CPCU 552, CP&L FINAL EXAM Quizlet 2024 With 100%
Verified Accurate Answers
The supplemental payments section of the Commercial General Liability coverage form is most correctly
defined as
The supplemental payments section of the Commercial General Liability coverage form is most
correctly defined as specified costs the insurer will pay as part of any claim the insurer investigates or
defends under Coverage A or B
Excess liability policies
Do not provide coverage for exposures not covered in primary policies.
Part Two of the Workers Compensation and Employers Liability Policy (WC&EL) is the employers liability
portion of the policy. Under this portion of the policy the insurer would pay for
Common law liability for occupational injury to employees,
Some state no-fault laws preserve the tort system but require insurers to offer personal injury protection
(PIP) insurance that provides specified first-party benefits. This is referred to as
An add-on no-fault law.
Loss reduction techniques are intended to reduce the
Severity of losses.
Tom and Jerry own a General Motors vehicle dealership, and they have purchased an Auto Dealers
Coverage Form (ADCF) with the False Pretense Coverage endorsement. In January, Chuck (one of their
salespeople) makes a deal with Max for a new car. Chuck gives Max $30,000 for his two trade-in vehicles
and Max drives away with a new car worth $40,000. Later that week, the dealership business office
discovers that Max did not have proper title to either of the trade-in vehicles, and now the dealership
cannot sell them.How much, if anything, will Tom and Jerry's ADCF pay towards the loss suffered by the
taking of these two cars?
Tom and Jerry's ADCF will pay $25,000 for this loss - the maximum amount payable under the False
Pretense endorsement for losses caused by any one person in a year.
Larry is an employee of XYZ Company and works solely in State A which is the only state listed on XYZ's
workers compensation policy. XYZ obtained a small job in neighboring State B and while Larry is working
in State B he injured himself. Which one of the following would be the response from XYZ's workers
compensation insurer to Larry's claim for benefits?
It would provide State A workers compensation benefits to Larry
QRS, LLC has been a small town's largest employer for a long time. When the owner of QRS, LLC died, the
company was forced to lay off 25 percent of its workforce, because the proper life insurance was not in
force for the owner. These mass lay-offs resulted in bad publicity in the town paper and much negativity
,directed at the company in various town meetings. The employment practices liability (EPL) policy in
force for QRS, LLC provided money to cover QRS's costs to retain a PR firm.Such costs are called
Reputation management costs.
Mitchell is a highway contractor whose company is covered with a workers compensation policy and an
unendorsed Business Auto Coverage Form (BACF). Which one of the following losses would be covered
by his business auto policy?
An employee runs over a subcontractor's equipment with an owned auto.
Which one of the following statements is true about an excess policy?
It provides coverage no broader than is provided by underlying polices.
Although professional liability policies for financial and legal professionals contain many of the same
provisions of those for other professionals, there are important differences. Which one of the following
would be covered under the professional liability policies for financial and legal professionals that
contain the broadest definition of professional services?
Claims arising from any professional service performed for others for a fee
An excess liability insurance policy that covers a claim in excess of the underlying limits only if the loss is
covered by the underlying policy is called
A following-form excess policy
A dealership keeps a customer's auto overnight. The auto, while on premises, is damaged by hail. The
dealership has garagekeepers coverage on a legal liability basis on an Auto Dealers Coverage Form. The
customer has a Liability-only policy. The customer asks the dealership to pay for the hail damage, but the
claim is denied by the insurer. The only way the dealership's policy would have paid the claim is if the
dealership had purchased
One of the garagekeepers direct coverage options.
The Broad Form Products Coverage endorsement can be used
To delete the Auto Dealers Coverage Form (ADCF) exclusion for defective products.
Cox Corporation recently had a covered personal liability judgment against it for $5 million. It has an
underlying commercial general liability policy with a $1 million limit, which is the amount required by the
umbrella insurer. The umbrella policy has a $10 million limit with a $10,000 SIR. How much is the
ultimate net loss to the umbrella insurer?
The ultimate net loss to the umbrella insurer is $4,000,000.
The Supplementary Payments section of the Commercial General Liability (CGL) Coverage Form contains
provisions concerning the insurer's duty to defend indemnitees of the insured, but only if specific
conditions are met. Which one of the following is one of these conditions?
The indemnitee and the insured must ask the insurer to conduct and control the defense.
