CPCU 551 Full Exam Questions With 100% Correct Answers 2023, Exams of Advanced Education

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CPCU 551 Full Exam Questions With

100% Correct Answers 2023

Commercial Package Policy (CPP) 1-1 - Correct Answer-Policy that covers two or more lines of business by combining ISO's commercial lines coverage parts Businessowners Policy (BOP) 1-2 - Correct Answer-A package policy that combines most of the property and liability coverages needed by small and medium-sized businesses Output Policy 1-3 - Correct Answer-A policy that combines, in one form and associated endorsements, all or most of the commercial property coverages that the insured organization needs, and uses a flexible rating plan Commercial Property Conditions 1-4 - Correct Answer-A required component of the commercial property coverage part that contains conditions applicable to all commercial property coverage forms Policy Condition 1-5 - Correct Answer-Any provision that qualifies an otherwise enforceable promise made in the policy Actual Cash Value (ACV) 1-6 - Correct Answer-Cost to replace property with new property of like kind and quality less depreciation Replacement Cost 1-7 - Correct Answer-Cost to repair or replace property using new materials of like kind and quality with no deduction for depreciation Fixture 2-1 - Correct Answer-Any personal property affixed to real property in such a way as to become part of the real property Trade Fixtures 2-2 - Correct Answer-Fixtures and equipment that may be attached to a building during a tenant's occupancy, with the intention that they be removed when the tenant leaves Improvements and Betterments 2-3 - Correct Answer-Alterations or additions made to the building at the expense of the insured who does not own the building and who cannot legally remove them Commercial Bailment 2-4 - Correct Answer-The temporary possession by one party (the bailee) of personal property of another party (the bailor) for a specific purpose beneficial to both parties

Agreed Value Optional Coverage 2-5 - Correct Answer-Optional coverage that suspends the Coinsurance condition if the insured carries the amount of insurance agreed to by the insurer and the insured Inflation Guard Optional Coverage 2-6 - Correct Answer-Coverage for the effects of inflation that automatically increases the limit of insurance by the percentage of annual increase shown in the declarations Replacement Cost Optional Coverage 2-7 - Correct Answer-Coverage for losses to most types of property on a replacement cost basis (with no deduction for depreciation or obsolescence) instead of an actual cash value basis Causes of Loss - Basic Form 3-1 - Correct Answer-Form that covers Fire, Lightning, Explosion, Windstorm, Hail, Smoke, Aircraft, Vehicles, Riot, Civil Commotion, Vandalism, Sprinkler Leakage, Sinkhole Collapse, and Volcanic Action Causes of Loss - Broad Form 3-2 - Correct Answer-Form that covers basic form perils, plus Falling Objects; Weight of Snow, Ice, or sleet; Water Damage; and (as additional coverage) Collapse caused by certain perils Manufacturer's Selling Price (Finished ""Stock"" Only) Endorsement 4-1 - Correct Answer-A commercial property endorsement that values finished stock manufactured by the insured at selling price, less any discounts and expenses that the insured would have otherwise had. Functional Building Valuation Endorsement 4-2 - Correct Answer-A commercial property endorsement that provides modified replacement cost coverage on buildings; may be appropriate when insuring a building with a replacement cost far in excess of its market value Specific Insurance 4-3 - Correct Answer-Insurance that covers each building for a specific limit of insurance and personal property at each building for a specific limit of insurance Blanket Insurance 4-4 - Correct Answer-Insurance that covers either of the following with one limit of insurance:

1. one type of property in one or more separately rated buildings, or
2. two or more types of property in one or more separately rated buildings" Peak Season Limit of Insurance Endorsement 4-5 - Correct Answer-Endorsement that covers the fluctuating values of business in personal property by providing differing amounts of insurance for certain time periods during the policy period Value Reporting Form 4-6 - Correct Answer-A commercial property form that bases the insured's premium for business personal property on the values that the insured reports to the insurer periodically during the policy period

