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CPCU 552 Questions and Correct Answers
Which one of these is not an example of a coverage that is
excluded under Coverage A of the CGL coverage form because it is
insured under another policy? Ans: Liquor liability (Liquor liability
is not an example of a coverage that is excluded under Coverage A
of the CGL coverage form because it is insured under another
policy.
An endorsement that eliminates the liquor liability exclusion and
provides coverage for organizations in the business of selling or
serving alcoholic beverages is an example of which type of
endorsement? Ans: Miscellaneous coverage amendment
endorsement (
Which one of the following is true regarding the Commercial
General Liability's (CGL's) unmanned aircraft coverage
endorsements? Ans: Premium for these endorsements is on a
"refer to company" basis.
Jill, who is the named insured on an unendorsed Business Auto
Coverage Form (BACF), hired Jimmy to assist in her business. Jill
asked Jimmy to purchase some business supplies. While he was
driving his own car, Jimmy's vehicle was hit by an uninsured
motorist. Jimmy's medical expenses were $2,000, and the damage
to his car was $4,000. Which one of the following correctly
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, 2 | Page
indicates how much Jill's auto insurer will pay Jimmy for his
losses? Ans: $0 (An employee of the insured is not an insured if
the covered auto is owned by the employee.
An auto dealer advertises that a new vehicle is available for
$18,000 with no down payment and an interest rate of 1 percent.
A customer attempts to purchase the vehicle, but is told that the
price is now $21,000 and the interest rate is 9 percent. The
customer files suit, alleging false advertisement of prices and
failure to comply with the Truth in Lending Act. Which one of the
following correctly describes coverage for this claim under the
Auto Dealers Coverage Form? Ans: There will be coverage for the
failure to comply with the Truth in Lending Act, but not for the
false advertisement of prices. (There will be coverage for the
failure to comply with the Truth in Lending Act, but not for the
false advertisement of prices.
A claim representative is handling a claim for an auto dealership
insured under the Auto Dealers Coverage Form (ADCF). Several
new autos and autos left for service by customers were damaged
when a fire started in the service building. The representative has
verified that the loss occurred to the named insured at an insured
location during the policy period; that Sections I and II of the
ADCF apply to the losses and that the autos qualify as covered
autos. The next step that the representative should take in
determining whether coverage applies is to Ans: Review the policy
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conditions to determine whether they preclude coverage at the
time of loss. (The next step that the representative should take in
determining whether coverage applies is to review the policy
conditions to determine whether they preclude coverage at the
time of loss.
The Motor Carrier Coverage Form (MCCF) covers owners and
lessors of autos hired by the named insured, subject to conditions.
When the hired auto is a trailer, the owner, or anyone else from
whom the named insured hires or borrows a covered trailer, is an
insured while the trailer is connected to a power unit that is a
covered auto or while the trailer is Ans: Not connected to a power
unit but is being used exclusively in the named insured's business.
(The owner is an insured while the trailer is connected to a power
unit that is a covered auto or while the trailer is not connected to a
power unit but is being used exclusively in the named insured's
business.
Which one of the following would always be excluded under
employers liability insurance? Ans: An employee files a claim for
depression resulting from harassment at work.
Bill's Premium Packing (BPP) operates a fruit and vegetable canning
operation. It purchases its produce from growers in three states in
the Northeast. As a result, its operations are seasonal and during
peak periods it depends on large numbers of casual laborers who
© 2025 All rights reserved
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are exempt from coverage under the applicable state workers
compensation laws. Therefore, the company has purchased a
Voluntary Compensation and Employers Liability Endorsement for
its Workers Compensation and Employers Liability Insurance
(WC&EL) Policy. When a casual laborer is badly injured on the job,
the worker launches a lawsuit against BPP, alleging negligence.
Which one of the following best describes how BPP's WC&EL
insurer would respond? Ans: The insurer would defend the
insured against the employee's suit and pay any settlement
awarded, subject to the stipulated limits of liability.
Some organizations such as school boards, municipalities, and
non-profit organizations carry a special type of directors and
officers (D&O) liability policy. What is the name given to this type
of D&O coverage? Ans: Occupation-specific
An unendorsed securities brokers professional liability policy will
insure the firm and registered representatives for claims alleging
negligence committed on the firm's behalf in which one of the
following capacities? Ans: Selling life insurance products (An
unendorsed securities brokers professional liability policy will
insure the firm and registered representatives for claims alleging
negligence committed on the firm's behalf while selling life
insurance products.
