AINS 103 LATEST 2026 TEST PAPER QUESTIONS AND
ANSWERS GUARANTEE A+
✔✔John purchased a new lawnmower two years ago. After significant use, the
lawnmower needed servicing. A repairman sharpened the blade but he failed to
reattach it properly to the lawnmower. When John was using the lawnmower, the blade
flew off and seriously injured John's daughter. From the standpoint of a commercial
liability loss for the repair shop, this is an example of - ✔✔Completed operations liability.
✔✔Automobile liability exposures can result from - ✔✔Hiring or borrowing an
automobile.
✔✔Workers compensation benefits include which one of the following? -
✔✔Rehabilitation Benefits.
✔✔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? - ✔✔Intangible property.
✔✔An email was sent to a company's employee containing a harmful attachment.
Several employees opened the attachment which allowed hackers to obtain customer
contact information. This cyber risk loss is - ✔✔Damage to intangible property.
✔✔Which one of the following best describes real property? - ✔✔Tangible property that
include land, structures permanently attached to the land, and whatever is growing on
the land.
✔✔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? - ✔✔A defective
gas range manufactured by the insured explodes causing injury.
✔✔A building contractor uses lower grade materials than called for in the specifications
for an office building. A year after the building was completed, a balcony collapses,
injuring several employees and customers and causing damage to the building and
contents. For the building construction company, this is an example of - ✔✔A completed
operations liability exposure.
✔✔To be covered under a workers compensation statute, an injury or disease (in most
states) must meet which one of the following requirements? - ✔✔Arise out of
employees job-related injuries and diseases.
,✔✔Which one of the following supply chain exposures can a business mitigate by
carefully wording contracts and diversifying suppliers? - ✔✔Loss of supply due to
external events.
✔✔Bio-Pharma was a highly regarded pharmaceutical company. That changed last
year when it was revealed that Bio-Pharma researchers had fabricated test results of
the company's new hypertension drug, a company official bribed a key regulator to get
the drug approved. These revelations led to a sharp decline in sales of all Bio-Pharma's
drugs, a sharp decline in net income, and a decline in Bio-Pharma's stock price. This
scenario clearly indicates the value of a corporation's - ✔✔Reputation.
✔✔Sally is a commercial property claims adjuster. When she first assigned a claim, she
reviews the commercial property part of the policy to make sure that the property that
suffered the loss matches the description of the property insured. She also reviews the
kinds and amounts of coverage provided. Which of the following components of the
commercial property part will provide Sally with this information? - ✔✔Commercial
property declarations page.
✔✔Billy owns a baseball souvenir store in Cooperstown, NY. He insured his store under
a Building and Personal Property Coverage Form (BPP) with a $275,000 limit and a
$1,500 deductible. A large fire in the store caused significant damage amounting to
$310,000 in covered damages. How much would Billy's insurer pay under his BPP? -
✔✔$275,000.
✔✔Which one of the following is one of the covered causes of loss in the commercial
property policy Causes of Loss - Basic Form? - ✔✔Explosion.
✔✔Which one of the following statements about Inflation Guard optional coverage of
the Building and Personal Property Coverage Form (BPP) is true? - ✔✔It automatically
increases the limit of insurance by the percentage of annual increase shown in the
declarations.
✔✔Which one of the following would be covered under the Extra Expense insuring
agreement of the Business Income (and Extra Expense) Coverage Form? - ✔✔Costs to
move to a temporary location.
✔✔Lucy's Bakery is insured under a commerical package policy with the Business
Income (and Extra Expenses) Coverage Form. A fire loss caused significant damage to
the building. When Lucy learned that it would take 9 months to repair the building, she
decided to temporarily relocate to a nearby rental location. All of the following would be
considered covered extra expenses under the Business Income (and Extra Expense)
Coverage form, EXCEPT: - ✔✔The salary of the assistant baker and cake decorator.
,✔✔Dooley's Restaurant is insured under a commerical pacakge policy (CPP) with the
Business Income (with Extra Expense) Coverage form. The business sufferd a
$400,000 loss of business income when it was forced to suspend operations after
floodwaters damaged the basement and first floor of the restaraunt. Which one of the
follow is an acceptable reason for the CPP insurer to deny the business income claim? -
✔✔The policy's covered cause of loss did not include flood.
