AIC 303 Exam Questions and Answers Latest Update 2025-2026
One function of umbrella liability insurance that differs from the functions of excess liability
insurance is that umbrella insurance - Answers Covers some claims that the insured
organization's underlying liability policies do not cover.
Umbrella insurance covers some claims that the insured organization's underlying liability
policies do not cover.
A typically available cyber risk coverage that includes payment of fines and penalties is -
Answers Regulatory action.
Correct. A typically available cyber risk coverage that includes payment of fines and penalties is
regulatory action.
Which one of the following statements about defense coverage in the typical professional
liability insurance policy is most accurate? - Answers Although professional liability policies
differ, most policies pay for defense costs as long as they fall within the limits of the policy.
Correct. Although professional liability policies differ, most policies pay for defense costs as
long as they fall within the limits of the policy.
Samuel is a retired dentist who practiced in the same town for thirty years. His professional
liability coverage was with the same insurer for the last ten years of his career. The policies
were written on a claims-made basis with a retroactive date of January 1, 2001 and a five-year
extended reporting period. Samuel cancelled his professional liability policy when he retired on
July 1, 2011. On March 15, 2013 a former patient filed a sexual abuse claim against Samuel.
The alleged incident occurred on March 17, 2011. Which one of the following best describes
how Samuel's professional liability coverage will respond? - Answers The coverage will not
apply because the claim did not arise out of the rendering or failing to render professional
dental services.
Which one of the following terms contained in the HO-3 policy is defined as an accident,
including continuous or repeated exposure to the same general harmful conditions? - Answers
An occurrence is an accident, including continuous or repeated exposure to the same general
harmful conditions.
Which one of the following statements is correct with respect to eligibility for coverage under a
businessowners policy (BOP)? - Answers BOP eligibility rules are based on the size of the
business and the complexity of loss exposures.
Umbrella liability insurance - Answers May cover some claims that are not covered by
underlying liability insurance.
,Which one of the following best describes the differences between a following-form excess
liability policy and a self-contained excess liability policy? - Answers A self-contained excess
liability policy is subject only to its own provisions.
All of the following are included as insureds under the Section II—Liability Coverages of a
homeowners policy, EXCEPT: - Answers The named insured's separated spouse who resides
and works in another state
Correct. All the people in the answer choices are insureds under the policy except for the
separated spouse of the named insured who does not reside with the named insured. To qualify
as an insured, the spouse of the named insured must be a resident of the same household as
the named insured.
Personal umbrella policies usually cover the insured's liability for personal injury. Under the
Personal Umbrella Liability Policy, which one of the following is included under the definition of
personal injury? - Answers False Arrest
Under the Personal Umbrella Liability Policy, false arrest is included under the definition of
personal injury.
Which one of the following major sections of the general liability coverage form would be found
only in a form with a claims-made trigger? - Answers Extended Reporting Periods
Correct. The Extended Reporting Periods section is only found in general liability forms with a
claims-made trigger.
In which one of the following situations would media liability cyber coverage apply? - Answers A
marketing employee inadvertently uses a copyrighted photo on the WidgetCorp website.
Correct. Media liability coverage relates to an organization's liability for material published on its
own website.
One of the three basic forms of excess liability insurance policies is designed so that it
incorporates the provisions of the underlying policy and then modifies those provisions with
additional conditions or exclusions in the excess liability policy. That type of excess liability
policy form is known as - Answers A combination excess liability policy.
Claims alleging property damage, bodily injury, or financial loss are common against some
professionals. Which one of the following professionals is most likely to encounter all three
varieties of claims? - Answers Architect professionals commonly encounter all three varieties of
claims.
Which one of the following regarding the use of recorded statements is most accurate? -
Answers Because they are more efficient, companies have turned almost exclusively to
recorded statements.
, To respond to common customer inquiries such as claims status updates, many insurers are
deploying technology in the form of - Answers Chatbots powered by artificial intelligence are
used to answer questions and interact with customers online.
With a few limited exceptions, commercial general liability policies specifically exclude -
Answers Pollution and environmental perils.
Correct. With a few limited exceptions, commercial general liability policies specifically exclude
pollution and environmental perils.
The liability of one party for the damages suffered by another is based on - Answers The law.
Correct. The liability of one party for the damages suffered by another is based on the law, while
coverage is based on insurance policy wording.
Which one of the following applications of technology saves a great deal of time and travel for
claims reps? - Answers Digital appraisal photos
Correct. Claims reps are increasingly saving on time and travel by relying on photos taken by
insureds or specialists to assess damage and make appraisals.
Which one of the following is an advantage of using written statement instead of recorded
statements? - Answers Written statements minimize allegations that questions were leading or
that the claimant was entrapped.
Although there is a wide variety of types of liability claims, they always involve how many types
of parties? - Answers Liability claims always involve three types of parties: the insured, the
insurer and the third party making a claim against the insured
The job of the claims rep involves three primary areas of claims handling: coverage, liability and
- Answers Damages.
Correct. The job of the claims rep involves three primary areas of claims handling: coverage,
liability and damages.
Donnell is a claims rep gathering evidence for automotive claim. In assembling the case file he
includes an x-ray of a broken bone suffered by the claimant. This x-ray is - Answers Pictorial
evidence.
Correct. Pictorial evidence includes photographs, x-rays, videos and other images.
Coverage disputes might arise from a variety of circumstances including late notice of an
accident, applicability of an exclusion, or failure of the insured to cooperate. When any of these
situations exist, insurers - Answers Conduct detailed investigations.
Correct. When situations arise that may lead to coverage disputes, insurers conduct prompt and
detailed investigations.
