Exam FX, VA Property & Casualty Insurance
Exam Questions and Answers
1. The members of a limited liability company are insureds under a
Business-owners policy (BOP) if: The limited liability company is designated as the
named insured.
2. An endorsement added to a businessowners policy that provides
coverage for direct damage caused by utility service disruption
stemming from a covered peril is called: Utility Services - Direct Damage.
3. Which of the following would be the insured's duty in the event of
a loss according to the duties in event of occurrence, claim, or suit
condition?: Providing specific details regarding an occurrence
4. Which common policy condition prohibits the insured from
changing the rights or duties as defined under the policy to any
other person or entity without the written consent of the insurance
company?: Transfer of rights and duties under the policy
5. A company has a businessowners policy on a building with an
estimated replacement cost of $300,000. The company carries
$150,000 of insurance. If a loss occurs, how much will the insured
company be paid?: The coinsurance formula would apply
,6. The businessowners policy liability coverage will pay for
necessary medical expenses of others incurred within what
maximum time period?: 1 year
7. The most the insurer will pay for a loss under a businessowners
policy is: The limit of insurance after the deductible is paid.
8. Which of the following is NOT settled on an actual cash value
basis while covered under the business property coverage form?:
Valuable papers and records
9. Which endorsement adds coverage for employee use of
automobiles in the insured's business and the insured's use of rented
autos if no coverage is provided on a business auto policy?: Hired and
nonowned auto liability
10. Which of the following is an example of a protective safeguard
in a busines- sowners policy?: Automatic sprinkler system
11. A BOP (businessowners policy) is most similar to: Homeowners.
12. Jean owns a craft store. The protective safeguards
endorsement of her BOP requires the store to have a functional
automatic sprinkler system. A winter storm freezes the pipes to
,the sprinkler system, causing the system to shut
down. How many hours does Jean have to restore the system before
she must notify her insurer?: 48 hours
13. Frank's Steaks furnishes meat to steakhouses. An accident on
the premises causes the building to lose refrigeration for 32 hours.
The state inspectors will not allow the meat in the refrigerating units
to be sold for human consumption, and Frank loses $18,500 in
disposing of the meat. What coverage under Frank's BOP policy will
cover the loss?: Utility service - direct damage
14. Which of the following is eligible for a businessowners policy?:
A 6-story oflce building with less than 100,000 square feet total area
15. In business income additional coverage in a businessowners
policy (BOP), the waiting period that must occur before the period of
restoration may begin is: 72 hours.
16. Under the additional coverages of a businessowners policy,
property re- moved to protect it from loss will be covered at
another location for up to: 30 days.
17. All of the following statements are true regarding employee
dishonesty op- tional coverage under the businessowners policy (BOP)
EXCEPT: It provides coverage for all employees, even those employees who were
, terminated in the past 90 days.
18. Under a businessowners policy, the inspections and surveys
condition spec- ifies all of the following EXCEPT: The insurer does not have the right to
inspect the insured's property and operations.
19. When is a hired and nonowned auto liability endorsement
available in a businessowners policy (BOP)?: Only if the insured does not have
commercial auto coverage
20. In addition to the common policy conditions, all of the
following conditions apply to liability coverage EXCEPT: Employers liability.
21. The liability coverage of the businessowners policy is written on
a: Businessowners liability coverage form.
22. All of the following would be covered under the medical
expense coverage of a businessowners policy EXCEPT: Mental health
counseling.
23. A businessowners policy is: A self-contained prepackaged policy.
24. Which of the following is defined as a covered cause of loss in
businessown- ers property coverage?: Leakage from fire-extinguishing equipment
Exam Questions and Answers
1. The members of a limited liability company are insureds under a
Business-owners policy (BOP) if: The limited liability company is designated as the
named insured.
2. An endorsement added to a businessowners policy that provides
coverage for direct damage caused by utility service disruption
stemming from a covered peril is called: Utility Services - Direct Damage.
3. Which of the following would be the insured's duty in the event of
a loss according to the duties in event of occurrence, claim, or suit
condition?: Providing specific details regarding an occurrence
4. Which common policy condition prohibits the insured from
changing the rights or duties as defined under the policy to any
other person or entity without the written consent of the insurance
company?: Transfer of rights and duties under the policy
5. A company has a businessowners policy on a building with an
estimated replacement cost of $300,000. The company carries
$150,000 of insurance. If a loss occurs, how much will the insured
company be paid?: The coinsurance formula would apply
,6. The businessowners policy liability coverage will pay for
necessary medical expenses of others incurred within what
maximum time period?: 1 year
7. The most the insurer will pay for a loss under a businessowners
policy is: The limit of insurance after the deductible is paid.
8. Which of the following is NOT settled on an actual cash value
basis while covered under the business property coverage form?:
Valuable papers and records
9. Which endorsement adds coverage for employee use of
automobiles in the insured's business and the insured's use of rented
autos if no coverage is provided on a business auto policy?: Hired and
nonowned auto liability
10. Which of the following is an example of a protective safeguard
in a busines- sowners policy?: Automatic sprinkler system
11. A BOP (businessowners policy) is most similar to: Homeowners.
12. Jean owns a craft store. The protective safeguards
endorsement of her BOP requires the store to have a functional
automatic sprinkler system. A winter storm freezes the pipes to
,the sprinkler system, causing the system to shut
down. How many hours does Jean have to restore the system before
she must notify her insurer?: 48 hours
13. Frank's Steaks furnishes meat to steakhouses. An accident on
the premises causes the building to lose refrigeration for 32 hours.
The state inspectors will not allow the meat in the refrigerating units
to be sold for human consumption, and Frank loses $18,500 in
disposing of the meat. What coverage under Frank's BOP policy will
cover the loss?: Utility service - direct damage
14. Which of the following is eligible for a businessowners policy?:
A 6-story oflce building with less than 100,000 square feet total area
15. In business income additional coverage in a businessowners
policy (BOP), the waiting period that must occur before the period of
restoration may begin is: 72 hours.
16. Under the additional coverages of a businessowners policy,
property re- moved to protect it from loss will be covered at
another location for up to: 30 days.
17. All of the following statements are true regarding employee
dishonesty op- tional coverage under the businessowners policy (BOP)
EXCEPT: It provides coverage for all employees, even those employees who were
, terminated in the past 90 days.
18. Under a businessowners policy, the inspections and surveys
condition spec- ifies all of the following EXCEPT: The insurer does not have the right to
inspect the insured's property and operations.
19. When is a hired and nonowned auto liability endorsement
available in a businessowners policy (BOP)?: Only if the insured does not have
commercial auto coverage
20. In addition to the common policy conditions, all of the
following conditions apply to liability coverage EXCEPT: Employers liability.
21. The liability coverage of the businessowners policy is written on
a: Businessowners liability coverage form.
22. All of the following would be covered under the medical
expense coverage of a businessowners policy EXCEPT: Mental health
counseling.
23. A businessowners policy is: A self-contained prepackaged policy.
24. Which of the following is defined as a covered cause of loss in
businessown- ers property coverage?: Leakage from fire-extinguishing equipment
