AINS 103 PRACTICE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS | ALREADY GRADED A+RECENT VERSION

AINS 103 PRACTICE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS | ALREADY GRADED A+RECENT VERSION 1) Loss exposure - answer any condition or situation that presents a possibility of loss, whether or not an actual loss occurs. 2) Property loss exposure - answer a condition that presents the possibility that a person or an organization will sustain a loss resulting from damage (including destruction, taking, or loss of use) to property in which that person or organization has a financial interest. 3) Real property (realty) - answer tangible property consisting of land, all structures permanently attached to the land, and whatever is growing on the land. 4) Personal property - answer all tangible or intangible property that is not real property 5) Business personal property - answer stock, furniture, fixtures, equipment and machinery, tenant's improvements and betterments, and other personal property owned by the insured 6) Fixture - answer any personal property affixed to real property in such a way as to become part of the real property 7) Money - answer currency, coins, bank notes, and sometimes traveler's checks, credit card slips, and money orders held for sale to the public 8) Securities - answer written instruments representing either money or other property, such as stocks and bonds 9) Peril - answer the cause of a loss 10) Business income insurance - answer insurance that covers the reduction in an organization's income when operations are interrupted by damage to property caused by a covered peril 11) Business interruption - answer loss of revenue that a business or another organization sustains because its operations are suspended as a result of physical injury to its property 12) Profit - answer net income that results when revenues exceed expenses 13) Continuing expenses - answer expenses that continue to be incurred during a business interruption 14) Extra expenses - answer expenses, in addition to ordinary expenses, that an organization incurs to mitigate the effects of a business interruption 15) Liability - answer a legal responsibility for the consequences of an act or omission 16) Liability loss exposure - answer any condition or situation that presents the possibility of a claim alleging legal responsibility of a person or business for injury or damage suffered by another party 17) Personal loss exposure - answer any condition or situation that presents the possibility of a financial loss to an individual or a family by such causes as death, sickness, injury, or unemployment 18) Bailee - answer the party temporarily possessing the personal property in a bailment 19) Marine insurance - answer insurance that, in the u.s., includes both ocean and inland marine coverage and, in the rest of the world, is limited to insurance for vessels and cargo 20) Inland marine insurance - answer insurance that covers many different classes of property that typically involve an element of transportation on land 21) Ocean marine insurance - answer insurance that covers vessels and their cargoes, including various vessel-related liability exposures 22) Workers compensation - answer a system that pays lost wages, medical and vocational rehabilitation expenses, and death benefits to injured workers or their dependents for employment-related injuries and diseases 23) Workers compensation statute - answer a statute that obligates employers, regardless of fault, to pay specified medical, disability, rehabilitation, and death benefits for their employees' job-related injuries and diseases 24) Occupational disease - answer disease thought to be caused by work or the work environment 25) Employee - answer a person who is (1) currently employed by the insured or an ex-employee terminated within the past 30 days; (2) compensated by the insured by salary, wages, or commissions; and (3) subject to the control and direction of the insured. 26) Independent contractor - answer a person (or organization) hired to perform services without being subject to the hirer's direction and control regarding work details 27) Employee leasing - answer an arrangement in which a third party provides a firm with employees for a fee 28) Cyber risk - answer the possibility that data will end up in the possession of a party who is not authorized to have that data and who can use it in a manner that is harmful to the individual or organization that is the subject of the data and/or the party that collected and stored the data. 29) Reputation - answer an intangible asset, a key determinant of future business prospects, resulting from a collection of perceptions and opinions, past and present, about an organization that resides in the consciousness of its stakeholders 30) Reputational risk - answer the risk that negative publicity, whether true or not, will damage a company's reputation and its ability to operate its business 31) Supply chain - answer the network of external stakeholders on which an organization relies for goods and services 32) Intellectual property - answer the product of human intelligence that has economic value 33) Commercial property coverage part - answer commercial package policy (cpp) coverage component that provides a broad range of coverages to "middle-market" or larger firms to insure buildings and business personal