Quiz
AIC 303
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Questions in this quiz (92)
1The liability of one party for the damages suffered by another is based on:
- AA. Coverage Limits
- BB. NAIC Model Guidelines
- CC. The Law
- DD. Insurance Policy Wording
2Which one of the following applications of technology saves a great deal of time and travel for claims reps?:
- AA. Drones
- BB. Digital appraisal photos
- CC. Data from the Internet of Things
- DD. Chatbots
3Which one of the following is the most common type of liability claim in the United States?
- AA. Auto Liability
- BB. Premises
- CC. Products Liability
- DD. Professional Liability
4Mitsuki was working on her lawn when she realized a hedge needed trimming. She noticed a landscaping crew across the street and asked the supervisor if she could borrow a hedge trimmer for a short time. He lent her the tool and she began trimming the bush, but because she was unfamiliar with the tool, she ended up cutting her leg. She hired an attorney, Antonia, in her suit against the landscaping company Antonia based the suit on the legal theory of:
- AA. Voluntary assumption of liability
- BB. Special circumstances
- CC. Statutory duty to provide security
- DD. Special relationship
5Freja became the victim of identity theft after her credit card company experienced a breach of cyber security. Freja learned that over 100 other customers of the credit card company experienced similar problems as a result of several such breaches. The best way for Freja and the other victims of identity theft to collect damages from the credit card company is to:
- AA. Each file their lawsuits separately.
- BB. File a class-action law suit based on contract law.
- CC. File a professional liability lawsuit.
- DD. File a class-action law suit based on tort law.
6Hugo is handling a claim for a delivery service in which an experienced driver is accused of assaulting a customer during a delivery. To determine if the service has engaged in negligent behavior, Hugo asks the employer if it:
- AA. Has background check procedures in place and were they followed?
- BB. Knows of any history of violence from the pre-employment background check.
- CC. Has job application procedures in place and were they followed?
- DD. Retained the employee despite having notice of a propensity for violence.
7Claims 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?
- AA. Architects
- BB. Dentists
- CC. Accountants
- DD. Attorneys
8Personal 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?
- AA. Professional liability
- BB. Abandonment
- CC. Assault and battery intentionally committed
- DD. False arrest
9In which one of the following situations would funds transfer fraud coverage apply?
- AA. A hacker gains access to company accounts and transfers funds to other criminal parties
- BB. A bookkeeper embezzles small amounts of money from company accounts over a long period of time
- CC. An employee receives a phishing email and is fooled into transferring company funds to a criminal's account
- DD. A hacker gains access to a company's telephone system and uses it to make overseas calls
10Which 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?
- AA. Claim
- BB. Exposure
- CC. Occurrence
- DD. Loss
11As a commercial risk advisor, Marianne educates her clients on their needs for first-party and/or third-party cyber coverage. Which one of the following best summarizes the goals of first-party coverage?
- AA. Assessing and upgrading hardware and software to prevent breaches
- BB. Providing defense for liability claims from breaches of customer information
- CC. Restoring lost business income and resuming operations
- DD. Providing coverage for claims of misuse of proprietary data on the company's own website
12Joe's Cleaning Service is having a very good year, with close to a 30% increase in sales. Joe is wondering if this growth will affect his general liability premium at the end of the policy period. Which one of the following sections of the general liability coverage form will provide this information?
- AA. Endorsements
- BB. Limits of Insurance
- CC. Extended Reporting Period
- DD. Declarations Form
13Which one of the following is true with regard to coverage for acts of directors or officers under a personal umbrella policy?
- AA. They are always covered
- BB. They are always excluded
- CC. Directors or officers of a not-for-profit organization are covered
- DD. Directors or officers of a for-profit organization are covered
14In which one of the following situations would media liability coverage apply?