,Which one of the following statements about the Liquor Liability Coverage Form is true?
It contains an each common cause limit as well as an aggregate limit.
Under the Business Auto Coverage Form (BACF), collision is generally understood to mean
A striking together with violent impact.
A common endorsement to the Business Auto Coverage Form (BACF) is the Employee Hired Auto
endorsement. This endorsement states that an employee of the named insured is an insured
The employee is an insured while operating an auto rented in the employee's name with the named
insured's permission.
Railroad owners commonly require contractors to purchase a Railroad Protective Liability Coverage
Form. Which one of the following statements about this form is true?
One of the coverage limits applies to physical damage to property owned by or leased or entrusted to
the railroad
Which one of the following statements about the general aggregate limit under a Commercial General
Liability (CGL) Coverage Form is true?
It is reduced by an claims paid for medical payments under Coverage C.
Tom often runs errands for his boss at XYZ Company, using the boss' car. On one of these errands, Tom is
involved in a serious auto accident. He spends a couple of weeks in the hospital; misses four weeks of
work; and must undergo physical therapy. Does XYZ's Workers Compensation and Employers Liability
Insurance (WC&EL) Policy cover Tom's injuries, lost income, and rehabilitation expenses?
Yes, the workers compensation policy would pay all of Tom's expenses, because his injuries arose out
of his employment at XYZ Company.
Aircraft have a significant exposure to catastrophe losses. Of the many reasons for the catastrophic loss
potential of aircraft, the most significant is
The physical properties of aircraft.
A security guard is employed at a pier where shipping containers are loaded and unloaded from barges.
There is also a small marina for pleasure craft at the pier. The security guard trips over equipment left on
a dock alongside a pleasure craft and is injured. The pier only has insurance coverage that provides
benefits under the Longshore and Harbor Workers Compensation Act (LHWCA). Is the guard's injury
covered under LHWCA?
The injury is covered by LHWCA because the guard is not covered under a state's workers
compensation law.
ABC Plumbing entered into a contract with Bill to install a commercial grade septic system on his
property. The installation of the septic septic was time sensitive because the rest of Bill's construction
project could not go forward until the septic system was in place. The contract required that the work be
done within 30 days of contract signing, or ABC would have to pay a penalty of $1,000 per day. Which
, one of the following categories of damages does the $1,000 per day penalty specified in the contract fall
into?
Liquidated damages
Many states have funds from which employers may purchase workers compensation insurance. Such
funds may be either
Competitive or monopolistic
Section II—Who Is an Insured identifies the persons and organizations that qualify as insureds under the
Commercial General Liability (CGL) Coverage Form. Which one of the following statements regarding
who is considered an insured is most accurate?
When a CGL policy covers one or more individuals as named insureds, any person or organization
having proper temporary custody of the named insured's property following the named insured's
death is an insured.
What is the name given to a claim by an employee who says that he or she was fired because of the filing
of a workers compensation claim?
Retaliation claim
Javier's business auto policy contains a personal injury protection (PIP) endorsement. He is involved in an
auto accident in the covered auto, resulting in $30,000 in property damage, $5,000 in third-party bodily
injury, and $10,000 in personal medical expenses. If Javier's business auto policy has a general aggregate
limit of $100,000 and a PIP limit of $15,000 and he is at fault for the accident, how much will his insurer
pay under the PIP coverage
PIP provides first-party benefits for medical expenses, loss of income, loss of services, and funeral
expenses resulting from bodily injury to occupants of a covered auto because of an auto accident. It
pays regardless of which party was at fault in the accident. Therefore, Javier's insurer will pay him
$10,000 in medical expenses from the PIP coverage. The other damages will be payable under
different coverages available on his policy.
Which one of the following statements about coverage triggers in cyber risk insurance policies is most
accurate?
Both claims-made coverage triggers and occurrence coverage triggers are available, but occurrence
coverage triggers are more appropriate for some insuring agreements than for others
According to the Terrorism Risk Insurance Act (TRIA), one of the two required conditions that an insurer
must meet at the time of an initial offer, purchase, and renewal of insurance is the disclosure of the
premium for terrorism coverage. What is the other condition
A make-available provision
Acme Insurance cannot agree with insured Jill Jenkins on the amount of a covered physical damage loss
under Jill's Business Auto Coverage Form. Jill requested an appraisal. Acme and Jill each appoint an
appraiser, and the appraisers appoint an umpire. An award in writing signed by any two of the three
Verified Accurate Answers
The supplemental payments section of the Commercial General Liability coverage form is most correctly
defined as
The supplemental payments section of the Commercial General Liability coverage form is most
correctly defined as specified costs the insurer will pay as part of any claim the insurer investigates or
defends under Coverage A or B
Excess liability policies
Do not provide coverage for exposures not covered in primary policies.
