Louisiana P&C Exam | Questions with 100% Correct Answers | Updated &Verified | 2024-
2025 | 100% Score
Aleatory Contract - ✔✔the consideration that is being exchanged is unequal or unrelated to the
consideration given by the other party
Basic Form - ✔✔named peril coverage, the least coverage available. In dwelling policies it includes: fire,
lightning, removal, and internal explosion
Broad Form - ✔✔named peril coverage, covering more named perils than the basic form. In dwelling
coverage it covers all perils under basic including EC and V&MM plus: damage by burglars (not theft);
weight of ice, snow or sleet; accidental discharge or overflow of water or steam; freezing of plumbing,
heating, a/c, or sprinkler systems; falling objects; artificially generated electrical current; and tearing
apart, cracking, burning, or bulging of a steam or water system.
Builder's Risk - ✔✔used to insure buildings under construction
Business Income - ✔✔(time element form) covers loss of income when a business has to suspend
because of a direct loss. Business income is covered over the time the operations are suspended while
the building is being repaired or replaced. It is calculated as the net income that would've been earned if
the loss occurred and the cost to continue operations including payroll
Cancellation - ✔✔termination of a policy by either the insurer or insured before the expiration date
Cargo - ✔✔What the ship is hauling
Causes of Loss - ✔✔after choosing commercial property coverage for the type of property your business
needs covered, you then need to choose the causes of loss that will be covered. A business may choose
Basic, Broad, or Special cause of loss forms and the extra is Earthquake (volcanic eruption additional) -
that state the perils protected against
Cease & Decist - ✔✔an official legal document that will require an individual to stop doing something
,Certificate of Authority - ✔✔makes the insurer an admitted company and proves that the Department
of Insurance finds the company financially sound and structured well enough to meet the requirements
of the state insurance code to conduct insurance business in Louisiana
Collapse - ✔✔covers unexpected falling down or caving in of a building
Collision - ✔✔collision coverage pays for direct and accidental loss due to upset or collision of the
vehicle with another object. Collision coverage would provide protection for an insured auto due to
collision with another vehicle, collision with another object such as a bridge or tree, and upset or
overturn of the vehicle subject to a deductible
Common Carrier - ✔✔a carrier is a commercial organization that transports goods or passengers. A
carrier is classified as a common carrier when it dedicates its property to public use in such a manner
that its services are available to the public on a regular basis. Common carriers hold themselves out to
the public as engaged in the business of transporting persons or property from site to site for
compensation or a fee. Examples of common carriers include railroads, bus companies, trucking firms,
taxicab companies, airlines, and ferries
Common Conditions - ✔✔conditions that apply to all coverage parts such as cancellation, changes,
inspections, examination of books and records, etc
Common Declarations - ✔✔provides information as to who, what, when, where and how much. It will
include the insurance company name, the named insured, policy period, business description, coverage
parts, premium, and policy forms. All policies take effect on 12:01 AM at the mailing address of the
insured listed in the policy. It contains the list of 7 coverage parts followed by the appropriate premium
if there is coverage for the part, but no premium listed if the part is not included in the package
Compulsory - ✔✔states with laws that require employers to provide worker's compensation insurance
under penalty of law
Controlled Business - ✔✔when a producer gets into the insurance business in Louisiana to sell only to
themselves, their family and employer
,Elective - ✔✔in states that have elective laws for workers compensation, an employer does not have to
be subject to the State's WC laws, but if they choose not to be subject to it they lose their common law
defenses against liability suits
Employer's Liability - ✔✔insurance for claims that are not covered under Workers compensation laws
including: exempt employments, illegal employments, and non-compensable injuries
Errors and Omissions - ✔✔coverage protects insurance agents and brokers from financial losses they
may suffer as a result of a client that sues for damages because the insured gave incorrect advice or
didn't inform the client about important issues
Equipment Breakdown - ✔✔the coverage is will pay for damage property caused by the object
described in the declarations. The object must be in use or connected and ready for use when accident
occurs. An accident is defined as the sudden and accidental breakdown of an object resulting in damage
Excess Coverage - ✔✔insurance that covers the same thing as another policy, but only the amount of a
claim or loss after the limit of the other policy is reached and may include amounts or events that may
not be covered by the other policy
Experience or Merit Rating - ✔✔the rate is affected by the insured's own past loss experience. Insured's
with fewer claims pay a lower premium
Extended Coverage - ✔✔in dwelling policies, extended coverage basic (EC) adds coverage for:
windstorm or hail, explosion, volcanic eruption, riot or civil commotion, aircraft or vehicles (damage due
to direct physical contact with an aircraft or vehicle not owned by the resident), and smoke to the basic
coverage of fire, lightning and internal explosion
Extra Expense - ✔✔covers expenses more than normal business expenses the business will incur to keep
it operational following a direct loss to the business property. It may include the expenses of moving to
a new location or to rent new equipment
Farm Policy - ✔✔covers property and liability for the business of a farm operation as well as a residence.
