Alberta General Insurance
Level 1 – Questions and
Answers Already Passed
Your insured, a sole proprietor, purchased a building valued at $1 million. The
insurance policy has a coinsurance clause based on the replacement cost value of
90%. Contrary to your advice, your insured insures the building for only $500,000.
He suffers a windstorm loss totaling $150,000. How much will the insurer pay?
a) $75,000
b) $83,333
c) $150,000
d) $93.755 - ANSWER-b) $83,333
An insured property is covered by two separate commercial policies placed with
two different insurers. Insurer A's policy has a limit of $100,000 and Insurer B's
policy has a limit of $200,000. The insured suffers an insurable loss of $230,000.
Assuming no deductibles apply, how much will each insurer pay?
a) Insurer A will pay $100,000. Insurer B will pay $130,000
b) Insurer A will pay $100,000, Insurer B will pay $200,000
,c) Insurer A will pay $76,659. Insurer B will pay $153,341
d) Neither insurer will pay. Two policies on the same property are prohibited -
ANSWER-c) Insurer A will pay $76,659. Insurer B will pay $153,341
On a Commercial Building, Equipment, and Stock Form, that insures the building
owner, which of the following would not be included under the "building"
definition?
a) Growing plants and trees inside the building used for decorative purposes
b) Building maintenance supplies
c) Fixed structures pertaining to the building
d) Temporary fixtures and fittings - ANSWER-d) Temporary fixtures and fittings
Under a Commercial Building, Equipment, and Stock insurance policy, the
definition of "stock" includes
a) merchandise of every description usual to the insured's business, including
packing and wrapping materials
b) advertising material usual to the insured's business
c) all stock including similar property belonging to others for which the insured is
obligated to insure
d) all of the above - ANSWER-d) all of the above
The Commercial Building, Equipment and Stock insurance policy identifies three
types of equipment for which coverage is provided. Which of the following is NOT
one of these three types?
,a) Tenants' improvements and betterments if the insured does not own the
building
b) Packing materials used to ship stock
c) Property belonging to others for which the insured is legally liable
d) The contents usual to the business the insured is engaged in, other than stock -
ANSWER-b) Packing materials used to ship stock
The basic principle of business interruption insurance is
a) to arrange alternate employment for employees while the building is being
repaired following an insured loss
b) To restore the premises to the condition they were in before the loss
c) to cover the cost of relocation the business
d) to restore the income that would have been earned had the business not been
interrupted - ANSWER-d) to restore the income that would have been earned had
the business not been interrupted
On a commercial crime insurance policy, employee dishonesty insurance
a) is provided on a discovery basis
b) is also known as fidelity insurance
c) protects insured against dishonest acts committed by employees, alone or in
collusion with others
d) all of the above - ANSWER-d) all of the above
, Which of the following losses normally excluded under a boiler and machinery
policy can be added by endorsement?
a) Fire
b) Nuclear reaction or radioactive contamination
c) Increased costs due to the enforcement of a bylaw regulating building
construction
d) War related losses - ANSWER-c) Increased costs due to the enforcement of a
bylaw regulating building construction
A surety bond
a) is a contract between two parties
b) protects the surety
c) provides security to a party entering into a contractual agreement with another
d) protects the insurer - ANSWER-c) provides security to a party entering into a
contractual agreement with another
A marine insurance policy provides coverage for
a) the hull and cargo
b) the hull only
c) cargo only
Level 1 – Questions and
Answers Already Passed
Your insured, a sole proprietor, purchased a building valued at $1 million. The
insurance policy has a coinsurance clause based on the replacement cost value of
90%. Contrary to your advice, your insured insures the building for only $500,000.
He suffers a windstorm loss totaling $150,000. How much will the insurer pay?
a) $75,000
b) $83,333
c) $150,000
d) $93.755 - ANSWER-b) $83,333
An insured property is covered by two separate commercial policies placed with
two different insurers. Insurer A's policy has a limit of $100,000 and Insurer B's
policy has a limit of $200,000. The insured suffers an insurable loss of $230,000.
Assuming no deductibles apply, how much will each insurer pay?
a) Insurer A will pay $100,000. Insurer B will pay $130,000
b) Insurer A will pay $100,000, Insurer B will pay $200,000
,c) Insurer A will pay $76,659. Insurer B will pay $153,341
d) Neither insurer will pay. Two policies on the same property are prohibited -
ANSWER-c) Insurer A will pay $76,659. Insurer B will pay $153,341
On a Commercial Building, Equipment, and Stock Form, that insures the building
owner, which of the following would not be included under the "building"
definition?
a) Growing plants and trees inside the building used for decorative purposes
b) Building maintenance supplies
c) Fixed structures pertaining to the building
d) Temporary fixtures and fittings - ANSWER-d) Temporary fixtures and fittings
Under a Commercial Building, Equipment, and Stock insurance policy, the
definition of "stock" includes
a) merchandise of every description usual to the insured's business, including
packing and wrapping materials
b) advertising material usual to the insured's business
c) all stock including similar property belonging to others for which the insured is
obligated to insure
d) all of the above - ANSWER-d) all of the above
The Commercial Building, Equipment and Stock insurance policy identifies three
types of equipment for which coverage is provided. Which of the following is NOT
one of these three types?
,a) Tenants' improvements and betterments if the insured does not own the
building
b) Packing materials used to ship stock
c) Property belonging to others for which the insured is legally liable
d) The contents usual to the business the insured is engaged in, other than stock -
ANSWER-b) Packing materials used to ship stock
The basic principle of business interruption insurance is
a) to arrange alternate employment for employees while the building is being
repaired following an insured loss
b) To restore the premises to the condition they were in before the loss
c) to cover the cost of relocation the business
d) to restore the income that would have been earned had the business not been
interrupted - ANSWER-d) to restore the income that would have been earned had
the business not been interrupted
On a commercial crime insurance policy, employee dishonesty insurance
a) is provided on a discovery basis
b) is also known as fidelity insurance
c) protects insured against dishonest acts committed by employees, alone or in
collusion with others
d) all of the above - ANSWER-d) all of the above
, Which of the following losses normally excluded under a boiler and machinery
policy can be added by endorsement?
a) Fire
b) Nuclear reaction or radioactive contamination
c) Increased costs due to the enforcement of a bylaw regulating building
construction
d) War related losses - ANSWER-c) Increased costs due to the enforcement of a
bylaw regulating building construction
A surety bond
a) is a contract between two parties
b) protects the surety
c) provides security to a party entering into a contractual agreement with another
d) protects the insurer - ANSWER-c) provides security to a party entering into a
contractual agreement with another
A marine insurance policy provides coverage for
a) the hull and cargo
b) the hull only
c) cargo only
