CAIB 2 Chapter 4 Practice Test 1 Bank Completely Solved

Define Endorsement. - ANSWER-Endorsements change terms of existing policies Define Rider. - ANSWER-Riders add coverages to those all ready on policy Indicate Covered or Not Covered on Sign Form (C/NC) a) mechanical breakdown b) damage caused by power surge c) damage caused when dropped during installation d) damage caused by freezing e) damage caused by striking employees - ANSWER-a) NC mechanical breakdown b) NC damage caused by power surge c) NC damage caused when dropped during installation d) NC damage caused by freezing e) NC damage caused by striking employees What values are insured on a Glass Rider? - ANSWER-i) Glass ii) Artwork on glass iii) Tape and foil on glass When would tenants require Glass Riders? - ANSWER-Tenants may require glass coverage when tenants have assumed responsibility for damage to glass in a lease What type of information is required by underwriters when insuring glass on a scheduled basis? - ANSWER-i) Type, size and number of glass units ii) Location of glass iii) Information of any lettering, tape, foil or ornamentation What are two factors, relating to location, which may influence Glass Rider premiums? - ANSWER-i) Interior or exterior ii) Level located on building (ie. first floor or second floor) List three examples of losses insured by Glass Riders. - ANSWER-i) Employee breaks glass while carrying lumber into store ii) Customer breaks glass with floor lamp they just purchased, while leaving the store iii) Glass breaks as a result of settling of building's foundation Indicate Covered or Not Covered under Glass Riders. (C/NC) a) glass broken during construction b) glass broken during repairs to window frame c) glass damage when building is vacant, unoccupied or shut down for more than 30 consecutive days - ANSWER-a) NC glass broken during construction b) NC glass broken during repairs to window frame c) NC glass damage when building is vacant, unoccupied or shut down for more than 30 consecutive days What are four coverages provided by the Accounts Receivable Form and provide an example of each. - ANSWER-i) Amounts which cannot be collected due to loss of accounts receivable records example: Client cannot remember entire list of customers who have an outstanding amount due to your client ii) Interest on loans or lines of credit your client needs to utilize to pay current liabilities example: Money owed to suppliers must be paid prior to settlement with insurer iii) Extra costs in the collection of accounts receivable example: Amounts paid to collection agencies or overtime wages to staff who work overtime attempting to collect accounts iv) Expenses incurred in the reconstruction of records example: Client hires accounting firm to reconstruct records What is the requirement of insurers when accounts receivable records are not in use and the premises are closed? - ANSWER-When records are not in use or when premises is closed, accounts receivable records must be stored in described receptacle What are two factors which will influence premiums to be charged on Accounts Receivable coverage? - ANSWER-i) Availability of duplicates ii) Quality of described receptacle What are two factors which will influence premiums to be charged on Valuable Papers and Records coverage? - ANSWER-i) Availability of duplicates ii) Quality of described receptacle When can coverage be extended to insure Valuable Papers and Records while off premises? - ANSWER-i) When being transported outside premises ii) When at other premises on a temporary basis What limit of coverage is available to insure Valuable Papers and Records while off premises? - ANSWER-10% of amount of insurance or $5,000 whichever is less What type of electrical disturbance is insured by Valuable Papers and Records Insurance? - ANSWER-When electrical disturbance caused by lightning damages valuable papers, coverage is provided What are three coverages sections found in EDP Policies? - ANSWER-i) Loss to data processing systems and component parts (HARDWARE) ii) Loss to data processing media and programs (SOFTWARE) iii) Extra expense What are two key coverage advantages provided by Section 1 of EDP Policies? - ANSWER-i) Broad water losses ii) Mechanical and electrical breakdown List five causes of mechanical and electrical breakdown insured by EDP Policies. - ANSWER-i) Errors in machine programming ii) Processing iii) Short circuit iv) Dampness or dryness of atmosphere v) Extremes of temperature