- AA. A WidgetCorp sales rep distributes thumb drives to clients, not knowing that they contain a virus
- BB. WidgetCorp prints brochures that exaggerate its sales figures and is sued by a competitor
- CC. A national publication prints an unflattering article about WidgetCorp, damaging its reputation
- DD. A marketing employee inadvertently uses a copyrighted photo on the WidgetCorp website
15An architect retires after a long career designing hotels. Six months after his retirement and the expiration of his professional liability policy, the architect receives a letter from an attorney advising that his client is suing the architect. The suit indicates the client suffered an injury allegedly caused by the poor design and placement of a glass wall in the lobby of a hotel for which the architect had drawn the plans. The professional liability policy may:
- AA. Not provide coverage due to a bodily injury exclusion for policies of architects and engineers.
- BB. Not provide coverage since the architect is now retired and no longer has a current policy.
- CC. Provide coverage only if the accident occurred under the observation provision.
- DD. Provide coverage for the loss under an automatic provision that extends tail coverage to the architect.
16One distinguishing feature between umbrella liability insurance and excess liability insurance is that:
- AA. Umbrella liability coverage may be subject to a self-insured retention
- BB. Excess liability insurance is a form of reinsurance while umbrella insurance is primary insurance
- CC. Excess liability policies include defense costs while umbrella liability policies do not
- DD. Excess liability carries a larger deductible than umbrella liability
17All of the following are included as insureds for the Section II - Liability Coverages of a homeowners policy EXCEPT:
- AA. The named insured's neighbor while caring for the insured's dog if the dog causes injury while in the neighbor's care.
- BB. The 19-year old exchange student who temporarily lives with and under the care of the named insured and his spouse.
- CC. The named insured's spouse who lives with the named insured but is away on business most Mondays through Fridays
- DD. The named insured's 30-year-old best friend who is not related but becomes a temporary resident of the named insured's household
18BOP rating incorporates which one of the following variables?
- AA. The number of stories in the insured building
- BB. Whether the coverage is claims-made or occurrence based
- CC. The amount of the policy deductible
- DD. Whether the policy is new business or a policy renewal
19The need for excess or umbrella liability insurance is closely related to three basic issues involved in the use of liability insurance. Which one of the following is one of the three basic issues?
- AA. Effect of aggregate limits
- BB. Required underlying coverages
- CC. Insurer solvency
- DD. Difficulty in estimating minimum possible losses for liability loss exposures
20A typically available cyber risk coverage that includes payment of fines and penalties is:
- AA. Crisis management to mitigate damage to reputation
- BB. Cyber extortion
- CC. Regulatory action
- DD. Cyber crime
21Some states require the insurer to offer the insured the option to extend the personal umbrella to cover which one of the following?
- AA. Personal injury
- BB. Bodily injury
- CC. Uninsured and underinsured motorists protection
- DD. Property Damage
22Which one of the following best describes the process for rating business income and any additional coverages that are automatically included in the businessowners policy?
- AA. BOP property rates include loadings (built-in charges) for these coverages.
- BB. These coverages are usually provided at no additional premium
- CC. Rates are computed separately for each and then added to the base rate.
- DD. BOP manuals include specific additional premium amount for each additional coverage.
23Which one of the following statements concerning professional liability insurance coverage is most accurate?
- AA. Most professional liability policies limit coverage to those acts committed in the U.S. or Canada
- BB. Most professional liability policies provide coverage for acts committed anywhere in the world, as long as the suit is brought in the U.S. or Canada
- CC. Most professional liability policies have been amended to provide coverage for acts committed in the territorial U.S., although there are no restrictions on where the suit is brought.
- DD. Most professional liability policies have been amended to provide coverage for acts committed anywhere in North America, including both Canada and Mexico.
24There are a number of reasons that organizations find that they need excess or umbrella liability insurance. Which one of the following statements most accurately describes how organizations go about establishing their need for excess or umbrella liability insurance?
- AA. Insureds often purchase excess or umbrella insurance coverage because their primary insurers are unwilling to provide adequate limits within the primary insurance layer.
- BB. Insureds must first establish an accurate measure of their maximum possible loss for liability exposures before they can even consider purchasing umbrella or excess liability insurance.
- CC. Excess liability insurance is usually purchased as a supplement to an existing primary insurance layer, while umbrella liability insurance is usually used as a primary layer.
- DD. For those insureds that wish to increase their retentions, excess liability insurance is more suitable for use as a supplement to self-insured retentions than umbrella liability insurance.
