CPCU 551 Simulated Exam
Questions and Correct Detailed
Answers
Which one of the following statements is correct with respect to the Preservation of Property
additional coverage of the Building and Personal Property Coverage Form (BPP)? - Answer: It
protects against "any direct physical loss or damage" and is not limited to either the covered causes
of loss or locations stipulated in the coverage form.
A dairy farm insures its farm under an ISO farm policy with the broad causes of loss. The farm's silo is
damaged when a delivery truck accidentally runs into it. Which one of the following coverage forms
applies to this loss? - Answer: Coverage G—Barns, Outbuildings and Other Farm Structures
Oculus, Inc., is a large, national retailer that sells a variety of consumer goods. Oculus carries a
Commercial Package Policy that includes Insurance Services Office's Commercial Crime Coverage
Form (Loss Sustained) with the following insuring agreements: Employee Theft; Forgery or
Alteration; Inside the Premises—Theft of Money and Securities; and Inside the Premises—Robbery
or Safe Burglary of Other Property. The limit of insurance for each one of these insuring agreements
is $100,000 and the deductible per occurrence for each one of these insuring agreements is $1,000.
The policy year is 20X1.
During 20X1, two employees, Beth and Jim, in collusion, stole money and merchandise from Oculus.
Beth and Jim stole money on May 1, 20X1 and August 13, 20X1. They also stole merchandise on
January 15, 20X1 and September 29, 20X1. The amount of the money loss totaled $15,000 while the
amount of the merchandise loss totaled $ - Answer: $100,000
The Business Park Condominium Association is insured under the Condominium Association
Coverage Form and follows the single entity concept. Which one of the following losses would be
covered under this form? - Answer: The club house of the condominium association is vandalized,
resulting in extensive damage to its furniture.
Marvel Inc. suffers storm damage to its building and business personal property. Although Marvel's
insurer agrees that the loss is covered by the company's Building and Personal Property Coverage
Form (BPP), it offers Marvel significantly less money than Marvel expected. The condition of the
(BPP) that establishes a method for the insurer and Marvel to resolve disputes about the insured
property's value or amount of loss is referred to as the - Answer: Appraisal condition
Questions and Correct Detailed
Answers
Which one of the following statements is correct with respect to the Preservation of Property
additional coverage of the Building and Personal Property Coverage Form (BPP)? - Answer: It
protects against "any direct physical loss or damage" and is not limited to either the covered causes
of loss or locations stipulated in the coverage form.
A dairy farm insures its farm under an ISO farm policy with the broad causes of loss. The farm's silo is
damaged when a delivery truck accidentally runs into it. Which one of the following coverage forms
applies to this loss? - Answer: Coverage G—Barns, Outbuildings and Other Farm Structures
Oculus, Inc., is a large, national retailer that sells a variety of consumer goods. Oculus carries a
Commercial Package Policy that includes Insurance Services Office's Commercial Crime Coverage
Form (Loss Sustained) with the following insuring agreements: Employee Theft; Forgery or
Alteration; Inside the Premises—Theft of Money and Securities; and Inside the Premises—Robbery
or Safe Burglary of Other Property. The limit of insurance for each one of these insuring agreements
is $100,000 and the deductible per occurrence for each one of these insuring agreements is $1,000.
The policy year is 20X1.
During 20X1, two employees, Beth and Jim, in collusion, stole money and merchandise from Oculus.
Beth and Jim stole money on May 1, 20X1 and August 13, 20X1. They also stole merchandise on
January 15, 20X1 and September 29, 20X1. The amount of the money loss totaled $15,000 while the
amount of the merchandise loss totaled $ - Answer: $100,000
The Business Park Condominium Association is insured under the Condominium Association
Coverage Form and follows the single entity concept. Which one of the following losses would be
covered under this form? - Answer: The club house of the condominium association is vandalized,
resulting in extensive damage to its furniture.
Marvel Inc. suffers storm damage to its building and business personal property. Although Marvel's
insurer agrees that the loss is covered by the company's Building and Personal Property Coverage
Form (BPP), it offers Marvel significantly less money than Marvel expected. The condition of the
(BPP) that establishes a method for the insurer and Marvel to resolve disputes about the insured
property's value or amount of loss is referred to as the - Answer: Appraisal condition