Ordinance or Law Coverage Endorsement 4-7 - Correct Answer-Endorsement that covers three types of losses resulting from the enforcement of building ordinances or laws:

1. the value of the undamaged portion of a building that must be demolished
2. the cost to demolish the building's undamaged portion and remove its debris
3. the increase cost to rebuild the property Utility Services - Direct Damage Endorsement 4-8 - Correct Answer-A commercial property endorsement that covers damage to covered property caused by the interruption of utility services (water, communications , or power) to the insured premises. Spoilage Coverage Endorsement 4-9 - Correct Answer-Endorsement that covers damage to perishable stock due to power outages; on-premises breakdown; or contamination of the insured's refrigeration, cooling, or humidity control equipment Radioactive Contamination Endorsement 4-10 - Correct Answer-A commercial property endorsement for organizations that have a radioactive contamination exposure on their premises, other than a nuclear reactor or fuel for a nuclear reactor; covers physical loss to covered property caused by sudden and accidental radioactive contamination Condominium 5-1 - Correct Answer-A real estate development consisting of a group of units, in which the air space within the boundaries of each unit is owned by the unit owner, and all remaining real and personal property is owned jointly by all the unit owners. Condominium Unit 5-2 - Correct Answer-The portion of a condominium that is owned solely by a unit owner Condominium Association 5-3 - Correct Answer-The entity composed of the unit owners in a condominium to manage the condominium and to own the common elements Common Elements 5-4 - Correct Answer-Areas of a condominium that are jointly owned by all unit owners, including the land on which the building is located Condominium Association Agreement 5-5 - Correct Answer-A document that describes what each condo owner has purchased, and clarifies the rights and responsibilies of the unit owners and the association Bare-Walls Concept 5-6 - Correct Answer-A concept of condo ownership in which the association has no ownership interest within the bare walls of each unit Single-Entity Concept (original specifications coverage) 5-7 - Correct Answer-A concept of condo ownership in which the association is considered to be the owner fo all

property contained in the unit as sold to the original purchaser or replacements of such property if the replacements are of like kind and quality. All-in Concept (additional installations coverage) 5-8 - Correct Answer-A concept of condo ownerhsip that is similar to the single-entity concept except that the all-in concept includes improvements made by the unit owner, not just the original installations or replacements of like kind and quality Cooperative Corporation 5-9 - Correct Answer-A form of real property ownership in which the real property is owned by a corporation whose shareholders are the tenants of the property. Planned Unit Development (Homeowners Association) 5-10 - Correct Answer-A real estate development in which each occupant has exclusive ownership of its own unit, and the land that the structure occupies. A homeowners's association composed of all unit owners jointly owns the surrounding land and structures. Builders Risk Coverage Form 5-11 - Correct Answer-A form that covers buildings in the course of construction, including additions or alterations to existing buildings Standard Property Policy (SPP) 5-12 - Correct Answer-A commercial property policy form covering buildings and business personal property on restricted terms. Legal Liability Coverage Form 5-13 - Correct Answer-A commercial property coverage form that provides legal liability coverage on bulidings or personal property of others in the insured's care, custody, or control. Leasehold Interest Coverage Form 5-14 - Correct Answer-A commercial property coverage form for insuring a tenants financial loss resulting from the cancellation of the tenant's lease because of damage to the premises by a covered cause of loss." Write Your Own (WYO) 6-1 - Correct Answer-A program allowing private insurers to write flood insurance under the National Flood Insurance Program Emergency Program 6-2 - Correct Answer-Initial phase of a community's participation in the National Flood Insurance Program in which property owners in flood areas can purchase limited amounts of insurance at subsidized rates. Regular Program 6-3 - Correct Answer-Second phase of the National Flood Insurance Program in which the community agrees to adopt flood-control and land-use restrictions and in which property owners purchase higher amounts of flood insurance than under the emergency program General Property Form 6-4 - Correct Answer-The version of the National Flood Insurance Program (NFIP) Standard Flood Insurance Policy that is used for insuring commercial buildings and contents

