AINS 103 Exam Review Questions and Correct Answers
1. In property insurance, the term "property in transit" refers to which one of
the following? Answer -C. Property while being transported by trucks, cars, buses, trains, airplanes, and
ships
2. Extra expenses are expenses, in addition to ordinary expenses, that an orga-
nization incurs to mitigate the effects of a business interruption. Which one of
the following is an example of an extra expense? Answer -B. Cost to rent temporary oflce
space
3. Radley Contracting Company is installing new signage on the front of a
building. George, a passerby walking near the building is injured when a Radley
employee accidentally drops a tool from a crane. George likely has the ability
to assert which one the following types of claim? Answer -B. Premises and operations
liability
4. Which one of the following entities would likely have the greatest completed
operations loss exposure? Answer -A. Paul the plumber
5. A carrier that is prevented by an accident from delivering the cargo aboard
its ship may face an exposure called loss of freight, which is Answer -B. The
compensation the
carrier receives for transporting cargo.
6. To be covered under a workers compensation statute, an injury or disease (in
most states) must meet which one of the following requirements? Answer -A.
Arise out of employees' job-related injuries and diseases
7. The unauthorized intrusion into a company's computer network resulting in
damage to intellectual property is best classified as which one of the following
types of cyber liability exposures? Answer -D. Intangible property
8. An email was sent to a company's employees containing a harmful attach-
ment. Several employees opened the attachment which allowed hackers to
obtain customer contact information. This cyber risk loss is Answer -D. Damage to
intangible
property.
9. NH Manufacturing insures its building and personal property under the com-
mercial property coverage part of a commercial package policy (CPP). During a
blizzard, a portion of the building's roof collapsed from the weight of snow. The
risk manager pulled out the CPP to make sure that the building was covered
, AINS 103 Exam Review Questions and Correct Answers
for this type of loss. Which one of the following components of the commercial
property coverage part would provide the risk manager with information on
the covered perils? Answer -A. Causes of loss form
, AINS 103 Exam Review Questions and Correct Answers
10. Which one of the following is one of the covered causes of loss in the
commercial property policy Causes of Loss—Basic form? Answer -
Vandalism
11. Billy owns a baseball souvenir store in Cooperstown, NY. He insured his store
under a Building and Personal Property Coverage Form (BPP) with a $275,000
limit and a $1,500 deductible. A large fire in the store caused significant
damage amounting to $310,000 in covered damages. How much would Billy's
insurer pay under his BPP? Answer -$275K
12. Which one of the following statements about Inflation Guard optional cov-
erage of the Building and Personal Property Coverage Form (BPP) is true?
Answer -C. It
is automatically increases the limit of insurance by the percentage of annual increase shown in the declarations.
13. Which one of the following would be covered under the Extra Expense insur-
ing agreement of the Business Income (and Extra Expense) Coverage Form?
Answer -D. Costs to move to a temporary location
14. Which one of the following would be considered an extra expense under
the Business Income (and Extra Expense) Coverage Form of the commercial
package policy? Answer -C. The increased cost of rent at a temporary location
15. When Sylvester Properties suffered a $500,000 loss of business income, it
filed a claim under the Business Income (and Extra Expense) Coverage Form
(BIC) of its commercial package policy. In order for the loss to be covered, the
loss of business income must be due to a necessary suspension in operations
caused by a direct physical loss or damage to property at the premises for
which BIC is shown in the policy declarations. Which one of the following is
also part of the criteria for the loss to be covered? Answer -C. The loss or damage must be
caused by a covered cause of loss.
16. Karma Tea Shop (KTS) has three locations in Boston. The business is insured
by a commercial package policy with the Business Income (and Extra Expense)
Coverage Form (BIC). The BIC has a $300,000 limit of insurance which applies to
all three locations and a 70 percent coinsurance provision. The business income
insurance for KTS is written on a Answer -B. Blanket basis.
