AIC EXAM TEST 1 QUESTIONS AND
ANSWERS.
Scope - ANS >> A list of the areas damaged that includes the type of damage, a description of the
b b b b b b b b b b b b b b b b b b b
proposed action to take regarding the damaged property (such as repair, replace, remove, or
b b b b b b b b b b b b b b
demolish), and the area's measurements.
b b b b b
Nonwaiver agreement - ANS >> A signed agreement indicating that during the course of investigation,
b b b b b b b b b b b b b b
neither the insurer nor the insured waives rights under the policy
b b b b b b b b b b b
Insurable interest - ANS >> An interest in the subject of an insurance policy that is not unduly remote
b b b b b b b b b b b b b b b b b b
band that would cause the interested party to suffer financial loss if an insured event occurred.
b b b b b b b b b b b b b b b
Bailee - ANS >> The party temporarily possessing the personal property in a bailment.
b b b b b b b b b b b b b
Trustee - ANS >> Someone who has the legal title to a property but is responsible for ensuring that it
b b b b b b b b b b b b b b b b b b b
be used, handled, and transferred solely for the benefit of the beneficiary.
b b b b b b b b b b b b
Security interest - ANS >> An interest in property (real or personal) that allows the property to be sold
b b b b b b b b b b b b b b b b b b
on default to satisfy the debt for which the security interest was given.
b b b b b b b b b b b b b
Public adjuster - ANS >> An outside organization or person hired by an insured to represent the
b b b b b b b b b b b b b b b b
insured in a claim in exchange for a fee.
b b b b b b b b b
Business income insurance - ANS >> Insurance that covers the reduction in an organization's income
b b b b b b b b b b b b b b
when operations are interrupted by damage to property caused by a covered peril.
b b b b b b b b b b b b b
Business interruption - ANS >> Loss of revenue that a business or another organization sustains
b b b b b b b b b b b b b b
because its operations are suspended as a result of physical injury to its property
b b b b b b b b b b b b b b
Net income - ANS >> The difference between revenues (such as money received for goods or services)
b b b b b b b b b b b b b b b b
and expenses (such as money paid for merchandise, rent, and insurance).
b b b b b b b b b b b
Profit - ANS >> Net income that results when revenues exceed expenses.
b b b b b b b b b b b
Net loss - ANS >> Net income that results when expenses exceed revenues.
b b b b b b b b b b b b
Continuing expenses - ANS >> Expenses that continue to be incurred during a business interruption.
b b b b b b b b b b b b b b
Noncontinuing expenses - ANS >> Expenses that will not continue during a business interruption.
b b b b b b b b b b b b b
Extra expenses - ANS >> Expenses, in addition to ordinary expenses, that an organization incurs to
b b b b b b b b b b b b b b b
mitigate the effects of a business interruption.
b b b b b b b
, Inland marine insurance - ANS >> Insurance that covers many different classes of property that
b b b b b b b b b b b b b b
btypically involve an element of transportation on land.
b b b b b b b
Marine insurance - ANS >> Insurance that, in the U.S., includes both ocean and inland marine coverage
b b b b b b b b b b b b b b b b
and, in the rest of the world, is limited to insurance for vessels and cargo.
b b b b b b b b b b b b b b b
Nationwide Marine Definition - ANS >> Statement of the types of property that may be insured on
b b b b b b b b b b b b b b b b
inland marine and ocean marine insurance forms.
b b b b b b b
Origin and cause expert - ANS >> An expert who independently determines where and how a fire
b b b b b b b b b b b b b b b b
began.
b
Incendiary fire - ANS >> An intentionally set fire.
b b b b b b b b
Trailer - ANS >> Fuel configured in a manner to spread a fire.
b b b b b b b b b b b b
Alibi - ANS >> An assertion that the party in question was elsewhere at the time the crime occurred.
b b b b b b b b b b b b b b b b b b
Specified perils - ANS >> A method of designating the covered perils (causes of loss) in a property
b b b b b b b b b b b b b b b b b
insurance policy by naming them in the policy.
