USAA LICENSING Practice Exam Questions
and Answers Latest Versions 2025 Top Rated
A+
What is the sales limit for a BOP insurance policy? - ANSWER 3 million dollars
annually
What type of business coverage does the Auto industry have? - ANSWER
Garagekeepers coverage
The aggregate limit of the commercial general liability (CGL) policy is the most the
insurer will pay per? - ANSWER Policy period, regardless of the number of claims
filed
The insured, Lefty's Bar wants coverage for liability arising out of selling and
serving alcoholic beverages. Such coverage can be provided by purchasing? -
ANSWER A liquor liability coverage form
The business-owners policy provides? - ANSWER a prepackaged policy of
property and liability coverage for certain types of small businesses
What is theft? - ANSWER The unlawful taking of property.
What is burglary? - ANSWER breaking and entering
What is a custodian? - ANSWER A person having custody of insured property
inside the premises
What is a Surety? - ANSWER The party that guarantees fulfillment of the
obligor's promise.
,Suretyship is? - ANSWER Bonding contract guaranteeing a principles promise
The "penalty" on a bond is equal to what amount? - ANSWER The face amount
What is a performance bond used for? - ANSWER Used to guarantee that work
will be completed to specifications.
What is a payment bond used for? - ANSWER Used to guarantee that bills for
labor and materials will be paid by the contractor.
What is Hull coverage in Ocean Marine Insurance? - ANSWER coverage for the
ship itself and all onboard equipment; comprehensive and collision for the ship.
What is a peril? - ANSWER A cause of loss or hazard.
What protection does Barratry cover? - ANSWER Any illegal act by the master or
crew to defraud the ownders of the ship or cargo.
What does the Inchmaree Clause cover? - ANSWER applies to loss resulting from
negligence by the captain or crew as well as defects in the ship's hull or machinery
What is hangerkeepers liability coverage used for? - ANSWER Aviation coverage
Which surety bond guarantees that bills for labor and materials will be paid by the
contractor as they are due? - ANSWER Payment bond
The party to a surety bond who promises to do or not do a specific thing is? -
ANSWER The principle
,A surety bond protects the? - ANSWER The obligee
Who pays losses under bond contacts? - ANSWER Surety
Insurance - ANSWER Transfer of risk from one person or organization to an
insurance company
Indemnity - ANSWER The principle to restore the insured to the pre-loss
economic or financial condition.
Law of Large numbers - ANSWER Mathematical principle used by insurers to
predict losses to charge the appropriate premiums
Insurable Interest - ANSWER Proof that someone stands to lose financially if a
loss occurs; must exist at the time of the loss in property and casualty insurance
Binder - ANSWER Temporary insurance contract; commits the company to act as
if a policy has been issued
Peril - ANSWER Cause of loss
Direct Loss - ANSWER Immediate actual physical damage to tangible property
Indirect loss - ANSWER Inability to use property as a result of a direct loss
Risk - ANSWER Chance of loss; uncertainty of loss
What are the two types of risk? - ANSWER Speculative and Pure
Speculative Risk - ANSWER Involves the simultaneous chance of gain or loss: is
not insurable
Pure Risk - ANSWER a risk that presents the chance of loss but no opportunity
for gain (insurable)
What are two examples of speculative risk? - ANSWER Gambling
Investing
What is an example of your risk? - ANSWER Car accident
Physical hazards include - ANSWER Visible condition that increases the chance
, of loss
Morale Hazard - ANSWER Attitude of carelessness or indifference to loss
Insurer - ANSWER The insurance company (a.k.a. second party to the contract)
and Answers Latest Versions 2025 Top Rated
A+
What is the sales limit for a BOP insurance policy? - ANSWER 3 million dollars
annually
What type of business coverage does the Auto industry have? - ANSWER
Garagekeepers coverage
The aggregate limit of the commercial general liability (CGL) policy is the most the
insurer will pay per? - ANSWER Policy period, regardless of the number of claims
filed
The insured, Lefty's Bar wants coverage for liability arising out of selling and
serving alcoholic beverages. Such coverage can be provided by purchasing? -
ANSWER A liquor liability coverage form
The business-owners policy provides? - ANSWER a prepackaged policy of
property and liability coverage for certain types of small businesses
What is theft? - ANSWER The unlawful taking of property.
What is burglary? - ANSWER breaking and entering
What is a custodian? - ANSWER A person having custody of insured property
inside the premises
What is a Surety? - ANSWER The party that guarantees fulfillment of the
obligor's promise.
,Suretyship is? - ANSWER Bonding contract guaranteeing a principles promise
The "penalty" on a bond is equal to what amount? - ANSWER The face amount
What is a performance bond used for? - ANSWER Used to guarantee that work
will be completed to specifications.
What is a payment bond used for? - ANSWER Used to guarantee that bills for
labor and materials will be paid by the contractor.
What is Hull coverage in Ocean Marine Insurance? - ANSWER coverage for the
ship itself and all onboard equipment; comprehensive and collision for the ship.
What is a peril? - ANSWER A cause of loss or hazard.
What protection does Barratry cover? - ANSWER Any illegal act by the master or
crew to defraud the ownders of the ship or cargo.
What does the Inchmaree Clause cover? - ANSWER applies to loss resulting from
negligence by the captain or crew as well as defects in the ship's hull or machinery
What is hangerkeepers liability coverage used for? - ANSWER Aviation coverage
Which surety bond guarantees that bills for labor and materials will be paid by the
contractor as they are due? - ANSWER Payment bond
The party to a surety bond who promises to do or not do a specific thing is? -
ANSWER The principle
,A surety bond protects the? - ANSWER The obligee
Who pays losses under bond contacts? - ANSWER Surety
Insurance - ANSWER Transfer of risk from one person or organization to an
insurance company
Indemnity - ANSWER The principle to restore the insured to the pre-loss
economic or financial condition.
Law of Large numbers - ANSWER Mathematical principle used by insurers to
predict losses to charge the appropriate premiums
Insurable Interest - ANSWER Proof that someone stands to lose financially if a
loss occurs; must exist at the time of the loss in property and casualty insurance
Binder - ANSWER Temporary insurance contract; commits the company to act as
if a policy has been issued
Peril - ANSWER Cause of loss
Direct Loss - ANSWER Immediate actual physical damage to tangible property
Indirect loss - ANSWER Inability to use property as a result of a direct loss
Risk - ANSWER Chance of loss; uncertainty of loss
What are the two types of risk? - ANSWER Speculative and Pure
Speculative Risk - ANSWER Involves the simultaneous chance of gain or loss: is
not insurable
Pure Risk - ANSWER a risk that presents the chance of loss but no opportunity
for gain (insurable)
What are two examples of speculative risk? - ANSWER Gambling
Investing
What is an example of your risk? - ANSWER Car accident
Physical hazards include - ANSWER Visible condition that increases the chance
, of loss
Morale Hazard - ANSWER Attitude of carelessness or indifference to loss
Insurer - ANSWER The insurance company (a.k.a. second party to the contract)