25An unendorsed securities brokers professional liability policy will insure the firm and registered representatives for claims alleging negligence committed on the firm's behalf in which one of the following capacities?
- AA. Selling property-casualty insurance products
- BB. Selling life insurance products
- CC. Brokering real estate
- DD. Brokering mortgages
26The claim expenses additional coverage under Section II of a homeowners policy covers:
- AA. The insured's reasonable expenses at the insurer's request.
- BB. The insured's personal liability.
- CC. Medical payments incurred by others.
- DD. Premiums on bonds exceeding the personal liability limit.
27Michael is a general liability claims adjuster for Goshen Mutual. He wants to see if an insured has any endorsements that apply to its general liability policy. Which one of the following sections of the coverage form would provide this information for Michael?
- AA. Declarations
- BB. Definitions
- CC. Coverages
- DD. Conditions
28Which one of the following statements about defense coverage in the typical professional liability insurance policy is most accurate?
- AA. Although defense costs are usually covered under the standard commercial general liability policy, they are typically excluded in professional liability policies.
- BB. The most common provision for paying defense costs in professional liability policies is to pay them in addition to the policy limits, similar to how they are treated in the standard commercial general liability policy.
- CC. Defense costs of up to $15,000 are payable under the standard professional liability policy as long as it is endorsed and an additional premium is paid for the coverage.
- DD. Although professional liability policies differ, most policies pay for defense costs as long as they fall within the limits of the policy.
29Grace bought a property that had formerly been a factory. The EPA began an environmental study and determined that Grace's property was the source of groundwater contamination. Under CERCLA, which one of the following groups is liable for the cost of cleanup?
- AA. Grace and all prior owners
- BB. Grace only
- CC. Anyone the EPA proves was negligent
- DD. Grace and prior owners who accepted the waste
30Lucy's property was damaged by an accident caused by Valteri and Sara. Lucy lives in a state that uses a system of pure several liability. This means that Valteri and Sara:
- AA. Are each liable up to the total amount of Lucy's damages
- BB. Can be held separately responsible for the entire amount of Lucy's damages
- CC. Will split the amount of Lucy's damages evenly among themselves
- DD. Are liable only for their respective share of Lucy's damages
31Carolina throws a party for her employees, one of whom gets into an accident on his way home and injures Gabriela. Gabriela's attorney will most likely try to prove that Carolina is vicariously liable for Gabriela's injuries by establishing that:
- AA. Gabriela was visibly intoxicated
- BB. The event benefited Carolina
- CC. Carolina was a social host
- DD. Carolina violated dram shop laws
32Charlotte hosts a charity event and allows Cristobal to set up a bar and charge attendees for drinks. Georgia buys a whiskey from Cristobal for her friend, Juhani, who leaves the party intoxicated and injures Mikael in an accident. Mikael would most likely have the strongest case against:
- AA. Charlotte
- BB. Cristobal
- CC. Georgia
- DD. The Distiller
33Javiera leases a space in Osakri's parking garage to park her car. Which one of the following best identifies the party liable for vandalism to the inside of Javiera's car?
- AA. Osakri is liable because bailees are strictly for property in their care
- BB. Javiera is liable because she did not take normal care of her car
- CC. Osakri would be liable if it is determined he did not take great care of the car
- DD. Javiera would be liable if she neglected to lock the car
34Rin was injured in an accident caused by Daniel and Julio. Rin lives in a state that uses a system of joint and several liability. This means that Daniel and Julio:
- AA. Are liable only for their respective share of Rin's damages
- BB. Are each liable up to the total amount of Rin's damages
- CC. Will split their responsibility for Rin's damages evenly among themselves
- DD. Can be held separately responsible for the entire amount of Rin's damages.
