AINS 103 All Practice Questions from the Course With
Complete Solutions
A building contractor uses lower grade materials than called for
in the specifications for an office building. A year after the
building was completed, a balcony collapses, injuring several
employees and customers and causing damage to the building
and contents. For the building construction company, this is an
example of
Select one:
A. A completed operations liability exposure.
B. An operations liability exposure.
C. A premises liability exposure.
D. A products liability exposure. Correct Answers A. A
completed operations liability exposure.
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
Select one:
A. The compensation the carrier receives for transporting cargo.
B. A penalty the carrier pays the shipper for nondelivery.
C. The liability for loss or damage to the cargo entrusted to it.
D. The cost of disposing of undeliverable goods. Correct
Answers A. The compensation the carrier receives for
transporting cargo.
A commercial building may contain furniture, machinery and
equipment and finished products. Which one of the following is
the term generally used in property insurance policies to refer to
all these types of property?
,Select one:
A. Business personal property
B. Stock
C. Inventory
D. Commercial property Correct Answers A. Business personal
property
A contractor is hired to install a new concrete sidewalk in front
of a store. Several weeks after the sidewalk was installed, the
concrete buckles and a passerby trips and falls on the buckled
sidewalk. The passerby sues the contractor to recover medical
expenses incurred due to the fall. This commercial liability loss
is categorized as
Select one:
A. Products liability.
B. Environmental liability.
C. Professional liability.
D. Completed operations liability. Correct Answers D.
Completed operations liability.
A customer filed a suit against Patsy's Market, claiming that she
was injured when she slipped and fell in the produce section.
The customer claimed that she broke her elbow, had to have
surgery, and missed a week of work. The owner of Patsy's
Market told its commercial general liability (CGL) insurer that
the produce area was always clean and that the claim was
suspicious. After reviewing the medical bills and video footage
from the market, the insurer concluded that Patsy's Market was
probably liable for the customer's injury. The CGL insurer will
most likely attempt to do which one of the following?
Select one:
,A. Defend Patsy's Market in court
B. Refuse to defend Patsy's Market based on an exclusion
C. Negotiate an out of court settlement
D. Deny the claim based on the owner's suspicion Correct
Answers C. Negotiate an out of court settlement
A customer shopping at Clark's Food Market dropped a bottle of
wine at the checkout counter. The bottle broke and cut the
customer's leg. The customer required some minor medical
attention and a few stitches. Which one of the following
coverages under Clark's Commercial General Liability (CGL)
coverage form would pay for the customer's expenses?
Select one:
A. Personal and advertising injury liability coverage
B. Liquor liability coverage
C. Premises and operations liability coverage
D. Medical payments coverage Correct Answers D. Medical
payments coverage
A family recently purchased a new home constructed by a
residential home builder. Two months after taking possession,
several of the family members were injured when the roof
suddenly collapsed. The family sued the construction company
and was awarded monetary damages for their injuries. This is an
example of which one of the following types of commercial
liability loss exposure for the construction company?
Select one:
A. Products liability
B. Premises and operations liability
C. Completed operations liability
, D. Employers liability Correct Answers C. Completed
operations liability
A motor truck cargo liability policy
Select one:
A. Covers a trucking company's liability for damage to goods of
others while being transported by the trucker.
B. Covers property in the care, custody or control of a
governmental agency.
C. Provides broad coverage for parcel post shipments
throughout the United States, Canada, and Mexico.
D. Covers cargo either on an inland marine policy or an ocean
marine policy. Correct Answers A. Covers a trucking
company's liability for damage to goods of others while being
transported by the trucker.
A not-for-profit public interest group posted a newspaper
editorial on its electronic chatroom that falsely accused a local
politician of criminal activity. The public interest group is
insured under an unendorsed Commercial General Liability
(CGL) policy. The politician who was falsely accused filed suit
against the public interest group for libel. Which one of these
statements best describes the probable response the public
interest group will receive from its insurer after the insurer
reviews these facts?
Select one:
A. The claim will be covered because the territory of Coverage
B of the CGL policy is worldwide for personal and advertising
injury offenses that take place through the Internet.
