WEBCE COMMERCIAL LINES 101 TEST
PAPER QUESTIONS SOLUTIONS
GRADED A+
⩥ An insured who has included the business income coverage form in
her commercial property coverage part is prevented from opening her
store at a strip mall because firefighters have closed off the entire area to
fight a fire at the other end of the mall. this occurs at 8:30 a.m. on
Monday. The fire is extinguished before any damage occurs to the
insured's store, but the firefighters keep the area closed while the safety
of the entire strip mall is evaluated. Assuming the mall remains closed
by order of the fire department, at what time does the insured's coverage
begin to pay for the loss of business income? Answer: 8:30 am Thursday
⩥ Which of the following causes of loss is EXCLUDED under the
commercial property coverage part's special causes of loss form?
Answer: Mechanical breakdown
⩥ The premium audit of a commercial general liability policy provides
that Answer: The premium paid to initiate coverage is an estimated
amount. The insurer determines the actual premium by audits of the
insured's records. - CORRECT ANSWER
,⩥ A client terminated an individual's employment on August 1. How
long is the terminated individual considered an employee under the
client's commercial crime coverage? Answer: 30 days
⩥ An insured's increased costs of construction due to building
ordinances total $22,000. The insured's limit of insurance under her
building and personal property coverage form is $400,000. Assuming
that the increased costs of construction are covered, how much will the
insured's policy pay for this part of the loss? Answer: NOT - $20,000
NOT - $22,000
NOT - $10,000
$15,000
⩥ Which of the following statements is true in regard to the bankruptcy
of a business insured under a commercial general liability policy?
Answer: The insurer will continue to honor its obligation to pay
damages for liability and medical expenses in the event an insured
business goes bankrupt - CORRECT ANSWER
⩥ The driver of car A is injured when her car is struck from behind by
car B. A police officer arrives on the scene and determines that the
accident was caused by the driver of car B. Subsequently, a claim is filed
, against the insurance company that insures the driver of car B. In this
case, who is the third party to the claim? Answer: The driver of car A -
CORRECT ANSWER
⩥ An insured, accompanied by an employee, is driving an auto covered
by the business auto coverage form to a meeting with a customer when
her loses control of the car and hits a guardrail. The insured is uninjured,
but the employee needs medical treatment that costs $400. In addition,
the employee cannot work for 3 days, resulting in $600 of lost earnings.
What is the total amount that will be paid under the insured's auto bodily
liability coverage as a result of this accident? Answer: NOT - $1,000
NOT - $400
⩥ A client insured under a building and personal property coverage form
decides to sure the insurer in regard to a loss that occurred in 2018. By
what year must the suit be brought under the legal action against the
insurer condition? Answer: 2020
⩥ Which of the following coverages is NOT available for inclusion in an
ISO commercial package policy? Answer: Aviation insurance
⩥ A client with commercial auto insurance under the business auto
coverage form spends $1,200 to rent an auto for a period of time after a
covered auto is stolen. The stolen auto is covered for theft. How much of
PAPER QUESTIONS SOLUTIONS
GRADED A+
⩥ An insured who has included the business income coverage form in
her commercial property coverage part is prevented from opening her
store at a strip mall because firefighters have closed off the entire area to
fight a fire at the other end of the mall. this occurs at 8:30 a.m. on
Monday. The fire is extinguished before any damage occurs to the
insured's store, but the firefighters keep the area closed while the safety
of the entire strip mall is evaluated. Assuming the mall remains closed
by order of the fire department, at what time does the insured's coverage
begin to pay for the loss of business income? Answer: 8:30 am Thursday
⩥ Which of the following causes of loss is EXCLUDED under the
commercial property coverage part's special causes of loss form?
Answer: Mechanical breakdown
⩥ The premium audit of a commercial general liability policy provides
that Answer: The premium paid to initiate coverage is an estimated
amount. The insurer determines the actual premium by audits of the
insured's records. - CORRECT ANSWER
,⩥ A client terminated an individual's employment on August 1. How
long is the terminated individual considered an employee under the
client's commercial crime coverage? Answer: 30 days
⩥ An insured's increased costs of construction due to building
ordinances total $22,000. The insured's limit of insurance under her
building and personal property coverage form is $400,000. Assuming
that the increased costs of construction are covered, how much will the
insured's policy pay for this part of the loss? Answer: NOT - $20,000
NOT - $22,000
NOT - $10,000
$15,000
⩥ Which of the following statements is true in regard to the bankruptcy
of a business insured under a commercial general liability policy?
Answer: The insurer will continue to honor its obligation to pay
damages for liability and medical expenses in the event an insured
business goes bankrupt - CORRECT ANSWER
⩥ The driver of car A is injured when her car is struck from behind by
car B. A police officer arrives on the scene and determines that the
accident was caused by the driver of car B. Subsequently, a claim is filed
, against the insurance company that insures the driver of car B. In this
case, who is the third party to the claim? Answer: The driver of car A -
CORRECT ANSWER
⩥ An insured, accompanied by an employee, is driving an auto covered
by the business auto coverage form to a meeting with a customer when
her loses control of the car and hits a guardrail. The insured is uninjured,
but the employee needs medical treatment that costs $400. In addition,
the employee cannot work for 3 days, resulting in $600 of lost earnings.
What is the total amount that will be paid under the insured's auto bodily
liability coverage as a result of this accident? Answer: NOT - $1,000
NOT - $400
⩥ A client insured under a building and personal property coverage form
decides to sure the insurer in regard to a loss that occurred in 2018. By
what year must the suit be brought under the legal action against the
insurer condition? Answer: 2020
⩥ Which of the following coverages is NOT available for inclusion in an
ISO commercial package policy? Answer: Aviation insurance
⩥ A client with commercial auto insurance under the business auto
coverage form spends $1,200 to rent an auto for a period of time after a
covered auto is stolen. The stolen auto is covered for theft. How much of
