GEORGIA PROPERTY & CASUALTY INSURANCE
EXAM Prep (Latest 2024/ 2025 UPDATE)
QUESTIONS AND VERIFIED ANSWERS| 100%
CORRECT| GRADE A
General Liability policies protect... - ANSWERYour business if a 3rd party is harmed as
a result of your business activity
Commercial Auto policies protect... - ANSWERYour business if you're in an auto
accident while working or in a company vehicle
Workers Comp policies protect... - ANSWERYour business if an employee is injured
on the job
Professional Liability policies protect... - ANSWERYour business if a client accuses you
of making a mistake or giving bad advice (AKA errors and emissions insurance)
Commercial Property policies protect... - ANSWERYour business if the space, assets,
and/or equipment are damaged and need to be replaced/repaired
Business Interruption policies protect... - ANSWERYour business if you can't generate
revenue for a period of time
Fiduciary Liability policies protect... - ANSWERYour business from lawsuits claiming
the mismanagement of employee benefit plans
Host Liquor Liability policies protect... - ANSWERBusinesses that don't sell alcohol,
but permit drinking on their property (generally included on a GL policy)
Inland Marine policies protect... - ANSWERBusiness property that gets transported
over land (such as medical equipment, construction vehicles, etc.)
Aggregate Limit - ANSWERThe maximum amount an insurer will pay for all covered
losses during the covered policy period.
Arbitration - ANSWERSettling a dispute by agreeing to accept the decision of a
neutral 3rd party
Commercial Umbrella Insurance - ANSWERExtends coverage beyond the limits of
scheduled underlying liability policies.
Fidelity Bond - ANSWERInsurance policy that pays the employer money in the case of
employees' theft
,Fiduciary - ANSWERSomeone who has to act in the best interest of another party
GL class code - ANSWERCode to identify different types of businesses based on their
risk level (helps insurer determine cost)
Hold Harmless Agreement - ANSWERProtects a party from liability if there are
damages or losses (protects from a 3rd party's claim)
Indemnity - ANSWERA payment for damage or loss (agreement between business
and insurer to help business be whole after a loss)
Insurance Adjuster - ANSWERSomeone who evaluates damages to determine costs
insurer will pay for losses
Loss Payee - ANSWERA person or an entity other than the named insured to whom
the proceeds of insurance will be paid
Named Perils - ANSWEROnly those perils specifically named in the policy are covered
Nose Coverage - ANSWERProtects business from claims filed for an incident that
occurred during an older/previous policy
Open Perils - ANSWERAll perils are covered unless specifically excluded (common
with property insurance)
Products and Completed Operations - ANSWERHelps cover losses if your
products/completed service causes bodily injury or damage to another person's
property
Products-Completed Operations Aggregate Limit - ANSWERThe most the insurer will
pay for losses payable under Coverage A included in the Product and Completed
Operations Hazard.
Rider - ANSWERAdditional that provides more coverage than base policy
Subrogation - ANSWERThe right for an insurer to pursue a third party that caused an
insurance loss to the insured
Vicarious Liability - ANSWERLegal responsibility placed on one person for the acts of
another
Workers Comp class code - ANSWERCodes that identify type of work and risk
workers face
Direct/physical loss - ANSWERSelf explanatory (house fire, car accident, etc)
, Indirect loss - ANSWERConsequential loss as the result from a direct loss (temporary
housing, rental car, etc)
Peril - ANSWERThe cause of a loss (fire, flood, disease, icy roads, etc)
Moral Hazard - ANSWERResults from a decision to do something wrong or be less
cautious
Morale Hazard - ANSWERResults from careless or reckless actions/attitudes (ex:
texting and driving)
Physical Hazard - ANSWERSelf explanatory (slippery floor, icy road, structural
defects, etc)
Risk Sharing - ANSWERDistribute risk among a number of individuals
Transfer risk - ANSWERInsurance, hold harmless agreements
Principle of indemnity - ANSWERStates that insurance companies will restore you to
the same financial position you were in before (ex: if your house burns down, an
insurer will not pay for you to build a better house, but one to the same standard as
before)
Actual Cash Value - ANSWERreplacement cost minus depreciation
Replacement cost - ANSWERthe cost to replace an inventory item in its identical
form
Judgement Rating - ANSWEReach exposure is individually evaluated, and the rate is
determined largely by the judgement of the underwriter
Manual or Class Rating - ANSWERuses company rates for a particular state or area
that are contained in a manual
Merit Rating - ANSWERa rating plan by which class rates are adjusted upward or
downward based on individual loss experience
HO-2 - ANSWER-Broad form
-covers the dwelling, other structures, and personal property on a named perils basis
-owner occupied
HO-3 - ANSWER-special form
-Dwelling and other structures are covered on an open perils basis. Personal
property is covered on a named perils basis
-owner occupied
HO-4 - ANSWERRenter's insurance
EXAM Prep (Latest 2024/ 2025 UPDATE)
QUESTIONS AND VERIFIED ANSWERS| 100%
CORRECT| GRADE A
General Liability policies protect... - ANSWERYour business if a 3rd party is harmed as
a result of your business activity
Commercial Auto policies protect... - ANSWERYour business if you're in an auto
accident while working or in a company vehicle
Workers Comp policies protect... - ANSWERYour business if an employee is injured
on the job
Professional Liability policies protect... - ANSWERYour business if a client accuses you
of making a mistake or giving bad advice (AKA errors and emissions insurance)
Commercial Property policies protect... - ANSWERYour business if the space, assets,
and/or equipment are damaged and need to be replaced/repaired
Business Interruption policies protect... - ANSWERYour business if you can't generate
revenue for a period of time
Fiduciary Liability policies protect... - ANSWERYour business from lawsuits claiming
the mismanagement of employee benefit plans
Host Liquor Liability policies protect... - ANSWERBusinesses that don't sell alcohol,
but permit drinking on their property (generally included on a GL policy)
Inland Marine policies protect... - ANSWERBusiness property that gets transported
over land (such as medical equipment, construction vehicles, etc.)
