ALABAMA ADJUSTER UPDATED QUESTIONS AND
ANSWERS GRADED A+
✔✔100. In the bond world, a limit of liability is sometimes called the - ✔✔bond penalty.
✔✔101. A commercial blanket Fidelity bond is written with a(n) ______________ limit,
and the Blanket Position bond is written a(n) ______________ limit. - ✔✔occurrence -
per employee
✔✔102. The We-R-Nice Credit Union hired an outside collector to do its dirty work with
delinquent accounts.
It turned out that the collector _____________ considered an employee for purposes of
coverage under form 23. - ✔✔Is
✔✔103. Mr. Big was a bank president. Mr. Medium was an ambitious bank teller and try
to learn everything he could about the business. One day the news arrived that of the
bank's ATM machines had been vandalized, but no money was missing. Mr. Medium
wanted to show off his knowledge, so he said, "It's a good thing we have that ATM
Rider on our Fidelity bond. Looks like we're covered!" "Ha!" said Mr. Big. "That comment
just shows why I'm the bank president and you're not. You don't even know that ATM
rider - ✔✔doesn't cover vandalism and malicious mischief."
✔✔104. Which of the following items is NOT excluded from Aviation Hull insurance? -
✔✔Flight instruments
✔✔105. Bruno suffers a loss on a shipment of clothing that is insured under an Open
Cargo policy, but is also covered by an Inland marine form. If the Inland Marine
insurance agrees to make payment for the loss, what will Bruno's Open Cargo Policy
pay? - ✔✔It eliminates coverage on losses covered by another policy.
✔✔106. Barratry is - ✔✔a wrongful act by a master or crew that causes loss.
✔✔107. The vessel Speedy carried cargo from New York to Plymouth, England and
had a memorable voyage. A mighty storm required the master to jettison some of the
cargo to save the ship. While the crew was busy Jettisoning, lightning caused the fire
which further damaged cargo, and a particularly nasty wave lifted and crashed the ship
into the ocean with such force that it damaged still more cargo. To top it off, when the
speedy limped into port, the cargo owner refused to pay his shipping bill. Which event if
not covered under an Open Cargo Policy? - ✔✔Refusal to pay shipping bill
✔✔108. Louisiana Hot Stuff is a tanker that is still afloat but if carrying valuable cargo
and have some potential Environmental hazard. What type of salvage operations will
likely be needed for Louisiana Hot Stuff? - ✔✔A and C
, ✔✔109. The good ship Sharktrucker carried cargo from Brownsville to Corpus Christi.
Once it docked in Corpus, it was unloaded and moved to a warehouse until it could be
picked up by a truck in two days. In the process of being moved into the warehouse,
some of the goods were damaged. Does this qualify for a cargo claim? - ✔✔Yes,
because it was on the water at some time.
✔✔110. When the hull of the vessel Bad Seas suffered extensive hull damage in a
typhoon, the ship was deemed a constructive total loss, which meant that - ✔✔the
owner had the option of a settlement or the salvage amount.
✔✔111. The Sue and Labor clause refers to - ✔✔the duties of the master and crew to
take all necessary action to prevent further damage after a loss occurs.
✔✔112. The Beatific is covered under a hull policy. While traveling in the Gulf of
Mexico, the Beatific discovered a ship in distress, so the master towed the vessel and
towing, suffered a loss to the hull costing $4,500. Who pays for the $4,500 loss? -
✔✔The last two the whole while towing will be paid by the Beatific' hull insurer.
✔✔113. The P&I form SP-23 includes coverage for loss of life, injury and illness, but it
does not include - ✔✔employees other than seaman.
✔✔114. P & I clubs are - ✔✔assessment mutual.
✔✔115. __________________ is to the Marine insurance world what liability protection
is to the Personal and Commercial insurance world. - ✔✔Protection and Indemnity
insurance
✔✔116. Which of the following is NOT one of the four kinds of risks covered by Surplus
Lines insurance? - ✔✔Requires low limits of insurance
✔✔117. ___________________ Protects professional liability an errors and omissions
risks associated with computer processing. - ✔✔Electronic Data Liability Insurance
✔✔118. Mr. Muddy Waters carried flood insurance in the amount of $45,000 on his
single-family dwelling and $10,000 on its contents. The policy is written with the
standard $500 deductible. The house had a replacement cost of $50,000. A flood
caused the following losses: House: $20,000 on a replacement cost basis and $18,000
on an ACV basis Contents: $4,000 on a replacement cost basis and $2000 on an ACV
basis How much will Mr. Waters collect under his flood insurance? - ✔✔House:
$19,500; Contents $1,500
✔✔119. Which of the following could a farmer not cover under a national flood
insurance policy? - ✔✔Growing crop
ANSWERS GRADED A+
✔✔100. In the bond world, a limit of liability is sometimes called the - ✔✔bond penalty.