The eligible risks include growing and marketing crops, fruits, mushrooms, vegetables, flowers, green
house or nursery stock, or sod, raising or keeping of livestock, poultry, fur bearing animals, bees, and
aquaculture (fish farms)
, Foreign - ✔✔incorporated in states (or U.S. territories) other than Louisiana
Freight - ✔✔the revenue to the ship owner to deliver the cargo
Garagekeepers - ✔✔a type of bailee coverage (protecting the business for damage to the property of
their customers) available to automobile dealerships. Garagekeepers insurance provides coverage for
damage to automobiles of others arising out of the general operations of the business. The need for
garagekeepers insurance arises from the fact that garage liability insurance does not cover property
damage losses to automobiles in an insured's care, custody, or control
General average - ✔✔defined as an ocean marine loss which occurs through the voluntary sacrifice of
any part of the vessel or cargo to safeguard the vessel or cargo
Liability - ✔✔coverage provided to an insured if a claim is made or a suit is brought against the insured
for damages due to bodily injury or property damage to others
Loss costs - ✔✔a base rate that includes the policy's share of claims and expenses
Loss of Use - ✔✔coverage is for either additional living expenses or fair rental value if the premisis
becomes uninhabitable due to a covered loss
Loss of Specie - ✔✔when property ceases to be a thing of the kind insured; it is payable as a total loss
Hull coverage (ocean marine) - ✔✔for physical damage or loss of the ship
Insurable Interest - ✔✔the interest an insured may have in property that is the subject of insurance.
Damage or destruction of the property or a casualty occurrence would cause financial loss.
Interline endorsements - ✔✔endorsements that apply to more than one coverage part and are included
in one page
2025 | 100% Score
Aleatory Contract - ✔✔the consideration that is being exchanged is unequal or unrelated to the
consideration given by the other party
Basic Form - ✔✔named peril coverage, the least coverage available. In dwelling policies it includes: fire,
lightning, removal, and internal explosion
Broad Form - ✔✔named peril coverage, covering more named perils than the basic form. In dwelling
coverage it covers all perils under basic including EC and V&MM plus: damage by burglars (not theft);
weight of ice, snow or sleet; accidental discharge or overflow of water or steam; freezing of plumbing,
heating, a/c, or sprinkler systems; falling objects; artificially generated electrical current; and tearing
apart, cracking, burning, or bulging of a steam or water system.
Builder's Risk - ✔✔used to insure buildings under construction
Business Income - ✔✔(time element form) covers loss of income when a business has to suspend
because of a direct loss. Business income is covered over the time the operations are suspended while
the building is being repaired or replaced. It is calculated as the net income that would've been earned if
the loss occurred and the cost to continue operations including payroll
Cancellation - ✔✔termination of a policy by either the insurer or insured before the expiration date
Cargo - ✔✔What the ship is hauling
Causes of Loss - ✔✔after choosing commercial property coverage for the type of property your business
needs covered, you then need to choose the causes of loss that will be covered. A business may choose
Basic, Broad, or Special cause of loss forms and the extra is Earthquake (volcanic eruption additional) -
that state the perils protected against
Cease & Decist - ✔✔an official legal document that will require an individual to stop doing something
,Certificate of Authority - ✔✔makes the insurer an admitted company and proves that the Department
of Insurance finds the company financially sound and structured well enough to meet the requirements
of the state insurance code to conduct insurance business in Louisiana
Collapse - ✔✔covers unexpected falling down or caving in of a building
Collision - ✔✔collision coverage pays for direct and accidental loss due to upset or collision of the
vehicle with another object. Collision coverage would provide protection for an insured auto due to
collision with another vehicle, collision with another object such as a bridge or tree, and upset or
overturn of the vehicle subject to a deductible
Common Carrier - ✔✔a carrier is a commercial organization that transports goods or passengers. A
carrier is classified as a common carrier when it dedicates its property to public use in such a manner
that its services are available to the public on a regular basis. Common carriers hold themselves out to
the public as engaged in the business of transporting persons or property from site to site for
compensation or a fee. Examples of common carriers include railroads, bus companies, trucking firms,
