1 | Page
AINS 103: Practice Quiz-All Chapters
Questions and Answers Latest 2026
For most businesses, which peril poses the greatest risk
of a large or total property loss? Ans: For most
businesses, fire poses the greatest risk of a large or total
property loss.
Extra expenses are expenses, in addition to ordinary
expenses, that an organization incurs to mitigate the
effects of a business interruption. Which one of the
following is an example of an extra expense? Ans: Cost to
rent temporary office space.
An electrical contractor was hired to install a new 100-
amp fuse box in the Smith's home. During installation,
the contractor inadvertently left a small screwdriver in a
duct space behind the panel. Three weeks later, the
screwdriver caused an electrical short which led to a fire.
Which one of the following loss exposures best
categorizes the electrical contractor's legal liability
exposure for the fire damages? Ans: Completed
operations liability.
Upon entering a restaurant, a customer grasped a
handrail that broke off, causing the customer to fall and
break his wrist. This is an example of which one of the
following types of commercial general liability loss? Ans:
Premises and operations liability.
© 2025 All rights reserved
, 2 | Page
Inland marine insurance is insurance that covers: Ans:
Many different classes of property that typically involve
an element of transportation on land.
Workers compensation benefits include which one of the
following? Ans: Rehabilitation benefits.
Bio-Pharma was a highly-regarded pharmaceutical
company. That changed last year when it was revealed
that Bio-Pharma researchers had fabricated test results of
the company's new hypertension drug, and a company
official bribed a key regulator to get the drug approved.
These revelations led to a sharp decline in sales of all of
Bio-Pharma's drugs, a sharp decline in net income, and a
decline in Bio-Pharma's stock price. This scenario clearly
indicates the value of a corporation's...? Ans: Reputation.
When a clothing manufacturer decides to expand the sale
of its clothing line by offering internet purchases, it
creates new exposures not otherwise covered, or not fully
covered, by a traditional policy. These include: Ans: Loss
or damage caused by computer viruses.
Sally is a commercial property claims adjuster. When she
is first assigned a claim, she reviews the commercial
property part of the policy to make sure that the
property that suffered the loss matches the description
of the property insured. She also reviews the kinds and
amount of coverage provided. Which one of the following
components of the commercial property part will provide
Sally with this information? Ans: The commercial
property declarations page contains information such as
a description of the property insured, the kinds and
© 2025 All rights reserved
, 3 | Page
amounts of coverage provided, and any optional
coverages, among other information.
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? Ans: $275,000. $310,000 - $1,500 = $308,500, which
exceeds the BPP limit. The insurer will pay $275,000. The
deductible is subtracted from the loss, not the limit.
Which one of the following is one of the covered causes
of loss in the commercial property policy Causes of
Loss—Basic form? Ans: Explosion is a covered cause of
loss under the basic form. All the others are additional
causes of loss covered by the broad form (and they are
also covered under the special form).
Which one of the following is correct with respect to the
Increased Cost of Construction additional coverage of the
Building and Personal Property Coverage Form (BPP)?
Ans: It provides a small amount of insurance to cover the
increased cost to comply with ordinances or laws
regulating the repair, rebuilding, or replacement of
covered buildings.
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? Ans:
The increased cost of rent at a temporary location.
© 2025 All rights reserved
, 4 | Page
Dooley's Restaurant is insured under a commercial
package policy (CPP) with the Business Income (with Extra
Expense) Coverage Form. The business suffered a
$400,000 loss of business income when it was forced to
suspend operations after flood waters damaged the
basement and first floor of the restaurant. Which one of
the following is an acceptable reason for the CPP insurer
to deny the business income claim? Ans: The policy's
covered causes of loss did not include flood.
Which one of the following would be covered under the
Extra Expense insuring agreement of the Business Income
(and Extra Expense) Coverage Form? Ans: Costs to move
to a temporary location.
Richard's Clothing Store has a $500,000 Business Income
(and Extra Expense) Coverage Form on which there is an
80 percent coinsurance clause. A fire swept through the
store. Richard's Clothing Store estimates that its net
income plus all operating expenses for the policy period
would have been $1,875,000. The estimated business
income loss is $300,000. How much will the insurer pay?
Ans: $100,000. The coinsurance factor would be the
amount of insurance carried ($500,000) divided by the
amount of insurance required (80 percent of $1,875,000).
The factor is 1/3. This, multiplied by the loss, yields
$100,000 that the insurer will pay.
