AINS 103 Questions with CORRECT Answers
Question:
The Crime coverage form that covers losses occurring during the policy period and
discovered no later than 1 year after the policy expiration is
a. Discovery Form
b. Loss Sustained Form
Answer:
b. Loss Sustained Form
Question:
In property insurance, the term "property in transit" refers to which one of the following?
A. Mobile equipment while moving under its own power from one work location to
another
B. Property while being transported by trucks, cars, buses, trains, airplanes, and ships
C. Property while being moved from one building to another at the insured location only
D. Owned property while located anywhere other than the insured location
Answer:
B. Property while being
transported by trucks, cars, buses, trains, airplanes, and ships
Question:
In business income insurance, the expenses that an organization would not have
incurred if the business interruption had not occurred are called
A. Extra expenses.
B. Excludable expenses.
C. Continuing expenses.
D. Contingent expenses.
Answer:
A. Extra expenses.
,Question:
These are expenses that would not have incurred if the business interruption had not
occurred. XYZ contractor, covered under an unendorsed Commercial General Liability
(CGL) Coverage Form, is installing kitchen cabinets in a customer's home. The
contractor manufactured the cabinets. While the contractor is fastening a cabinet, it
falls and injures the customer. Which one of the following best explains how coverage
under the contractor's CGL Coverage Form applies in this case?
A. Premises and operations liability applies because the contractor was in the process of
installing the cabinets.
B. Products and completed operations liability applies because the contractor was
installing
cabinets it manufactured.
C. Products and completed operations liability applies because the contractor was
completing
the work.
D. Premises and operations liability applies because the contractor was working at the
customer's premises.
Answer:
A. Premises and operations liability applies because the contractor was in the process of
installing the cabinets.
Question:
A vehicle owner had a tire store install four new wheels and tires on the vehicle. On the
way home from the store, one of the wheels came off, causing the vehicle to
accidentally run off the road and strike a tree. The vehicle owner sued the tire store for
failing to properly tighten the lug nuts on the vehicle. The loss exposure faced by the
tire store in this case is known as
A. Automobile liability.
B. Completed operations liability.
C. Employers liability.
D. Products liability.
Answer:
B. Completed operations liability.
,Question:
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
A. The cost of disposing of undeliverable goods.
B. A penalty the carrier pays the shipper for nondelivery.
C. The compensation the carrier receives for transporting cargo.
D. The liability for loss or damage to the cargo entrusted to it.
Answer:
C. The compensation the carrier receives
for transporting cargo.
Question:
Joe signs a contract with Home Builders to install the electrical wiring for a new home.
He uses his own tools and follows the specifications in the contract. Joe is burned while
installing the wiring. Does Home Builders' workers compensation policy cover Joe's
injury?
A. Yes, because the injury arose out of and in the course of employment
B. Yes, because Home Builders must provide no-fault protection for employees
C. No, because Joe is not an employee of Home Builders
D. No, because Joe probably contributed to the injury
Answer:
C. No, because Joe is not an employee of Home
Builders
Question:
Workers Comp is not applicable to: Independent contactors and their employees Leased
employees Temporary employees Meat Products Company (MPC) runs packing plants in
three Midwest states. The company was in the news recently because of its labor
practices. The Department of Labor (DOL) investigated complaints from five female
employees that MPC discriminated against them. The DOL found the claim was true. The
Immigration and Naturalization Service (INS) found that the company employed illegal
immigrants and paid them less than the minimum wage. When this news became
public, MPC's reputation was severely harmed. This scenario illustrates which source of
reputation risk?
A. Corporate social responsibility
B. Communication and crisis management
C. Corporate governance and leadership
D. Regulatory and legal compliance
Answer:
D. Regulatory and legal compliance
, Question:
Cyber risk intellectual property loss exposures include
A. Property damage liability.
B. Loss to tangible property.
C. Personal and advertising injury liability.
D. Cyber extortion of trade secrets.
Answer:
D. Cyber extortion of trade secrets.
Question:
Stanton Industries insures its building and business personal property under the
commercial property coverage part of a commercial package policy. Anthony is the new
risk manager for Stanton Industries. He wants to look at the policy to review the
property insured, the kinds and amounts of coverage provided, and any optional
coverages. Which one of the following component parts of the commercial property part
would provide Anthony with this information?
A. Causes of loss form
B. Commercial property declarations
C. Commercial property conditions
D. Coverage form
Answer:
B. Commercial property declarations
Question:
The declarations page contains information such as a description of the property
insured, the kinds and 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?