Complete Solutions
A building contractor uses lower grade materials than called for
in the specifications for an office building. A year after the
building was completed, a balcony collapses, injuring several
employees and customers and causing damage to the building
and contents. For the building construction company, this is an
example of
Select one:
A. A completed operations liability exposure.
B. An operations liability exposure.
C. A premises liability exposure.
D. A products liability exposure. Correct Answers A. A
completed operations liability exposure.
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
Select one:
A. The compensation the carrier receives for transporting cargo.
B. A penalty the carrier pays the shipper for nondelivery.
C. The liability for loss or damage to the cargo entrusted to it.
D. The cost of disposing of undeliverable goods. Correct
Answers A. The compensation the carrier receives for
transporting cargo.
A commercial building may contain furniture, machinery and
equipment and finished products. Which one of the following is
the term generally used in property insurance policies to refer to
all these types of property?
,Select one:
A. Business personal property
B. Stock
C. Inventory
D. Commercial property Correct Answers A. Business personal
property
A contractor is hired to install a new concrete sidewalk in front
of a store. Several weeks after the sidewalk was installed, the
concrete buckles and a passerby trips and falls on the buckled
sidewalk. The passerby sues the contractor to recover medical
expenses incurred due to the fall. This commercial liability loss
is categorized as
Select one:
A. Products liability.
B. Environmental liability.
C. Professional liability.
D. Completed operations liability. Correct Answers D.
Completed operations liability.
A customer filed a suit against Patsy's Market, claiming that she
was injured when she slipped and fell in the produce section.
The customer claimed that she broke her elbow, had to have
surgery, and missed a week of work. The owner of Patsy's
Market told its commercial general liability (CGL) insurer that
the produce area was always clean and that the claim was
suspicious. After reviewing the medical bills and video footage
from the market, the insurer concluded that Patsy's Market was
probably liable for the customer's injury. The CGL insurer will
most likely attempt to do which one of the following?
Select one:
,A. Defend Patsy's Market in court
B. Refuse to defend Patsy's Market based on an exclusion
C. Negotiate an out of court settlement
D. Deny the claim based on the owner's suspicion Correct
Answers C. Negotiate an out of court settlement
A customer shopping at Clark's Food Market dropped a bottle of
wine at the checkout counter. The bottle broke and cut the
customer's leg. The customer required some minor medical
attention and a few stitches. Which one of the following
coverages under Clark's Commercial General Liability (CGL)
coverage form would pay for the customer's expenses?
Select one:
A. Personal and advertising injury liability coverage
B. Liquor liability coverage
C. Premises and operations liability coverage
D. Medical payments coverage Correct Answers D. Medical
payments coverage
A family recently purchased a new home constructed by a
residential home builder. Two months after taking possession,
several of the family members were injured when the roof
suddenly collapsed. The family sued the construction company
and was awarded monetary damages for their injuries. This is an
example of which one of the following types of commercial
liability loss exposure for the construction company?
Select one:
A. Products liability
B. Premises and operations liability
C. Completed operations liability
, D. Employers liability Correct Answers C. Completed
operations liability
A motor truck cargo liability policy
Select one:
A. Covers a trucking company's liability for damage to goods of
others while being transported by the trucker.
B. Covers property in the care, custody or control of a
governmental agency.
C. Provides broad coverage for parcel post shipments
throughout the United States, Canada, and Mexico.
D. Covers cargo either on an inland marine policy or an ocean
marine policy. Correct Answers A. Covers a trucking
company's liability for damage to goods of others while being
transported by the trucker.
A not-for-profit public interest group posted a newspaper
editorial on its electronic chatroom that falsely accused a local
politician of criminal activity. The public interest group is
insured under an unendorsed Commercial General Liability
(CGL) policy. The politician who was falsely accused filed suit
against the public interest group for libel. Which one of these
statements best describes the probable response the public
interest group will receive from its insurer after the insurer
reviews these facts?
Select one:
A. The claim will be covered because the territory of Coverage
B of the CGL policy is worldwide for personal and advertising
injury offenses that take place through the Internet.