17. Michael is a general liability claims adjuster for Goshen Mutual. He wants to
1. In property insurance, the term "property in transit" refers to which one of
the following? Answer -C. Property while being transported by trucks, cars, buses, trains, airplanes, and
ships
2. Extra expenses are expenses, in addition to ordinary expenses, that an orga-
nization incurs to mitigate the effects of a business interruption. Which one of
the following is an example of an extra expense? Answer -B. Cost to rent temporary oflce
space
3. Radley Contracting Company is installing new signage on the front of a
building. George, a passerby walking near the building is injured when a Radley
employee accidentally drops a tool from a crane. George likely has the ability
to assert which one the following types of claim? Answer -B. Premises and operations
liability
4. Which one of the following entities would likely have the greatest completed
operations loss exposure? Answer -A. Paul the plumber
5. A carrier that is prevented by an accident from delivering the cargo aboard
its ship may face an exposure called loss of freight, which is Answer -B. The
compensation the
carrier receives for transporting cargo.
6. To be covered under a workers compensation statute, an injury or disease (in
most states) must meet which one of the following requirements? Answer -A.
Arise out of employees' job-related injuries and diseases
7. The unauthorized intrusion into a company's computer network resulting in
damage to intellectual property is best classified as which one of the following
types of cyber liability exposures? Answer -D. Intangible property
8. An email was sent to a company's employees containing a harmful attach-
ment. Several employees opened the attachment which allowed hackers to
obtain customer contact information. This cyber risk loss is Answer -D. Damage to
intangible
property.
9. NH Manufacturing insures its building and personal property under the com-
mercial property coverage part of a commercial package policy (CPP). During a
blizzard, a portion of the building's roof collapsed from the weight of snow. The
risk manager pulled out the CPP to make sure that the building was covered
, AINS 103 Exam Review Questions and Correct Answers
for this type of loss. Which one of the following components of the commercial
property coverage part would provide the risk manager with information on
the covered perils? Answer -A. Causes of loss form
, AINS 103 Exam Review Questions and Correct Answers
10. Which one of the following is one of the covered causes of loss in the
commercial property policy Causes of Loss—Basic form? Answer -
Vandalism
11. Billy owns a baseball souvenir store in Cooperstown, NY. He insured his store
under a Building and Personal Property Coverage Form (BPP) with a $275,000
limit and a $1,500 deductible. A large fire in the store caused significant
damage amounting to $310,000 in covered damages. How much would Billy's
insurer pay under his BPP? Answer -$275K
12. Which one of the following statements about Inflation Guard optional cov-
erage of the Building and Personal Property Coverage Form (BPP) is true?
Answer -C. It
is automatically increases the limit of insurance by the percentage of annual increase shown in the declarations.
13. Which one of the following would be covered under the Extra Expense insur-
ing agreement of the Business Income (and Extra Expense) Coverage Form?
Answer -D. Costs to move to a temporary location
14. Which one of the following would be considered an extra expense under
the Business Income (and Extra Expense) Coverage Form of the commercial
package policy? Answer -C. The increased cost of rent at a temporary location
15. When Sylvester Properties suffered a $500,000 loss of business income, it
filed a claim under the Business Income (and Extra Expense) Coverage Form
(BIC) of its commercial package policy. In order for the loss to be covered, the
loss of business income must be due to a necessary suspension in operations
caused by a direct physical loss or damage to property at the premises for
which BIC is shown in the policy declarations. Which one of the following is
also part of the criteria for the loss to be covered? Answer -C. The loss or damage must be
caused by a covered cause of loss.
16. Karma Tea Shop (KTS) has three locations in Boston. The business is insured
by a commercial package policy with the Business Income (and Extra Expense)
Coverage Form (BIC). The BIC has a $300,000 limit of insurance which applies to
all three locations and a 70 percent coinsurance provision. The business income
insurance for KTS is written on a Answer -B. Blanket basis.
17. Michael is a general liability claims adjuster for Goshen Mutual. He wants to
