CIC Commercial Multiline Exam questions with correct answers

CIC Commercial Multiline Exam \| \| \| \|




questions with correct answers \| \| \|




Identify and describe the three primary purposes of excess liability/umbrella
\| \| \| \| \| \| \| \| \| \|




policies (LO1) - CORRECT ANSWERS ✔✔1. Provide additional limits that
\| \| \| \| \| \| \| \| \| \|




are excess over underlying limits of insurance
\| \| \| \| \| \|




2. Provide primary coverage when underlying poliy does not respond beacuse
\| \| \| \| \| \| \| \| \| \| \|




its aggregate limits of insruance are exhausted.
\| \| \| \| \| \| \|




3. Provide broader coverage than the exsiting underlying insurance
\| \| \| \| \| \| \| \|




excess liability coverage forms and commercial umbrella liability policy -
\| \| \| \| \| \| \| \| \| \|




CORRECT ANSWERS ✔✔1. follow forms \| \| \| \| \|




- hella short
\| \|




- "basically what underlying says but more money"
\| \| \| \| \| \| \|




- does NOT provide broader coverage
\| \| \| \| \| \|




2. excess liability
\| \| \|




- own insuring agreement and stuff
\| \| \| \| \| \|




- could be the same, narrower, broader
\| \| \| \| \| \|




3. commercial umbrella liability policy
\| \| \| \| \|




- own insuring agreement and stuff
\| \| \| \| \|




- broader coverage
\| \|

,Define "Self-Insured Retention" (SIR) and apply it (LO2) - CORRECT
\| \| \| \| \| \| \| \| \| \|




ANSWERS ✔✔SIR is the dolllar amount listed in the declarations paid by the
\| \| \| \| \| \| \| \| \| \| \| \| \|




named insured before the excess insurance becomes applicable
\| \| \| \| \| \| \| \|




Applies only when the excess policy provide broader insurance protection
\| \| \| \| \| \| \| \| \| \|




Does not apply when the umbrella drops down over exhausted limits or when
\| \| \| \| \| \| \| \| \| \| \| \| \|




exceee over underlying limits.
\| \| \| \|




SIR may be written per occurrence or policy period basis
\| \| \| \| \| \| \| \| \|




Explain the importance of concurrent dates and be able to provide solutions
\| \| \| \| \| \| \| \| \| \| \| \|




for non-concurrency situations (LO3) - CORRECT ANSWERS ✔✔Concurrent
\| \| \| \| \| \| \| \|




dates means the policy period of the excess/umbrella policy are the same as
\| \| \| \| \| \| \| \| \| \| \| \| \|




those of the underlying insurance policies
\| \| \| \| \| \|




The declarations of the excess liability has a schedule of underlying insurance
\| \| \| \| \| \| \| \| \| \| \| \|




that indicates the required limits that are to be in effect at its effective date.
\| \| \| \| \| \| \| \| \| \| \| \| \| \| \|




The underlying limits must be unimpaired at the effective debate of the excess
\| \| \| \| \| \| \| \| \| \| \| \| \|




liability



Describe the underlying insurance requirements of
\| \| \| \| \| \|




excess liability/commercial umbrella policies and apply the in a practical
\| \| \| \| \| \| \| \| \| \|




applications. (LO4)*** - CORRECT ANSWERS ✔✔Coverage \| \| \| \| \| \|




\| Most insures typically require CGL, Business Auto and Employer Liability
\| \| \| \| \| \| \| \| \| \|




Other liability policies may be required for other known exposure such as
\| \| \| \| \| \| \| \| \| \| \| \| \|




aircraft, Iiquor liability, watercraft\| \| \| \|

,Limits of Insruance \| \| \|




\| limits required by varies by insurer
\| \| \| \| \| \|




\| Some exposures require higher underlying limits
\| \| \| \| \| \|




The required limits must be in full effect at the effective date of the policy
\| \| \| \| \| \| \| \| \| \| \| \| \| \| \| \|




period



Compare and contract the insuring agreement known as pay on behalf and
\| \| \| \| \| \| \| \| \| \| \| \|




indemnify (LO5) - CORRECT ANSWERS ✔✔Pay on Behalf of \| \| \| \| \| \| \| \| \|




\| - The insure has stricter control of defense, investigation or settlements
\| \| \| \| \| \| \| \| \| \| \|




\| - The insurer pays damages directly to third party on behalf of
\| \| \| \| \| \| \| \| \| \| \| \|




-The insure has the duty to defend when the underlying does not provide
\| \| \| \| \| \| \| \| \| \| \| \| \| \|




coverage \|




Indemnify

- strict indemnity (insured uses their own funds directly to pay claims and
\| \| \| \| \| \| \| \| \| \| \| \| \|




insurer reimburses) \|




- based on legal obligations to pay (insured still has control but indemnity is
\| \| \| \| \| \| \| \| \| \| \| \| \| \|




based on legal obligation to pay - insurer write checks to insured)
\| \| \| \| \| \| \| \| \| \| \|




types of damages, defense costs, and ultimate net loss in Excess liability and
\| \| \| \| \| \| \| \| \| \| \| \| \|




umbrella policies \| \|




what is the coverage area - CORRECT ANSWERS ✔✔damages
\| \| \| \| \| \| \| \|




- follow form follows underlying
\| \| \| \|

, - excess liability/commercial umbrella (pay because of bodily injury and
\| \| \| \| \| \| \| \| \| \|




property damage as defined or pays because of personal advertising injury as
\| \| \| \| \| \| \| \| \| \| \| \|




defined)



defense

- duty to defend
\| \| \| \|




- not duty to defend in some cases (still right to defend)
\| \| \| \| \| \| \| \| \| \| \|




- defense cost included within the SIR is often referred to as first dollar defense
\| \| \| \| \| \| \| \| \| \| \| \| \| \|

\|




ultimate net loss (different ways to pay this- what the court says must be paid)
\| \| \| \| \| \| \| \| \| \| \| \| \| \|




- all sums paid or payable in settlement
\| \| \| \| \| \| \| \|




- all sums paid or payable as damages
\| \| \| \| \| \| \| \|




coverage area \|




- worldwide or anywhere in universe, could also be limited
\| \| \| \| \| \| \| \| \|




exclusions for excess and umbrella - CORRECT ANSWERS ✔✔- aircraft
\| \| \| \| \| \| \| \| \|




- watercraft
\|




- contractual liability
\| \|




- liquor liability
\| \| \|




- pollution
\|




- damage to property
\| \| \|




- damage to your work
\| \| \| \|