A. $273,500
B. $275,000
C. $308,500
D. $310,000
Answer:
B. $275,000
Question:
The Crime coverage form that covers losses occurring during the policy period and
discovered no later than 1 year after the policy expiration is
a. Discovery Form
b. Loss Sustained Form
Answer:
b. Loss Sustained Form
Question:
In property insurance, the term "property in transit" refers to which one of the following?
A. Mobile equipment while moving under its own power from one work location to
another
B. Property while being transported by trucks, cars, buses, trains, airplanes, and ships
C. Property while being moved from one building to another at the insured location only
D. Owned property while located anywhere other than the insured location
Answer:
B. Property while being
transported by trucks, cars, buses, trains, airplanes, and ships
Question:
In business income insurance, the expenses that an organization would not have
incurred if the business interruption had not occurred are called
A. Extra expenses.
B. Excludable expenses.
C. Continuing expenses.
D. Contingent expenses.
Answer:
A. Extra expenses.
,Question:
These are expenses that would not have incurred if the business interruption had not
occurred. XYZ contractor, covered under an unendorsed Commercial General Liability
(CGL) Coverage Form, is installing kitchen cabinets in a customer's home. The
contractor manufactured the cabinets. While the contractor is fastening a cabinet, it
falls and injures the customer. Which one of the following best explains how coverage
under the contractor's CGL Coverage Form applies in this case?
A. Premises and operations liability applies because the contractor was in the process of
installing the cabinets.
B. Products and completed operations liability applies because the contractor was
installing
cabinets it manufactured.
C. Products and completed operations liability applies because the contractor was
completing
the work.
D. Premises and operations liability applies because the contractor was working at the
customer's premises.
Answer:
A. Premises and operations liability applies because the contractor was in the process of
installing the cabinets.
Question:
A vehicle owner had a tire store install four new wheels and tires on the vehicle. On the
way home from the store, one of the wheels came off, causing the vehicle to
accidentally run off the road and strike a tree. The vehicle owner sued the tire store for
failing to properly tighten the lug nuts on the vehicle. The loss exposure faced by the
tire store in this case is known as
A. Automobile liability.
B. Completed operations liability.
C. Employers liability.
D. Products liability.
Answer:
B. Completed operations liability.
,Question:
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
A. The cost of disposing of undeliverable goods.
B. A penalty the carrier pays the shipper for nondelivery.
C. The compensation the carrier receives for transporting cargo.
D. The liability for loss or damage to the cargo entrusted to it.
Answer:
C. The compensation the carrier receives
for transporting cargo.
Question:
Joe signs a contract with Home Builders to install the electrical wiring for a new home.
He uses his own tools and follows the specifications in the contract. Joe is burned while
installing the wiring. Does Home Builders' workers compensation policy cover Joe's
injury?
A. Yes, because the injury arose out of and in the course of employment
B. Yes, because Home Builders must provide no-fault protection for employees
C. No, because Joe is not an employee of Home Builders
D. No, because Joe probably contributed to the injury
Answer:
C. No, because Joe is not an employee of Home
Builders
Question:
Workers Comp is not applicable to: Independent contactors and their employees Leased
employees Temporary employees Meat Products Company (MPC) runs packing plants in
three Midwest states. The company was in the news recently because of its labor
practices. The Department of Labor (DOL) investigated complaints from five female
employees that MPC discriminated against them. The DOL found the claim was true. The
Immigration and Naturalization Service (INS) found that the company employed illegal
immigrants and paid them less than the minimum wage. When this news became
public, MPC's reputation was severely harmed. This scenario illustrates which source of
reputation risk?
A. Corporate social responsibility
B. Communication and crisis management
C. Corporate governance and leadership
D. Regulatory and legal compliance
Answer:
D. Regulatory and legal compliance
, Question:
Cyber risk intellectual property loss exposures include
A. Property damage liability.
B. Loss to tangible property.
C. Personal and advertising injury liability.
D. Cyber extortion of trade secrets.
Answer:
D. Cyber extortion of trade secrets.
Question:
Stanton Industries insures its building and business personal property under the
commercial property coverage part of a commercial package policy. Anthony is the new
risk manager for Stanton Industries. He wants to look at the policy to review the
property insured, the kinds and amounts of coverage provided, and any optional
coverages. Which one of the following component parts of the commercial property part
would provide Anthony with this information?
A. Causes of loss form
B. Commercial property declarations
C. Commercial property conditions
D. Coverage form
Answer:
B. Commercial property declarations
Question:
The declarations page contains information such as a description of the property
insured, the kinds and 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?
A. $273,500
B. $275,000
C. $308,500
D. $310,000
Answer:
B. $275,000