✔✔Richard's Clothing Store has a $500,000 Business Income (and Extra Expense)
Coverage Form on which there is an 80 percent coinsurance clause. A fire swept
through the store. Richard's Clothing Store estimates that its net income plus all
operating expenses for the policy period would have been $1,875,000. The estimated
business income loss is $300,000. How much will the insurer pay? - ✔✔$100,000.
✔✔Hill Top Wholesale experienced a loss from a fire at its warehouse. When the
owner, Joann, called to report the loss to the commercial property insurer, she was
reminded of certain obligations that the insured must meet in order for the coverage to
apply. There are also certain rules that the insurer must follow. Which one of the
following components of the commercial property coverage part of the commercial
package policy would include these obligations and rules? - ✔✔Commercial property
conditions.
✔✔Which one of the following is a covered cause of loss under the Cause of Loss -
Basic Form? - ✔✔Sprinkler leakage.
✔✔Cameron has a Commercial Package Policy (CPP) that has a Building and Personal
Property Coverage Form (BPP) with a Causes of Loss - Broad Form covering his
building with a $750,000 limit. A tropical storm struck Cameron's building and the strong
winds tore most of the shingles from the building's roof and shattered multiple windows
with flying debris. The total amount of damages was $20,000 for the windows and
$20,000 for the shingles. How much will Cameron's insurer pay for damage to his
windows and shingles? - ✔✔$40,000.
✔✔Which one of the following statements is correct with regard to the Building and
Personal Property Coverage Form (BPP)? - ✔✔Insureds who have selected the
replacement cost option may also elect to have the personal property of others valued
at replacement cost.
✔✔Which one of the following would be considered an extra expense under the
Business Income (and Extra Expense) Coverage Form of the commercial package
policy? - ✔✔The increase cost of rent at a temporary location.
✔✔Which one of the following statements is true regarding the Business Income
(without Extra Expense) Coverage Form? - ✔✔It covers only extra expenses that
reduce the business income loss.
, ✔✔When Sylvester Properties suffered a $500,000 loss of business income, it filed a
claim under the Business Income (and Extra Expense) Coverage Form (BIC) of its
commercial package policy./ In order for the loss to be covered, the loss of business
income must be due to a necessary suspension in operations caused by a direct
physical loss or damage to property at the premises for which BIC is shown in the policy
declarations. Which one of the following is also part of the criteria for the loss to be
covered? - ✔✔The loss or damage must be caused by a covered cause of loss.
✔✔Stanton Industries insures its building and business personal property under the
commercial property coverage part of a commercial package policy. Anthony is the new
risk manager for Stanton Industries. He wants to look at the policy to review the
property insured, the kinds and amounts of coverage provided, and any optional
coverages. Which one of the following component parts of the commercial property part
would provide Anthony with this information? - ✔✔Commercial property declarations.
✔✔Which one of the following perils would be covered under the commercial property
policy broad form but not covered under the basic form? - ✔✔Damage due to weight of
snow.
✔✔Which one of the following statements best describes the Causes of Loss - Special
Form? - ✔✔The Special Form provides coverage for direct physical losses other than
those that are not specifically excluded.
✔✔Which one of the follow is correct with respect to the Increased Cost of Construction
additional coverage of the Building and Personal Property Coverage Form (BPP)? -
✔✔It provides a small amount of insurance to cover the increase cost to comply with
ordinances or laws regulating the repair, rebuilding, or replacement of covered
buildings.
✔✔Sam's Hair Salon (SHS) is insured under a commercial package policy with the
Business Income (and Extra Expense) Coverage From (BIC). The BIC has a $500,000
limit of insurance and a 70% coinsurance provision. A fire damaged SHS's building and
the business was forced to close down for 4 months while the damage could be
repaired. This resulted in a BIC loss of $250,000. The salons net income plus operating
expenses that would have been incurred in the absence of the loss for 12 months
beginning at the policy inception was $700,000. Which one of the following represents
the coinsurance basis? - ✔✔$700,000.
✔✔Which one of the following statements is correct regarding a commercial general
liability policy with an occurrence coverage form? - ✔✔The injury or damage must
happen during the policy period.
