USAA Licensing Exam 2023 Passed 100%

USAA Licensing Exam 2023 Passed 100% Insurance *** Transfer of risk from one person or organization to an insurance company Indemnity *** The principle to restore the insured to the pre-loss economic or financial condition. Law of Large numbers *** Mathematical principle used by insurers to predict losses to charge the appropriate premiums Insurable Interest *** Proof that someone stands to lose financially if a loss occurs; must exist at the time of the loss in property and casualty insurance Binder *** Temporary insurance contract; commits the company to act as if a policy has been issued Peril *** Cause of loss Direct Loss *** Immediate actual physical damage to tangible property Indirect loss *** Inability to use property as a result of a direct loss Risk *** Chance of loss; uncertainty of loss What are the two types of risk? *** Speculative and Pure Speculative Risk *** Involves the simultaneous chance of gain or loss: is not insurable Pure Risk *** a risk that presents the chance of loss but no opportunity for gain (insurable) What are two examples of speculative risk? *** Gambling Investing What is an example of your risk? *** Car accident Physical hazards include *** Visible condition that increases the chance of loss Morale Hazard *** Attitude of carelessness or indifference to loss Insurer *** The insurance company (a.k.a. second party to the contract) Named Insured *** A party named on the declarations who is purchasing the insurance policy (a.k.a. first party to the contract) Insured *** Who the insurer promises to protect in addition to the named insured Limit of Liability *** The maximum amount that can be paid for a covered loss Consideration *** An exchange of value between parties to a contract Waiver *** The voluntary relinquishment of a known right What is Estopple? *** When an agent tells an insured/makes the statement there is coverage for a loss when there is no such coverage, then the insurer is prevented from denying the claim as a result of what precedent? Concealment *** Insured or prospect deliberately withholding material information from the insurer, this voids coverage Material Misrepresentation *** Insured or prospect giving incorrect material information to the insurer, this voids coverage Warranty *** A written condition in the policy that must be true at the time of the loss Texas Department of Insurance *** In Texas, the insurance industry is regulated by the Commissioner *** The (_______) is appointed by the governor and heads the Texas Department of Insurance Adjuster *** According to the Texas Insurance Code, any person who investigates or adjusts losses, or any person who supervises the handling of claims must be licensed as an (_______________) A Staff Adjuster *** A (_____) is on the payroll of an insurance company and is paid a salary or by the hour Independent Adjuster *** A (___) handles claims for one or more insurance companies and receives a fee based on time and expense. Public Adjuster *** A (__) works on behalf of the insured in negotiating a claim settlement. In Texas a (______) requires another separate license called a "public adjusters license". Insurance Agent *** Persons marketing (Selling) insurance products are called (___) Alien Insurer *** An insurer organized and domiciled outside the United States is called an (_____) Domestic Insurer *** An insurer organized, admitted, and writing insurance in Texas is called a (______) A Foreign Insurer *** An insurer domiciled outside the state where she writes business is called a (____) Unfair Claim Settlement *** An adjuster intentionally lowballs the claim settlement by offering less than the amount owed to the insured Unfair Claim Settlement Practices Act *** An Agent collects a premium for a policy, but does not send it to the company and allows a policy to be canceled Unfair Claims Settlement Practices Act *** The insurance company fails to adopt reasonable standards for processing claims Unfair Claim Settlement *** If an adjuster were to deny a claim without conducting a reasonable investigation. This would be an example of what type of claim settlement violation? Supplemental Coverages *** The insurance company defends the insured for a suit arising out of a covered claim An unfair claims settlement practice. *** If an adjuster were to deny a claim without providing the policyholder with a reasonable explanation for the denial, this would be an example of what type of claims settlement practice? An unfair claims settlement practice *** If the adjuster tells the insured that he has no coverage under a policy when the coverage really exists, this would be an example of what type of claims settlement practice? 15 days *** How many days does an adjust have to acknowledge the claim 15 Business days *** How many days does an adjust have to accept or reject the claim after he receives complete information? 