COMMERCIAL CASUALTY II PRACTICE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS | ALREADY GRADED A+RECENT VERSION

COMMERCIAL CASUALTY II PRACTICE EXAM QUESTIONS WITH CORRECT DETAILED ANSWERS | ALREADY GRADED A+RECENT VERSION 1) Accident - answer an event or continuous or repeated exposure to the same conditions resulting in bodily injury or property damage 2) auto - answer a land motor vehicle; "trailer" or semitrailer designed for travel on public roads; or any other land vehicle that is subject to a compulsory or financial responsibility law or other motor vehicle insurance law where it is licensed or principally garaged. An auto does not include "mobile equipment." 3) bodily injury - answer injury, sickness, or death sustained by a person 4) concurrency - answer when the dates of an excess/umbrella policy and an underlying policy or policies are the same 5) conditions - answer the rules of a contract for an insured and insurance company 6) coverage territory - answer the geographic area where insurance applies 7) declarations - answer the part of a policy that shows the who, what, when, and where 8) deductible - answer the amount the insurance company reduces its payment for a loss; it is shown in the declarations for each coverage 9) depreciation - answer the amount of value an auto has lost due to its age, mileage, or wear and tear 10) diminution - answer the perceived loss in market or resale value resulting from a direct and accidental "loss" 11) duty to defend - answer an insurance company's assumed obligation to defend an insured for any covered claim 12) employee - answer includes a "leased worker;" does not include a "temporary worker" 13) endorsements - answer additions to a policy that amend the coverage provided in the coverage form 14) exclusions - answer provisions that specify situations where coverage does not apply 15) experience modifier - answer an indicator of an employer's claims experience; a factor used in premium computation 16) hired autos - answer autos that a business organization or sole proprietor leases, hires, rents, or borrows; does not include autos belonging to employees or partners or any of their family members 17) indemnify - answer when the insured pays for the covered claim and then asks for reimbursement from the insurance company 18) information page - answer a page of declaratory information found in workers compensation policies. The page outlines the employer being insured, the policy period (when the coverage begins and ends), and the coverage provided by the policy. 19) insured - answer a person or organization qualifying as an insured in the who is an insured provision of the coverage 20) insurance coverage form - answer the part of a policy in which the promises an insurance company makes to an insured are outlined in detail 21) insured contract - answer a contract where the insured has assumed tort liabilities of another party, subject to the limits of the insurance policy 22) leased worker - answer someone leased to the insured by a labor leasing firm under the terms of a contractual agreement 23) liability insuring agreement - answer a promise the insurance company makes to pay sums the insured is obligated to pay as damages and to defend the insured 24) limit - answer the most that would be paid for any one accident or loss; the limit is shown in the declarations 25) loss - answer a direct or accidental loss or damage 26) mobile equipment - answer equipment that is designed for travel off public roads, including specific types of equipment and vehicles as described in the policy 27) monopolistic state fund - answer a state-created, state-owned, and state-operated workers compensation insurance facility; it writes all workers compensation insurance for the state 28) named insured - answer the person or organization shown on the declarations 29) negligence - answer used to determine whether the operator of an auto is responsible for an accident. Negligence has four elements: 1) a duty is owed to others; 2) that duty is breached; 3) injury or damage results; 4) the breach of the duty is the proximate cause of the injury or damage. 30) non-owned auto - answer autos that a business organization or sole proprietor doesn't own, hire, rent, or borrow in connection to the business; includes autos belonging to employees or partners or any of their family members 31) owned autos - answer autos that are owned (titled/leased) in the name of a business or organization, or owned by a sole proprietor, and being used for business purposes. 32) pollutant - answer any solid, liquid, gaseous, or thermal irritant or contaminant 33) property damage - answer damage to or loss of use of tangible property 34) sir (self-insured retention) - answer the amount an insured must pay before an insurance policy will respond to a loss; the sir is shown on a policy's declarations 35) temporary worker - answer a worker furnished to the insured as a substitute for a permanent "employee" who is on leave, or someone who works for the insured to meet seasonal or short-term workload conditions 36) tort - answer a legal wrong done to others 37) underlying insurance condition - answer a requirement in excess and umbrella policies where the insured must maintain underlying insurance as described in the declarations during the policy period of the excess or umbrella policy 38) ultimate net loss - answer the total of amounts paid or payable in the settlement of claims or suits 39) vicarious liability - answer when one party is held responsible for the actions of another party due to the nature of their relationship 40) State workers compensation laws are no-fault systems. T/f - answer true 41) employer purchase of workers compensation insurance is voluntary in all state but texas and new jersey. T/f - answer false; with the exception of texas and new jersey, all states have made employer purchase of workers compensation insurance mandatory. 42) one advantage of workers compensation to employers is predictable costs. T/f - answer true 43) list 4 states that have monopolistic funds. - answer north dakota, ohio, wyoming, washington 44) list 2 states where workers compensation is elective for employers. - answer texas and new jersey 45) both item 3a and item 3c of the information pages of a wc policy list the states the policy covers. Explain the difference between these two items. - answer 3a triggers wc insurance for the state or state listed in which the policyholder currently has ongoing business. 3c lists all of other states except those listed in 3a and monopolistic states that the policyholder may conduct business during the policy term. 46) list the three main types of physical damage coverage. - answer comprehensive coverage, specified causes of loss coverage, collision coverage 47) identify the three functions of a commercial umbrella policy. - answer to provide excess limits above underlying liability insurance limits, to replace underlying insurance limits as aggregate limits are exhausted, to provide broader insurance protection than the underlying insurance. 48) define the term "buffer layer," as it applies to an insured. - answer a buffer layer is an amount of insurance above underlying insurance and beneath other excess insurance. A buffer layer could be $5,000,000 of liability insurance in excess of $1,000,000, and also underlying a layer of $5,000,000 above it. 49) describe how the underlying insurance requirement works and the dangers of non-concurrent policies. - answer the excess/umbrella policy will perform, assuming the underlying policies are maintained. When the underlying policies are not concurrent with the excess/umbrella policy, serious coverage gaps can arise. 50) the coverage territory of an umbrella policy is typically broader than the territory in an underlying policy. T/f - answer true 51) umbrella policies may change the definitions in underlying policies. T/f - answer true 52) a "true" umbrella policy tends to be more restrictive than excess liability policies. T/f - answer false; a "true" umbrella typically has broader coverage with fewer exclusions. 53) a follow form excess policy provides the same coverage as the underlying policies but at higher limits. T/f - answer true 54) a stand-alone excess policy has its own terms and conditions and may or may not cover losses that are covered by the underlying policies. T/f - answer true 55) explain what an excess/umbrella policy will do in the event of a covered liability claim. - answer the excess/umbrella policy will drop down to provide primary coverage when aggregate limits are exhausted by a prior liability claim(s).