ANSWERS GUARANTEE A+
✔✔John purchased a new lawnmower two years ago. After significant use, the
lawnmower needed servicing. A repairman sharpened the blade but he failed to
reattach it properly to the lawnmower. When John was using the lawnmower, the blade
flew off and seriously injured John's daughter. From the standpoint of a commercial
liability loss for the repair shop, this is an example of - ✔✔Completed operations liability.
✔✔Automobile liability exposures can result from - ✔✔Hiring or borrowing an
automobile.
✔✔Workers compensation benefits include which one of the following? -
✔✔Rehabilitation Benefits.
✔✔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? - ✔✔Intangible property.
✔✔An email was sent to a company's employee containing a harmful attachment.
Several employees opened the attachment which allowed hackers to obtain customer
contact information. This cyber risk loss is - ✔✔Damage to intangible property.
✔✔Which one of the following best describes real property? - ✔✔Tangible property that
include land, structures permanently attached to the land, and whatever is growing on
the land.
✔✔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? - ✔✔A defective
gas range manufactured by the insured explodes causing injury.
✔✔A building contractor uses lower grade materials than called for in the specifications
for an office building. A year after the building was completed, a balcony collapses,
injuring several employees and customers and causing damage to the building and
contents. For the building construction company, this is an example of - ✔✔A completed
operations liability exposure.
✔✔To be covered under a workers compensation statute, an injury or disease (in most
states) must meet which one of the following requirements? - ✔✔Arise out of
employees job-related injuries and diseases.
,✔✔Which one of the following supply chain exposures can a business mitigate by
carefully wording contracts and diversifying suppliers? - ✔✔Loss of supply due to
external events.
✔✔Bio-Pharma was a highly regarded pharmaceutical company. That changed last
year when it was revealed that Bio-Pharma researchers had fabricated test results of
the company's new hypertension drug, a company official bribed a key regulator to get
the drug approved. These revelations led to a sharp decline in sales of all Bio-Pharma's
drugs, a sharp decline in net income, and a decline in Bio-Pharma's stock price. This
scenario clearly indicates the value of a corporation's - ✔✔Reputation.
✔✔Sally is a commercial property claims adjuster. When she first assigned a claim, she
reviews the commercial property part of the policy to make sure that the property that
suffered the loss matches the description of the property insured. She also reviews the
kinds and amounts of coverage provided. Which of the following components of the
commercial property part will provide Sally with this information? - ✔✔Commercial
property declarations page.
✔✔Billy owns a baseball souvenir store in Cooperstown, NY. He insured his store under
a Building and Personal Property Coverage Form (BPP) with a $275,000 limit and a
$1,500 deductible. A large fire in the store caused significant damage amounting to
$310,000 in covered damages. How much would Billy's insurer pay under his BPP? -
✔✔$275,000.
✔✔Which one of the following is one of the covered causes of loss in the commercial
property policy Causes of Loss - Basic Form? - ✔✔Explosion.
✔✔Which one of the following statements about Inflation Guard optional coverage of
the Building and Personal Property Coverage Form (BPP) is true? - ✔✔It automatically
increases the limit of insurance by the percentage of annual increase shown in the
declarations.
✔✔Which one of the following would be covered under the Extra Expense insuring
agreement of the Business Income (and Extra Expense) Coverage Form? - ✔✔Costs to
move to a temporary location.
✔✔Lucy's Bakery is insured under a commerical package policy with the Business
Income (and Extra Expenses) Coverage Form. A fire loss caused significant damage to
the building. When Lucy learned that it would take 9 months to repair the building, she
decided to temporarily relocate to a nearby rental location. All of the following would be
considered covered extra expenses under the Business Income (and Extra Expense)
Coverage form, EXCEPT: - ✔✔The salary of the assistant baker and cake decorator.
,✔✔Dooley's Restaurant is insured under a commerical pacakge policy (CPP) with the
Business Income (with Extra Expense) Coverage form. The business sufferd a
$400,000 loss of business income when it was forced to suspend operations after
floodwaters damaged the basement and first floor of the restaraunt. Which one of the
follow is an acceptable reason for the CPP insurer to deny the business income claim? -
✔✔The policy's covered cause of loss did not include flood.
