RMIN 4000 EDMUNDS EXAM 3 QUESTIONS AND ANSWERS ALREADY GRADED A+. 100% VERIFIED
SOLUTIONS | UPDATED PER LATEST GUIDELINES | GRADED A+...
Question 1
Which of the following is the primary purpose of a Commercial General Liability policy?
A. To cover damage to the insured's own building
B. To cover bodily injury and property damage liability arising from the insured's premises, operations, or
products
C. To cover work-related employee injuries
D. To cover damage to owned automobiles
🟢 Correct Answer:
B. To cover bodily injury and property damage liability arising from the insured's premises, operations, or
products
🔴 RATIONALE:
A Commercial General Liability policy covers the insured's legal liability for bodily injury and property damage
to third parties. It does not cover first-party property, employee injuries, or owned autos.
Question 2
Which commercial property coverage form is used to insure both buildings and business personal property in a
single contract?
A. Building and Personal Property Coverage Form
B. Business Income Coverage Form
,C. Builders Risk Coverage Form
D. Condominium Association Coverage Form
🟢 Correct Answer:
A. Building and Personal Property Coverage Form
🔴 RATIONALE:
The Building and Personal Property Coverage Form combines coverage for buildings and business personal
property. It is a common commercial property form.
Question 3
Workers compensation insurance provides which of the following benefits to an injured employee?
A. Medical care and wage replacement for work-related injuries
B. Pain and suffering damages
C. Punitive damages
D. Unemployment benefits
🟢 Correct Answer:
A. Medical care and wage replacement for work-related injuries
🔴 RATIONALE:
Workers compensation is a no-fault system that provides medical care and wage replacement for employees
injured in the course of employment. It generally does not cover pain and suffering or punitive damages.
,Question 4
Business income coverage is designed to protect an organization against:
A. Damage to the reputation of the business
B. Employee theft
C. Professional liability claims
D. Loss of income due to a covered suspension of operations
🟢 Correct Answer:
D. Loss of income due to a covered suspension of operations
🔴 RATIONALE:
Business income insurance, also called business interruption insurance, replaces lost net income and continuing
expenses when a covered cause of loss suspends operations.
Question 5
In a CGL policy, which of the following is generally excluded?
A. Bodily injury caused by an accident on the premises
B. Damage to the insured's own work
C. Property damage caused by a covered product
D. Legal defense costs for a covered claim
🟢 Correct Answer:
B. Damage to the insured's own work
, 🔴 RATIONALE:
The CGL policy excludes damage to the insured's own work or product to avoid covering faulty workmanship as
a liability claim. Third-party bodily injury and property damage are typically covered.
Question 6
A company that manufactures faulty brakes that cause an auto accident may be covered for resulting claims
under which type of liability?
A. Professional liability
B. Directors and officers liability
C. Products and completed operations liability
D. Employment practices liability
🟢 Correct Answer:
C. Products and completed operations liability
🔴 RATIONALE:
Products and completed operations liability, included in CGL, covers claims for bodily injury or property damage
caused by the insured's products after they leave the premises.
Question 7
A risk manager wants to estimate the maximum possible loss from a single event. This is known as:
A. Probable maximum loss
SOLUTIONS | UPDATED PER LATEST GUIDELINES | GRADED A+...
Question 1
Which of the following is the primary purpose of a Commercial General Liability policy?
A. To cover damage to the insured's own building
B. To cover bodily injury and property damage liability arising from the insured's premises, operations, or
products
C. To cover work-related employee injuries
D. To cover damage to owned automobiles
🟢 Correct Answer:
B. To cover bodily injury and property damage liability arising from the insured's premises, operations, or
products
🔴 RATIONALE:
A Commercial General Liability policy covers the insured's legal liability for bodily injury and property damage
to third parties. It does not cover first-party property, employee injuries, or owned autos.
Question 2
Which commercial property coverage form is used to insure both buildings and business personal property in a
single contract?
A. Building and Personal Property Coverage Form
B. Business Income Coverage Form
,C. Builders Risk Coverage Form
D. Condominium Association Coverage Form
🟢 Correct Answer:
A. Building and Personal Property Coverage Form
🔴 RATIONALE:
The Building and Personal Property Coverage Form combines coverage for buildings and business personal
property. It is a common commercial property form.
Question 3
Workers compensation insurance provides which of the following benefits to an injured employee?
A. Medical care and wage replacement for work-related injuries
B. Pain and suffering damages
C. Punitive damages
D. Unemployment benefits
🟢 Correct Answer:
A. Medical care and wage replacement for work-related injuries
🔴 RATIONALE:
Workers compensation is a no-fault system that provides medical care and wage replacement for employees
injured in the course of employment. It generally does not cover pain and suffering or punitive damages.
,Question 4
Business income coverage is designed to protect an organization against:
A. Damage to the reputation of the business
B. Employee theft
C. Professional liability claims
D. Loss of income due to a covered suspension of operations
🟢 Correct Answer:
D. Loss of income due to a covered suspension of operations
🔴 RATIONALE:
Business income insurance, also called business interruption insurance, replaces lost net income and continuing
expenses when a covered cause of loss suspends operations.
Question 5
In a CGL policy, which of the following is generally excluded?
A. Bodily injury caused by an accident on the premises
B. Damage to the insured's own work
C. Property damage caused by a covered product
D. Legal defense costs for a covered claim
🟢 Correct Answer:
B. Damage to the insured's own work
, 🔴 RATIONALE:
The CGL policy excludes damage to the insured's own work or product to avoid covering faulty workmanship as
a liability claim. Third-party bodily injury and property damage are typically covered.
Question 6
A company that manufactures faulty brakes that cause an auto accident may be covered for resulting claims
under which type of liability?
A. Professional liability
B. Directors and officers liability
C. Products and completed operations liability
D. Employment practices liability
🟢 Correct Answer:
C. Products and completed operations liability
🔴 RATIONALE:
Products and completed operations liability, included in CGL, covers claims for bodily injury or property damage
caused by the insured's products after they leave the premises.
Question 7
A risk manager wants to estimate the maximum possible loss from a single event. This is known as:
A. Probable maximum loss
