CPCU 552, CP&L FINAL EXAM QUESTIONS &
VERIFIED CORRECT ANSWERS
Which one of the following statements about the general aggregate limit under a Commercial General
Liability (CGL) Coverage Form is true? - CORRECT ANSWER ✔✔ - It is reduced by claims paid for medical
payments under Coverage C.
Aircraft have a significant exposure to catastrophe losses. Of the many reasons for the catastrophic loss
potential of aircraft, the most significant is - CORRECT ANSWER ✔✔ - The physical properties of aircraft.
A security guard is employed at a pier where shipping containers are loaded and unloaded from barges.
There is also a small marina for pleasure craft at the pier. The security guard trips over equipment left on a
dock alongside a pleasure craft and is injured. The pier only has insurance coverage that provides benefits
under the Longshore and Harbor Workers Compensation Act (LHWCA). Is the guard's injury covered under
LHWCA? - CORRECT ANSWER ✔✔ - The injury is covered by LHWCA because the guard is not covered under
a state's workers compensation law.
ABC Plumbing entered into a contract with Bill to install a commercial grade septic system on his property.
The installation of the septic was time sensitive because the rest of Bill's construction project could not go
forward until the septic system was in place. The contract required that the work be done within 30 days of
contract signing, or ABC would have to pay a penalty of $1,000 per day. Which one of the following
categories of damages does the $1,000 per day penalty specified in the contract fall into? - CORRECT
ANSWER ✔✔ - Liquidated damages
Many states have funds from which employers may purchase workers compensation insurance. Such funds
may be either - CORRECT ANSWER ✔✔ - Competitive or monopolistic
Section II—Who Is an Insured identifies the persons and organizations that qualify as insureds under the
Commercial General Liability (CGL) Coverage Form. Which one of the following statements regarding who is
considered an insured is most accurate? - CORRECT ANSWER ✔✔ - When a CGL policy covers one or more
individuals as named insureds, any person or organization having proper temporary custody of the named
insured's property following the named insured's death is an insured.
What is the name given to a claim by an employee who says that he or she was fired because of the filing of
a workers compensation claim? - CORRECT ANSWER ✔✔ - Retaliation claim
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CPCU 552, CP&L
©®
,Javier's business auto policy contains a personal injury protection (PIP) endorsement. He is involved in an
auto accident in the covered auto, resulting in $30,000 in property damage, $5,000 in third-party bodily
injury, and $10,000 in personal medical expenses. If Javier's business auto policy has a general aggregate
limit of $100,000 and a PIP limit of $15,000 and he is at fault for the accident, how much will his insurer pay
under the PIP coverage - CORRECT ANSWER ✔✔ - PIP provides first-party benefits for medical expenses, loss
of income, loss of services, and funeral expenses resulting from bodily injury to occupants of a covered auto
because of an auto accident. It pays regardless of which party was at fault in the accident. Therefore, Javier's
insurer will pay him $10,000 in medical expenses from the PIP coverage. The other damages will be payable
under different coverages available on his policy.
Which one of the following statements about coverage triggers in cyber risk insurance policies is most
accurate? - CORRECT ANSWER ✔✔ - Both claims-made coverage triggers and occurrence coverage triggers
are available, but occurrence coverage triggers are more appropriate for some insuring agreements than for
others
According to the Terrorism Risk Insurance Act (TRIA), one of the two required conditions that an insurer
must meet at the time of an initial offer, purchase, and renewal of insurance is the disclosure of the
premium for terrorism coverage. What is the other condition - CORRECT ANSWER ✔✔ - A make-available
provision
Acme Insurance cannot agree with insured Jill Jenkins on the amount of a covered physical damage loss
under Jill's Business Auto Coverage Form. Jill requested an appraisal. Acme and Jill each appoint an
appraiser, and the appraisers appoint an umpire. An award in writing signed by any two of the three binds
both Acme and Jill. One appraiser and the umpire ruled for Jill and against Acme. Which one of the following
statements is true regarding this scenario? - CORRECT ANSWER ✔✔ - Jill and Acme will share the cost of the
umpire.
Matthew Jones, the named insured under an unendorsed Business Auto Coverage Form (BACF), requires his
employees to use their own cars for business purposes. One of Matthew's employees, Paul, causes an
accident while driving his own truck for the business. Matthew's BACF shows symbol 1 for liability coverage.
Which one of the following correctly indicates whether Paul is an insured under the policy for the accident? -
CORRECT ANSWER ✔✔ - Paul is not covered because employees are not insured while using their own autos
in the named insured's business.
