1
AU61 - UNDERWRITING ORGANIZATIONS
PROPERTY RISKS EXAM QUESTIONS WITH
SOLUTIONS
A small fire occurred in a local neighborhood damaging half of Gretta's Grocery
Store. Smoke damage occurred throughout the store. Health authorities are likely
to do which one of the following with the food items in the store? - correct-
answer - Destroy the food items
Self-service operations such as laundries and gas stations represent a significant
percentage of service industry occupancies. Although self-service equipment is
designed for easy operation, an underwriter might find such a business
unacceptable if a trained attendant is not on hand, due to the risk of - correct-
answer - Vandalism
, 2
Which one of the following terms refers to the ability of an item or material to
ignite and burn? - correct-answer - Combustibility
Special hazards of the class - correct-answer - Are characteristics typical of all
occupancies in a given class that can cause or aggravate a loss
BabyLearn Corporation manufactures toys for infants and toddlers. Its two main
product lines are nondestructible plastic toys, and wood products such as puzzles,
blocks, and shapes that fit together. Its operations are housed in fully sprinklered
fire-resistive buildings. The raw plastic components are manufactured in one area,
wood components in another, and final assembly is completed in yet another.
Each area is separated from the others by fire divisions. The plastics operations
include cast-molding, cutting, and melting of raw materials to form the finished
toy components. The wood operations include cutting, treating, assembly, and
, 3
painting. While all of the following risk characteristics are important to consider,
which one is likely to be of most concern to a property insurance underwriter that
is evaluating BabyLearn Corporation's account? - correct-answer - Fire and
explosion risk related to flammable plastic dust particles generated by the
processing operations
Juan, a risk control representative, is conducting an assessment of the
headquarters of Westin Waste, a multi-county refuse collection and disposal
company. Westin's offices house several hundred employees on seven floors. The
building was built ten years ago. There is a lobby and eating area for its
employees on the first floor, a small coffee room next to the restrooms on each
floor, and a dining room on the seventh floor with a small refrigerator and coffee
service for the convenience of its executives. Westin maintains a large network
server in a separate room on the first floor, as well as a storage room for janitorial
and other supplies. Westin provides desktop computers and steel desks for each
of its office employees. Most of the floors of the building are partitioned into
cubicles. The floors are tiled, and each wall is mostly windows, with vinyl blinds.
, 4
To which one of the following hazards is Juan likely t - correct-answer - The
office's electrical and wiring systems
For commercial property insurance, the fire loss exposure for habitational
occupancies can be significant. Therefore, a property underwriter should be
aware of the leading cause of habitational occupancy fires, which is - correct-
answer - Cooking equipment
The use of oxygen and gases, as in a hospital, is a serious hazard. All of the
following statements regarding this hazard are truce, EXCEPT: - correct-answer -
Gasses, anesthetics, oxygen, and acetylene must be properly stored in approved
non-metal cylinders
AU61 - UNDERWRITING ORGANIZATIONS
PROPERTY RISKS EXAM QUESTIONS WITH
SOLUTIONS
A small fire occurred in a local neighborhood damaging half of Gretta's Grocery
Store. Smoke damage occurred throughout the store. Health authorities are likely
to do which one of the following with the food items in the store? - correct-
answer - Destroy the food items
Self-service operations such as laundries and gas stations represent a significant
percentage of service industry occupancies. Although self-service equipment is
designed for easy operation, an underwriter might find such a business
unacceptable if a trained attendant is not on hand, due to the risk of - correct-
answer - Vandalism
, 2
Which one of the following terms refers to the ability of an item or material to
ignite and burn? - correct-answer - Combustibility
Special hazards of the class - correct-answer - Are characteristics typical of all
occupancies in a given class that can cause or aggravate a loss
BabyLearn Corporation manufactures toys for infants and toddlers. Its two main
product lines are nondestructible plastic toys, and wood products such as puzzles,
blocks, and shapes that fit together. Its operations are housed in fully sprinklered
fire-resistive buildings. The raw plastic components are manufactured in one area,
wood components in another, and final assembly is completed in yet another.
Each area is separated from the others by fire divisions. The plastics operations
include cast-molding, cutting, and melting of raw materials to form the finished
toy components. The wood operations include cutting, treating, assembly, and
, 3
painting. While all of the following risk characteristics are important to consider,
which one is likely to be of most concern to a property insurance underwriter that
is evaluating BabyLearn Corporation's account? - correct-answer - Fire and
explosion risk related to flammable plastic dust particles generated by the
processing operations
Juan, a risk control representative, is conducting an assessment of the
headquarters of Westin Waste, a multi-county refuse collection and disposal
company. Westin's offices house several hundred employees on seven floors. The
building was built ten years ago. There is a lobby and eating area for its
employees on the first floor, a small coffee room next to the restrooms on each
floor, and a dining room on the seventh floor with a small refrigerator and coffee
service for the convenience of its executives. Westin maintains a large network
server in a separate room on the first floor, as well as a storage room for janitorial
and other supplies. Westin provides desktop computers and steel desks for each
of its office employees. Most of the floors of the building are partitioned into
cubicles. The floors are tiled, and each wall is mostly windows, with vinyl blinds.
, 4
To which one of the following hazards is Juan likely t - correct-answer - The
office's electrical and wiring systems
For commercial property insurance, the fire loss exposure for habitational
occupancies can be significant. Therefore, a property underwriter should be
aware of the leading cause of habitational occupancy fires, which is - correct-
answer - Cooking equipment
The use of oxygen and gases, as in a hospital, is a serious hazard. All of the
following statements regarding this hazard are truce, EXCEPT: - correct-answer -
Gasses, anesthetics, oxygen, and acetylene must be properly stored in approved
non-metal cylinders