© 2025 All rights reserved
CPCU 552 Questions and Correct Answers
Which one of these is not an example of a coverage that is
excluded under Coverage A of the CGL coverage form because it is
insured under another policy? Ans: Liquor liability (Liquor liability
is not an example of a coverage that is excluded under Coverage A
of the CGL coverage form because it is insured under another
policy.
An endorsement that eliminates the liquor liability exclusion and
provides coverage for organizations in the business of selling or
serving alcoholic beverages is an example of which type of
endorsement? Ans: Miscellaneous coverage amendment
endorsement (
Which one of the following is true regarding the Commercial
General Liability's (CGL's) unmanned aircraft coverage
endorsements? Ans: Premium for these endorsements is on a
"refer to company" basis.
Jill, who is the named insured on an unendorsed Business Auto
Coverage Form (BACF), hired Jimmy to assist in her business. Jill
asked Jimmy to purchase some business supplies. While he was
driving his own car, Jimmy's vehicle was hit by an uninsured
motorist. Jimmy's medical expenses were $2,000, and the damage
to his car was $4,000. Which one of the following correctly
© 2025 All rights reserved
, 2 | Page
indicates how much Jill's auto insurer will pay Jimmy for his
losses? Ans: $0 (An employee of the insured is not an insured if
the covered auto is owned by the employee.
An auto dealer advertises that a new vehicle is available for
$18,000 with no down payment and an interest rate of 1 percent.
A customer attempts to purchase the vehicle, but is told that the
price is now $21,000 and the interest rate is 9 percent. The
customer files suit, alleging false advertisement of prices and
failure to comply with the Truth in Lending Act. Which one of the
following correctly describes coverage for this claim under the
Auto Dealers Coverage Form? Ans: There will be coverage for the
failure to comply with the Truth in Lending Act, but not for the
false advertisement of prices. (There will be coverage for the
failure to comply with the Truth in Lending Act, but not for the
false advertisement of prices.
A claim representative is handling a claim for an auto dealership
insured under the Auto Dealers Coverage Form (ADCF). Several
new autos and autos left for service by customers were damaged
when a fire started in the service building. The representative has
verified that the loss occurred to the named insured at an insured
location during the policy period; that Sections I and II of the
ADCF apply to the losses and that the autos qualify as covered
autos. The next step that the representative should take in
determining whether coverage applies is to Ans: Review the policy
© 2025 All rights reserved
, 3 | Page
conditions to determine whether they preclude coverage at the
time of loss. (The next step that the representative should take in
determining whether coverage applies is to review the policy
conditions to determine whether they preclude coverage at the
time of loss.
The Motor Carrier Coverage Form (MCCF) covers owners and
lessors of autos hired by the named insured, subject to conditions.
When the hired auto is a trailer, the owner, or anyone else from
whom the named insured hires or borrows a covered trailer, is an
insured while the trailer is connected to a power unit that is a
covered auto or while the trailer is Ans: Not connected to a power
unit but is being used exclusively in the named insured's business.
(The owner is an insured while the trailer is connected to a power
unit that is a covered auto or while the trailer is not connected to a
power unit but is being used exclusively in the named insured's
business.
Which one of the following would always be excluded under
employers liability insurance? Ans: An employee files a claim for
depression resulting from harassment at work.
Bill's Premium Packing (BPP) operates a fruit and vegetable canning
operation. It purchases its produce from growers in three states in
the Northeast. As a result, its operations are seasonal and during
peak periods it depends on large numbers of casual laborers who
© 2025 All rights reserved
, 4 | Page
are exempt from coverage under the applicable state workers
compensation laws. Therefore, the company has purchased a
Voluntary Compensation and Employers Liability Endorsement for
its Workers Compensation and Employers Liability Insurance
(WC&EL) Policy. When a casual laborer is badly injured on the job,
the worker launches a lawsuit against BPP, alleging negligence.
Which one of the following best describes how BPP's WC&EL
insurer would respond? Ans: The insurer would defend the
insured against the employee's suit and pay any settlement
awarded, subject to the stipulated limits of liability.
Some organizations such as school boards, municipalities, and
non-profit organizations carry a special type of directors and
officers (D&O) liability policy. What is the name given to this type
of D&O coverage? Ans: Occupation-specific
An unendorsed securities brokers professional liability policy will
insure the firm and registered representatives for claims alleging
negligence committed on the firm's behalf in which one of the
following capacities? Ans: Selling life insurance products (An
unendorsed securities brokers professional liability policy will
insure the firm and registered representatives for claims alleging
negligence committed on the firm's behalf while selling life
insurance products.
© 2025 All rights reserved