35Leah's husband was killed in an automobile accident. She is making a claim for pecuniary loss, mental anguish, loss of consortium, and loss of counseling. Leah is making a claim known as a:
- AA. Decedent action
- BB. Survival action
- CC. Wrongful death action
- DD. Pecuniary action
36Carolina is handling a bodily injury claim for an auto accident. She is considering the reasonable estimate of damages the claimant is likely to be able to prove, the claimant's risk of a verdict in the insured's favor, the insured's proportionate share of liability in the event of an unfavorable verdict, and the variables affecting a jury's likely award. Carolina is creating a(n):
- AA. Estimate of reasonable damages
- BB. Good settlement valuation
- CC. Initial settlement offer
- DD. Claim defense strategy
37Miu is assessing liability in an auto claim. She has reviewed and applied the relevant law, determined the legal defenses that apply to the facts, determined the choices the claimant may have, and determined the degree of liability. In which of Miu's steps did she consider comparative and contributory negligence?
- AA. Determine the degree of liability
- BB. Determine the choices the claimant may have
- CC. Review and apply the relevant law
- DD. Determine the legal defenses that apply
38Which one of the following statements best describes the rating process used with businessowners policies (BOPs)?
- AA. As the eligibility rules for BOPs were broadened, some insurers began using judgment rating for some classes.
- BB. BOP rating is not as complicated as the rating for a commercial package policy.
- CC. Originally, BOP rates were based on square footage.
- DD. Rating a BOP is actually more complicated than rating comparable coverages in a commercial package policy.
39An unendorsed securities brokers professional liability policy will insure the firm and registered representatives for claims alleging negligence committed on the firm's behalf in which one of the following capacities?
- AA. Brokering real estate
- BB. Selling life insurance policies
- CC. Brokering mortgages
- DD. Selling property-casualty insurance products
40Personal 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?
- AA. Bodily harm
- BB. Workers compensation
- CC. Assault and battery intentionally committed
- DD. Malicious prosecution
41Katie is a claims representative handling a bodily injury claim. She needs to review a medical report with the treating physician's determination of impairment rating. She should use the:
- AA. Physician's desk reference
- BB. Gray's Anatomy: The Anatomical Basis of Clinical Practice
- CC. Medicare Claims Processing Manual
- DD. AMA Guides to Evaluation of Permanent Impairment
42Self-contained excess liability policies:
- AA. Are designed to apply over a self-insured layer instead of an underlying policy
- BB. Contain a deductible specific to the policy
- CC. Can create coverage gaps between excess and underlying layers
- DD. Have the same conditions as the underlying layer
43All of the following are included as insureds for the Section II - Liability Coverages of a homeowners policy, EXCEPT:
- AA. The homeowners association that sends a loss assessment bill to the named insured
- BB. The 19-year-old exchange student who temporarily lives with and under the care of the named insured and his spouse
- CC. The named insured's neighbor while caring for the insured's dog if the dog causes injury while in the neighbor's care
- DD. The named insured's 17-year-old foster child
44Alex is a psychologist who is evaluating a patient with psychological disorders. He is conducting the Wechsler Adult Intelligence Scale, the Minnesota Miniphasic Personality Inventory, the Thematic Apperception Test, and the Halstead-Reitan Battery. Which one of the following of Alex's tests is a neuropsychological test?
- AA. Wechsler Adult Intelligence Scale
- BB. Minnesota Miniphasic Personality Inventory
- CC. Thematic Apperception Test
- DD. Halstead-Reitan Battery
45Which one of the following is an advantage of using written statement instead of recorded statements?
- AA. Written statements minimize allegations that questions were leading or that the claimant was entrapped
- BB. Written statements can be produced by an insured, freeing the claims rep's time
- CC. Only written statements are accepted in many courts
- DD. Written statements are typically accomplished more quickly
46Samuel is handling a bodily injury claim for Mia, who slipped and fell at an insured location and injured her right ankle. During the course of treatment for her ankle, Mia began to ask the physician for treatment for her neck pain after being in a car accident. Samuel denied payment for the neck treatment because the neck injury is a(n):
- AA. Intervening problem
- BB. Unrelated problem
- CC. Chronic problem
- DD. Acute problem
47Aleski parked his car in a parking lot while he ate in a restaurant. It was dark when he returned to his car to find he had parked in an area where the lighting was not working, in violation of local code. He was subsequently attacked and robbed by an individual hiding in the shadows. Aleski made a claim against the parking lot owner based on which of the following legal theories?