Joe's Cleaning Service is having a very good year, with
close to a 30 percent increase in sales. Joe is wondering if
this growth will affect his general liability premium at the
end of the policy period. Which one of the following
sections of the general liability coverage form will
© 2025 All rights reserved
AINS 103: Practice Quiz-All Chapters
Questions and Answers Latest 2026
For most businesses, which peril poses the greatest risk
of a large or total property loss? Ans: For most
businesses, fire poses the greatest risk of a large or total
property loss.
Extra expenses are expenses, in addition to ordinary
expenses, that an organization incurs to mitigate the
effects of a business interruption. Which one of the
following is an example of an extra expense? Ans: Cost to
rent temporary office space.
An electrical contractor was hired to install a new 100-
amp fuse box in the Smith's home. During installation,
the contractor inadvertently left a small screwdriver in a
duct space behind the panel. Three weeks later, the
screwdriver caused an electrical short which led to a fire.
Which one of the following loss exposures best
categorizes the electrical contractor's legal liability
exposure for the fire damages? Ans: Completed
operations liability.
Upon entering a restaurant, a customer grasped a
handrail that broke off, causing the customer to fall and
break his wrist. This is an example of which one of the
following types of commercial general liability loss? Ans:
Premises and operations liability.
© 2025 All rights reserved
, 2 | Page
Inland marine insurance is insurance that covers: Ans:
Many different classes of property that typically involve
an element of transportation on land.
Workers compensation benefits include which one of the
following? Ans: Rehabilitation benefits.
Bio-Pharma was a highly-regarded pharmaceutical
company. That changed last year when it was revealed
that Bio-Pharma researchers had fabricated test results of
the company's new hypertension drug, and a company
official bribed a key regulator to get the drug approved.
These revelations led to a sharp decline in sales of all of
Bio-Pharma's drugs, a sharp decline in net income, and a
decline in Bio-Pharma's stock price. This scenario clearly
indicates the value of a corporation's...? Ans: Reputation.
When a clothing manufacturer decides to expand the sale
of its clothing line by offering internet purchases, it
creates new exposures not otherwise covered, or not fully
covered, by a traditional policy. These include: Ans: Loss
or damage caused by computer viruses.
Sally is a commercial property claims adjuster. When she
is first assigned a claim, she reviews the commercial
property part of the policy to make sure that the
property that suffered the loss matches the description
of the property insured. She also reviews the kinds and
amount of coverage provided. Which one of the following
components of the commercial property part will provide
Sally with this information? Ans: The commercial
property declarations page contains information such as
a description of the property insured, the kinds and
© 2025 All rights reserved
, 3 | Page
amounts of coverage provided, and any optional
coverages, among other information.
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? Ans: $275,000. $310,000 - $1,500 = $308,500, which
exceeds the BPP limit. The insurer will pay $275,000. The
deductible is subtracted from the loss, not the limit.
Which one of the following is one of the covered causes
of loss in the commercial property policy Causes of
Loss—Basic form? Ans: Explosion is a covered cause of
loss under the basic form. All the others are additional
causes of loss covered by the broad form (and they are
also covered under the special form).
Which one of the following is correct with respect to the
Increased Cost of Construction additional coverage of the
Building and Personal Property Coverage Form (BPP)?
Ans: It provides a small amount of insurance to cover the
increased cost to comply with ordinances or laws
regulating the repair, rebuilding, or replacement of
covered buildings.
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? Ans:
The increased cost of rent at a temporary location.
© 2025 All rights reserved
, 4 | Page
Dooley's Restaurant is insured under a commercial
package policy (CPP) with the Business Income (with Extra
Expense) Coverage Form. The business suffered a
$400,000 loss of business income when it was forced to
suspend operations after flood waters damaged the
basement and first floor of the restaurant. Which one of
the following is an acceptable reason for the CPP insurer
to deny the business income claim? Ans: The policy's
covered causes of loss did not include flood.
Which one of the following would be covered under the
Extra Expense insuring agreement of the Business Income
(and Extra Expense) Coverage Form? Ans: Costs to move
to a temporary location.
Richard's Clothing Store has a $500,000 Business Income
(and Extra Expense) Coverage Form on which there is an
80 percent coinsurance clause. A fire swept through the
store. Richard's Clothing Store estimates that its net
income plus all operating expenses for the policy period
would have been $1,875,000. The estimated business
income loss is $300,000. How much will the insurer pay?
Ans: $100,000. The coinsurance factor would be the
amount of insurance carried ($500,000) divided by the
amount of insurance required (80 percent of $1,875,000).
The factor is 1/3. This, multiplied by the loss, yields
$100,000 that the insurer will pay.
Joe's Cleaning Service is having a very good year, with
close to a 30 percent increase in sales. Joe is wondering if
this growth will affect his general liability premium at the
end of the policy period. Which one of the following
sections of the general liability coverage form will
© 2025 All rights reserved