5 calendar days *** How many days does an adjuster have to send the check after he agrees to pay the claim? What hazards does Standard Fire Protection cover? *** (FLI)Fire, Lightning, Internal Explosions What hazards does Name Peril "Basic" Cover? *** (FLI)+ W-Wind C- Civil Commotion S- Smoke H- Hail A- Aircraft V- Vehicle not owned by the insured V- Volcano activity E- Explosion R- Riot M- Malicious Mischief What hazards are covered under "Named Peril Broad" coverage? *** (FLI+WCSHAVVERM) & B- Burglary Damage I- Ice/Sleet/Snow G- Glass Coverage A- Accidental Discharge/Overflow F- Falling Objects F- Freezing Pluming E- Electric Current C- Collapse Coverage T- Tearing Appart What hazards or perils are listed in the "Special Exclusions" policy? *** Building Ordinances Mechanical Breakdown War & Nuclear Power Surge - Offcite International Acts Earthquake Flood Temporary/ Emergency License *** A special allowance that can be made by the Texas Insurance Commissioner for an insurance company employee during an emergency for the purposes of training? Five day's notice *** How many days notice must a company give the Commissioner to issue a temporary license or emergency license to an individual for the pruposes of training? Who is responsible for the actions of the licensee once an emergency or temporary license has been issued? *** The firm requesting the license is responsible.. A Property and Casualty Adjuster licenses allows? *** This license allows a person to adjust or supervise claims in all areas of property and casualty insurance EXECPT workers' compensation. Domestic Insurer *** An insurance company that is incorporated in the state. Foreign Insurance Company *** An insurance company that is incorporated outside the state where it is conducting business Who is the Chief Executive Officer of the Texas Department of Insurance? *** The Commissioner How long does the Commissioner serve? *** A term of two years What are the basic qualifications for adjusters in Texas? *** a. 18 years of age b. Citizen of Texas or approved by a nonresidents home state c. If a nonresident of the U.S., he must comply with all federal laws pertaining to employment in the U.S. d. Trustworthy e. Sufficient training or experience to be a competent adjuster f. Must pass an examination to qualify for adjusters licensing. Who is exempt from Examination? *** Those individuals with are: 1. Chartered Property and Casualty Underwriter (CPCU) 2. Associate in Claims (AIC) designation 3. A persons who's adjusters license has expired within a period of less than one year How long after the change of a business location must a licensee notify the Commissioner? *** 30 days How long is an adjusters license good for? *** Two years on the licensee birthday How much does is an adjuster required to pay to renew a license that has expired within less than 90 days? *** The renewal fee PLUS a 50% penalty How many hours of continuing education are requested to renew a license? *** 24 hours every two year cycle How much of continuing education must be conducted in a classroom environment? *** 50% of the 24 hours How many hours of ethics training are required during continuing edcuation? *** 2 hours of 24 total hours. What authority does the Commissioner of Insurance have? *** To police the activities of two entities: 1. Insurance companies 2. Insurance professionals, including the licensing of insurance agents and adjusters How often is a domestic headquartered insurance company audited by the office of the Commissioner? *** Once every 5 years The insurance company pays for what event which is required to take place every five years? *** The audit by the insurance commission. What action can the Commissioner take regarding an adjuster or agents license? *** The Commissioner may: deny, suspend, revoke, or refuse to renew a license. **If a licensee is convicted by final judgement a felony. Who is responsible for licensing property and casualty adjusters? *** The Texas Department of Insurance 10-days *** How many days' advance notice is an adjuster entitled to receive in the event of a hearing with the Texas Department of Insurance? 24-hours *** A licensed property and casualty adjuster must complete how many hours of continuing education within a 2 year licensing period? Name one designation that exempts a person from taking the property and casualty adjuster state exam. *** 1. Chartered Property and Casualty Underwriter (CPCU) 2. Associate in Claims (AIC) designation 3. A persons who's adjusters license has expired within a period of less than one year An individual must be what age to receive their property and casualty adjuster license? *** 18 years old How many hours of ethics must a licensed adjuster complete every licensing period? *** 2 hours of ethics How soon must a licensed adjuster notify the Texas Department of Insurance (TDI) of an address change? *** Within 30 days of the change. Who appoints the Commissioner of Insurance? *** The Governor of Texas How many companies might an independent adjuster represent? *** 1 or more companines The Insured *** Someone a public adjuster may represent is the? How many parties does an insurance contact have? *** 2 parties in an insurance contract How long does an insurer have to respond to a notice of claim? *** 15 days Once an agreement has been reached regarding settlement of a claim, how long does an insurer have to issue a check? *** 5 business days When does the duty to "defend in court"? *** Only once the law suit has been filed in court. What are the three requirements for a compintent party? *** Age 18 Sane Sober What are the essential elements of a contract? *** Competent Parties Agreement Lawful Objectives Consideration The principle that states that an insured should be restored after a loss to approximately the same financial position as before the loss is know as? *** Indemnity What part of an insurance policy personalizes the policy as to whom and what