b b b b b b b b
Open perils - ANS >> A method of designating covered perils (causes of loss) in a property insurance
b b b b b b b b b b b b b b b b b
policy by covering direct physical loss unless the policy excludes it.
b b b b b b b b b b b
Theft - ANS >> The taking of personal property from its rightful owner, without the owner's consent,
b b b b b b b b b b b b b b b b
with the intent to deprive the owner of its value.
b b b b b b b b b b
Period of restoration - ANS >> The period during which business income loss is covered under the BIC
b b b b b b b b b b b b b b b b b
forms; it begins 72 hours after the physical loss occurs and ends when the property is (or should have
b b b b b b b b b b b b b b b b b b b
been) restored to use with reasonable speed. (With regard to extra expense coverage, it begins
b b b b b b b b b b b b b b b
immediately after the physical loss occurs.)
b b b b b b
Reconciliation - ANS >> The process of matching the net income and continuing expenses projections
b b b b b b b b b b b b b b
with the actual sales made and expenses incurred during the loss period.
b b b b b b b b b b b b
Ocean marine insurance - ANS >> Insurance that covers vessels and their cargoes, including various
b b b b b b b b b b b b b b
vessel-related liability exposures.
b b b
Value Reporting Form - ANS >> A commercial property form that bases the insured's premium for
b b b b b b b b b b b b b b b
business personal property on the values that the insured reports to the insurer periodically during
b b b b b b b b b b b b b b b
the policy period.
b b b
Motor truck cargo liability policy - ANS >> Policy that covers a trucker's liability for damage to cargo of
b b b b b b b b b b b b b b b b b b
others being transported by the trucker.
b b b b b b
Bill of lading - ANS >> A document acknowledging receipt of goods from the shipper, given by the
b b b b b b b b b b b b b b b b b
carrier, which includes the terms of the contract of carriage for the goods.
b b b b b b b b b b b b b
ANSWERS.
Scope - ANS >> A list of the areas damaged that includes the type of damage, a description of the
b b b b b b b b b b b b b b b b b b b
proposed action to take regarding the damaged property (such as repair, replace, remove, or
b b b b b b b b b b b b b b
demolish), and the area's measurements.
b b b b b
Nonwaiver agreement - ANS >> A signed agreement indicating that during the course of investigation,
b b b b b b b b b b b b b b
neither the insurer nor the insured waives rights under the policy
b b b b b b b b b b b
Insurable interest - ANS >> An interest in the subject of an insurance policy that is not unduly remote
b b b b b b b b b b b b b b b b b b
band that would cause the interested party to suffer financial loss if an insured event occurred.
b b b b b b b b b b b b b b b
Bailee - ANS >> The party temporarily possessing the personal property in a bailment.
b b b b b b b b b b b b b
Trustee - ANS >> Someone who has the legal title to a property but is responsible for ensuring that it
b b b b b b b b b b b b b b b b b b b
be used, handled, and transferred solely for the benefit of the beneficiary.
b b b b b b b b b b b b
Security interest - ANS >> An interest in property (real or personal) that allows the property to be sold
b b b b b b b b b b b b b b b b b b
on default to satisfy the debt for which the security interest was given.
b b b b b b b b b b b b b
Public adjuster - ANS >> An outside organization or person hired by an insured to represent the
b b b b b b b b b b b b b b b b
insured in a claim in exchange for a fee.
b b b b b b b b b
Business income insurance - ANS >> Insurance that covers the reduction in an organization's income
b b b b b b b b b b b b b b
when operations are interrupted by damage to property caused by a covered peril.
b b b b b b b b b b b b b
Business interruption - ANS >> Loss of revenue that a business or another organization sustains
b b b b b b b b b b b b b b
because its operations are suspended as a result of physical injury to its property
b b b b b b b b b b b b b b
Net income - ANS >> The difference between revenues (such as money received for goods or services)
b b b b b b b b b b b b b b b b
and expenses (such as money paid for merchandise, rent, and insurance).
