AIT General Insurance for IT and Support Professionals
Questions With Complete Solutions
ABC Company (ABC) manufactures welding torches and sells
them to contractors. One of the torches used by a contractor
malfunctions and causes a fire that destroys a building under
construction. Which one of the following would cover ABC
against a subsequent products liability claim for the fire loss?
Coverage A—Bodily Injury and Property Damage Liability of
ABC's commercial general liability (CGL) policy
An architect makes false statements about one of his
competitors, who sues him for slander. Which one of the
following would cover the architect for a loss arising out of this
situation?
Coverage B - Personal and Advertising Injury Liability of the
Commercial General Liability (CGL) Coverage Form
All of the following conditions must exist in order for business
income insurance to cover a loss, EXCEPT:
There must be a reduction in extra expenses.
A self-insured retention (SIR) is
An amount that is deducted from claims that are payable under
an umbrella liability policy and that are not covered at all by any
primary policy.
All homeowners policy forms
Follow a similar general pattern of construction but may vary in
terms of coverage specifics.
,A delivery person trips and falls over the insured's uneven
sidewalk. The delivery person sues the insured for his medical
bills. This claim falls under which one of the following
coverages of the insured's homeowners policy?
Personal liability coverage
An insurance-to-value provision in property insurance policies
that reduces the amount the insurer will pay for a covered loss
that occurs to property that is underinsured is
A coinsurance clause.
As used in most liability insurance policies, personal injury
means which one of the following?
A specific group of intentional torts, including defamation, false
arrest, and invasion of privacy
An accurate measure of loss frequency is important because
The proper treatment of the loss exposure often depends on how
frequently the loss is expected to occur.
Analyzing the potential frequency and severity of a loss
exposure enables the risk manager to
Prioritize loss exposures.
A document listing potential loss exposures that a household or
an organization may face is a
Loss exposure survey or checklist.
A business buys multiple small warehouses to minimize the
effects of a single loss. This is an example of
,Separation
Atwell Insurance Company has the following expenses:
Dividends
$
50,000
Claim staff salaries
$
90,000
Agents' commissions
$
180,000
Advertising costs
$
30,000
Rent and utilities
$
40,000
What is the amount of Atwell Insurance Company's acquisition
expenses?
$210,000
, Sally went downhill skiing on vacation. On the back of her lift
ticket was printed an agreement that the skier would not hold the
ski resort responsible for any injury incurred. From the ski
resort's perspective, this is an example of
Noninsurance transfer
Monitoring a risk management program is an
Ongoing activity.
In smaller organizations and in households, the person making
risk management decisions is often the person
Implementing the program.
When implementing selected risk management techniques, a risk
manager must
Determine how to allocate the costs of the program.
Risk manager Maria Sanchez is evaluating her employer's
current fleet of vehicles to ensure they are roadworthy and
determine if any replacements are needed. Maria's activities are
part of which one of the following steps in the risk management
process?
Monitoring results and revising the risk management program
In order to monitor and modify the risk management program,
the risk manager must periodically
Identify and analyze new and existing loss exposures.
Which one of the following best describes how effective risk
management benefits society?
Questions With Complete Solutions
ABC Company (ABC) manufactures welding torches and sells
them to contractors. One of the torches used by a contractor
malfunctions and causes a fire that destroys a building under
construction. Which one of the following would cover ABC
against a subsequent products liability claim for the fire loss?
Coverage A—Bodily Injury and Property Damage Liability of
ABC's commercial general liability (CGL) policy
An architect makes false statements about one of his
competitors, who sues him for slander. Which one of the
following would cover the architect for a loss arising out of this
situation?
Coverage B - Personal and Advertising Injury Liability of the
Commercial General Liability (CGL) Coverage Form
All of the following conditions must exist in order for business
income insurance to cover a loss, EXCEPT:
There must be a reduction in extra expenses.
A self-insured retention (SIR) is
An amount that is deducted from claims that are payable under
an umbrella liability policy and that are not covered at all by any
primary policy.
All homeowners policy forms
Follow a similar general pattern of construction but may vary in
terms of coverage specifics.
,A delivery person trips and falls over the insured's uneven
sidewalk. The delivery person sues the insured for his medical
bills. This claim falls under which one of the following
coverages of the insured's homeowners policy?
Personal liability coverage
An insurance-to-value provision in property insurance policies
that reduces the amount the insurer will pay for a covered loss
that occurs to property that is underinsured is
A coinsurance clause.
As used in most liability insurance policies, personal injury
means which one of the following?
A specific group of intentional torts, including defamation, false
arrest, and invasion of privacy
An accurate measure of loss frequency is important because
The proper treatment of the loss exposure often depends on how
frequently the loss is expected to occur.
Analyzing the potential frequency and severity of a loss
exposure enables the risk manager to
Prioritize loss exposures.
A document listing potential loss exposures that a household or
an organization may face is a
Loss exposure survey or checklist.
A business buys multiple small warehouses to minimize the
effects of a single loss. This is an example of
,Separation
Atwell Insurance Company has the following expenses:
Dividends
$
50,000
Claim staff salaries
$
90,000
Agents' commissions
$
180,000
Advertising costs
$
30,000
Rent and utilities
$
40,000
What is the amount of Atwell Insurance Company's acquisition
expenses?
$210,000
, Sally went downhill skiing on vacation. On the back of her lift
ticket was printed an agreement that the skier would not hold the
ski resort responsible for any injury incurred. From the ski
resort's perspective, this is an example of
Noninsurance transfer
Monitoring a risk management program is an
Ongoing activity.
In smaller organizations and in households, the person making
risk management decisions is often the person
Implementing the program.
When implementing selected risk management techniques, a risk
manager must
Determine how to allocate the costs of the program.
Risk manager Maria Sanchez is evaluating her employer's
current fleet of vehicles to ensure they are roadworthy and
determine if any replacements are needed. Maria's activities are
part of which one of the following steps in the risk management
process?
Monitoring results and revising the risk management program
In order to monitor and modify the risk management program,
the risk manager must periodically
Identify and analyze new and existing loss exposures.
Which one of the following best describes how effective risk
management benefits society?