Part Two of the Workers Compensation and Employers Liability Policy (WC&EL) is the employers liability
portion of the policy. Under this portion of the policy the insurer would pay for
Common law liability for occupational injury to employees,
Some state no-fault laws preserve the tort system but require insurers to offer personal injury protection
(PIP) insurance that provides specified first-party benefits. This is referred to as
An add-on no-fault law.
Loss reduction techniques are intended to reduce the
Severity of losses.
Tom and Jerry own a General Motors vehicle dealership, and they have purchased an Auto Dealers
Coverage Form (ADCF) with the False Pretense Coverage endorsement. In January, Chuck (one of their
salespeople) makes a deal with Max for a new car. Chuck gives Max $30,000 for his two trade-in vehicles
and Max drives away with a new car worth $40,000. Later that week, the dealership business office
discovers that Max did not have proper title to either of the trade-in vehicles, and now the dealership
cannot sell them.How much, if anything, will Tom and Jerry's ADCF pay towards the loss suffered by the
taking of these two cars?
Tom and Jerry's ADCF will pay $25,000 for this loss - the maximum amount payable under the False
Pretense endorsement for losses caused by any one person in a year.
Larry is an employee of XYZ Company and works solely in State A which is the only state listed on XYZ's
workers compensation policy. XYZ obtained a small job in neighboring State B and while Larry is working
in State B he injured himself. Which one of the following would be the response from XYZ's workers
compensation insurer to Larry's claim for benefits?
It would provide State A workers compensation benefits to Larry
QRS, LLC has been a small town's largest employer for a long time. When the owner of QRS, LLC died, the
company was forced to lay off 25 percent of its workforce, because the proper life insurance was not in
force for the owner. These mass lay-offs resulted in bad publicity in the town paper and much negativity
,directed at the company in various town meetings. The employment practices liability (EPL) policy in
force for QRS, LLC provided money to cover QRS's costs to retain a PR firm.Such costs are called
Reputation management costs.
Mitchell is a highway contractor whose company is covered with a workers compensation policy and an
unendorsed Business Auto Coverage Form (BACF). Which one of the following losses would be covered
by his business auto policy?
An employee runs over a subcontractor's equipment with an owned auto.
Which one of the following statements is true about an excess policy?
It provides coverage no broader than is provided by underlying polices.
Although professional liability policies for financial and legal professionals contain many of the same
provisions of those for other professionals, there are important differences. Which one of the following
would be covered under the professional liability policies for financial and legal professionals that
contain the broadest definition of professional services?
Claims arising from any professional service performed for others for a fee
An excess liability insurance policy that covers a claim in excess of the underlying limits only if the loss is
covered by the underlying policy is called
A following-form excess policy
A dealership keeps a customer's auto overnight. The auto, while on premises, is damaged by hail. The
dealership has garagekeepers coverage on a legal liability basis on an Auto Dealers Coverage Form. The
customer has a Liability-only policy. The customer asks the dealership to pay for the hail damage, but the
claim is denied by the insurer. The only way the dealership's policy would have paid the claim is if the
dealership had purchased
One of the garagekeepers direct coverage options.
The Broad Form Products Coverage endorsement can be used
To delete the Auto Dealers Coverage Form (ADCF) exclusion for defective products.
Cox Corporation recently had a covered personal liability judgment against it for $5 million. It has an
underlying commercial general liability policy with a $1 million limit, which is the amount required by the
umbrella insurer. The umbrella policy has a $10 million limit with a $10,000 SIR. How much is the
ultimate net loss to the umbrella insurer?
The ultimate net loss to the umbrella insurer is $4,000,000.
The Supplementary Payments section of the Commercial General Liability (CGL) Coverage Form contains
provisions concerning the insurer's duty to defend indemnitees of the insured, but only if specific
conditions are met. Which one of the following is one of these conditions?
The indemnitee and the insured must ask the insurer to conduct and control the defense.
,Which one of the following statements about the Liquor Liability Coverage Form is true?