One function of umbrella liability insurance that differs from the functions of excess liability
insurance is that umbrella insurance - Answers Covers some claims that the insured
organization's underlying liability policies do not cover.
Umbrella insurance covers some claims that the insured organization's underlying liability
policies do not cover.
A typically available cyber risk coverage that includes payment of fines and penalties is -
Answers Regulatory action.
Correct. A typically available cyber risk coverage that includes payment of fines and penalties is
regulatory action.
Which one of the following statements about defense coverage in the typical professional
liability insurance policy is most accurate? - Answers Although professional liability policies
differ, most policies pay for defense costs as long as they fall within the limits of the policy.
Correct. Although professional liability policies differ, most policies pay for defense costs as
long as they fall within the limits of the policy.
Samuel is a retired dentist who practiced in the same town for thirty years. His professional
liability coverage was with the same insurer for the last ten years of his career. The policies
were written on a claims-made basis with a retroactive date of January 1, 2001 and a five-year
extended reporting period. Samuel cancelled his professional liability policy when he retired on
July 1, 2011. On March 15, 2013 a former patient filed a sexual abuse claim against Samuel.
The alleged incident occurred on March 17, 2011. Which one of the following best describes
how Samuel's professional liability coverage will respond? - Answers The coverage will not
apply because the claim did not arise out of the rendering or failing to render professional
dental services.
Which one of the following terms contained in the HO-3 policy is defined as an accident,
including continuous or repeated exposure to the same general harmful conditions? - Answers
An occurrence is an accident, including continuous or repeated exposure to the same general
harmful conditions.
Which one of the following statements is correct with respect to eligibility for coverage under a
businessowners policy (BOP)? - Answers BOP eligibility rules are based on the size of the
business and the complexity of loss exposures.
Umbrella liability insurance - Answers May cover some claims that are not covered by
underlying liability insurance.
,Which one of the following best describes the differences between a following-form excess
liability policy and a self-contained excess liability policy? - Answers A self-contained excess
liability policy is subject only to its own provisions.
All of the following are included as insureds under the Section II—Liability Coverages of a
homeowners policy, EXCEPT: - Answers The named insured's separated spouse who resides
and works in another state
Correct. All the people in the answer choices are insureds under the policy except for the
separated spouse of the named insured who does not reside with the named insured. To qualify
as an insured, the spouse of the named insured must be a resident of the same household as
the named insured.
Personal umbrella policies usually cover the insured's liability for personal injury. Under the
Personal Umbrella Liability Policy, which one of the following is included under the definition of
personal injury? - Answers False Arrest
Under the Personal Umbrella Liability Policy, false arrest is included under the definition of
personal injury.
Which one of the following major sections of the general liability coverage form would be found
only in a form with a claims-made trigger? - Answers Extended Reporting Periods
Correct. The Extended Reporting Periods section is only found in general liability forms with a
claims-made trigger.
In which one of the following situations would media liability cyber coverage apply? - Answers A
marketing employee inadvertently uses a copyrighted photo on the WidgetCorp website.
Correct. Media liability coverage relates to an organization's liability for material published on its
own website.
One of the three basic forms of excess liability insurance policies is designed so that it
incorporates the provisions of the underlying policy and then modifies those provisions with
additional conditions or exclusions in the excess liability policy. That type of excess liability
policy form is known as - Answers A combination excess liability policy.
Claims alleging property damage, bodily injury, or financial loss are common against some
professionals. Which one of the following professionals is most likely to encounter all three
varieties of claims? - Answers Architect professionals commonly encounter all three varieties of
claims.
Which one of the following regarding the use of recorded statements is most accurate? -
Answers Because they are more efficient, companies have turned almost exclusively to
recorded statements.
, To respond to common customer inquiries such as claims status updates, many insurers are
deploying technology in the form of - Answers Chatbots powered by artificial intelligence are
used to answer questions and interact with customers online.
With a few limited exceptions, commercial general liability policies specifically exclude -
Answers Pollution and environmental perils.
Correct. With a few limited exceptions, commercial general liability policies specifically exclude
pollution and environmental perils.
The liability of one party for the damages suffered by another is based on - Answers The law.
Correct. The liability of one party for the damages suffered by another is based on the law, while
coverage is based on insurance policy wording.
Which one of the following applications of technology saves a great deal of time and travel for
claims reps? - Answers Digital appraisal photos
Correct. Claims reps are increasingly saving on time and travel by relying on photos taken by
insureds or specialists to assess damage and make appraisals.
Which one of the following is an advantage of using written statement instead of recorded
statements? - Answers Written statements minimize allegations that questions were leading or
that the claimant was entrapped.
Although there is a wide variety of types of liability claims, they always involve how many types
of parties? - Answers Liability claims always involve three types of parties: the insured, the
insurer and the third party making a claim against the insured
The job of the claims rep involves three primary areas of claims handling: coverage, liability and
- Answers Damages.
Correct. The job of the claims rep involves three primary areas of claims handling: coverage,
liability and damages.
Donnell is a claims rep gathering evidence for automotive claim. In assembling the case file he
includes an x-ray of a broken bone suffered by the claimant. This x-ray is - Answers Pictorial
evidence.
Correct. Pictorial evidence includes photographs, x-rays, videos and other images.
Coverage disputes might arise from a variety of circumstances including late notice of an
accident, applicability of an exclusion, or failure of the insured to cooperate. When any of these
situations exist, insurers - Answers Conduct detailed investigations.
Correct. When situations arise that may lead to coverage disputes, insurers conduct prompt and
detailed investigations.
