ARM 402 Ch 2 Exam Questions and
Answers with Verified Solutions | Latest
Updated 2026
A risk management technique Insurance
that transfers the potential
financial consequences of
certain specified loss
exposures from the insured to
the insurer.
Premium is specified at policy Guaranteed cost insurance
inception, when the policy
takes effect-the insurer does
not modify the premium at the
end of the policy period based
on the insured's loss
experience during the policy
period
An insurance policy with a Large deductible plan
significant per occurrence or
per accident deductible-the
insurer adjusts and pays the
entire loss and then bills the
insured for the deductible
amount
A policy that covers liability Excess Liability Policy
claims in excess of the limits
of an underlying policy or a
, stated retention amount
Successive levels (or layers) of Layering
coverage using an excess of
loss strategy in which each
layer is in excess of the lower
limits provided by another
insurer, resulting in a
structured program of high
limits of coverage.
The layers of coverage in an Working Layers
organization's insurance
program that are most often
called on to pay claims
An excess liability policy that Following Form Excess Liability
covers a claim in excess of the Policy
underlying limits only if the
loss is covered by the
underlying insurance.
An excess liability policy that Self-contained excess liability policy
is subject to its own provisions
only and does not depend on
the provisions of the
underlying policies for
determining the scope of its
coverage.
A liability policy that provides Umbrella Liability Policy
excess coverage above
underlying policies and may
also provide coverage not
Answers with Verified Solutions | Latest
Updated 2026
A risk management technique Insurance
that transfers the potential
financial consequences of
certain specified loss
exposures from the insured to
the insurer.
Premium is specified at policy Guaranteed cost insurance
inception, when the policy
takes effect-the insurer does
not modify the premium at the
end of the policy period based
on the insured's loss
experience during the policy
period
An insurance policy with a Large deductible plan
significant per occurrence or
per accident deductible-the
insurer adjusts and pays the
entire loss and then bills the
insured for the deductible
amount
A policy that covers liability Excess Liability Policy
claims in excess of the limits
of an underlying policy or a
, stated retention amount
Successive levels (or layers) of Layering
coverage using an excess of
loss strategy in which each
layer is in excess of the lower
limits provided by another
insurer, resulting in a
structured program of high
limits of coverage.
The layers of coverage in an Working Layers
organization's insurance
program that are most often
called on to pay claims
An excess liability policy that Following Form Excess Liability
covers a claim in excess of the Policy
underlying limits only if the
loss is covered by the
underlying insurance.
An excess liability policy that Self-contained excess liability policy
is subject to its own provisions
only and does not depend on
the provisions of the
underlying policies for
determining the scope of its
coverage.
A liability policy that provides Umbrella Liability Policy
excess coverage above
underlying policies and may
also provide coverage not