property 34) Commercial package policy (cpp) - answer policy that covers two or more lines of business by combining iso's commercial lines coverage parts 35) Monoline policy - answer policy that covers only one line of business 36) Coinsurance - answer an insurance-to-value provision in many property insurance policies providing that if the property is underinsured, the amount that an insurer will pay for a covered loss is reduced 37) Occurrence coverage trigger - answer the event that triggers coverage under an occurrence coverage form: injury or damage that occurs during the policy period 38) Claims-made coverage trigger - answer the event that triggers coverage under a claims-made coverage form; the first making of a claim against any insured during either the policy period or an extended reporting period 39) Occurrence - answer an accident, including continuous or repeated exposure to substantially the same general harmful conditions 40) Bodily injury - answer physical injury to a person, including sickness, disease, and death 41) Property damage - answer physical injury to, destruction of, or loss of use of tangible property 42) Modular policy - answer an insurance policy that consists of several different documents, none of which by itself forms a complete policy 43) Business auto coverage form - answer a coverage form, filed by iso, that covers liability arising out of the ownership, maintenance, or use of autos and physical damage to autos owned, leased, or hired by the named insured 44) Personal injury protection - answer coverage that pays benefits, regardless of fault, for medical expense, income loss, and other benefits, resulting from bodily injury to occupants of a covered auto 45) Medical payments - answer reasonable expenses incurred for necessary medical and funeral services because of bodily injury 46) Uninsured motorist (um) coverage - answer coverage that provides a source of recovery for occupants of a covered auto or for qualifying pedestrians who are injured in an accident caused by an at-fault motorist who does not have the state minimum liability insurance or by a hit-and-run driver 47) Which one of the following best describes real property? Select one: A. Property being shipped to or from others. B. Business personal property that includes furniture, machinery and equipment, and stock/inventory. C. Tangible property that includes land, structures permanently attached to the land, and whatever is growing on the land. D. Vehicles, merchandise, furniture, tools, and similar items. - answer c. Tangible property that includes land, structures permanently attached to the land, and whatever is growing on the land. 48) 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. Insurance premiums C. Debt repayments D. Payroll of key employees - answer a. Cost to rent temporary office space 49) upon entering a restaurant, a customer grasped a handrail that broke off, causing the customer to fall and break his wrist. This is an example of which one of the following types of commercial general liability loss? Select one: A. Premises and operations liability B. Personal and advertising injury liability C. Absolute liability D. Products and completed operations liability - answer a. Premises and operations liability 50) 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. Professional liability. B. Property liability. C. Operations liability. D. Premises and operations liability. - answer d. Premises and operations liability. 51) automobile liability exposures can result from Select one: A. Damage to or destruction of an owned vehicle. B. Loss of use of an owned automobile. C. Workers compensation laws. D. Hiring or borrowing an automobile. - answer d. Hiring or borrowing an automobile. 52) to be covered under a workers compensation statute, an injury or disease (in most states) must meet which one of the following requirements? Select one: A. Result from the employer's negligence B. Occur away from the regular work premises C. Arise out of employees' job-related injuries and diseases D. Result in total disability - answer c. Arise out of employees' job-related injuries and diseases 53) cyber risk intellectual property loss exposures include Select one: A. Cyber extortion of trade secrets. B. Personal and advertising injury liability. C. Loss to tangible property. D. Property damage liability. - answer a. Cyber extortion of trade secrets. 54) as part of its assessment of its cyber risk, an organization should consider whether there are any intangible property exposures. Which one of the following would best be classified as an intangible property loss? Select one: A. Two disgruntled employees use the computer system to transfer office funds into their own personal bank accounts. B. The computer system is hacked and data including credit card numbers are stolen. C. Thieves break into the main office and steal several desktop computers. D. There is a fire in the storage area which destroys the backup copy of the office computer system. - answer b. The computer system is hacked and data including credit card numbers are stolen. 