- AA. Statutory duty to provide security
- BB. Special circumstances
- CC. Special relationship
- DD. Voluntary assumption of liability
48Coverage 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:
- AA. Contact the state insurance commissioner's office
- BB. Suspend the claim
- CC. Notify legal counsel
- DD. Conduct detailed investigations
49Luis is completing an impairment rating report for a patient. This includes the anticipated effect of the medical condition on the patient's daily activities, a comparison of clinical findings with the AMA guide's criteria, his conclusion on whether the medical condition will result in incapacitation, and the expected recovery date and prediction of full or partial recovery. Which one of the following is a component of Luis's report relating to the impairment criteria?
- AA. Expected recovery date and prediction of full or partial recovery
- BB. Comparison of clinical findings with the AMA guide's criteria
- CC. Anticipated effect of the medical condition on the patient's daily activities
- DD. Conclusion on whether the medical condition will result in incapacitation
50Which one of the following best identifies an advance payment?
- AA. A partial claim payment accompanied by a signed release
- BB. A payment made on behalf of a claimant to a provider, such as a medical professional or auto repair facility
- CC. A payment in full made to a claimant who has not responded to settlement offers
- DD. A partial claim payment issued without obtaining a signed release
51Janine rents an apartment from a landlord. Her lease contains a clause requiring her to indemnify the landlord for any damages for which she is responsible. This is an example of a:
- AA. Subrogation clause
- BB. Tort obligation
- CC. Contribution clause
- DD. Hold-harmless agreement
52For evidence to be admitted by a court, it must be relevant, competent and:
- AA. Credible
- BB. Material
- CC. Timely
- DD. Unimpeachable
53JKL Company retains general liability claims up to $100,000 per occurrence. The company purchased excess liability insurance that provides both specific and aggregate excess coverage on an annual basis. After the $100,000 retention, the specific excess limit is $500,000 per occurrence. The aggregate excess limit is $5 million. During the year this excess arrangement was in place, JKL sustained three general liability claims. These three occurrences resulted in settlements of $700,000, $50,000, and $400,000. How much of these three settlements will JKL's excess insurer pay in total?
- AA. $800,000
- BB. $900,000
- CC. $1,050,000
- DD. $1,100,000
54Chelsea is injured in an accident caused by an uninsured motorist and signs a UM release. Which one of the following is correct?
- AA. She may collect an additional settlement directly from the uninsured motorist
- BB. She must cooperate with her insurer in pursuing subrogation
- CC. She may choose any responsible third party to subrogate against the responsible motorist
- DD. Her UM payment will be in addition to any liability payments made.
55Shota serves drinks to Nanami at his tavern. Nanami leaves the bar and drives home. On the way, she gets into an accident and injures Cian, who retains an attorney. The attorney's most likely course of action will be to allege that:
- AA. Nanami was inside the tavern before she drove her car
- BB. The alcohol manufacturer is liable for the effects of its product
- CC. Nanami's auto policy is primary in covering Cian's medical bills
- DD. Shota served Nanami when she was visibly intoxicated
56Which one of the following losses would be the most likely to be paid under a marine protection and indemnity insurance policy?
- AA. Losses to cargo following seizure of the vessel by pirates
- BB. Damage to another vessel caused by an at-fault collision
- CC. Expenses incurred to return to an injured crew member to his sign-on port
- DD. The portion of a general average loss assigned to the shipowner
57Fatima was a passenger on an airplane when one of the other passengers became agitated and began behaving erratically. Before the flight attendants were able to subdue him, the passenger struck Fatima in the face. Fatima hires Luke to represent her in her claim against the airline. Luke bases his suit on which one of the following legal theories?
- AA. Voluntary assumption of liability
- BB. Special relationship
- CC. Statutory duty to provide security
- DD. Special circumstances
58A physician is visiting Guatemala after a major disaster to administer aid. A patient with a large laceration requiring stitches develops an infection that is believed to be due to unsterilized equipment. The patient intends to file suit against the physician. In order for the loss to be covered under a typical professional liability policy, the:
- AA. Loss would have to occur in the US or Canada
- BB. Policy must list Guatemala under the coverage territory
- CC. Patient must file suit in Guatemala where the loss occurred
- DD. Patient must file suit in the US or Canada.
