AINS 103 LATEST 2026 EXAM QUESTIONS AND ANSWERS
GUARANTEE A+
✔✔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.
✔✔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. The
coinsurance factor would be the amount of insurance carried ($500,000) divided by the
amount of insurance required (80 percent of $1,875,000). The factor is 1/3. This,
multiplied by the loss, yields $100,000 that the insurer will pay.
✔✔Joe's Cleaning Service is having a very good year, with close to a 30 percent
increase in sales. Joe is wondering if this growth will affect his general liability premium
at the end of the policy period. Which one of the following sections of the general liability
coverage form will provide this information? - ✔✔The CGL declarations form will include
rating and premium auditing information.
✔✔A customer filed a suit against Patsy's Market, claiming that she was injured when
she slipped and fell in the produce section. The customer claimed that she broke her
elbow, had to have surgery, and missed a week of work. The owner of Patsy's Market
told its commercial general liability (CGL) insurer that the produce area was always
clean and that the claim was suspicious. After reviewing the medical bills and video
footage from the market, the insurer concluded that Patsy's Market was probably liable
for the customer's injury. The CGL insurer will most likely attempt to do which one of the
following? - ✔✔If the insurer's investigation revealed that Patsy's Market was liable and
that the damages were covered by the policy, it would likely try to negotiate an out of
court settlement.
✔✔The Commercial General Liability (CGL) Coverage Form defines the term
"occurrence" as: - ✔✔An accident, including continuous or repeated exposure to
substantially the same general harmful conditions.
✔✔The Commercial General Liability (CGL) Coverage B—Personal and Advertising
Injury Liability provides coverage for which one of the following? - ✔✔The definition of
personal and advertising injury in the CGL policy includes liability arising from false
arrest.
,✔✔Injury arising out of which one of the following offenses could be covered under
Coverage B of the Commercial General Liability policy? - ✔✔Injury arising out of false
arrest could be covered under Coverage B of the Commercial General Liability policy.
✔✔Shady Stories, a tabloid newspaper, prints a false story about a local politician.
Shady knows the story is false but thinks it will sell a lot of papers. The politician claims
damages from Shady. Shady's Commercial General Liability (CGL) Coverage Form
excludes coverage for this loss because the claim arose out of which one of the
following? - ✔✔Written material that was known to be false.
✔✔Under the Commercial General Liability (CGL) Coverage Form, medical payments
coverage applies to which one of the following? - ✔✔A volunteer worker of the named
insured.
✔✔Shelton Manufacturing has an annual picnic and softball game for its employees and
their families. During the softball game, Greg (the spouse of an employee) was injured
while sliding into home plate. He was taken to the hospital for x-rays and a cast for his
broken foot. His medical expenses were $3,800. Within 60 days, Greg made a claim for
the $3,800 under Coverage C—Medical Payments of Shelton Manufacturing's CGL
policy. The claim will not be paid under Coverage C - Medical Payments because: -
✔✔Greg was injured during physical exercise, games, or sports contests.
✔✔An insured keeps his truck in a garage. A deer gets trapped in the garage and, in an
attempt to escape, climbs on top of the truck, breaking the windshield and causing
several dents in the hood. The insured's Business Auto Coverage Form (BACF)
provides physical damage coverage for specified causes of loss with a $100 deductible
and collision with a $250 deductible. It will cost the insured $750 to replace the broken
windshield and $1,200 to repair the dents. How much, if anything, will the business auto
insurer pay for this loss? - ✔✔$0. The business auto insurer will not pay for the loss
because specified causes of loss coverage lists covered perils but does not include
damage caused by animals.
✔✔The Auto Medical Payments Coverage endorsement to the business auto policy
provides coverage for: - ✔✔Reasonable and necessary medical and funeral expenses
incurred by a person injured while occupying a covered auto.
✔✔Zelda has an automobile accident that is covered by a Business Auto Coverage
Form. The accident results in a pollution expense due to gasoline spilling from the
covered auto, as well as property damage and bodily injury to a third party. The cost for
the bodily injury is $1,000 along with $2,000 property damage. The pollution clean-up
cost is $5,000. Ignoring any deductible that may apply, how much will Zelda's insurer
pay for these losses? - ✔✔Zelda's policy will pay $8,000. All losses are covered.
, ✔✔If the insured expands operations into a new state, which one of the following
statements is true? - ✔✔The insured must notify the insurer within thirty days or else no
coverage will apply for that state.