55) a commercial building may contain furniture, machinery and equipment and finished products. Which one of the following is the term generally used in property insurance policies to refer to all these types of property? Select one: A. Business personal property B. Stock C. Inventory D. Commercial property - answer a. Business personal property 56) a family recently purchased a new home constructed by a residential home builder. Two months after taking possession, several of the family members were injured when the roof suddenly collapsed. The family sued the construction company and was awarded monetary damages for their injuries. This is an example of which one of the following types of commercial liability loss exposure for the construction company? Select one: A. Products liability B. Premises and operations liability C. Completed operations liability D. Employers liability - answer c. Completed operations liability 57) which one of the following is an example of injury or damage arising from an occurrence that would be covered by the products and completed operations liability portion of the commercial general liability (cgl) coverage form? Select one: A. A defective gas range manufactured by the insured explodes causing injury. B. A customer's house is set on fire while the insured is doing plumbing work. C. A dissatisfied customer sues an insured for slander. D. A customer is injured when she slips on a wet floor in a store. - answer a. A defective gas range manufactured by the insured explodes causing injury 58) joe motors, which services automobiles, wants to maintain the goodwill of its customers. This is best accomplished by Select one: A. Purchasing garage liability insurance. B. Purchasing garagekeepers insurance. C. Lowering the physical damage deductible under its business auto insurance. D. Raising liability limits under its business auto insurance. - answer b. Purchasing garagekeepers insurance. 59) workers compensation benefits include which one of the following? Select one: A. Death benefits of 100 percent of wage loss B. Pain and suffering benefits C. Rehabilitation benefits D. Property damage benefits - answer c. Rehabilitation benefits 60) 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 intangible property. B. Damage to personal property. C. Damage to tangible property. D. Errors and omissions liability. - answer a. Damage to intangible property. 61) an individual owns a web-based business. All sales records and contact data are maintained on the same network server as the website. Someone hacks into the server and deletes all of the saved data. Which one of the following types of loss is this? Select one: A. Tangible property B. Personal injury C. Intangible property D. Contingent business income - answer c. Intangible property 62) property insurance policies use the term "personal property" to refer to the Select one: A. Property in transit. B. Contents in and around a building. C. Buildings not attached to the main building. D. Company's copyrights and trademarks. - answer b. Contents in and around a building. 63) in business income insurance, the expenses that an organization would not have incurred if the business interruption had not occurred are called Select one: A. Continuing expenses. B. Contingent expenses. C. Excludable expenses. D. Extra expenses. - answer d. Extra expenses. 64) a vehicle owner had a tire store install four new wheels and tires on the vehicle. On the way home from the store, one of the wheels came off, causing the vehicle to accidentally run off the road and strike a tree. The vehicle owner sued the tire store for failing to properly tighten the lug nuts on the vehicle. The loss exposure faced by the tire store in this case is known as Select one: A. Employers liability. B. Completed operations liability. C. Automobile liability. D. Products liability. - answer b. Completed operations liability. 65) which one of the following loss exposures exist when a business can be held legally liable for bodily injury or property damage caused by their repair or contracting work? Select one: A. Operations liability B. Completed operations liability C. Workers' compensation liability D. Products liability - answer b. Completed operations liability 66) inland marine insurance is insurance that covers Select one: A. Businesses that own or operate watercraft, or import or export goods. B. Many different classes of property that typically involve an element of transportation on land. C. Companies that ship goods by commercial vessel on inland waterways. D. Miscellaneous lines such as burglary, glass, and steam boilers. - answer b. Many different classes of property that typically involve an element of transportation on land. 67) sue is injured at work, and her job responsibilities are reduced for 30 days, after which time she is fully recovered. Sue has which one of the following types of workers compensation disabilities? Select one: A. Temporary total disability B. Permanent partial disability C. Temporary partial disability D. Permanent total disability - answer c. Temporary partial disability 68) meat products company (mpc) runs packing plants in three midwest states. The company was in the news recently because of its labor practices. The department of labor (dol) investigated complaints from five female employees that mpc discriminated against them. The dol found the claim was true. The immigration and naturalization service (ins) found that the company employed illegal immigrants and paid them less than the minimum wage. When this news became public, mpc's reputation was severely harmed. This scenario illustrates which source of reputation risk? Select one: A. Corporate governance and leadership B. Corporate social responsibility C. Regulatory and legal compliance D. Communication and crisis management - answer c. Regulatory and legal compliance 69) the two categories of property that are exposed to loss from cyber risk are Select one: A. Insured and uninsured. B. Covered and not covered. C. Tangible and intangible. D. Real and personal. - answer c. Tangible and intangible. 