CPCU 552, CP&L FINAL EXAM Latest Update
2025-2026 Exam 140 Questions with 100%
Verified Correct Answers Guaranteed A+
- CORRECT ANSWER:
A claim representative is handling a claim for an auto dealership insured under the Auto
Dealers Coverage Form (ADCF). Several new autos and autos left for service by
customers were damaged when a fire started in the service building. The representative
has verified that the loss occurred to the named insured at an insured location during
the policy period; that Sections I and II of the ADCF apply to the losses and that the
autos qualify as covered autos. The next step that the representative should take in
determining whether coverage applies is to - CORRECT ANSWER: Review the policy
conditions to determine whether they preclude coverage at the time of loss.
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 - CORRECT ANSWER: The employee is an insured while
operating an auto rented in the employee's name with the named insured's permission.
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 - CORRECT ANSWER: One of the garagekeepers direct
coverage options.
A major corporation is deciding to diversify their business and has acquired a LLC to
help them do this. When corporation acquired the LLC they wanted to see if the LLC
became an insured under their current policy. In an unendorsed CGL policy does the
LLC become an Insured?
,A. The LLC is insured under the corporation's policy for 90 days after acquisition
because it is new to the company
B. Since the LLC is joining a corporation The Newly Acquired Organizations provision
extends to the LLC
C. The LLC is not able to be an Insured since it is not named in the policy.
D. The LLC is an insured until the end of the policy period after acquisition since it is
diversifying the company - CORRECT ANSWER: Answer: C
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? - CORRECT ANSWER: The injury is covered by LHWCA
because the guard is not covered under a state's workers compensation law.
A. A underaged UGA student goes downtown with his parents and is drinking a couple
of shots. He asks for another shot from the server. The server, knowing that his parents
might leave a good tip, decides to serve the student one more shot. As the family gives
the server a tip and drags their child outside, they are picked up by a completely sober
Uber driver, who then gets into a car accident downtown injuring another driver.
B. An old grandpa named Billy Joe is trying to relive his "glory days" on Homecoming
Weekend and decides to go downtown on Friday before the game the next day. He
meets up with his Pi Kappa Alpha brothers for their 50th reunion and is noticeably
intoxicated. Trying to show his fraternity brothers that he is still the champion, he asks
the bartender for one more margarita. He chugs the margarita down, and his fraternity
brothers carry him on his shoulders outside to his car that is parked. As he - CORRECT
ANSWER: B is the correct answer because Billy Joe is noticeably intoxicated and he is
the one driving when he runs into the Kia Soul.
A. Civil law is a classification of law that applies to legal matters governed by criminal
law and that protects rights and provides remedies for breaches of duties owed to
others.
B. Liability insurance responds to liability imposed by both civil law and criminal law.
,C. Oftentimes, a single act cannot constitute both a civil wrong and a crime.
D. The criminal law is punishable by imprisonment and fines, while the civil law is
punishable by money and injunctions. - CORRECT ANSWER: Explanations:
A. Civil law is a classification of law that applies to legal matters NOT governed by
criminal law and that protects rights and provides remedies for breaches of duties owed
to others.
ABC Corporation is insured under a standard unendorsed workers compensation policy
for only the state of Florida. Three months before the present policy began, ABC
opened a sales office in Georgia due to business volume growing in that state. ABC
failed to report the new location and new state at policy inception. The manager of the
Georgia office fell and was injured and missed work for three weeks after the inception
of the ABC policy. The manager made claim for Georgia benefits. Which one of the
following is true regarding ABC's coverage for Georgia benefits? - CORRECT
ANSWER: Coverage for this claim would not be covered by ABC's insurance.
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? - CORRECT ANSWER: Liquidated damages
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 - CORRECT ANSWER: 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 binds both Acme and Jill.
One appraiser and the umpire ruled for Jill and against Acme. Which one of the
, following statements is true regarding this scenario? - CORRECT ANSWER: Jill and
Acme will share the cost of the umpire.
Adam is an executive at Blithe Manufacturing (Blithe). He drives a car that is owned by
Blithe and insured under the company's Business Auto Coverage Form (BACF). Adam
is permitted to drive the vehicle for both business and personal use. One Sunday
morning, Adam is driving the car on a highway when he is struck by another vehicle and
pushed into the guardrail. The car that struck Adam did not stop, but several other
people who witnessed the accident did stop. They all confirmed that Adam was struck
by another reckless driver who never stopped. Adam was seriously injured and car was
totaled. Which one of the following endorsements to Blithe's BACF would best cover
Adam's significant medical expenses and the damage to the vehicle? - CORRECT
ANSWER: The Uninsured Motorists Coverage endorsement (UM) would best cover
Adam's medical expenses and the damage to the vehicle, because it was an owned
vehicle involved in a hit and run accident. Adam's injuries are significant and because
the accident occurred on a Sunday it would not be covered by workers compensation.
Aggregate Limits
Products Liability example - CORRECT ANSWER: 6.6
Aircraft have a significant exposure to catastrophe losses. Of the many reasons for the
catastrophic loss potential of aircraft, the most significant is - CORRECT ANSWER: The
physical properties of aircraft.
Alejandro was recently appointed to the Board of a medium-sized clothing
manufacturing company. As he grew more acquainted with his company and after doing
some digging, Alejandro was struck by a few red-flags concerning malpractice and
exploitation potentially having been committed by upper-level management as well as
certain board members. Alejandro is disgusted and hopes to soon discontinue his
relationship with the firm. Meanwhile, however, Alejandro wants to protect himself
legally in the event that employees or others sue the board members. Which coverage
should Alejandro acquire?