✔✔What, if anything, is a difference between an excess liability policy and an umbrella
liability policy? - ✔✔While both policies provide excess limits, an umbrella policy may
also provide coverage not available in the underlying policies.
✔✔One distinguishing feature between umbrella liability insurance and excess liability
insurance is that: - ✔✔Umbrella liability coverage may be subject to a self-insured
retention.
✔✔There are several types of breakdown losses to fired pressure vessels. Which one
of the following is an example of this type of loss? - ✔✔Bulging is an example of a
breakdown loss to a fire pressured vessel.
✔✔James is in the process of forming his own brokerage company which will include
several employees. James will be best protected by purchasing which one of the
following to cover the crime loss exposures of his company? - ✔✔Financial Institution
Bond.
✔✔A policy that covers damage to customer's goods while in the possession of the
insured, regardless of liability is: - ✔✔A bailees' customers policy.
✔✔An insured is planning on transporting a valuable turbine from its place of
manufacture to a power plant across the country. What type of inland marine policy
would best meet the insurance needs to cover this cargo during the trip? - ✔✔Trip
transit policy.
✔✔Jenn is a producer for Goshen Mutual. She is trying to determine if a new prospect,
Mr. Cooper's Café is eligible for the businessowners policy (BOP). Mr. Cooper's Café is
a small restaurant located on the first floor of an office building, serving only breakfast
and lunch. Cooking on the premises is limited to coffee makers, a grill, and microwave
appliances. It has seating for 10-15 people, and large refrigerated cases with food, beer
and wine to-go. Which one of the following factors about Mr. Cooper's Café would make
it ineligible for BOP coverage? - ✔✔The fact that Mr. Cooper's Café sell beer and wine
would most likely make it ineligible for BOP coverage. The limited cooking and seating
capacity, and fact that it is located in an office building would all be acceptable.
✔✔Hank is a new commercial insurance producer. He is walking down the main street
of Springfield trying to determine which businesses might be eligible for the
businessowners policy (BOP) and which would not be eligible. Which one of the
following main street businesses would be ineligible for BOP coverage? - ✔✔Springfield
Bank. Banks and financial institutions are generally not eligible for BOP coverage.
GUARANTEE A+
✔✔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.
✔✔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. The
coinsurance factor would be the amount of insurance carried ($500,000) divided by the
amount of insurance required (80 percent of $1,875,000). The factor is 1/3. This,
multiplied by the loss, yields $100,000 that the insurer will pay.
✔✔Joe's Cleaning Service is having a very good year, with close to a 30 percent
increase in sales. Joe is wondering if this growth will affect his general liability premium
at the end of the policy period. Which one of the following sections of the general liability
coverage form will provide this information? - ✔✔The CGL declarations form will include
rating and premium auditing information.
✔✔A customer filed a suit against Patsy's Market, claiming that she was injured when
she slipped and fell in the produce section. The customer claimed that she broke her
elbow, had to have surgery, and missed a week of work. The owner of Patsy's Market
told its commercial general liability (CGL) insurer that the produce area was always
clean and that the claim was suspicious. After reviewing the medical bills and video
footage from the market, the insurer concluded that Patsy's Market was probably liable
for the customer's injury. The CGL insurer will most likely attempt to do which one of the
following? - ✔✔If the insurer's investigation revealed that Patsy's Market was liable and
that the damages were covered by the policy, it would likely try to negotiate an out of
court settlement.
✔✔The Commercial General Liability (CGL) Coverage Form defines the term
"occurrence" as: - ✔✔An accident, including continuous or repeated exposure to
substantially the same general harmful conditions.
✔✔The Commercial General Liability (CGL) Coverage B—Personal and Advertising
Injury Liability provides coverage for which one of the following? - ✔✔The definition of
personal and advertising injury in the CGL policy includes liability arising from false
arrest.
,✔✔Injury arising out of which one of the following offenses could be covered under
Coverage B of the Commercial General Liability policy? - ✔✔Injury arising out of false
arrest could be covered under Coverage B of the Commercial General Liability policy.
✔✔Shady Stories, a tabloid newspaper, prints a false story about a local politician.
Shady knows the story is false but thinks it will sell a lot of papers. The politician claims
damages from Shady. Shady's Commercial General Liability (CGL) Coverage Form
excludes coverage for this loss because the claim arose out of which one of the
following? - ✔✔Written material that was known to be false.
