AINS 103 Questions with CORRECT Answers

AINS 103 Questions with CORRECT Answers

Question:
Property Loss Exposure/Physical Damage Losses
Answer:
Any condition that presents the possibility that a person will sustain a loss resulting from
damage to or theft of that property


Question:
2 Main Categories of Property
Answer:
Real Property and Personal Property


Question:
Real Property
Answer:
Land, permanently-attached structures on top of land, and anything growing on land


Question:
Personal Property
Answer:
Any movable property other than real property. Ex. Supplies, furniture, computers,
tools, etc.


Question:
Securities
Answer:
Non-cash financial instruments that have monetary value. Ex. stocks and bonds. Highly
susceptible to theft and fire losses.


Question:
Peril
Answer:
Type of event that has effect on a property that causes owner to suffer financial loss.
Refers to the actual means by which property gets damaged or destroyed.

,Question:
Fire
Answer:
Greatest risk of large/total property loss for most businesses


Question:
Financial Consequences of Loss
Answer:
Reduction (or total loss) in value of property


Question:
Increased expenses (ex
Answer:
cost of temporarily renting equipment if own equipment is stolen)


Question:
Lost income (ex
Answer:
lost income while damaged property is unusable)


Question:
Continuing Expenses
Answer:
Expenses that continue to be incurred during a business interruption. Ex: employee
payroll, debt repayments, taxes, insurance premiums, etc.


Question:
Extra Expenses
Answer:
New expenses paid (in addition to ordinary expenses) to mitigate or reduce the effects
of a business interruption. Ex: Renting temporary space while original location is being
repairded/restored.

,Question:
Business Income Loss
Answer:
Lost Profit + Total Expenses


Question:
Liability Exposures
Answer:
A condition or situation that presents possibility of financial loss due to being sued or
held responsible for someone else's damages or injury.


Question:
Premises Liability
Answer:
Being liable for damage/injury that occurs on insured's premises. Ex: slip and fall


Question:
Operations Liability
Answer:
Being liable for damage/injury caused during insured's ongoing operations (while
product/service is being created or rendered). Ex: moving company damages
customer's items while carrying them into customer's home. One of the most common
sources of liability.


Question:
Products Liability
Answer:
Being liable for damage/injury that results due to manufacture, distribution, or sale of
unsafe/defective product. Ex: Manufactured item explodes due to manufacturing defect.


Question:
Completed Operations Liability
Answer:
Being held liable for damage/injury that results after work is completed. Ex: Plumber
installs pipes incorrectly and it springs leak. One of the most common sources of
liability.

, Question:
Damages
Answer:
Cost of victim's damages or injury


Question:
Defense Costs
Answer:
Cost to investigate& defend against lawsuits filed due to loss


Question:
Reputational Harm
Answer:
Harm to insured's reputation, even if company found to not be liable.


Question:
Can stem from owning/operating vehicles, transporting goods, using thirdparty to
transport goods. Usually not covered under commercial general property or general
liability policies.
Answer:
Auto & Transportation Risks


Question:
Marine Loss Exposures
Answer:
Relate to the movement of goods or other property. I.e., liability or damage relating to
the transit of goods. Refers to any form or transit, not just ocean transit.


Question:
Inland Marine Insurance
Answer:
Covers many classes of property that typically involve transport on land