59Magnus goes to a bicycle shop and buys a mountain bike from the "Off-road Bikes" section of the store. During his first off-road excursion with the bicycle, the front wheel bends and Magnus is thrown from the bike resulting in multiple injuries. Magnus could bring a products liability lawsuit against the bicycle shop because of the:
- AA. Misrepresentation
- BB. Express warranty
- CC. Uniform Commercial Code
- DD. Implied warranty of merchantability
60Adam is walking through a mall and texting on his phone at the same time. In the center of the mall, he walks into the fountain and falls injuring his arm and head. Adam would most likely be able to receive:
- AA. Damages for the mall owner's negligence
- BB. Medical payments up to $10,000
- CC. Unlimited medical payments
- DD. Nothing because he was at fault
61Which one of the following statements concerning the policy forms used by insurers to provide excess liability and umbrella liability coverage is most accurate?
- AA. Most insurers use standardized forms for their excess and umbrella liability forms because the policy language has usually been tested in court already
- BB. Almost all excess liability insurance policies are written on standardized forms, while almost all umbrella policies are manuscript forms
- CC. Umbrella liability policies are written on standardized policy forms, while excess liability policies are usually manuscript policies
- DD. Many insurers do not use standardized policies for excess and umbrella liability policies, and the policies vary considerably in the coverages they offer
62Julian's property is being impacted by contamination from petroleum byproducts from the neighboring property, which is occupied by an industrial operation. He wishes to recover the maximum damages. Julian's attorney advises him to bring a lawsuit under:
- AA. Nuisance theory
- BB. Superfund
- CC. Clean Air Act
- DD. CERCLA
63Anna injured her back in a not-at-fault auto accident and has a bodily injury claim with the other driver's insurance company. Later she fell and her back injury was aggravated. Her claims representative for the first accident told her that the aggravation of her back injury:
- AA. Was covered because it was a chronic condition
- BB. Was not covered because it was an intervening problem
- CC. Was covered because it was an unavoidable consequence of the back injury
- DD. Was not covered because it was not an unavoidable consequence of the back injury
64The hospital that treated Dante following a car accident notifies his insurer of a lien on the claim for medical services rendered. Having been formally communicated to the insurer, the lien is now known as:
- AA. A transmitted lien
- BB. A documented lien
- CC. An outstanding lien
- DD. A perfected lien
65Katarina was injured when she tripped and fell while on Rodrigo's property. In order for Rodrigo to be liable for Katarina's injury, she must prove that Rodrigo:
- AA. Intentionally caused her injury through his inaction
- BB. Had constructive knowledge of the hazard before her injury
- CC. Knew about the hazard because her injury was foreseeable
- DD. Breached a duty owed to her through his action or inaction
66Charlene's Clothing is a retail store selling expensive women's clothing. It is insured under an unendorsed Commercial General Liability Coverage Form. One day an employee suspects that a customer is about to shoplift an expensive bag, so she grabs the customer and detains her until the police arrive. The customer files a suit against Charlene's for humiliation and minor bruising. This is an example of which one of the following CGL loss exposures?
- AA. Premises and operations
- BB. Personal and advertising injury
- CC. Products and completed operations
- DD. Medical payments
67Juan is calculating a settlement in an auto liability claim and is determining a reasonable estimate of the damages the claimant is likely to be able to prove. In estimating the initial probable verdict range, Juan bases his calculations:
- AA. On provable damages, including considerations for liability and other variables
- BB. Solely on provable damages without considering liability or other variables
- CC. On likely damages, liability, and characteristics of the insured, claimant and venue.
- DD. Solely on the predictive values based on similar cases in his experience
68Cristobal has several methods available to him as he evaluates the settlement range for his claim: individual case methos, roundtable technique, formula method, and expert system. Which method should Cristobal use if he is dealing with a minor soft tissue claim and wants a simple approach to achieve an early, mutually agreeable settlement?
