard to
the fault or negligence of the insured.
Which of the following statements would be an example of a product liability claim? - Answer
a) An insured, while delivering product to a customer, hits another car with the delivery truck
causing bodily injury and property damage.
b) Someone tampers with the insured's product causing the insured to have to recall all
products that are on the shelf.
c) The insured's product has to be recalled because of an expiration date.
*d) Faulty packaging of a cereal caused spoilage that resulted in someone getting sick.
Product liability covers damage done by the product but not damage to the product.
A bond is written for a set limit, and the surety will be liable only for this amount of the limit.
This limit is known as the - Answer a) Limit of liability.
*b) Penalty.
c) Face value.
d) Stated amount.
Questions and All Correct Answers.
Employee theft coverage may be written as - Answer a) Blanket coverage.
b) Name schedule coverage.
c) Position schedule coverage.
d) Any of the above.
Employee theft may be written as any of the above forms.
An insured is applying for a casualty insurance policy. One of the conditions of the policy allows
the insurance company to inspect the insured's books at the end of the policy term to make
sure sufficient premium has been collected for the exposure she plans to insure. Which
condition is part of the insured's policy? - Answer *a) Deposit premium audit
b) Excess liability coverage
c) Contract Bond
d) Errors and Omissions insurance
Deposit premium audit is a condition that allows an insurer to inspect the insured's books at the
end of the policy term to make sure sufficient payment has been collected for the exposure.
Which of the following would be named on the declarations page of a property or liability
policy? - Answer a) Additional insureds
*b) First named insured
c) Beneficiaries
d) All insureds
First named insured is the individual whose name appears first on the policy's declaration.
All of the following are true statements regarding the supplementary payments of a commercial
general liability policy EXCEPT - Answer a) They pay pre-judgment and post-judgment
interest.
b) They pay all reasonable costs incurred by the insured in helping to investigate or defend a
claim.
*c) They pay defense costs even after the aggregate limit has been reached.
d) They pay all expenses incurred by the insurer.
, Once the aggregate has been reached, the insurer will not be responsible for paying further
claims; therefore, the insurer no longer pays to defend.
What is the deductible of a personal liability umbrella policy called? - Answer a) The PIL
b) The CGL
c) The CPP
d) The SIR
The self-insured retention (SIR) is an initial part of a loss the insured pays before the umbrella
pays if no other policy covers the loss.
Which of the following statements is true regarding the commercial general liability policy's
Coverage C - Medical Payments? - Answer a) The coverage is liability insurance because it
pays only if the insured is legally liable.
b) The coverage provides high limits of insurance for bodily injury losses.
*c) The coverage is considered good will because payments are made without regard to fault.
d) The coverage applies to bodily injury to the named insured.
Coverage C - Medical Payments provides necessary medical, surgical, ambulance, hospital,
nursing or funeral expenses for injuries to third parties. Payments will be paid without regard to
the fault or negligence of the insured.
Which of the following statements would be an example of a product liability claim? - Answer
a) An insured, while delivering product to a customer, hits another car with the delivery truck
causing bodily injury and property damage.
b) Someone tampers with the insured's product causing the insured to have to recall all
products that are on the shelf.
c) The insured's product has to be recalled because of an expiration date.
*d) Faulty packaging of a cereal caused spoilage that resulted in someone getting sick.
Product liability covers damage done by the product but not damage to the product.
A bond is written for a set limit, and the surety will be liable only for this amount of the limit.
This limit is known as the - Answer a) Limit of liability.
*b) Penalty.
c) Face value.
d) Stated amount.
