AINS 23
Agreed Value optional coverage is often elected by risk averse firms in order to - Answer-Alleviate the
risk of not complying with the Coinsurance condition.
Which one of the following statements is correct with respect to the Building and Personal Property
(BPP) Coverage Form? - Answer-The BPP lists several types of classes of property that do not qualify as
covered property.
Which one of the following is correct with respect to the Increased Cost of Construction additional
coverage of the Building and Personal Property Coverage Form (BPP)? - Answer-It provides a small
amount of insurance to cover the increased cost to comply with ordinances or laws regulating the
repair, rebuilding, or replacement of covered buildings.
Which one of the following is one of the covered causes of loss in the commercial property policy Causes
of Loss—Basic form? - Answer-Vandalism
Which one of the following is correct with respect to the Inspections and Surveys common condition of
the Insurance Services Office (ISO) Commercial Package Policy? - Answer-The insurer does not make
safety inspections, and does not guarantee that conditions are safe or healthful.
Although buildings can be classified in many ways, the system used to classify buildings for purposes of
rating commercial property insurance is based on their - Answer-Ability to resist fire.
,Which one of the following is true about the Business Income Agreed Value coverage option in a
business income form? - Answer-The coinsurance condition is suspended as long as the insured carries
the amount of insurance that is agreed upon with the insurer.
Rachel's salon is insured under a commercial package policy that includes the Business Income (and
Extra Expense) Coverage Form. Rachel's salon sustained an actual loss of business income at the
described premises as a result of a fire damage and access to Rachel's salon was prohibited by civil
authority. Rachel decided to rent a temporary location and rent substitute equipment while her shop
was being repaired. However, while at the temporary location, Rachel's regular customers attended
other salons and Rachel' income was below normal levels. Rachel returned to her salon once it was
repaired and her business income returned to normal. Which one of the following insuring agreements
would best apply to Rachel's claim under the Business Income (and Extra Expense) Coverage Form? -
Answer-Business Income and Extra Expense insuring agreements
Martin's Dry Cleaners (MDC) is insured under a Business Income (and Extra Expense) Coverage Form
with a $1 million Business Income limit of insurance for the dry cleaners location, subject to option (2)
Business Income Other Than "Rental Value". None of the optional coverages of the Business Income
(and Extra Expense) are in effect and no endorsements apply to MDC's Business Income (and Extra
Expense) Coverage Form. The one year policy period shown in the declarations began on July 1, 20X1.
On October 1, 20X1, access was denied to MDC for five weeks by civil authorities because of fire damage
to a shop right next door to MDC. The resulting loss of business income that MDC sustained was
$70,000, including a $5,000 loss for the first 72 hours following the time of action by civil authority. After
the first 72 hours, MDC sustained $11,000 business income loss in week 1, $12,000 business income loss
in week 2, $13,000 bu - Answer-$50,000 of Martins dry cleaners business income would be covered
under the Business Income (and Extra Expense) Coverage Form. Coverage applies up to a maximum of
four consecutive weeks after the time of the action.
Which one of these is an example of a loss that would be covered under the Commercial Crime
Coverage Form? - Answer-Compensatory damages arising directly from a loss covered by the policy
would be covered under the Commercial Crime Coverage Form.
ABC, Inc., is a large, national retailer that sells a variety of consumer goods. ABC carries a Commercial
Package Policy that includes Insurance Service Office's Commercial Crime Coverage Form (Loss
Sustained) with the following insuring agreements: Employee Theft; Forgery or Alteration; Inside the
Premises—Theft of Money and Securities; and Inside the Premises—Robbery or Safe Burglary of Other
, Property. The limit of insurance for each one of these insuring agreements is $100,000 and the
deductible per occurrence for each one of these insuring agreements is $1,000. The policy year is 20X1.
