CPCU 551 - TERMS, COVERAGES &
FORMS EXAM 2025 QUESTIONS AND
ANSWERS 100% SOLVED.
,Accounts receivable insurance - ANSWERInsurance that covers the sums the insured is
unable to collect when records of accounts receivable are destroyed by a covered
cause of loss.
Accumulation clause - ANSWERA clause in open cargo policies that doubles the policy
limit when, for reasons beyond the control of the assured, shipments accumulate at
some point in transit.
Act of God - ANSWERA natural and unavoidable catastrophe that interrupts the
expected course of events.
Actual cash value (ACV) - ANSWERCost to replace property with new property of like
kind and quality less depreciation.
Actual loss sustained - ANSWERA valuation method in business income policies
designed to make the insured whole by demonstrating the actual amount of loss that
occurs during the period of restoration.
Additional Covered Property endorsement - ANSWERA commercial property
endorsement that enables the insured to cover selected items under the Building and
Personal Property Coverage Form (BPP) that would otherwise be property not covered.
Agreed value method - ANSWERA method of valuing property in which the insurer and
the insured agree, at the time the policy is written, on the maximum amount that will be
paid in the event of a total loss.
Agreed Value optional coverage - ANSWEROptional coverage that suspends the
Coinsurance condition if the insured carries the amount of insurance agreed to by the
insurer and insured.
All other like perils - ANSWERPerils similar to those specifically named in the Perils
Clause of an ocean marine insurance policy.
All-in concept (additional installations coverage) - ANSWERA concept of condominium
ownership that is similar to the single-entity concept except that the all-in concept
includes improvements made by the unit owner, not just the original installations or
replacements of like kind and quality.
Alteration - ANSWERSomething done to a written instrument that changes its meaning
or terms without the consent of all parties to the instrument.
,American Association of Insurance Services (AAIS) - ANSWERA national insurance
advisory organization that develops policy forms, manual rules, and rating information
used by U.S. property-casualty insurers.
Animal mortality insurance - ANSWERInsurance that covers loss of valuable animals by
(1) death resulting from accident, injury, sickness, or disease or (2) theft, subject to
exclusions.
Annual transit policy - ANSWERPolicy that covers all shipments made or received by
the insured throughout a one-year policy period.
Appraisal - ANSWERA method of resolving disputes between insurers and insureds
over the amount owed on a covered loss.
Assailing thieves - ANSWERPersons, other than passengers or members of the crew,
who steal or attempt to steal property by violence or force.
Assignment provision - ANSWERA policy provision that prohibits an insured from
transferring ownership of an insurance policy to another party without the insurer's
written consent.
Assured - ANSWERIn ocean marine policies, the party named as the insured.
Attachment point - ANSWERThe dollar amount above which the reinsurer responds to
losses.
Auto physical damage coverage - ANSWERCoverage for damage to or theft of a
covered auto that can include both collision coverage and other than collision
(comprehensive) coverage.
Avoidance - ANSWERA risk control technique that involves ceasing or never
undertaking an activity so that the possibility of a future loss occurring from that activity
is eliminated.
Bailee - ANSWERThe party temporarily possessing the personal property in a bailment.
Bailees' customers policy - ANSWERA policy that covers damage to customers' goods
while in the possession of the insured, regardless of whether the insured is legally liable
for the damage.
Bailor - ANSWERThe owner of the personal property in a bailment.
Bare-walls concept - ANSWERA concept of condominium ownership in which the
association has no ownership interest within the bare walls of each unit.
, Barns, Outbuildings, and Other Farm Structures Coverage Form - ANSWERcovers farm
buildings and structures (other than dwellings), silos (if described), portable buildings,
fences, corrals, pens, chutes, feed racks, outside radio, tv equipment,
improvements/betterments - either scheduled or blanket
Barratry - ANSWERSerious misconduct by the vessel's master or crew that is contrary
to the owner's interest.
Bill of lading - ANSWERA document acknowledging receipt of goods from the shipper,
given by the carrier which includes the terms of the contract of carriage for the goods.
Blanket insurance - ANSWERInsurance that covers either of the following with one limit
of insurance: (1) one type of property in one or more separately rated buildings or (2)
two or more types of property in one or more separately rated buildings.
Block policy - ANSWERA dealers policy, particularly one written for a jeweler or furrier.
BMC 32 - Endorsement for Motor Common Carrier Policies of Insurance for Cargo
Liability - ANSWERan endorsement that insurers must attach to motor truck cargo
liability policies of interstate carriers stating that the insurer will pay cargo claims for
which the insured is liable, up to the limits required by the US DOT, even if such claims
are not covered in the policy
BMC 32—Endorsement for Motor Common Carrier Policies of Insurance for Cargo
Liability - ANSWERAn endorsement that insurers must attach to motor truck cargo
liability policies of interstate carriers stating that the insurer will pay cargo claims for
which the insured is liable, up to the limits required by the U.S. Department of
Transportation, even if such claims are not covered under the policy.
Boiler - ANSWERA fired pressure vessel constructed of cast iron or steel in which water
is heated to produce steam or hot water.
Brands and Labels endorsement - ANSWEREndorsement that permits the insured,
when the insurer takes damaged merchandise as salvage, to stamp the word "salvage"
on the merchandise or to remove its brands or labels before sale.
Breakdown coverage - ANSWERCoverage, in an EDP equipment floater, for perils such
as mechanical failure, electrical disturbance, and damage to electronic data when
covered equipment breaks down.
Builders Risk - Collapse During Construction Endorsement - ANSWERendorsement
which adds coverage for collapse to Builders Risk Coverage Form
Builders Risk - Theft of Building Materials, Fixtures, Machinery, and Equipment
Endorsement - ANSWERendorsement which adds coverage for theft of uninstalled
FORMS EXAM 2025 QUESTIONS AND
ANSWERS 100% SOLVED.