taxicab companies, airlines, and ferries
Common Conditions - ✔✔conditions that apply to all coverage parts such as cancellation, changes,
inspections, examination of books and records, etc
Common Declarations - ✔✔provides information as to who, what, when, where and how much. It will
include the insurance company name, the named insured, policy period, business description, coverage
parts, premium, and policy forms. All policies take effect on 12:01 AM at the mailing address of the
insured listed in the policy. It contains the list of 7 coverage parts followed by the appropriate premium
if there is coverage for the part, but no premium listed if the part is not included in the package
Compulsory - ✔✔states with laws that require employers to provide worker's compensation insurance
under penalty of law
Controlled Business - ✔✔when a producer gets into the insurance business in Louisiana to sell only to
themselves, their family and employer
,Elective - ✔✔in states that have elective laws for workers compensation, an employer does not have to
be subject to the State's WC laws, but if they choose not to be subject to it they lose their common law
defenses against liability suits
Employer's Liability - ✔✔insurance for claims that are not covered under Workers compensation laws
including: exempt employments, illegal employments, and non-compensable injuries
Errors and Omissions - ✔✔coverage protects insurance agents and brokers from financial losses they
may suffer as a result of a client that sues for damages because the insured gave incorrect advice or
didn't inform the client about important issues
Equipment Breakdown - ✔✔the coverage is will pay for damage property caused by the object
described in the declarations. The object must be in use or connected and ready for use when accident
occurs. An accident is defined as the sudden and accidental breakdown of an object resulting in damage
Excess Coverage - ✔✔insurance that covers the same thing as another policy, but only the amount of a
claim or loss after the limit of the other policy is reached and may include amounts or events that may
not be covered by the other policy
Experience or Merit Rating - ✔✔the rate is affected by the insured's own past loss experience. Insured's
with fewer claims pay a lower premium
Extended Coverage - ✔✔in dwelling policies, extended coverage basic (EC) adds coverage for:
windstorm or hail, explosion, volcanic eruption, riot or civil commotion, aircraft or vehicles (damage due
to direct physical contact with an aircraft or vehicle not owned by the resident), and smoke to the basic
coverage of fire, lightning and internal explosion
Extra Expense - ✔✔covers expenses more than normal business expenses the business will incur to keep
it operational following a direct loss to the business property. It may include the expenses of moving to
a new location or to rent new equipment
Farm Policy - ✔✔covers property and liability for the business of a farm operation as well as a residence.
The eligible risks include growing and marketing crops, fruits, mushrooms, vegetables, flowers, green
house or nursery stock, or sod, raising or keeping of livestock, poultry, fur bearing animals, bees, and
aquaculture (fish farms)
, Foreign - ✔✔incorporated in states (or U.S. territories) other than Louisiana
Freight - ✔✔the revenue to the ship owner to deliver the cargo
Garagekeepers - ✔✔a type of bailee coverage (protecting the business for damage to the property of
their customers) available to automobile dealerships. Garagekeepers insurance provides coverage for
damage to automobiles of others arising out of the general operations of the business. The need for
garagekeepers insurance arises from the fact that garage liability insurance does not cover property
damage losses to automobiles in an insured's care, custody, or control
General average - ✔✔defined as an ocean marine loss which occurs through the voluntary sacrifice of
any part of the vessel or cargo to safeguard the vessel or cargo
Liability - ✔✔coverage provided to an insured if a claim is made or a suit is brought against the insured
for damages due to bodily injury or property damage to others
Loss costs - ✔✔a base rate that includes the policy's share of claims and expenses
Loss of Use - ✔✔coverage is for either additional living expenses or fair rental value if the premisis
becomes uninhabitable due to a covered loss
Loss of Specie - ✔✔when property ceases to be a thing of the kind insured; it is payable as a total loss
Hull coverage (ocean marine) - ✔✔for physical damage or loss of the ship
Insurable Interest - ✔✔the interest an insured may have in property that is the subject of insurance.
Damage or destruction of the property or a casualty occurrence would cause financial loss.
Interline endorsements - ✔✔endorsements that apply to more than one coverage part and are included
in one page