Residential Condominium Association Policy (RCBAP) 6-5 - Correct Answer-A version of the National Flood Insurance Program Standard Flood Insurance Policy that is used for insuring residential condominium buildings, as well as contents that are owned either by the unit owners in common or by the condominium association solely. Coinsurance 6-6 - Correct Answer-An insurance-to-value provision in many property insurance policies providing that if the property is underinsured, the amount that an insurer will pay for a covered loss is reduced. Increased Cost of Compliance (ICC) 6-7 - Correct Answer-National Flood Insurance coverage that pays for compliance costs related to floodplain management for qualifying structures Difference in Conditions (DIC) policy, or (DIC) Insurance 6-8 - Correct Answer-Policy that covers on an "all-risks" basis to fill gaps in the insured's commercial property coverage, especially gaps in flood and earthquake coverage Highly Protected Risk 6-9 - Correct Answer-A large property whose construction meets high standards of risk mitigation and control characteristics and whose management maintains best practices loss control and risk mitigation techniques for the specified occupancy Layered Property Coverage 6-10 - Correct Answer-Two or more property policies arranged in levels of coverage; the policies in the second or higher tiers provide coverage only when the loss exceeds the coverage afforded by the lower-level policies. Attachment Point 6-11 - Correct Answer-The dollar amount above which the reinsurer responds to losses Business Income Insurance 7-1 - Correct Answer-Insurance that covers the reduction in an organization's income when operations are interrupted by damage to property caused by a covered peril Net Income 7-2 - Correct Answer-The difference between revenue and expenses Profit 7-3 - Correct Answer-Net Income that results when revenue exceeds expenses Net Loss 7-4 - Correct Answer-Net Income that results when expenses exceed revenues Continuing Expenses 7-5 - Correct Answer-Expenses that continue to be incurred during a business interruption Noncontinuing Expenses 7-6 - Correct Answer-Expenses that will not continue during a business interruption

Extra Expenses 7-7 - Correct Answer-Expenses, in addition to ordinary expenses, that an organization incurrs to mitigate the effects of a business interruption Dependent Property Exposure 7-8 - Correct Answer-The possibility of incurring business income loss because of physical loss occurring on the premises of an organization that the insured depends on for materials, products, or sales Coinsurance Basis 7-9 - Correct Answer-The sum of the insured's estimated net income and operatying expenses for 12 months following policy inception, minus only those expenses listed in the form Business Income Worksheet 7-10 - Correct Answer-A worksheet for calculating the amount of insurance necessary to comply with the Coinsurance condition of business income forms, for reporting business income values to the insurer, or for providing underwriters with information they need to evaluate an organizations business income loss exposure Period of Restoration 7-11 - Correct Answer-The period during which business income loss is covered under BIC forms. It begins 72 hours after the physical loss occurs, and ends when the property is (or should have been) restored to use with reasonable speed. (With regard to extra expense coverage, it begins immediately after the physical loss occurs). Civil Authority Additional Coverage 7-12 - Correct Answer-An additional coverage in business insurance form, coverint loss of business income and/or extra expense that results when access to the insured's premises is prohibited by civil authority because fo damage by a covered cause of loss to property other than the insured's Extended Business Income (EBI) additional coverage 7-13 - Correct Answer-Coverage for business income losses that continue after the period of restoration ends. Coverage begins when the damaged property has been restored and ends when the insured's business returns to normal, subject to a maximum of 30 days. Extended Period of Indemnity 7-14 - Correct Answer-An optional coverage that lengthens the duration of the extended business income additional coverage for up to 2 years. Interruption of Computer Operations Additional Coverage 7-15 - Correct Answer- Coverage for loss of business income or extra expense due to a suspension of operations resulting from an interruption of computer operations caused by destruction or corruption of electonic data as a result of a covered cause of loss. Maximum Period of Indemnity 7-16 - Correct Answer-Option that deletes the coinsurance clause while limiting loss payment to the lesser of 1) the amount of loss