Aggregate Limit - ANSWERThe maximum amount an insurer will pay for all covered
losses during the covered policy period.
Arbitration - ANSWERSettling a dispute by agreeing to accept the decision of a
neutral 3rd party
Commercial Umbrella Insurance - ANSWERExtends coverage beyond the limits of
scheduled underlying liability policies.
Fidelity Bond - ANSWERInsurance policy that pays the employer money in the case of
employees' theft
,Fiduciary - ANSWERSomeone who has to act in the best interest of another party
GL class code - ANSWERCode to identify different types of businesses based on their
risk level (helps insurer determine cost)
Hold Harmless Agreement - ANSWERProtects a party from liability if there are
damages or losses (protects from a 3rd party's claim)
Indemnity - ANSWERA payment for damage or loss (agreement between business
and insurer to help business be whole after a loss)
Insurance Adjuster - ANSWERSomeone who evaluates damages to determine costs
insurer will pay for losses
Loss Payee - ANSWERA person or an entity other than the named insured to whom
the proceeds of insurance will be paid
Named Perils - ANSWEROnly those perils specifically named in the policy are covered
Nose Coverage - ANSWERProtects business from claims filed for an incident that
occurred during an older/previous policy
Open Perils - ANSWERAll perils are covered unless specifically excluded (common
with property insurance)
Products and Completed Operations - ANSWERHelps cover losses if your
products/completed service causes bodily injury or damage to another person's
property
Products-Completed Operations Aggregate Limit - ANSWERThe most the insurer will
pay for losses payable under Coverage A included in the Product and Completed
Operations Hazard.
Rider - ANSWERAdditional that provides more coverage than base policy
Subrogation - ANSWERThe right for an insurer to pursue a third party that caused an
insurance loss to the insured
Vicarious Liability - ANSWERLegal responsibility placed on one person for the acts of
another
Workers Comp class code - ANSWERCodes that identify type of work and risk
workers face
Direct/physical loss - ANSWERSelf explanatory (house fire, car accident, etc)
, Indirect loss - ANSWERConsequential loss as the result from a direct loss (temporary
housing, rental car, etc)
Peril - ANSWERThe cause of a loss (fire, flood, disease, icy roads, etc)
Moral Hazard - ANSWERResults from a decision to do something wrong or be less
cautious
Morale Hazard - ANSWERResults from careless or reckless actions/attitudes (ex:
texting and driving)
Physical Hazard - ANSWERSelf explanatory (slippery floor, icy road, structural
defects, etc)
Risk Sharing - ANSWERDistribute risk among a number of individuals
Transfer risk - ANSWERInsurance, hold harmless agreements
Principle of indemnity - ANSWERStates that insurance companies will restore you to
the same financial position you were in before (ex: if your house burns down, an
insurer will not pay for you to build a better house, but one to the same standard as
before)
Actual Cash Value - ANSWERreplacement cost minus depreciation
Replacement cost - ANSWERthe cost to replace an inventory item in its identical
form
Judgement Rating - ANSWEReach exposure is individually evaluated, and the rate is
determined largely by the judgement of the underwriter
Manual or Class Rating - ANSWERuses company rates for a particular state or area
that are contained in a manual
Merit Rating - ANSWERa rating plan by which class rates are adjusted upward or
downward based on individual loss experience
HO-2 - ANSWER-Broad form
-covers the dwelling, other structures, and personal property on a named perils basis
-owner occupied
HO-3 - ANSWER-special form
-Dwelling and other structures are covered on an open perils basis. Personal
property is covered on a named perils basis
-owner occupied
HO-4 - ANSWERRenter's insurance