During 20X1, two employees, Beth and Jim, in collusion, stole money and merchandise from ABC. Beth
and Jim stole money on May 1, 20X1 and August 13, 20X1. They also stole merchandise on January 15,
20X1 and September 29, 20X1. The amount of the money loss totaled $15,000 while the amount of the
merchandise loss totaled $110,000. - Answer-Under the Commercial Crime Form, one of the ways in
which occurrence is defined is as "a series of acts whether or not related, committed by an "employee"
acting alone or in collusion during the policy period . . . " Consequently, all the separate acts of
employee theft that Beth and Jim committed (both money and merchandise) qualify as only one
occurrence when applying the limit of insurance applicable to employee theft loss.
ABC, Inc., is a large, national retailer that sells a variety of consumer goods. ABC carries a Commercial
Package Policy that includes Insurance Services Office's Commercial Crime Coverage Form (Loss
Sustained) with the following insuring agreements: Employee Theft; Forgery or Alteration; Inside the
Premises—Theft of Money and Securities; and Inside the Premises—Robbery or Safe Burglary of Other
Property. The limit of insurance for each one of these insuring agreements is $100,000 and the
deductible per occurrence for each one of these insuring agreements is $1,000. The policy year is 20X1.
On June 5, 20X1, a thief entered ABC through an open window while the store was closed and stole
$2,500 worth of electronic merchandise. The thief also broke into a safe causing $1,500 damage to the
safe and stole $3,000 in cash from the safe.
Under which insuring agreement would the theft of electronic merchandise be covered? - Answer-The
$2,500 theft of electronic merchandise is not covered under the Inside the Premises—Theft of Money
and Securities insuring agreement, because the stolen property does not qualify as money or securities.
This theft is also not covered under the Inside the Premises—Robbery and Safe Burglary of Other
Property, because the cause of loss does not meet the policy definition of robbery or burglary.
Which one of the following can be added to a builders risk policy to cover various incidental expenses
that might result from a physical loss to a building project, such as additional interest, advertising
expenses, or real estate taxes? - Answer-Soft costs coverage covers these expenses.
Agreed Value optional coverage is often elected by risk averse firms in order to - Answer-Alleviate the
risk of not complying with the Coinsurance condition.
Which one of the following statements is correct with respect to the Building and Personal Property
(BPP) Coverage Form? - Answer-The BPP lists several types of classes of property that do not qualify as
covered property.
Which one of the following is correct with respect to the Increased Cost of Construction additional
coverage of the Building and Personal Property Coverage Form (BPP)? - Answer-It provides a small
amount of insurance to cover the increased cost to comply with ordinances or laws regulating the
repair, rebuilding, or replacement of covered buildings.
Which one of the following is one of the covered causes of loss in the commercial property policy Causes
of Loss—Basic form? - Answer-Vandalism
Which one of the following is correct with respect to the Inspections and Surveys common condition of
the Insurance Services Office (ISO) Commercial Package Policy? - Answer-The insurer does not make
safety inspections, and does not guarantee that conditions are safe or healthful.
Although buildings can be classified in many ways, the system used to classify buildings for purposes of
rating commercial property insurance is based on their - Answer-Ability to resist fire.
,Which one of the following is true about the Business Income Agreed Value coverage option in a
business income form? - Answer-The coinsurance condition is suspended as long as the insured carries
the amount of insurance that is agreed upon with the insurer.
Rachel's salon is insured under a commercial package policy that includes the Business Income (and
Extra Expense) Coverage Form. Rachel's salon sustained an actual loss of business income at the
described premises as a result of a fire damage and access to Rachel's salon was prohibited by civil
authority. Rachel decided to rent a temporary location and rent substitute equipment while her shop
was being repaired. However, while at the temporary location, Rachel's regular customers attended
other salons and Rachel' income was below normal levels. Rachel returned to her salon once it was
repaired and her business income returned to normal. Which one of the following insuring agreements
would best apply to Rachel's claim under the Business Income (and Extra Expense) Coverage Form? -
Answer-Business Income and Extra Expense insuring agreements
Martin's Dry Cleaners (MDC) is insured under a Business Income (and Extra Expense) Coverage Form
with a $1 million Business Income limit of insurance for the dry cleaners location, subject to option (2)
Business Income Other Than "Rental Value". None of the optional coverages of the Business Income
(and Extra Expense) are in effect and no endorsements apply to MDC's Business Income (and Extra
Expense) Coverage Form. The one year policy period shown in the declarations began on July 1, 20X1.