sustained during the 120 days following the beginning of the period of restoration or 2) the policy limit. Monthly Limit of Indemnity 7-17 - Correct Answer-Option that deletes the coinsurance clause while limiting amount recoverable during any month of business interruption to a stipulated fraction (1/6, 1/4, or 1/3) of the insurance amount Ordinary Payroll 7-18 - Correct Answer-The entire payroll expense (including employee benefits, FICA payments, union dues paid by the employer, and workers comp premiums) for all employees of the insured except officers, executives, department managers, and employees under contract Ordinary Payroll Limitation or Exclusion endorsement 7-19 - Correct Answer- Endorsement that limits coverage for ordinary payroll expenses to a limited number or days or excludes such expenses altogether, allowing the insured to satisfy coinsurance requirement with a lower amount of insurance Discretionary Payroll Expense endorsement 7-20 - Correct Answer-An endorsement that extends business income forms to cover payroll expenses for specified job classifications or employees regardless of whether such expenses are nessary to resume operations. Power, Heat, and Refrigeration Deduction endorsement 7-21 - Correct Answer- Endorsement that eliminates power, heat, and refrigeration expenses from coverage and from the coinsurance calculation, allowing the insured to satisfy the coinsurance requirement with a lower limit of insurance. Business Income Premium Adjustment endorsement 7-22 - Correct Answer- Endorsement that bases the final policy premium earned by the insurer on the actual exposure as reported to the insured at 12-month intervals. Business Income Changes - Educational Institutions endorsement 7-23 - Correct Answer-Endorsement that modifies business income coverage forms to make them more appropriate for covering the business income loss exposures for schools. Utility Services - Time Element endorsement 7-24 - Correct Answer-Endorsement that covers loss of business income or extra expense a the insured premises caused by interruption of utility services (water, communications, or power) to the insured premises. Ordinance or Law - Increased Period of Restoration endorsement 7-25 - Correct Answer-Endorsement that covers loss of business income during the additional time required to comply with building ordinances or laws.

Business Income 7-26 - Correct Answer-Sum of 1) Net Profit or loss that would have been earned if the suspension had not occurred and 2) Normal operating expenses, including payroll, that continue during the suspension Nationwide Marine Definition 8-1 - Correct Answer-Spefifies the types of property athat may be insured on inland marine and ocean marine insurance forms Nonfiled Classes (uncontrolled classes) 8-2 - Correct Answer-The classes of inland marine business for which neither foms nor rates must be filed with the state insurance department Filed Classes (controlled classes) 8-3 - Correct Answer-The classes of inland marine business for which policy forms and/or rates must be filed with the state insurance department Floater 8-4 - Correct Answer-A policy designed to cover property that floats, or moves, from location to location Invoice Value 8-5 - Correct Answer-A valuation basis that values covered property at its invoice value, including freight Agreed Value Method 8-6 - Correct Answer-A method of valuing property in which the insurer and the insured agree, at the time the policy is written, on the maximum amount that will be paid in the event of a total loss. Shipper 8-7 - Correct Answer-The person or organization shipping goods, often the seller of the goods Consignee 8-8 - Correct Answer-The person or organization that receives property being transported by a carrier Common Carrier 8-9 - Correct Answer-Airlines, railroads, or trucking companies that furnish transportation to any member of the public seeking their offered services Contract Carriers 8-10 - Correct Answer-Carriers that furnish transportation services to shippers with whom they have contracts. Act of God 8-11 - Correct Answer-A natural and unavoidable catastrophe that interrupts the expected course of events Inherent Vice 8-12 - Correct Answer-A quality or condition within a particular type of property that tends to make the property destroy itself. Bill of Lading 8-13 - Correct Answer-A document acknowledging receipt of goods from the shipper, given by the carrier which includes the term of the contract of carriage for the goods.

