AINS 23 PT 3
Perils are an important aspect of property insurance. Which one of the following statements is correct
with respect to perils?
Select one:
A. A peril is the actual means by which property is damaged or destroyed such as fire, lightning,
windstorm, hail, or theft.
B. In order to be covered by an insurance policy, a peril must be defined and described in that policy.
C. Property insurance policies can cover specific perils and cannot exclude other perils.
D. A peril is anything that increases the frequency or the severity of a loss. - Answer-A
Extra expenses are expenses, in addition to ordinary expenses, that an organization incurs to mitigate
the effects of a business interruption. Which one of the following is an example of an extra expense?
Select one:
A. Cost to rent temporary office space
B. Payroll of key employees
C. Debt repayments
D. Insurance premiums - Answer-A
The liability loss exposure that exists when an organization is legally responsible for bodily injury or
property damage caused by an accident that occurs on an organization's owned, leased, or rented
property is
,Select one:
A. Premises and operations liability.
B. Property liability.
C. Operations liability.
D. Professional liability. - Answer-A
Telephone Company installs fiber-optic cable using a trenching machine that digs a trench, buries the
cable, fills in the trench, and reseeds, all in one pass. The trenching machine can install cable in a fifty-
home neighborhood in one day. A day after the trenching machine passes by, a member of the
community steps on the trenched area, sinks in, and breaks his leg. This is an example of a liability loss
exposure arising out of
Select one:
A. Premises.
B. Completed Operations
C. Products.
D. Professional. - Answer-B
Joe Motors, which services automobiles, wants to maintain the goodwill of its customers. This is best
accomplished by
Select one:
A. Raising liability limits under its business auto insurance.
B. Purchasing garage liability insurance.
C. Lowering the physical damage deductible under its business auto insurance.
D. Purchasing garagekeepers insurance. - Answer-D
The management of Maryland Marine Co. (MMC) must ensure that proper coverage is obtained for
work-related injuries. The employee population of MMC is a mixture of full-time and part-time
employees as well as some casual employees for one-time tasks. Much of MMC's work is done by
, independent contractors and temporary employees during peak seasons. Which one of the following
statements about these persons is true?
Select one:
A. Injuries to MMC's full-time ship captains are likely to be covered under state workers compensation
laws.
B. Temporary employees are considered employees of MMC rather than employees of the firm
supplying them to MMC.
C. The independent contractors are automatically employees under common law.
D. Many states workers compensation statutes exclude casual labor (temporary employees). - Answer-D
When a clothing manufacturer decides to expand the sale of its clothing line by offering internet
purchases, it creates new exposures not otherwise covered, or not fully covered, by a traditional policy.
These include
Select one:
A. Theft of clothing items in their store.
B. Lightning damage to the computer system used for internet sales.
C. Loss or damage caused by computer viruses.
D. Fire damage to clothing items currently listed for sale online. - Answer-C
An email was sent to a company's employees containing a harmful attachment. Several employees
opened the attachment which allowed hackers to obtain customer contact information. This cyber risk
loss is
Select one:
A. Damage to personal property.
B. Damage to tangible property.
C. Errors and omissions liability.
D. Damage to intangible property. - Answer-D
Perils are an important aspect of property insurance. Which one of the following statements is correct
with respect to perils?
Select one:
A. A peril is the actual means by which property is damaged or destroyed such as fire, lightning,
windstorm, hail, or theft.
B. In order to be covered by an insurance policy, a peril must be defined and described in that policy.
C. Property insurance policies can cover specific perils and cannot exclude other perils.
D. A peril is anything that increases the frequency or the severity of a loss. - Answer-A
Extra expenses are expenses, in addition to ordinary expenses, that an organization incurs to mitigate
the effects of a business interruption. Which one of the following is an example of an extra expense?
Select one:
A. Cost to rent temporary office space
B. Payroll of key employees
C. Debt repayments
D. Insurance premiums - Answer-A
The liability loss exposure that exists when an organization is legally responsible for bodily injury or
property damage caused by an accident that occurs on an organization's owned, leased, or rented
property is
,Select one:
A. Premises and operations liability.
B. Property liability.
C. Operations liability.
D. Professional liability. - Answer-A
Telephone Company installs fiber-optic cable using a trenching machine that digs a trench, buries the
cable, fills in the trench, and reseeds, all in one pass. The trenching machine can install cable in a fifty-
home neighborhood in one day. A day after the trenching machine passes by, a member of the
community steps on the trenched area, sinks in, and breaks his leg. This is an example of a liability loss
exposure arising out of
Select one:
A. Premises.
B. Completed Operations
C. Products.
D. Professional. - Answer-B
Joe Motors, which services automobiles, wants to maintain the goodwill of its customers. This is best
accomplished by
Select one:
A. Raising liability limits under its business auto insurance.
B. Purchasing garage liability insurance.
C. Lowering the physical damage deductible under its business auto insurance.
D. Purchasing garagekeepers insurance. - Answer-D
The management of Maryland Marine Co. (MMC) must ensure that proper coverage is obtained for
work-related injuries. The employee population of MMC is a mixture of full-time and part-time
employees as well as some casual employees for one-time tasks. Much of MMC's work is done by
, independent contractors and temporary employees during peak seasons. Which one of the following
statements about these persons is true?
Select one:
A. Injuries to MMC's full-time ship captains are likely to be covered under state workers compensation
laws.
B. Temporary employees are considered employees of MMC rather than employees of the firm
supplying them to MMC.
C. The independent contractors are automatically employees under common law.
D. Many states workers compensation statutes exclude casual labor (temporary employees). - Answer-D
When a clothing manufacturer decides to expand the sale of its clothing line by offering internet
purchases, it creates new exposures not otherwise covered, or not fully covered, by a traditional policy.
These include
Select one:
A. Theft of clothing items in their store.
B. Lightning damage to the computer system used for internet sales.
C. Loss or damage caused by computer viruses.
D. Fire damage to clothing items currently listed for sale online. - Answer-C
An email was sent to a company's employees containing a harmful attachment. Several employees
opened the attachment which allowed hackers to obtain customer contact information. This cyber risk
loss is
Select one:
A. Damage to personal property.
B. Damage to tangible property.
C. Errors and omissions liability.
D. Damage to intangible property. - Answer-D