ABC Corporation is insured under a standard unendorsed workers compensation policy for only the state of
Florida. Three months before the present policy began, ABC opened a sales office in Georgia due to business
volume growing in that state. ABC failed to report the new location and new state at policy inception. The
manager of the Georgia office fell and was injured and missed work for three weeks after the inception of
the ABC policy. The manager made claim for Georgia benefits. Which one of the following is true regarding
ABC's coverage for Georgia benefits? - CORRECT ANSWER ✔✔ - Coverage for this claim would not be
covered by ABC's insurance.
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CPCU 552, CP&L
©®
, The claims-made trigger in a site specific environmental impairment liability policy differs in three ways from
the trigger in other claims-made liability policies. Which one of the following best describes one of those
three ways? - CORRECT ANSWER ✔✔ - A site-specific environmental impairment liability policy typically does
not have a retroactive date.
The Grey Corporation has a Commercial General Liability Coverage Form with the following limits:
Each Occurrence $1,000,000
Damage to rented premises $100,000 each occurrence
Medical expense $5,000 any one person
Personal and advertising injury $1,000,000 any one person or organization
General aggregate limit $2,000,000
Product/completed operations aggregate limit $2,000,000
Assuming the policy is written on an occurrence basis, how much of the general aggregate limit, if any,
remains if the following claims have been paid under the policy?
A premises/operations liability claim of $600,000
A products liability claim of $1,200,000
$3,000 of medical expenses to a customer injured on the premises.
A personal and advertising injury liability claim of $300,000 - CORRECT ANSWER ✔✔ - The general aggregate
is reduced by any amounts paid under Coverages A, B, and C, except for those that arise out of
products/completed operations. Therefore, the general aggregate limit is reduced by $600,000 + $3,000 +
$300,000 = $903,000. This leaves $1,097,000 of the general aggregate limit remaining.
An example of liability imposed by statute is - CORRECT ANSWER ✔✔ - Workers compensation.
N July of 2010 the Dodd-Frank Act was passed in response to the public's demand for improvements in
financial systems and to curb abusive Wall Street practices. A significant provision of the Dodd-Frank Act was
the - CORRECT ANSWER ✔✔ - Abolishment of the Troubled Asset Relief Program (TARP).
The supplemental payments section of the Commercial General Liability coverage form is most correctly
defined as - CORRECT ANSWER ✔✔ - The supplemental payments section of the Commercial General
Liability coverage form is most correctly defined as specified costs the insurer will pay as part of any claim
the insurer investigates or defends under Coverage A or B
Excess liability policies - CORRECT ANSWER ✔✔ - Do not provide coverage for exposures not covered in
primary policies.
Page | 3
CPCU 552, CP&L
©®
VERIFIED CORRECT ANSWERS
Which one of the following statements about the general aggregate limit under a Commercial General
Liability (CGL) Coverage Form is true? - CORRECT ANSWER ✔✔ - It is reduced by claims paid for medical
payments under Coverage C.
Aircraft have a significant exposure to catastrophe losses. Of the many reasons for the catastrophic loss
potential of aircraft, the most significant is - CORRECT ANSWER ✔✔ - The physical properties of aircraft.
A security guard is employed at a pier where shipping containers are loaded and unloaded from barges.
There is also a small marina for pleasure craft at the pier. The security guard trips over equipment left on a
dock alongside a pleasure craft and is injured. The pier only has insurance coverage that provides benefits
under the Longshore and Harbor Workers Compensation Act (LHWCA). Is the guard's injury covered under
LHWCA? - CORRECT ANSWER ✔✔ - The injury is covered by LHWCA because the guard is not covered under
a state's workers compensation law.
ABC Plumbing entered into a contract with Bill to install a commercial grade septic system on his property.
The installation of the septic was time sensitive because the rest of Bill's construction project could not go
forward until the septic system was in place. The contract required that the work be done within 30 days of
contract signing, or ABC would have to pay a penalty of $1,000 per day. Which one of the following
categories of damages does the $1,000 per day penalty specified in the contract fall into? - CORRECT
ANSWER ✔✔ - Liquidated damages
Many states have funds from which employers may purchase workers compensation insurance. Such funds
may be either - CORRECT ANSWER ✔✔ - Competitive or monopolistic
Section II—Who Is an Insured identifies the persons and organizations that qualify as insureds under the
Commercial General Liability (CGL) Coverage Form. Which one of the following statements regarding who is
considered an insured is most accurate? - CORRECT ANSWER ✔✔ - When a CGL policy covers one or more
individuals as named insureds, any person or organization having proper temporary custody of the named
insured's property following the named insured's death is an insured.