are insured? *** Declarations An insurance policy is prepared by the insurance company, with little or no input from the insured. This means that an insurance police is *** An adhesion contract In liability policies, supplementary payments are? *** Payable in addition to the policy limit of liability. Endorsements are used to do all of the following EXECPT *** Cancel the entire policy. Who writes an endorsement? *** Underwriter's do What are Endorsements? *** They are changes to a policy by an underwriter and have a direct link to an increase in premiums. Are endorsements done verbally? *** No they are done in writing What are Supplementary payments? *** payments applied to policies that are paid in addition to policy limits What does the term BAILED stand for? *** B- Bonds A- Aid (First aid...) I- Interest on judgments against insured with no limits L- Loss of earnings, 250 per day E- Expenses incurred at the request of the insurer D- Defense and investigation costs-paid with no limit What is an endorsement? *** The only way to modify or change a policy What are the five elements of an endorsement? *** 1. Add, delete, or modify coverage 2. Must be in writing 3. Added to the back of a policy 4. Not used to cancel a policy 5. Only the underwriter has authority to issue endorsement. * Requires an additional premium for expanded coverage If more than one policy covers the same property, the payment of claims would be based on what liability principle? *** Pro-rata liability What does the acronym C.L.A.C. represent? *** - Competent Parties - Legal (in public interest) - Agreement Acceptance by Insurer - Consideration (Insured=Premium, Insurer=Promise to indemnify) D.I.C.E.E *** D- Declaration Page= 5 P's I- Insurance Agreement/Promise to pay C- Conditions= Rules/Requirements- Both insured and insurer E- Exclusions=(Perils, not covered) or (Property not covered) E- Endorsements= Only way to modify a policy, completed by underwriter and costs an additional premium. When an insurance policy is canceled, what consideration is used in determining the refund of the premiums? *** Insurer = Pro-rated Insured = Short Rate penalty BAILED *** B- Bonds A- First Aid at the scene of the accident I - Interest on judgments against insured L- Loss of earnings for the first policyholders E- Expenses determined by the adjuster D- Defense and investigation costs Supplementary Payments *** Paid policyholder and insurance company expenses Law of large numbers *** Predict losses to charge the appropriate premiums Limit of Liability also known as *** Policy limits Face Amount Independent Adjuster *** Works for a firm or breau Public Adjuster *** Requires an additional license Prompt, Fair, Accurate *** These terms keep you from violating the Unfair Claims Settlement Practices What must the adjuster provide to the insured to acknowledge a claim? *** Proof of loss claim form What is REAL PROPERTY? *** Bricks and sticks, property such as a structure. What is personal property? *** Everything that goes into a home/physical structure. What is SFP? *** Standard Fire Policy What forms the basis upon which the modern property insurance policies have been developed? *** Standard Fire Policy (SFP) What is "removal" coverage? *** Coverage built into every policy to protect undamaged property. What is SFPEC? *** Standard Fire Policy with Extended Coverage What are the "Conditions" in an insurance policy? *** The SFP does not cover losses by vandalism when property is vacant for more that how many days? *** 30 Days The SFP is what type of policy? *** A monoline policy, one type of insurance-property no liability insurance. Declarations *** Who, What, Where, and How What is in the Insuring Agreement *** The core of any insurance contract is it insuring agreement. The insuring agreement specifies what the insurance company will and will not do. Promise to Pay Perils Vacant is defined as? *** Premises are empty, no people, no property Unoccupied is defined as? *** No person is/persons are present, BUT furnishing remains and occupant intends to return. What does S.P.I.N. stand for? *** S- Separate damaged from undamaged property P- Protect undamaged property I- Inventory damaged/loss property N-Notify the insurer ASAP in writing under oath How many days maximum to complete proof of loss form? *** 91 days What is mortgagee? *** A mortgagee is the financial institution that lended the insured the money to buy the home. What are the rights of the lender/mortgagee? *** a. May act like the insured by paying premiums/making a claim b. Has the full right of recovery to the amount under mortgage c. Has a right to receive advance written notice of coverage cancellation (10 days in Texas) What is replacement costs? *** The money or cost associated to rebuild based on current material and labor costs. What is the coinsurance clause? *** Most commonly the requirement is 80%. What is the purpose of coinsurance? *** To carry insurance coverage to the full replacement value to ensure the insurer receives adequate premiums. Face amount is? *** The policy limit, or limit of liability. The declarations page includes what information? *** Policy limits and exclusions. What is the coinsurance penalty formula? *** Insurance Carried --------------------- Insurance Required * (Loss amount)= Equals amount paid by insurer/coinsurance. Liability is synonymous *** Casualty Personal injury liability includes? *** Libel Slander Invasion of privacy Faulse arrest Social media Negligence is determined when what four requirements are met? *** A failure to act reasonable and prudent. There is a four-step test to negligence. 