CPCU 552 EXAM QUESTIONS AND ANSWERS
1. 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 leased
employees. Much of MMC's work is done by independent contractors and tem-
porary employees during peak seasons. Which one of the following statements
about these persons is true?
Select one:
A. Leased employees are co-employees of MMC and the leasing company.
B. Injuries to MMC's full-time ship captains are likely to be covered under state
workers compensation laws.
C. Temporary employees are considered employees of MMC rather than
em- ployees of the firm supplying them to MMC.
D. The independent contractors are automatically employees under common
law.: A. Leased employees are co-employees of MMC and the leasing company.
2. Most of the claims covered by liability insurance are based on
A. Tort law.
B. Contract law.
C. Government statutes.
D. Regulatory law.: A. Tort law.
3. A mining company has a partial ceiling collapse in one of its mines. Investiga-
tors discover that the company neglected maintenance of their safety systems
which resulted in serious injury to several of their employees during the mine's
ceiling collapse. The legal liability imposed on the company for the injury to its
employees is based on
,A. Negligence.
B. Statute
C. Intentional Tort.
D. Contractual Liability.: B. Statute
4. A court rules that a demolition company is legally liable for claimed damages
resulting from the demolition company's blasting operations at a construction
site, in spite of the fact that the demolition company was in no way negligent
,and the resulting damages were entirely accidental. This type of liability is
known as
A. Statutory liability.
B. Contractual liability.
C. Strict liability
D. Premises liability.: C. Strict liability
5. To be able to work as an independent contractor for XYZ Company (XYZ), Larry
has to agree to be responsible for any legal liability of XYZ that arises from the
work that Larry does. This type of agreement is best referred to as a
A. Statutory agreement.
B. Assumption of liability agreement.
C. Breach of contract agreement.
D. Hold-harmless agreement.: D. Hold-harmless agreement.
6. Under workers compensation, employers are required to pay prescribed
benefits for occupational injuries or illnesses of their employees. This is an
example of legal liability based on
A. Statutes
B. Torts.
C. Civil law.
D. Contracts.: A. Statutes
7. The premises and operations liability loss exposure includes bodily injury or
property damage claims arising out of the use of which one of the following?
Select one:
A. Watercraft
, B. Automobile
C. Airplane
D. Mobile equipment: D. Mobile equipment
8. Radley Contracting Company is installing new signage on the front of a
building. George, a passerby walking near the building is injured when a Radley
employee accidentally drops a tool from a crane. George likely has the ability
to assert which one the following types of claim?
1. 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 leased
employees. Much of MMC's work is done by independent contractors and tem-
porary employees during peak seasons. Which one of the following statements
about these persons is true?
Select one:
A. Leased employees are co-employees of MMC and the leasing company.
B. Injuries to MMC's full-time ship captains are likely to be covered under state
workers compensation laws.
C. Temporary employees are considered employees of MMC rather than
em- ployees of the firm supplying them to MMC.
D. The independent contractors are automatically employees under common
law.: A. Leased employees are co-employees of MMC and the leasing company.
2. Most of the claims covered by liability insurance are based on
A. Tort law.
B. Contract law.
C. Government statutes.
D. Regulatory law.: A. Tort law.
3. A mining company has a partial ceiling collapse in one of its mines. Investiga-
tors discover that the company neglected maintenance of their safety systems
which resulted in serious injury to several of their employees during the mine's
ceiling collapse. The legal liability imposed on the company for the injury to its
employees is based on
,A. Negligence.
B. Statute
C. Intentional Tort.
D. Contractual Liability.: B. Statute
4. A court rules that a demolition company is legally liable for claimed damages
resulting from the demolition company's blasting operations at a construction
site, in spite of the fact that the demolition company was in no way negligent
,and the resulting damages were entirely accidental. This type of liability is
known as
A. Statutory liability.
B. Contractual liability.
C. Strict liability
D. Premises liability.: C. Strict liability
5. To be able to work as an independent contractor for XYZ Company (XYZ), Larry
has to agree to be responsible for any legal liability of XYZ that arises from the
work that Larry does. This type of agreement is best referred to as a
A. Statutory agreement.
B. Assumption of liability agreement.
C. Breach of contract agreement.
D. Hold-harmless agreement.: D. Hold-harmless agreement.
6. Under workers compensation, employers are required to pay prescribed
benefits for occupational injuries or illnesses of their employees. This is an
example of legal liability based on
A. Statutes
B. Torts.
C. Civil law.
D. Contracts.: A. Statutes
7. The premises and operations liability loss exposure includes bodily injury or
property damage claims arising out of the use of which one of the following?
Select one:
A. Watercraft
, B. Automobile
C. Airplane
D. Mobile equipment: D. Mobile equipment
8. Radley Contracting Company is installing new signage on the front of a
building. George, a passerby walking near the building is injured when a Radley
employee accidentally drops a tool from a crane. George likely has the ability
to assert which one the following types of claim?