- AA. Roundtable technique
- BB. Individual case method
- CC. Formula method
- DD. Expert system
69Sammy is the named insured on an HO-3 policy covering his family's home. Sammy and his wife, Sally, have a young daughter, Suzie, and a grown-up son, Steve, who lives with them, and they own a cocker spaniel puppy. While a neighboring couple and their five-year-old son, Jay, were visiting, the puppy bit Jay. Jay suffered a serious wound and his parents sued Sammy and Sally. All of the following are insureds under the HO-3, EXCEPT:
- AA. Suzie
- BB. Steve
- CC. Sally
- DD. Jay
70Which one of the following is true regarding personal umbrella policy conditions?
- AA. The insured must give the insurer written notice of loss within 12 hours
- BB. The policy territory is limited to the country where the policyholder resides
- CC. The umbrella policy will not pay anything in the event of a loss if the underlying insurance is not maintained
- DD. The umbrella policy provides excess coverage over any other insurance, whether it is collectible or not
71Despite following all best practices for both IT security and credit card processing. WidgetCorp suffers a cyber breach in which customer data is compromised, and fails to notify the affected customers immediately. Which of the following common liability coverages might be necessary in this situation?
- AA. Payment card liabilities and data network liability
- BB. Media liability and payment card liabilities and costs
- CC. Data and network liability and regulatory defense and penalties liability
- DD. Regulatory defense and penalties liability and media liability
72Which one of the following types of contractors would some insurers consider eligible for coverage under a businessowners policy?
- AA. A general contractor that supervises subcontractors
- BB. A wrecking and demolition contractor that occupies a home office building of 75,000 square feet in area
- CC. A small residential carpentry contractor
- DD. A contractor that specializes in installing insulation with annual receipts of $10 million
73Juhani is handling a claim and is estimating the settlement value. He wishes to incorporate many different data points including the trial venue to assist him in determining the value based on certain benchmarks and medical guidelines. Juhani should use the:
- AA. Expert system
- BB. Formula method
- CC. Roundtable technique
- DD. Individual case method
74Which one of the following is an example of a liability insurance claim?
- AA. Worker's compensation claim
- BB. Intellectual property infringement
- CC. Other than collision auto claim
- DD. Collision auto claim
75Alex buys a chemistry set for his daughter, Beatrice. When Beatrice tries one of the experiments, she accidentally adds the wrong component to the mixture. The resulting reaction causes the experiment to explode and seriously injure Beatrice. Alex hires an attorney who brings a lawsuit against the chemistry set manufacturer. In the lawsuit, the attorney maintains that the manufacturer:
- AA. Was guilty of negligent manufacture
- BB. Breached an absolute duty of safety
- CC. Demonstrated an intent to cause harm
- DD. Was guilty of negligent design
76Bar owner Conor serves drinks to Juan, who buys a round for himself and his friends, Miguel and Sota. The three friends leave the bar and get in an accident. If Juan claims Conor is liable for his injuries and sues him for damages, Conor's best defense would be:
- AA. Comparative negligence
- BB. Noninnocent participant
- CC. Contributory negligence
- DD. Assumption of risk
77Under Coverage E—Personal Liability of the HO-3 policy, the insurer's obligation to defend ends:
- AWhen the liability limit for the occurrence is exhausted by payment of a settlement or judgment.
- BWhen the costs of defense limits are exhausted.
- CWhen policy limits are exhausted by the claim expenses.
- DWhen the cost of defense exceeds the personal liability limits.
78A typically available cyber risk coverage that protects an insured when a thief causes the insured's financial institution to transfer funds is called:
- ACyber extortion.
- BRegulatory action.
- CFund transfer fraud.
- DNetwork security liability.
79Which one of the following types of buildings would most likely be eligible for coverage under a businessowners (BOP) policy?
- AAn eight-story office building that covers 50,000 square feet
- BA 10,000 square foot building housing an insurance agency
- CA 70,000 square foot office building with no apartments
- DA 10-story apartment building of 100,000 square feet containing offices
80Diego broke his leg when he slipped and fell on Elin's floor. Two weeks later, Kaito hit Diego with his car when Diego was crossing the street causing further injury to Diego's leg. Elin and Kaito are:
- ASeveral tortfeasors.