1. A duty owed 2. The duty must have been breached 3. The breach of that duty is the proximate cause 4. Actual loss- an actual injury or PD must occur What is a TORT? *** A tort is a civil wrong, not a criminal wrong. Absolute Liability *** Liability without fault; duty owed and duty breached; established by society (Personal Exposure) Pools, pets, firearms Strict Liability is *** All defective products; Tires, Legal Drugs, ***TOYS*** Liability coverage is for what "party" coverage? *** Third party coverage. Aggregate limit is? *** Business or commercial limit. Maximum coverage during the entire policy period. Accident is? *** A sudden and unforeseen event at a fixed time and place that causes BI or PD loss What is an Occurence? *** A term broader than accident that is expanded to include BI or PD loss caused by continued and repeated exposure to the same peril or conditions What are Compensatory Damages? *** money paid to make an injured person whole What are special damages? *** Monetary expense paid based on a receipt for the expense are considered special damages. What are general damages? *** Expenses paid for non-economic losses these include; pain, suffering, and malice. No receipt is provided or required. Define the term Punitive *** Punishes the wrongdoer because of actions greater than simple negligence; gross negligence Intended as a deterrent Awarded in a civil court Not considered to be a fine or penalty which would not be paid by the liability insurance *** The threat of punitive damages are designed to do what? Liability is what line of insurance? *** The second line of insurance Who does liability pay? *** Always pays the third party claimant. Deductibles never apply to whom? *** The third party. 1. Coverage is not listed for the peril/hazard 2. The insured is not liable for the damage *** What are the two reasons a claim would be denied? Should an adjuster ever fill in any information on the "proof of loss" claim form? *** No! When does the 91 days start on a signed and sworn proof of loss statement? *** The date the document was mailed (post marked) What is abandonment? *** This action by the insured which is never, ever...ever allowed. What is depreciation? *** A decrease in the value of the property as a result in how the property was used, age, or displays a lot of ware and tear. What is the definition of a Total-loss? *** Cost to repair is greater than the value of the property pre-loss value What is the formula to calculate a total loss? *** Salvage value+repair costs EXCEEDS the value pre-loss. Who has salvage rights to a total loss? *** The insurance company has salvage rights when the claimant accepts payment and surrenders the title. What is the definition of "replacement cost"? *** Where the insured will have the property replaced without subtracting deprecation. Today's costs for "LIKE, KIND, QUALITY". Contents/Personal Property Liquidated Demand Clause *** What is the formula for "Actual Cash Value"? *** Today's replacement cost - (minus) deprecation = Actual Cash Value. What is the formula for Valued Property? *** The agreed value/face amount already listed on the policy in the event of a total loss. *An appraisal will be used to establish that value* What is Liquid Demand Clause? *** A variation of valued policy that applies in Texas to a total loss to real property (buildings) by the peril of fire. Inherent Vice *** An insurance term referring to any defect or other characteristic of a product that could result in dam¬age to the product without external cause (for example, instability in a chemical that could cause it to explode spontaneously). Insurance policies may exclude these losses. Personal Property Limit/Liquidated Demand *** Personal property limits does not become part of the liquidated demand. Arbitration in NOT? *** Required in Texas! What is negotiation? *** Conferring with someone to arrive at an agreement about some matter. What is Subrogation? *** Is the transfer by the insured by to the insurance company of the legal right of the insureds' right of recovery against the party that caused the harm. *Only after insurer has paid first party* When does a claim go to Arbitration? *** Dispute over weather or not a claim is valid. If there is a total loss by fire in the state of Texas? *** requires insurer pay the face amount immediatly (limited to the value of the structure ONLY) Intangible Damages *** Non-economic, general damages including pain and suffering and mental anguish Why is negotiation important? *** Negotiation is a critical factor in meeting a companies goals. To promptly, fairly, and accurately settle a claim. When the insurer and the insured cannot agree on the value of a loss, the matter is submitted to disinterested parties for resolution. Under a standard appraisal clause, how many parties are involved in determining the value of the loss? *** 3 Parties What legal principles allows insurance companies to collect from the party at fault? *** Subrogation Arbitration involves what type of issue? *** Coverage Issues To whom might an insured abandon her property to be paid for a total loss? *** Abandonment is not allowed in Texas The adjuster must always do which of the following regarding claims