,Accounts receivable insurance - ANSWERInsurance that covers the sums the insured is
unable to collect when records of accounts receivable are destroyed by a covered
cause of loss.
Accumulation clause - ANSWERA clause in open cargo policies that doubles the policy
limit when, for reasons beyond the control of the assured, shipments accumulate at
some point in transit.
Act of God - ANSWERA natural and unavoidable catastrophe that interrupts the
expected course of events.
Actual cash value (ACV) - ANSWERCost to replace property with new property of like
kind and quality less depreciation.
Actual loss sustained - ANSWERA valuation method in business income policies
designed to make the insured whole by demonstrating the actual amount of loss that
occurs during the period of restoration.
Additional Covered Property endorsement - ANSWERA commercial property
endorsement that enables the insured to cover selected items under the Building and
Personal Property Coverage Form (BPP) that would otherwise be property not covered.
Agreed value method - ANSWERA method of valuing property in which the insurer and
the insured agree, at the time the policy is written, on the maximum amount that will be
paid in the event of a total loss.
Agreed Value optional coverage - ANSWEROptional coverage that suspends the
Coinsurance condition if the insured carries the amount of insurance agreed to by the
insurer and insured.
All other like perils - ANSWERPerils similar to those specifically named in the Perils
Clause of an ocean marine insurance policy.
All-in concept (additional installations coverage) - ANSWERA concept of condominium
ownership that is similar to the single-entity concept except that the all-in concept
includes improvements made by the unit owner, not just the original installations or
replacements of like kind and quality.
Alteration - ANSWERSomething done to a written instrument that changes its meaning
or terms without the consent of all parties to the instrument.
,American Association of Insurance Services (AAIS) - ANSWERA national insurance
advisory organization that develops policy forms, manual rules, and rating information
used by U.S. property-casualty insurers.
Animal mortality insurance - ANSWERInsurance that covers loss of valuable animals by
(1) death resulting from accident, injury, sickness, or disease or (2) theft, subject to
exclusions.
Annual transit policy - ANSWERPolicy that covers all shipments made or received by
the insured throughout a one-year policy period.
Appraisal - ANSWERA method of resolving disputes between insurers and insureds
over the amount owed on a covered loss.
Assailing thieves - ANSWERPersons, other than passengers or members of the crew,
who steal or attempt to steal property by violence or force.
Assignment provision - ANSWERA policy provision that prohibits an insured from
transferring ownership of an insurance policy to another party without the insurer's
written consent.
Assured - ANSWERIn ocean marine policies, the party named as the insured.
Attachment point - ANSWERThe dollar amount above which the reinsurer responds to
losses.
Auto physical damage coverage - ANSWERCoverage for damage to or theft of a
covered auto that can include both collision coverage and other than collision
(comprehensive) coverage.
Avoidance - ANSWERA risk control technique that involves ceasing or never
undertaking an activity so that the possibility of a future loss occurring from that activity
is eliminated.
Bailee - ANSWERThe party temporarily possessing the personal property in a bailment.
Bailees' customers policy - ANSWERA policy that covers damage to customers' goods
while in the possession of the insured, regardless of whether the insured is legally liable
for the damage.
Bailor - ANSWERThe owner of the personal property in a bailment.
Bare-walls concept - ANSWERA concept of condominium ownership in which the
association has no ownership interest within the bare walls of each unit.
, Barns, Outbuildings, and Other Farm Structures Coverage Form - ANSWERcovers farm
buildings and structures (other than dwellings), silos (if described), portable buildings,
fences, corrals, pens, chutes, feed racks, outside radio, tv equipment,
improvements/betterments - either scheduled or blanket
Barratry - ANSWERSerious misconduct by the vessel's master or crew that is contrary
to the owner's interest.
Bill of lading - ANSWERA document acknowledging receipt of goods from the shipper,
given by the carrier which includes the terms of the contract of carriage for the goods.
Blanket insurance - ANSWERInsurance that covers either of the following with one limit
of insurance: (1) one type of property in one or more separately rated buildings or (2)
two or more types of property in one or more separately rated buildings.
Block policy - ANSWERA dealers policy, particularly one written for a jeweler or furrier.
BMC 32 - Endorsement for Motor Common Carrier Policies of Insurance for Cargo
Liability - ANSWERan endorsement that insurers must attach to motor truck cargo
liability policies of interstate carriers stating that the insurer will pay cargo claims for
which the insured is liable, up to the limits required by the US DOT, even if such claims
are not covered in the policy
BMC 32—Endorsement for Motor Common Carrier Policies of Insurance for Cargo
Liability - ANSWERAn endorsement that insurers must attach to motor truck cargo
liability policies of interstate carriers stating that the insurer will pay cargo claims for
which the insured is liable, up to the limits required by the U.S. Department of
Transportation, even if such claims are not covered under the policy.
Boiler - ANSWERA fired pressure vessel constructed of cast iron or steel in which water
is heated to produce steam or hot water.
Brands and Labels endorsement - ANSWEREndorsement that permits the insured,
when the insurer takes damaged merchandise as salvage, to stamp the word "salvage"
on the merchandise or to remove its brands or labels before sale.
Breakdown coverage - ANSWERCoverage, in an EDP equipment floater, for perils such
as mechanical failure, electrical disturbance, and damage to electronic data when
covered equipment breaks down.
Builders Risk - Collapse During Construction Endorsement - ANSWERendorsement
which adds coverage for collapse to Builders Risk Coverage Form
Builders Risk - Theft of Building Materials, Fixtures, Machinery, and Equipment
Endorsement - ANSWERendorsement which adds coverage for theft of uninstalled