✔✔Richard's Clothing Store has a $500,000 Business Income (and Extra Expense)
Coverage Form on which there is an 80 percent coinsurance clause. A fire swept
through the store. Richard's Clothing Store estimates that its net income plus all
operating expenses for the policy period would have been $1,875,000. The estimated
business income loss is $300,000. How much will the insurer pay? - ✔✔$100,000.
✔✔Hill Top Wholesale experienced a loss from a fire at its warehouse. When the
owner, Joann, called to report the loss to the commercial property insurer, she was
reminded of certain obligations that the insured must meet in order for the coverage to
apply. There are also certain rules that the insurer must follow. Which one of the
following components of the commercial property coverage part of the commercial
package policy would include these obligations and rules? - ✔✔Commercial property
conditions.
✔✔Which one of the following is a covered cause of loss under the Cause of Loss -
Basic Form? - ✔✔Sprinkler leakage.
✔✔Cameron has a Commercial Package Policy (CPP) that has a Building and Personal
Property Coverage Form (BPP) with a Causes of Loss - Broad Form covering his
building with a $750,000 limit. A tropical storm struck Cameron's building and the strong
winds tore most of the shingles from the building's roof and shattered multiple windows
with flying debris. The total amount of damages was $20,000 for the windows and
$20,000 for the shingles. How much will Cameron's insurer pay for damage to his
windows and shingles? - ✔✔$40,000.
✔✔Which one of the following statements is correct with regard to the Building and
Personal Property Coverage Form (BPP)? - ✔✔Insureds who have selected the
replacement cost option may also elect to have the personal property of others valued
at replacement cost.
✔✔Which one of the following would be considered an extra expense under the
Business Income (and Extra Expense) Coverage Form of the commercial package
policy? - ✔✔The increase cost of rent at a temporary location.
✔✔Which one of the following statements is true regarding the Business Income
(without Extra Expense) Coverage Form? - ✔✔It covers only extra expenses that
reduce the business income loss.
, ✔✔When Sylvester Properties suffered a $500,000 loss of business income, it filed a
claim under the Business Income (and Extra Expense) Coverage Form (BIC) of its
commercial package policy./ In order for the loss to be covered, the loss of business
income must be due to a necessary suspension in operations caused by a direct
physical loss or damage to property at the premises for which BIC is shown in the policy
declarations. Which one of the following is also part of the criteria for the loss to be
covered? - ✔✔The loss or damage must be caused by a covered cause of loss.
✔✔Stanton Industries insures its building and business personal property under the
commercial property coverage part of a commercial package policy. Anthony is the new
risk manager for Stanton Industries. He wants to look at the policy to review the
property insured, the kinds and amounts of coverage provided, and any optional
coverages. Which one of the following component parts of the commercial property part
would provide Anthony with this information? - ✔✔Commercial property declarations.
✔✔Which one of the following perils would be covered under the commercial property
policy broad form but not covered under the basic form? - ✔✔Damage due to weight of
snow.
✔✔Which one of the following statements best describes the Causes of Loss - Special
Form? - ✔✔The Special Form provides coverage for direct physical losses other than
those that are not specifically excluded.
✔✔Which one of the follow is correct with respect to the Increased Cost of Construction
additional coverage of the Building and Personal Property Coverage Form (BPP)? -
✔✔It provides a small amount of insurance to cover the increase cost to comply with
ordinances or laws regulating the repair, rebuilding, or replacement of covered
buildings.
✔✔Sam's Hair Salon (SHS) is insured under a commercial package policy with the
Business Income (and Extra Expense) Coverage From (BIC). The BIC has a $500,000
limit of insurance and a 70% coinsurance provision. A fire damaged SHS's building and
the business was forced to close down for 4 months while the damage could be
repaired. This resulted in a BIC loss of $250,000. The salons net income plus operating
expenses that would have been incurred in the absence of the loss for 12 months
beginning at the policy inception was $700,000. Which one of the following represents
the coinsurance basis? - ✔✔$700,000.
✔✔Which one of the following statements is correct regarding a commercial general
liability policy with an occurrence coverage form? - ✔✔The injury or damage must
happen during the policy period.