practices? *** Investigate the claim The condition that provides a means to settle the amount of a loss when the insured and the insurance company cannot agree is? *** The appraisal condition. What is the split limit in the State of Texas? *** 30/60/25 In Texas, coverage may be purchased with? *** Split limits or combined single limits $60,000? *** The most BI liability paid as a result of any one accident, regardless of the number of BI claims $25,000? *** The most PD liability that will be paid for any one accident. ##/##/## *** BI-any one person/BI-for the whole accident/Property Damage for any one accident What is the out-of-state clause? *** If the insured is involved in a accident in a state that requires higher financial responsibility limits than Texas does, the policy will be interpreted to provide the higher limit. What is combined-single-limit? *** CSL combines the two per accident figures stated previously. It does not distinguish between BI and PD liability. Persons insured include? *** Named insured Resident Spouse Resident Relatives *Any person driving an insured car with the insured's or spouse's permission. Liability Coverage provides coverage for? *** Bodily injury(BI) and property damage (PD) for which any insured becomes legally responsible because of an auto accident. What is P.I.P? *** Personal Injury Protection What is UM coverage? *** Uninsured motorist. What is UIM coverage? *** Underinsured Motorist Coverage. Uninsured motorist (UM) coverage applies to? *** A hit-and-run driver is considered to be uninsured. UM coverage pays for the compensatory BI and PD's for which the insured is legally entitled but unable to collect from the at-fault driver. What does Part D of auto insurance cover? *** This is coverage purchased by the insured to indemnify for physical losses that have occurred to an insured's car. Dwelling Policy Form *** Structures where the actual owners live daily. This is also a mono-line policy. This only insures the property. Home owner policy form *** Structures where the actual owners do NOT live there. Think "Land Lords" Dwelling Policy states - States *** Property is insured up to a four unit dwelling. Home owners Policy States- *** Single family to the maximum of four units Dwelling Insurance Policy form *** Mainly used for residential rental property, not usually for owner-occupied homeowners property. Dwelling Insurance Policy Requirement *** Owner-or-co Coverage A *** The dwelling/the abode = Primary (all the other coverages are a % of A) Coverage B *** Building detached from the Abode (10% of coverage A) Coverage C *** Contents-personal property contents (50% of coverage A) Coverage D *** Indirect loss of use/fair rental value (only paid if the direct loss is covered, flood is not a covered peril) Coverage E *** Indirect loss of use to cover additional living expenses required to allow the household to maintain its normal standard of living; coverage is limited to 20% of Coverage A. Coverage L *** May be added by endorsement if the owner does reside within the dwelling. L for Liability Coverage M *** Medical Payments to the other person, not the first party. This is an act of "good-will". Section 1 for the Home Owners Policy *** Covers dwelling, other structures, personal property, loss of use + fair rental value. Section II of the Home Owners Policy covers? *** Liability, Coverage E- personal liability Coverage F- medical payments to others Farms, Businesses, Ranches are not eligible for what policy form? *** Not eligible for home owners policy coverage What is an insured? *** Named insured on declarations page; includes resident spouse All resident relatives Persons under age 21 in the care of the insured Full-time students under age 24 who are relatives of the named insured and were residents of the household before leaving for school, legal representatives if named insured dies. What perils/hazards are never covered by insurance? *** Insects, Inherent Vice, and Ware and Tear BAILEY is excluded from what commercial coverage? *** Commercial General Liability General Aggregate Limit under a CGL is? *** The most the insurer will pay per policy period (aggregate), regardless of the number of claims or losses under Coverage A, B, and C combined. CGL has two claim form versions, what are they? *** Occurrence and claims-made forms. An occurrence form involves the what coverage company? *** The company providing the insurance at the time of the occurrence. What does the acronym BOP stand for? *** Business Owners Policy Commercial Package Policy can insure what type of business? *** Totally flexible....small to HUGE corporations. B.O.P is restricted to what type of business? *** Small businesses policy, think mom and pop with tight supervision and low claims, low risk. What is the benefit of a BOP? *** Low premium for excellent coverage. BOP provides what type of coverage? *** Both liability and property line coverage. What is the purpose for BOP? There are three general purposes *** 1. Property coverage for buildings and business personal property 2. Business income and extra expense coverage; and 3. General liability coverage Section 1 of the BOP provides coverages for what type of businesses? *** Retail 25,000 or less sqft Office buildings not taller than six stories Apartment buildings not taller than six stories Service contractors-single service line, Carpentry, Residential Painting What type of businesses are not eligible for BOP? *** Automotive industry is not eligible School or government offices Places of amusement Large restaurants Banks and financial institution Manufacturing operations What is the definition of burglary *** 1. The taking of property from inside the premises by a person unlawfully entering or leave the premises. 