On October 1, 20X1, access was denied to MDC for five weeks by civil authorities because of fire damage
to a shop right next door to MDC. The resulting loss of business income that MDC sustained was
$70,000, including a $5,000 loss for the first 72 hours following the time of action by civil authority. After
the first 72 hours, MDC sustained $11,000 business income loss in week 1, $12,000 business income loss
in week 2, $13,000 bu - Answer-$50,000 of Martins dry cleaners business income would be covered
under the Business Income (and Extra Expense) Coverage Form. Coverage applies up to a maximum of
four consecutive weeks after the time of the action.
Which one of these is an example of a loss that would be covered under the Commercial Crime
Coverage Form? - Answer-Compensatory damages arising directly from a loss covered by the policy
would be covered under the Commercial Crime Coverage Form.
ABC, Inc., is a large, national retailer that sells a variety of consumer goods. ABC carries a Commercial
Package Policy that includes Insurance Service Office's Commercial Crime Coverage Form (Loss
Sustained) with the following insuring agreements: Employee Theft; Forgery or Alteration; Inside the
Premises—Theft of Money and Securities; and Inside the Premises—Robbery or Safe Burglary of Other
, Property. The limit of insurance for each one of these insuring agreements is $100,000 and the
deductible per occurrence for each one of these insuring agreements is $1,000. The policy year is 20X1.
During 20X1, two employees, Beth and Jim, in collusion, stole money and merchandise from ABC. Beth
and Jim stole money on May 1, 20X1 and August 13, 20X1. They also stole merchandise on January 15,
20X1 and September 29, 20X1. The amount of the money loss totaled $15,000 while the amount of the
merchandise loss totaled $110,000. - Answer-Under the Commercial Crime Form, one of the ways in
which occurrence is defined is as "a series of acts whether or not related, committed by an "employee"
acting alone or in collusion during the policy period . . . " Consequently, all the separate acts of
employee theft that Beth and Jim committed (both money and merchandise) qualify as only one
occurrence when applying the limit of insurance applicable to employee theft loss.
ABC, Inc., is a large, national retailer that sells a variety of consumer goods. ABC carries a Commercial
Package Policy that includes Insurance Services Office's Commercial Crime Coverage Form (Loss
Sustained) with the following insuring agreements: Employee Theft; Forgery or Alteration; Inside the
Premises—Theft of Money and Securities; and Inside the Premises—Robbery or Safe Burglary of Other
Property. The limit of insurance for each one of these insuring agreements is $100,000 and the
deductible per occurrence for each one of these insuring agreements is $1,000. The policy year is 20X1.
On June 5, 20X1, a thief entered ABC through an open window while the store was closed and stole
$2,500 worth of electronic merchandise. The thief also broke into a safe causing $1,500 damage to the
safe and stole $3,000 in cash from the safe.
Under which insuring agreement would the theft of electronic merchandise be covered? - Answer-The
$2,500 theft of electronic merchandise is not covered under the Inside the Premises—Theft of Money
and Securities insuring agreement, because the stolen property does not qualify as money or securities.
This theft is also not covered under the Inside the Premises—Robbery and Safe Burglary of Other
Property, because the cause of loss does not meet the policy definition of robbery or burglary.
Which one of the following can be added to a builders risk policy to cover various incidental expenses
that might result from a physical loss to a building project, such as additional interest, advertising
expenses, or real estate taxes? - Answer-Soft costs coverage covers these expenses.
