AIC QUESTIONS LATEST UPDATE) REAL QUESTIONS AND
VERIFIED ANSWERS |100% CORRECT | ALREADY GRADED
1) Your insured, a sole proprietor, purchased a building valued at $1
million. The insurance policy has a coinsurance clause based on the
replacement cost value of 90%. Contrary to your advice, your insured
insures the building for only $500,000. He suffers a windstorm loss
totalling $150,000. How much will the insurer pay?
a) $75,000
b)$83,333
c)$150,000
d) $93,755 Ans✓✓✓ b
2) An insured property is covered by two separate commercial policies
placed with two different insurers. Insurer A's policy has a limit of
$100,000 and Insurer B's policy has a limit of $200,000. The insured
suffers an insurable loss of $230,000. Assuming no deductibles apply,
how much will each insurer pay?
a) Insurer A will pay $100,000. Insurer B will pay $130,000
b)Insurer A will pay $100,000. Insurer B will pay $200,000
c) Insurer A will pay $76,659. Insurer B will pay $153,341
d) Neither insurer will pay. Two policies on the same property are
prohibited Ans✓✓✓ c
,3) On a Commercial Building, Equipment, and Stock Form, that insures
the building owner, which of the following would not be included under
the "building" definition?
a) Growing plants and trees inside the building used for decorative
purposes
b)Building maintenance supplies
c) Fixed structures pertaining to the building
d) Temporary fixtures and fittings Ans✓✓✓ d
4) Under a Commercial Building, Equipment, and Stock insurance
policy, the definition of "stock" includes
a) merchandise of every description usual to the insured's business,
including packing and wrapping materials
b)advertising material usual to the insured's business
c) all stock including similar property belonging to others for which the
insured is obligated to insure
d) all of the above Ans✓✓✓ d
5) The Commercial Building, Equipment, and Stock insurance policy
identifies three types of equipment for which coverage is provided.
Which of the following is NOT one of these three types?
a) Tenants' improvements and betterments if the insured does not own
the building
,b)Packing materials used to ship stock
c) Property belonging to others for which the insured is legally liable
d) The contents usual to the business the insured is engaged in, other
than stock Ans✓✓✓ b
stock6) The basic principle of business interruption insurance is
a) to arrange alternate employment for employees while the building is
being repaired following an insured loss
b)to restore the premises to the condition they were in before the loss
c) to cover the cost of relocating the business
d) to restore the income that would have been earned had the business
not been interrupted Ans✓✓✓ d
7) On a commercial crime insurance policy, employee dishonesty
insurance
a) is provided on a discovery basis
b)is also known as fidelity insurance
c) protects insured against dishonest acts committed by employees,
alone or in collusion with others
d) all of the above Ans✓✓✓ d
8) Which of the following losses normally excluded under a boiler and
machinery policy can be added by endorsement?
, a) Fireb)Nuclear reaction or radioactive contamination
c) Increased costs due to the enforcement of a bylaw regulating building
construction
d) War related losses Ans✓✓✓ c
9) A surety bond
a) is a contract between two parties
b)protects the surety
c) provides security to a party entering into a contractual agreement with
another
d) protects the insurer Ans✓✓✓ c
10) A marine insurance policy provides coverage for
a) the hull and cargo
b)the hull only
c) cargo only
d) property damage to third parties only, not the vessel itself Ans✓✓✓ a
11) Statutory conditions which are found in all fire policies
a) impose obligations on both the insured and the insurer
VERIFIED ANSWERS |100% CORRECT | ALREADY GRADED
1) Your insured, a sole proprietor, purchased a building valued at $1
million. The insurance policy has a coinsurance clause based on the
replacement cost value of 90%. Contrary to your advice, your insured
insures the building for only $500,000. He suffers a windstorm loss
totalling $150,000. How much will the insurer pay?
a) $75,000
b)$83,333
c)$150,000
d) $93,755 Ans✓✓✓ b
2) An insured property is covered by two separate commercial policies
placed with two different insurers. Insurer A's policy has a limit of
$100,000 and Insurer B's policy has a limit of $200,000. The insured
suffers an insurable loss of $230,000. Assuming no deductibles apply,
how much will each insurer pay?
a) Insurer A will pay $100,000. Insurer B will pay $130,000
b)Insurer A will pay $100,000. Insurer B will pay $200,000
c) Insurer A will pay $76,659. Insurer B will pay $153,341
d) Neither insurer will pay. Two policies on the same property are
prohibited Ans✓✓✓ c
,3) On a Commercial Building, Equipment, and Stock Form, that insures
the building owner, which of the following would not be included under
the "building" definition?
a) Growing plants and trees inside the building used for decorative
purposes
b)Building maintenance supplies
c) Fixed structures pertaining to the building
d) Temporary fixtures and fittings Ans✓✓✓ d
4) Under a Commercial Building, Equipment, and Stock insurance
policy, the definition of "stock" includes
a) merchandise of every description usual to the insured's business,
including packing and wrapping materials
b)advertising material usual to the insured's business
c) all stock including similar property belonging to others for which the
insured is obligated to insure
d) all of the above Ans✓✓✓ d
5) The Commercial Building, Equipment, and Stock insurance policy
identifies three types of equipment for which coverage is provided.
Which of the following is NOT one of these three types?
a) Tenants' improvements and betterments if the insured does not own
the building
,b)Packing materials used to ship stock
c) Property belonging to others for which the insured is legally liable
d) The contents usual to the business the insured is engaged in, other
than stock Ans✓✓✓ b
stock6) The basic principle of business interruption insurance is
a) to arrange alternate employment for employees while the building is
being repaired following an insured loss
b)to restore the premises to the condition they were in before the loss
c) to cover the cost of relocating the business
d) to restore the income that would have been earned had the business
not been interrupted Ans✓✓✓ d
7) On a commercial crime insurance policy, employee dishonesty
insurance
a) is provided on a discovery basis
b)is also known as fidelity insurance
c) protects insured against dishonest acts committed by employees,
alone or in collusion with others
d) all of the above Ans✓✓✓ d
8) Which of the following losses normally excluded under a boiler and
machinery policy can be added by endorsement?
, a) Fireb)Nuclear reaction or radioactive contamination
c) Increased costs due to the enforcement of a bylaw regulating building
construction
d) War related losses Ans✓✓✓ c
9) A surety bond
a) is a contract between two parties
b)protects the surety
c) provides security to a party entering into a contractual agreement with
another
d) protects the insurer Ans✓✓✓ c
10) A marine insurance policy provides coverage for
a) the hull and cargo
b)the hull only
c) cargo only
d) property damage to third parties only, not the vessel itself Ans✓✓✓ a
11) Statutory conditions which are found in all fire policies
a) impose obligations on both the insured and the insurer