2. There must be evidence of forcible entry or exit 3. Business must be closed Who is a custodian? *** The person who has custody of the insured property while inside the premises What is a performance bond? *** it guarantees the work will be completed to specifications of the contract by the contractor. What is a payment bond? *** The payment bond (labor and material bond) guarantees the payment of all bills incurred by the contractor for labor and materials incurred or supplied on the project. What is a fiduciary? *** A fiduciary occupies a high level of trust. What is a fidelity bond? *** Protects an employer against a dishonest employee The primary purposes of the business income coverage forms is to reimburse the insured for? *** Loss of income resulting from property damage at the insured's property, provided the peril is covered by the policy. Which of the following losses to covered equipment would be covered under the equipment breakdown protection coverage form? *** Damage from an explosion caused by the centrifugal force of moving parts. Under the commercial package policy, who may cancel the policy in writing and make changes to policy with the consent of the insurer? *** The first named insured Which of the following would be covered under the building coverage of the building and personal property coverage form? *** Fixtures Under the commercial property coverage part, the Cause of Loss-Broad Form insures against *** Perils in the Cause of Loss- Basic Form and additional perils Which commercial property coverage form covers damage to the property of others in the insured's care, custody, or control when a fee is exchanged? *** It is always excluded-BAILED What is CGL? *** Commercial General Liability What is covered in CGL under Coverage A, part a? *** Coverage A is bodily injury (BI) and property damage (PD) liability. What does Coverage A, of CGL represent? *** Premises and operations, think slip and fall claims What is covered in CGL under Coverage A, part b? *** Products and completed operations, after the work is done. What is covered in CGL under Coverage B? *** Persona and advertising injury. False arrest Malicious Prosecution Wrongful entry or eviction Slander or libel Violation of right to privacy *Does not cover fraud committed by the insured What does CGL Coverage C insure? *** Medical Payments What are the two types of CGL claims forms? *** Occurrence version and Claims-made version What does the term Occurrence version of the CGL policy indicate? *** Coverage is triggered by the loss itself (the occurrence) What does the term claims-made version of the CGL policy indicate? *** Coverage is triggered by the filing of the claim, when claim was made to the company. What is the purpose of the Business-owners Policy? *** To provide prepackaged property and liability coverage for small and medium sized businesses. What does section I of Business-owners Policy cover? *** Property coverage What is the sales limit for a BOP insurance policy? *** 3 million dollars annually What type of business coverage does the Auto industry have? *** Garagekeepers coverage The aggregate limit of the commercial general liability (CGL) policy is the most the insurer will pay per? *** Policy period, regardless of the number of claims filed The insured, Lefty's Bar wants coverage for liability arising out of selling and serving alcoholic beverages. Such coverage can be provided by purchasing? *** A liquor liability coverage form The business-owners policy provides? *** a prepackaged policy of property and liability coverage for certain types of small businesses What is theft? *** The unlawful taking of property. What is burglary? *** breaking and entering What is a custodian? *** A person having custody of insured property inside the premises What is a Surety? *** The party that guarantees fulfillment of the obligor's promise. Suretyship is? *** Bonding contract guaranteeing a principles promise The "penalty" on a bond is equal to what amount? *** The face amount What is a performance bond used for? *** Used to guarantee that work will be completed to specifications. What is a payment bond used for? *** Used to guarantee that bills for labor and materials will be paid by the contractor. What is Hull coverage in Ocean Marine Insurance? *** coverage for the ship itself and all onboard equipment; comprehensive and collision for the ship. What is a peril? *** A cause of loss or hazard. What protection does Barratry cover? *** Any illegal act by the master or crew to defraud the ownders of the ship or cargo. What does the Inchmaree Clause cover? *** applies to loss resulting from negligence by the captain or crew as well as defects in the ship's hull or machinery What is hangerkeepers liability coverage used for? *** Aviation coverage Which surety bond guarantees that bills for labor and materials will be paid by the contractor as they are due? *** Payment bond The party to a surety bond who promises to do or not do a specific thing is? *** The principle A surety bond protects the? *** The obligee Who pays losses under bond contacts? *** Surety