What is the name given to a claim by an employee who says that he or she was fired because of the filing of
a workers compensation claim? - CORRECT ANSWER ✔✔ - Retaliation claim
Page | 1
CPCU 552, CP&L
©®
,Javier's business auto policy contains a personal injury protection (PIP) endorsement. He is involved in an
auto accident in the covered auto, resulting in $30,000 in property damage, $5,000 in third-party bodily
injury, and $10,000 in personal medical expenses. If Javier's business auto policy has a general aggregate
limit of $100,000 and a PIP limit of $15,000 and he is at fault for the accident, how much will his insurer pay
under the PIP coverage - CORRECT ANSWER ✔✔ - PIP provides first-party benefits for medical expenses, loss
of income, loss of services, and funeral expenses resulting from bodily injury to occupants of a covered auto
because of an auto accident. It pays regardless of which party was at fault in the accident. Therefore, Javier's
insurer will pay him $10,000 in medical expenses from the PIP coverage. The other damages will be payable
under different coverages available on his policy.
Which one of the following statements about coverage triggers in cyber risk insurance policies is most
accurate? - CORRECT ANSWER ✔✔ - Both claims-made coverage triggers and occurrence coverage triggers
are available, but occurrence coverage triggers are more appropriate for some insuring agreements than for
others
According to the Terrorism Risk Insurance Act (TRIA), one of the two required conditions that an insurer
must meet at the time of an initial offer, purchase, and renewal of insurance is the disclosure of the
premium for terrorism coverage. What is the other condition - CORRECT ANSWER ✔✔ - A make-available
provision
Acme Insurance cannot agree with insured Jill Jenkins on the amount of a covered physical damage loss
under Jill's Business Auto Coverage Form. Jill requested an appraisal. Acme and Jill each appoint an
appraiser, and the appraisers appoint an umpire. An award in writing signed by any two of the three binds
both Acme and Jill. One appraiser and the umpire ruled for Jill and against Acme. Which one of the following
statements is true regarding this scenario? - CORRECT ANSWER ✔✔ - Jill and Acme will share the cost of the
umpire.
Matthew Jones, the named insured under an unendorsed Business Auto Coverage Form (BACF), requires his
employees to use their own cars for business purposes. One of Matthew's employees, Paul, causes an
accident while driving his own truck for the business. Matthew's BACF shows symbol 1 for liability coverage.
Which one of the following correctly indicates whether Paul is an insured under the policy for the accident? -
CORRECT ANSWER ✔✔ - Paul is not covered because employees are not insured while using their own autos
in the named insured's business.
ABC Corporation is insured under a standard unendorsed workers compensation policy for only the state of
Florida. Three months before the present policy began, ABC opened a sales office in Georgia due to business
volume growing in that state. ABC failed to report the new location and new state at policy inception. The
manager of the Georgia office fell and was injured and missed work for three weeks after the inception of
the ABC policy. The manager made claim for Georgia benefits. Which one of the following is true regarding
ABC's coverage for Georgia benefits? - CORRECT ANSWER ✔✔ - Coverage for this claim would not be
covered by ABC's insurance.
Page | 2
CPCU 552, CP&L
©®
, The claims-made trigger in a site specific environmental impairment liability policy differs in three ways from
the trigger in other claims-made liability policies. Which one of the following best describes one of those
three ways? - CORRECT ANSWER ✔✔ - A site-specific environmental impairment liability policy typically does
not have a retroactive date.
The Grey Corporation has a Commercial General Liability Coverage Form with the following limits:
Each Occurrence $1,000,000
Damage to rented premises $100,000 each occurrence
Medical expense $5,000 any one person
Personal and advertising injury $1,000,000 any one person or organization
General aggregate limit $2,000,000
Product/completed operations aggregate limit $2,000,000
Assuming the policy is written on an occurrence basis, how much of the general aggregate limit, if any,
remains if the following claims have been paid under the policy?
A premises/operations liability claim of $600,000
A products liability claim of $1,200,000
$3,000 of medical expenses to a customer injured on the premises.
A personal and advertising injury liability claim of $300,000 - CORRECT ANSWER ✔✔ - The general aggregate
is reduced by any amounts paid under Coverages A, B, and C, except for those that arise out of
products/completed operations. Therefore, the general aggregate limit is reduced by $600,000 + $3,000 +
$300,000 = $903,000. This leaves $1,097,000 of the general aggregate limit remaining.
An example of liability imposed by statute is - CORRECT ANSWER ✔✔ - Workers compensation.
N July of 2010 the Dodd-Frank Act was passed in response to the public's demand for improvements in
financial systems and to curb abusive Wall Street practices. A significant provision of the Dodd-Frank Act was
the - CORRECT ANSWER ✔✔ - Abolishment of the Troubled Asset Relief Program (TARP).
The supplemental payments section of the Commercial General Liability coverage form is most correctly
defined as - CORRECT ANSWER ✔✔ - The supplemental payments section of the Commercial General
Liability coverage form is most correctly defined as specified costs the insurer will pay as part of any claim
the insurer investigates or defends under Coverage A or B
Excess liability policies - CORRECT ANSWER ✔✔ - Do not provide coverage for exposures not covered in
primary policies.
Page | 3
CPCU 552, CP&L
©®