✔✔Under the Commercial General Liability (CGL) Coverage Form, medical payments
coverage applies to which one of the following? - ✔✔A volunteer worker of the named
insured.
✔✔Shelton Manufacturing has an annual picnic and softball game for its employees and
their families. During the softball game, Greg (the spouse of an employee) was injured
while sliding into home plate. He was taken to the hospital for x-rays and a cast for his
broken foot. His medical expenses were $3,800. Within 60 days, Greg made a claim for
the $3,800 under Coverage C—Medical Payments of Shelton Manufacturing's CGL
policy. The claim will not be paid under Coverage C - Medical Payments because: -
✔✔Greg was injured during physical exercise, games, or sports contests.
✔✔An insured keeps his truck in a garage. A deer gets trapped in the garage and, in an
attempt to escape, climbs on top of the truck, breaking the windshield and causing
several dents in the hood. The insured's Business Auto Coverage Form (BACF)
provides physical damage coverage for specified causes of loss with a $100 deductible
and collision with a $250 deductible. It will cost the insured $750 to replace the broken
windshield and $1,200 to repair the dents. How much, if anything, will the business auto
insurer pay for this loss? - ✔✔$0. The business auto insurer will not pay for the loss
because specified causes of loss coverage lists covered perils but does not include
damage caused by animals.
✔✔The Auto Medical Payments Coverage endorsement to the business auto policy
provides coverage for: - ✔✔Reasonable and necessary medical and funeral expenses
incurred by a person injured while occupying a covered auto.
✔✔Zelda has an automobile accident that is covered by a Business Auto Coverage
Form. The accident results in a pollution expense due to gasoline spilling from the
covered auto, as well as property damage and bodily injury to a third party. The cost for
the bodily injury is $1,000 along with $2,000 property damage. The pollution clean-up
cost is $5,000. Ignoring any deductible that may apply, how much will Zelda's insurer
pay for these losses? - ✔✔Zelda's policy will pay $8,000. All losses are covered.
, ✔✔If the insured expands operations into a new state, which one of the following
statements is true? - ✔✔The insured must notify the insurer within thirty days or else no
coverage will apply for that state.
✔✔What, if anything, is a difference between an excess liability policy and an umbrella
liability policy? - ✔✔While both policies provide excess limits, an umbrella policy may
also provide coverage not available in the underlying policies.
✔✔One distinguishing feature between umbrella liability insurance and excess liability
insurance is that: - ✔✔Umbrella liability coverage may be subject to a self-insured
retention.
✔✔There are several types of breakdown losses to fired pressure vessels. Which one
of the following is an example of this type of loss? - ✔✔Bulging is an example of a
breakdown loss to a fire pressured vessel.
✔✔James is in the process of forming his own brokerage company which will include
several employees. James will be best protected by purchasing which one of the
following to cover the crime loss exposures of his company? - ✔✔Financial Institution
Bond.
✔✔A policy that covers damage to customer's goods while in the possession of the
insured, regardless of liability is: - ✔✔A bailees' customers policy.
✔✔An insured is planning on transporting a valuable turbine from its place of
manufacture to a power plant across the country. What type of inland marine policy
would best meet the insurance needs to cover this cargo during the trip? - ✔✔Trip
transit policy.
✔✔Jenn is a producer for Goshen Mutual. She is trying to determine if a new prospect,
Mr. Cooper's Café is eligible for the businessowners policy (BOP). Mr. Cooper's Café is
a small restaurant located on the first floor of an office building, serving only breakfast
and lunch. Cooking on the premises is limited to coffee makers, a grill, and microwave
appliances. It has seating for 10-15 people, and large refrigerated cases with food, beer
and wine to-go. Which one of the following factors about Mr. Cooper's Café would make
it ineligible for BOP coverage? - ✔✔The fact that Mr. Cooper's Café sell beer and wine
would most likely make it ineligible for BOP coverage. The limited cooking and seating
capacity, and fact that it is located in an office building would all be acceptable.
✔✔Hank is a new commercial insurance producer. He is walking down the main street
of Springfield trying to determine which businesses might be eligible for the
businessowners policy (BOP) and which would not be eligible. Which one of the
following main street businesses would be ineligible for BOP coverage? - ✔✔Springfield
Bank. Banks and financial institutions are generally not eligible for BOP coverage.
