AINS 23 Assignment 11 SMART Practice
Exam
Which one of the following is a form of excess liability coverage?
a. A self-contained policy
b. A coinsurance policy
c. A maximum-possible-loss policy
d. A primary policy - Answer-a. A self-contained policy
A self-insured retention (SIR) in an umbrella liability policy in which one of the following ways?
a. An amount that is deducted from claims that are payable under an umbrella liability policy and that
aren't covered at all by any primary policy.
b. An amount that is deducted from all umbrella liability claims
c. An amount that is added to claims that are payable under an umbrella liability policy and that are not
covered at all by any primary policy.
d. An amount that is deducted from claims that are payable under an umbrella liability policy and that
are covered by any primary policy - Answer-a. An amount that is deducted from claims that are payable
under an umbrella liability policy and that aren't covered at all by any primary policy.
An umbrella liability policy performs which one of the following basic functions?
, a. It eliminates the need for primary coverage.
b. It provides additional limits above the each occurrence limits of the insured's primary policies.
c. It covers only those claims that are not covered by the insured's primary policies.
d. It is designed to eliminate restrictions in primary policies. - Answer-b. It provides additional limits
above the each occurrence limits of the insured's primary policies.
Which one of the following situations illustrates a professional liability loss exposure?
a. An attorney serves on the board of a not-for-profit organization.
b. A physician fails to maintain adequate lighting in the office parking lot.
c. A foreman fails to install safety nets in a building under construction.
d. An insurance producer fails to properly advise a client on his or her insurance needs. - Answer-d. An
insurance producer fails to properly advise a client on his or her insurance needs.
Professional liability insurance is usually written on:
a. Forms independently developed by individual insurers
b. Forms required by the NAIC
c. Standard forms
d. A blanket basis - Answer-a. Forms independently developed by individual insurers
The Commercial General Liability (CGL) policy provides that the insurer may, at its discretion, settle any
claim or suit. In contrast, professional liability and management liability policies typically have what is
referred to as a "hammer clause." This clause is invoked when the insured does not agree to a proposed
settlement. The hammer clause has the effect of doing which one of the following?
a. Requiring the insured to submit the claim to arbitration procedures
b. Forcing the insurer to make a subsequent settlement offer within 60 days of the initial offer
c. Mandating settlement within 180 days of triggering the hammer clause
d. Compelling the insured to agree to the settlement proposed by the insurer - Answer-d. Compelling
the insured to agree to the settlement proposed by the insurer
Exam
Which one of the following is a form of excess liability coverage?
a. A self-contained policy
b. A coinsurance policy
c. A maximum-possible-loss policy
d. A primary policy - Answer-a. A self-contained policy
A self-insured retention (SIR) in an umbrella liability policy in which one of the following ways?
a. An amount that is deducted from claims that are payable under an umbrella liability policy and that
aren't covered at all by any primary policy.
b. An amount that is deducted from all umbrella liability claims
c. An amount that is added to claims that are payable under an umbrella liability policy and that are not
covered at all by any primary policy.
d. An amount that is deducted from claims that are payable under an umbrella liability policy and that
are covered by any primary policy - Answer-a. An amount that is deducted from claims that are payable
under an umbrella liability policy and that aren't covered at all by any primary policy.
An umbrella liability policy performs which one of the following basic functions?
, a. It eliminates the need for primary coverage.
b. It provides additional limits above the each occurrence limits of the insured's primary policies.
c. It covers only those claims that are not covered by the insured's primary policies.
d. It is designed to eliminate restrictions in primary policies. - Answer-b. It provides additional limits
above the each occurrence limits of the insured's primary policies.
Which one of the following situations illustrates a professional liability loss exposure?
a. An attorney serves on the board of a not-for-profit organization.
b. A physician fails to maintain adequate lighting in the office parking lot.
c. A foreman fails to install safety nets in a building under construction.
d. An insurance producer fails to properly advise a client on his or her insurance needs. - Answer-d. An
insurance producer fails to properly advise a client on his or her insurance needs.
Professional liability insurance is usually written on:
a. Forms independently developed by individual insurers
b. Forms required by the NAIC
c. Standard forms
d. A blanket basis - Answer-a. Forms independently developed by individual insurers
The Commercial General Liability (CGL) policy provides that the insurer may, at its discretion, settle any
claim or suit. In contrast, professional liability and management liability policies typically have what is
referred to as a "hammer clause." This clause is invoked when the insured does not agree to a proposed
settlement. The hammer clause has the effect of doing which one of the following?
a. Requiring the insured to submit the claim to arbitration procedures
b. Forcing the insurer to make a subsequent settlement offer within 60 days of the initial offer
c. Mandating settlement within 180 days of triggering the hammer clause
d. Compelling the insured to agree to the settlement proposed by the insurer - Answer-d. Compelling
the insured to agree to the settlement proposed by the insurer