A. Employment-Related Practices Liability Insurance
2025-2026 Exam 140 Questions with 100%
Verified Correct Answers Guaranteed A+
- CORRECT ANSWER:
A claim representative is handling a claim for an auto dealership insured under the Auto
Dealers Coverage Form (ADCF). Several new autos and autos left for service by
customers were damaged when a fire started in the service building. The representative
has verified that the loss occurred to the named insured at an insured location during
the policy period; that Sections I and II of the ADCF apply to the losses and that the
autos qualify as covered autos. The next step that the representative should take in
determining whether coverage applies is to - CORRECT ANSWER: Review the policy
conditions to determine whether they preclude coverage at the time of loss.
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 - CORRECT ANSWER: The employee is an insured while
operating an auto rented in the employee's name with the named insured's permission.
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 - CORRECT ANSWER: One of the garagekeepers direct
coverage options.
A major corporation is deciding to diversify their business and has acquired a LLC to
help them do this. When corporation acquired the LLC they wanted to see if the LLC
became an insured under their current policy. In an unendorsed CGL policy does the
LLC become an Insured?
,A. The LLC is insured under the corporation's policy for 90 days after acquisition
because it is new to the company
B. Since the LLC is joining a corporation The Newly Acquired Organizations provision
extends to the LLC
C. The LLC is not able to be an Insured since it is not named in the policy.
D. The LLC is an insured until the end of the policy period after acquisition since it is
diversifying the company - CORRECT ANSWER: Answer: C
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? - CORRECT ANSWER: The injury is covered by LHWCA
because the guard is not covered under a state's workers compensation law.
A. A underaged UGA student goes downtown with his parents and is drinking a couple
of shots. He asks for another shot from the server. The server, knowing that his parents
might leave a good tip, decides to serve the student one more shot. As the family gives
the server a tip and drags their child outside, they are picked up by a completely sober
Uber driver, who then gets into a car accident downtown injuring another driver.
B. An old grandpa named Billy Joe is trying to relive his "glory days" on Homecoming
Weekend and decides to go downtown on Friday before the game the next day. He
meets up with his Pi Kappa Alpha brothers for their 50th reunion and is noticeably
intoxicated. Trying to show his fraternity brothers that he is still the champion, he asks
the bartender for one more margarita. He chugs the margarita down, and his fraternity
brothers carry him on his shoulders outside to his car that is parked. As he - CORRECT
ANSWER: B is the correct answer because Billy Joe is noticeably intoxicated and he is
the one driving when he runs into the Kia Soul.
A. Civil law is a classification of law that applies to legal matters governed by criminal
law and that protects rights and provides remedies for breaches of duties owed to
others.
B. Liability insurance responds to liability imposed by both civil law and criminal law.
,C. Oftentimes, a single act cannot constitute both a civil wrong and a crime.
D. The criminal law is punishable by imprisonment and fines, while the civil law is
punishable by money and injunctions. - CORRECT ANSWER: Explanations:
A. Civil law is a classification of law that applies to legal matters NOT governed by
criminal law and that protects rights and provides remedies for breaches of duties owed
to others.
ABC Corporation is insured under a standard unendorsed workers compensation policy
for only the state of Florida. Three months before the present policy began, ABC
opened a sales office in Georgia due to business volume growing in that state. ABC
failed to report the new location and new state at policy inception. The manager of the
Georgia office fell and was injured and missed work for three weeks after the inception
of the ABC policy. The manager made claim for Georgia benefits. Which one of the
following is true regarding ABC's coverage for Georgia benefits? - CORRECT
ANSWER: Coverage for this claim would not be covered by ABC's insurance.
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? - CORRECT ANSWER: Liquidated damages
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 - CORRECT ANSWER: 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 binds both Acme and Jill.
One appraiser and the umpire ruled for Jill and against Acme. Which one of the
, following statements is true regarding this scenario? - CORRECT ANSWER: Jill and
Acme will share the cost of the umpire.
Adam is an executive at Blithe Manufacturing (Blithe). He drives a car that is owned by
Blithe and insured under the company's Business Auto Coverage Form (BACF). Adam
is permitted to drive the vehicle for both business and personal use. One Sunday
morning, Adam is driving the car on a highway when he is struck by another vehicle and
pushed into the guardrail. The car that struck Adam did not stop, but several other
people who witnessed the accident did stop. They all confirmed that Adam was struck
by another reckless driver who never stopped. Adam was seriously injured and car was
totaled. Which one of the following endorsements to Blithe's BACF would best cover
Adam's significant medical expenses and the damage to the vehicle? - CORRECT
ANSWER: The Uninsured Motorists Coverage endorsement (UM) would best cover
Adam's medical expenses and the damage to the vehicle, because it was an owned
vehicle involved in a hit and run accident. Adam's injuries are significant and because
the accident occurred on a Sunday it would not be covered by workers compensation.
Aggregate Limits
Products Liability example - CORRECT ANSWER: 6.6
Aircraft have a significant exposure to catastrophe losses. Of the many reasons for the
catastrophic loss potential of aircraft, the most significant is - CORRECT ANSWER: The
physical properties of aircraft.
Alejandro was recently appointed to the Board of a medium-sized clothing
manufacturing company. As he grew more acquainted with his company and after doing
some digging, Alejandro was struck by a few red-flags concerning malpractice and
exploitation potentially having been committed by upper-level management as well as
certain board members. Alejandro is disgusted and hopes to soon discontinue his
relationship with the firm. Meanwhile, however, Alejandro wants to protect himself
legally in the event that employees or others sue the board members. Which coverage
should Alejandro acquire?
A. Employment-Related Practices Liability Insurance