b b b b b b b b b b b
Profit - ANS >> Net income that results when revenues exceed expenses.
b b b b b b b b b b b
Net loss - ANS >> Net income that results when expenses exceed revenues.
b b b b b b b b b b b b
Continuing expenses - ANS >> Expenses that continue to be incurred during a business interruption.
b b b b b b b b b b b b b b
Noncontinuing expenses - ANS >> Expenses that will not continue during a business interruption.
b b b b b b b b b b b b b
Extra expenses - ANS >> Expenses, in addition to ordinary expenses, that an organization incurs to
b b b b b b b b b b b b b b b
mitigate the effects of a business interruption.
b b b b b b b
, Inland marine insurance - ANS >> Insurance that covers many different classes of property that
b b b b b b b b b b b b b b
btypically involve an element of transportation on land.
b b b b b b b
Marine insurance - ANS >> Insurance that, in the U.S., includes both ocean and inland marine coverage
b b b b b b b b b b b b b b b b
and, in the rest of the world, is limited to insurance for vessels and cargo.
b b b b b b b b b b b b b b b
Nationwide Marine Definition - ANS >> Statement of the types of property that may be insured on
b b b b b b b b b b b b b b b b
inland marine and ocean marine insurance forms.
b b b b b b b
Origin and cause expert - ANS >> An expert who independently determines where and how a fire
b b b b b b b b b b b b b b b b
began.
b
Incendiary fire - ANS >> An intentionally set fire.
b b b b b b b b
Trailer - ANS >> Fuel configured in a manner to spread a fire.
b b b b b b b b b b b b
Alibi - ANS >> An assertion that the party in question was elsewhere at the time the crime occurred.
b b b b b b b b b b b b b b b b b b
Specified perils - ANS >> A method of designating the covered perils (causes of loss) in a property
b b b b b b b b b b b b b b b b b
insurance policy by naming them in the policy.
b b b b b b b b
Open perils - ANS >> A method of designating covered perils (causes of loss) in a property insurance
b b b b b b b b b b b b b b b b b
policy by covering direct physical loss unless the policy excludes it.
b b b b b b b b b b b
Theft - ANS >> The taking of personal property from its rightful owner, without the owner's consent,
b b b b b b b b b b b b b b b b
with the intent to deprive the owner of its value.
b b b b b b b b b b
Period of restoration - ANS >> The period during which business income loss is covered under the BIC
b b b b b b b b b b b b b b b b b
forms; it begins 72 hours after the physical loss occurs and ends when the property is (or should have
b b b b b b b b b b b b b b b b b b b
been) restored to use with reasonable speed. (With regard to extra expense coverage, it begins
b b b b b b b b b b b b b b b
immediately after the physical loss occurs.)
b b b b b b
Reconciliation - ANS >> The process of matching the net income and continuing expenses projections
b b b b b b b b b b b b b b
with the actual sales made and expenses incurred during the loss period.
b b b b b b b b b b b b
Ocean marine insurance - ANS >> Insurance that covers vessels and their cargoes, including various
b b b b b b b b b b b b b b
vessel-related liability exposures.
b b b
Value Reporting Form - ANS >> A commercial property form that bases the insured's premium for
b b b b b b b b b b b b b b b
business personal property on the values that the insured reports to the insurer periodically during
b b b b b b b b b b b b b b b
the policy period.
b b b
Motor truck cargo liability policy - ANS >> Policy that covers a trucker's liability for damage to cargo of
b b b b b b b b b b b b b b b b b b
others being transported by the trucker.
b b b b b b
Bill of lading - ANS >> A document acknowledging receipt of goods from the shipper, given by the
b b b b b b b b b b b b b b b b b
carrier, which includes the terms of the contract of carriage for the goods.
b b b b b b b b b b b b b