70) 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. A peril is the actual means by which property is damaged or destroyed such as fire, lightning, windstorm, hail, or theft. 71) a contractor is hired to install a new concrete sidewalk in front of a store. Several weeks after the sidewalk was installed, the concrete buckles and a passerby trips and falls on the buckled sidewalk. The passerby sues the contractor to recover medical expenses incurred due to the fall. This commercial liability loss is categorized as Select one: A. Products liability. B. Environmental liability. C. Professional liability. D. Completed operations liability. - answer d. Completed operations liability. 72) which one of the following entities would likely have the greatest completed operations loss exposure? Select one: A. Paul the plumber B. Doris the physician C. Moe the manufacturer D. Sam the accountant - answer a. Paul the plumber 73) a carrier that is prevented by an accident from delivering the cargo aboard its ship may face an exposure called loss of freight, which is Select one: A. The compensation the carrier receives for transporting cargo. B. A penalty the carrier pays the shipper for nondelivery. C. The liability for loss or damage to the cargo entrusted to it. D. The cost of disposing of undeliverable goods. - answer a. The compensation the carrier receives for transporting cargo. 74) the typical workers compensation statute provides payment for which one of the following? Select one: A. Medical bills sustained while an employee commutes to work on public transit B. Injuries to customers on the insured premises C. Medical bills for an injury sustained by an employee while working D. Any property damage that accompanies a bodily injury - answer c. Medical bills for an injury sustained by an employee while working 75) 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. Loss or damage caused by computer viruses. B. Fire damage to clothing items currently listed for sale online. C. Lightning damage to the computer system used for internet sales. D. Theft of clothing items in their store. - answer a. Loss or damage caused by computer viruses. 76) the unauthorized intrusion into a company's computer network resulting in damage to intellectual property is best classified as which one of the following types of cyber liability exposures? Select one: A. Loss of use B. Tangible property C. Intangible property D. Loss of business income - answer c. Intangible property 77) in property insurance, the term "property in transit" refers to which one of the following? Select one: A. Owned property while located anywhere other than the insured location B. Property while being moved from one building to another at the insured location only C. Mobile equipment while moving under its own power from one work location to another D. Property while being transported by trucks, cars, buses, trains, airplanes, and ships - answer d. Property while being transported by trucks, cars, buses, trains, airplanes, and ships 78) during a business interruption, some of the organization's expenses, called continuing expenses, will continue, and other expenses, called noncontinuing expenses, will not continue. Which one of the following is an example of a continuing expense? Select one: A. Cost to rent temporary office space B. Cost of overnight air shipment of needed repair parts C. Payroll of key employees D. Overtime wages to employees - answer c. Payroll of key employees 79) pedestrian wilma was injured as a result of a contractor's negligence when the contractor failed to adequately warn the public of a hazard when paving a road. Any resulting liability claim by wilma against the contractor would be considered to have arisen from the contractor's Select one: A. Products and completed operations liability exposure. B. Premises and operations liability exposure. C. Personal liability exposure. D. Absolute liability exposure. - answer b. Premises and operations liability exposure. 80) xyz contractor, covered under an unendorsed commercial general liability (cgl) coverage form, is installing kitchen cabinets in a customer's home. The contractor manufactured the cabinets. While the contractor is fastening a cabinet, it falls and injures the customer. Which one of the following best explains how coverage under the contractor's cgl coverage form applies in this case? Select one: A. Products and completed operations liability applies because the contractor was installing cabinets it manufactured. B. Premises and operations liability applies because the contractor was in the process of installing the cabinets. C. Products and completed operations liability applies because the contractor was completing the work. D. Premises and operations liability applies because the contractor was working at the customer's premises. - answer b. Premises and operations liability applies because the contractor was in the process of installing the cabinets.