- BJoint and several tortfeasors.
- CSuccessive tortfeasors.
- DPure joint tortfeasors.
81Ida asks Oliver to keep her dog for a week while she goes on vacation. In this situation, with respect to the dog, Oliver owes Ida a duty of:
- AGreat care.
- BOrdinary care.
- CNo care.
- DSlight care.
82Hugo is a claims representative and is creating a bodily injury investigation plan. He has obtained a signed medical authorization, identified the names of the medical providers, obtained medical records and bills, and identified additional medical expenses. Hugo is in which one of the following stages of the bodily injury investigation plan?
- ADetermine loss of earnings
- BInvestigate medical history
- CIdentify the injuries claimed
- DInvestigate mechanism of injury
83A claim involving injury to a minor should generally be resolved by a court-approved settlement when:
- AThe claim is anticipated to be for a relatively small amount.
- BEfforts to secure a Parental Guidance release have failed.
- CIt involves large sums of money or when the injuries may be permanent.
- DThe minor is under the age of 12.
84Georgia is handling an auto liability claim in which the claimant has several serious, debilitating injuries. The case has become very emotional, which has forced the sides to lose track of determining a fair settlement. Georgia's best bet would be to:
- AUse an expert system to determine the severity points of the factors.
- BCalculate the value using the formula method to simplify the process.
- CCalculate a BATNA to motivate the parties toward settlement.
- DRequest a roundtable to obtain consensus from others.
85Which one of the following statements about excess liability insurance coverage and umbrella liability insurance coverage is most accurate?
- AExcess liability policies typically provide primary coverage for certain types of losses not covered by underlying insurance, while umbrella liability policies typically do not.
- BBoth excess liability policies and umbrella liability policies typically provide primary coverage for certain types of losses not covered by underlying insurance.
- CNeither excess liability policies nor umbrella liability policies would provide primary coverage for a loss unless it was already covered by a primary insurance policy.
- DUmbrella liability policies typically provide primary coverage for certain types of losses not covered by underlying insurance, while excess liability policies typically do not.
86Excess and umbrella liability coverages provide additional coverages for liability exposures in which it may be problematic to determine the:
- AMinimum aggregate loss.
- BLegal liability.
- CMaximum probable loss.
- DTotal aggregate loss.
87Shota is evaluating a bodily injury claim for damages. He is considering whether the claimant has a job, family, or recreation that will be affected by the injury; whether the claimant will be disfigured; and if the claimant's personality has been affected. Shota is evaluating the claimant's
- APain and suffering.
- BPermanence of impairments.
- CMedical expenses.
- DLoss of consortium.
88Which one of the following major sections of the general liability coverage form would be found only in a form with a claims-made trigger?
- ALimits of Insurance
- BConditions
- CWho Is an Insured
- DExtended Reporting Periods
89An occurrence as defined in the HO-3 policy may include
- AProperty damage caused intentionally by an insured who is 13 years old or older.
- BMore than one accident with more than one injury.
- COne accident involving injury to more than one person.
- DA non-accidental event.
90An excess liability insurance policy that applies to a loss that exceeds the underlying limits only if the loss is also covered under the provisions of the excess liability insurance policy is called
- AA following-form excess liability policy.
- BAn aggregate excess liability policy.
- CAn umbrella liability policy.
- DA self-contained excess liability policy.
91Regarding the use of a parent-guardian release and indemnity agreement (PG release) in a claim involving a minor, the main factor to consider is:
- AThe age of the injured minor.
- BThe potential of the injury for permanency.
- CThe estimated cost of the claim.
- DWhether a court-approved settlement has been ruled out.
92Which one of the following would most likely be covered under a personal umbrella policy?
- AInterest on unpaid judgments
- BWorkers compensation
- CDamage to property an insured owns
- DIntentional injury
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- AIC Insurance Quiz on AIC 303, created by Mackenzie Waln on 11/01/2023.
- Author
- Mackenzie Waln
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- English
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