✔✔101. A commercial blanket Fidelity bond is written with a(n) ______________ limit,
and the Blanket Position bond is written a(n) ______________ limit. - ✔✔occurrence -
per employee
✔✔102. The We-R-Nice Credit Union hired an outside collector to do its dirty work with
delinquent accounts.
It turned out that the collector _____________ considered an employee for purposes of
coverage under form 23. - ✔✔Is
✔✔103. Mr. Big was a bank president. Mr. Medium was an ambitious bank teller and try
to learn everything he could about the business. One day the news arrived that of the
bank's ATM machines had been vandalized, but no money was missing. Mr. Medium
wanted to show off his knowledge, so he said, "It's a good thing we have that ATM
Rider on our Fidelity bond. Looks like we're covered!" "Ha!" said Mr. Big. "That comment
just shows why I'm the bank president and you're not. You don't even know that ATM
rider - ✔✔doesn't cover vandalism and malicious mischief."
✔✔104. Which of the following items is NOT excluded from Aviation Hull insurance? -
✔✔Flight instruments
✔✔105. Bruno suffers a loss on a shipment of clothing that is insured under an Open
Cargo policy, but is also covered by an Inland marine form. If the Inland Marine
insurance agrees to make payment for the loss, what will Bruno's Open Cargo Policy
pay? - ✔✔It eliminates coverage on losses covered by another policy.
✔✔106. Barratry is - ✔✔a wrongful act by a master or crew that causes loss.
✔✔107. The vessel Speedy carried cargo from New York to Plymouth, England and
had a memorable voyage. A mighty storm required the master to jettison some of the
cargo to save the ship. While the crew was busy Jettisoning, lightning caused the fire
which further damaged cargo, and a particularly nasty wave lifted and crashed the ship
into the ocean with such force that it damaged still more cargo. To top it off, when the
speedy limped into port, the cargo owner refused to pay his shipping bill. Which event if
not covered under an Open Cargo Policy? - ✔✔Refusal to pay shipping bill
✔✔108. Louisiana Hot Stuff is a tanker that is still afloat but if carrying valuable cargo
and have some potential Environmental hazard. What type of salvage operations will
likely be needed for Louisiana Hot Stuff? - ✔✔A and C
, ✔✔109. The good ship Sharktrucker carried cargo from Brownsville to Corpus Christi.
Once it docked in Corpus, it was unloaded and moved to a warehouse until it could be
picked up by a truck in two days. In the process of being moved into the warehouse,
some of the goods were damaged. Does this qualify for a cargo claim? - ✔✔Yes,
because it was on the water at some time.
✔✔110. When the hull of the vessel Bad Seas suffered extensive hull damage in a
typhoon, the ship was deemed a constructive total loss, which meant that - ✔✔the
owner had the option of a settlement or the salvage amount.
✔✔111. The Sue and Labor clause refers to - ✔✔the duties of the master and crew to
take all necessary action to prevent further damage after a loss occurs.
✔✔112. The Beatific is covered under a hull policy. While traveling in the Gulf of
Mexico, the Beatific discovered a ship in distress, so the master towed the vessel and
towing, suffered a loss to the hull costing $4,500. Who pays for the $4,500 loss? -
✔✔The last two the whole while towing will be paid by the Beatific' hull insurer.
✔✔113. The P&I form SP-23 includes coverage for loss of life, injury and illness, but it
does not include - ✔✔employees other than seaman.
✔✔114. P & I clubs are - ✔✔assessment mutual.
✔✔115. __________________ is to the Marine insurance world what liability protection
is to the Personal and Commercial insurance world. - ✔✔Protection and Indemnity
insurance
✔✔116. Which of the following is NOT one of the four kinds of risks covered by Surplus
Lines insurance? - ✔✔Requires low limits of insurance
✔✔117. ___________________ Protects professional liability an errors and omissions
risks associated with computer processing. - ✔✔Electronic Data Liability Insurance
✔✔118. Mr. Muddy Waters carried flood insurance in the amount of $45,000 on his
single-family dwelling and $10,000 on its contents. The policy is written with the
standard $500 deductible. The house had a replacement cost of $50,000. A flood
caused the following losses: House: $20,000 on a replacement cost basis and $18,000
on an ACV basis Contents: $4,000 on a replacement cost basis and $2000 on an ACV
basis How much will Mr. Waters collect under his flood insurance? - ✔✔House:
$19,500; Contents $1,500
✔✔119. Which of the following could a farmer not cover under a national flood
insurance policy? - ✔✔Growing crop