It contains an each common cause limit as well as an aggregate limit.
Under the Business Auto Coverage Form (BACF), collision is generally understood to mean
A striking together with violent impact.
A common endorsement to the Business Auto Coverage Form (BACF) is the Employee Hired Auto
endorsement. This endorsement states that an employee of the named insured is an insured
The employee is an insured while operating an auto rented in the employee's name with the named
insured's permission.
Railroad owners commonly require contractors to purchase a Railroad Protective Liability Coverage
Form. Which one of the following statements about this form is true?
One of the coverage limits applies to physical damage to property owned by or leased or entrusted to
the railroad
Which one of the following statements about the general aggregate limit under a Commercial General
Liability (CGL) Coverage Form is true?
It is reduced by an claims paid for medical payments under Coverage C.
Tom often runs errands for his boss at XYZ Company, using the boss' car. On one of these errands, Tom is
involved in a serious auto accident. He spends a couple of weeks in the hospital; misses four weeks of
work; and must undergo physical therapy. Does XYZ's Workers Compensation and Employers Liability
Insurance (WC&EL) Policy cover Tom's injuries, lost income, and rehabilitation expenses?
Yes, the workers compensation policy would pay all of Tom's expenses, because his injuries arose out
of his employment at XYZ Company.
Aircraft have a significant exposure to catastrophe losses. Of the many reasons for the catastrophic loss
potential of aircraft, the most significant is
The physical properties of aircraft.
A security guard is employed at a pier where shipping containers are loaded and unloaded from barges.
There is also a small marina for pleasure craft at the pier. The security guard trips over equipment left on
a dock alongside a pleasure craft and is injured. The pier only has insurance coverage that provides
benefits under the Longshore and Harbor Workers Compensation Act (LHWCA). Is the guard's injury
covered under LHWCA?
The injury is covered by LHWCA because the guard is not covered under a state's workers
compensation law.
ABC Plumbing entered into a contract with Bill to install a commercial grade septic system on his
property. The installation of the septic septic was time sensitive because the rest of Bill's construction
project could not go forward until the septic system was in place. The contract required that the work be
done within 30 days of contract signing, or ABC would have to pay a penalty of $1,000 per day. Which
, one of the following categories of damages does the $1,000 per day penalty specified in the contract fall
into?
Liquidated damages
Many states have funds from which employers may purchase workers compensation insurance. Such
funds may be either
Competitive or monopolistic
Section II—Who Is an Insured identifies the persons and organizations that qualify as insureds under the
Commercial General Liability (CGL) Coverage Form. Which one of the following statements regarding
who is considered an insured is most accurate?
When a CGL policy covers one or more individuals as named insureds, any person or organization
having proper temporary custody of the named insured's property following the named insured's
death is an insured.
What is the name given to a claim by an employee who says that he or she was fired because of the filing
of a workers compensation claim?
Retaliation claim
Javier's business auto policy contains a personal injury protection (PIP) endorsement. He is involved in an
auto accident in the covered auto, resulting in $30,000 in property damage, $5,000 in third-party bodily
injury, and $10,000 in personal medical expenses. If Javier's business auto policy has a general aggregate
limit of $100,000 and a PIP limit of $15,000 and he is at fault for the accident, how much will his insurer
pay under the PIP coverage
PIP provides first-party benefits for medical expenses, loss of income, loss of services, and funeral
expenses resulting from bodily injury to occupants of a covered auto because of an auto accident. It
pays regardless of which party was at fault in the accident. Therefore, Javier's insurer will pay him
$10,000 in medical expenses from the PIP coverage. The other damages will be payable under
different coverages available on his policy.
Which one of the following statements about coverage triggers in cyber risk insurance policies is most
accurate?
Both claims-made coverage triggers and occurrence coverage triggers are available, but occurrence
coverage triggers are more appropriate for some insuring agreements than for others
According to the Terrorism Risk Insurance Act (TRIA), one of the two required conditions that an insurer
must meet at the time of an initial offer, purchase, and renewal of insurance is the disclosure of the
premium for terrorism coverage. What is the other condition
A make-available provision
Acme Insurance cannot agree with insured Jill Jenkins on the amount of a covered physical damage loss
under Jill's Business Auto Coverage Form. Jill requested an appraisal. Acme and Jill each appoint an
appraiser, and the appraisers appoint an umpire. An award in writing signed by any two of the three