Charter 8-14 - Correct Answer-A travel contract in which transportation is temporarily hired for a specific trip Annual Transit Policy 8-15 - Correct Answer-Policy that covers all shipments made or received by the insured throughout a one-year policy period Open Cargo Policy 8-16 - Correct Answer-Policy that covers all goods shipped or received by the insured during the policy's term; comparable to an inland marine annual trip transit policy, but without a policy expiration date Assured 8-17 - Correct Answer-In ocean marine policies, the party named as the insured General Average 8-18 - Correct Answer-A partial loss that must, according to maratime law, be shared by all parties on a voyage (cargo owners and vessel owner) Sue and Labor Clause 8-19 - Correct Answer-Clause that covers the cost of reasonable measures that the insured is required to take to protect property from damage at the time of loss Warehouse-to-Warehoue Coverage 8-20 - Correct Answer-Clause in open cargo policies that covers the insured cargo during the ordinary course of trainsit (including land transit) from the time cargo leaves the point of shipment until it is delivered to its final destination. Free Capture and Seizure (FC&S) warranty 8-21 - Correct Answer-A warranty that excludes loss caused by war, piracy, virtually any lawful or unlawful taking of the vessel, a nuclear weapon, a mine, or a torpedo Strikes, Riots, and Civil Commotion (SR&CC) warranty 8-22 - Correct Answer-A warranty that excludes loss caused by strikes, labor distrubances, riots, vandalism, sabotage, or malicious acts Delay Clause 8-23 - Correct Answer-A clause that excludes coverage for loss caused by delay, such as loss of market, spoilage, and business interruption Inchmaree Clause 8-24 - Correct Answer-A clause that adds coverage to an ocean marine cargo policy for loss resulting from bursting of boilers, breakage of shafts, latent defects in the vessel, or faults or errors in the navigation or management of the vessel. FPA/AC (Free of Particular Average/American Conditions) 8-25 - Correct Answer-An exceptive warranty that excludes particular average unless the loss is actually caused by the stranding, sinking, or burning of the vessel or its collission with another vessel

Particular Average 8-26 - Correct Answer-Particular loss that is borne only by one party to a voyage (such as a cargo owner) Accumulation Clause 8-27 - Correct Answer-A clause in open cargo policies that doubles the policy limit when, for reasons beyond the control of the assured, shipments may accumulate at some point in transit Trip Transit Policy 8-28 - Correct Answer-Policy that covers a particular shipment of goods specified in the policy Mail Coverage form 8-29 - Correct Answer-Form that ocvers a financial institution against a loss of securities and other negotiable instruments while in transit through specified types of mail Parcel Post policy 8-30 - Correct Answer-Inland marine policy that provides broad coverage on parcel post shipments Motor Truck Cargo Liability policy 8-31 - Correct Answer-Policy that covers a trucker's liability for damage to cargo of others being transported by the trucker. Owners' Goods on Owners' Trucks policy 8-32 - Correct Answer-Type of motor truck cargo policy that covers any type of organization (not just a trucking company) fro damage to its own cargo while being transported on its own trucks BMC 32 - Endorsement for Motor Common Carrier Policies of Insurance for Cargo Liability 8-33 - Correct Answer-An endorsement that insurers must attach to motor truck cargo liability policies of interstate carriers stating that the insurer will pay cargo claims for which the insured is liable, up to the limits required by the US Dept of Transportation, even if such claims are not covered under the policy Equipment Floaters 8-34 - Correct Answer-A category of inland marine policies covering various types of equipment, wherever it may be located in the policy period Contracters Equipment floater 8-35 - Correct Answer-A policy that covers mobile equipment or tools while located anyqhere in the coverage territory Upgraded Value 8-36 - Correct Answer-The cost to replace covered equipment with the latest comparable state-of-the-art equipment available; It can be used as a valuation basis in an EDP floater Breakdown Coverage 8-37 - Correct Answer-Coverage, in an EDP equipment floater, for perils such as mechanical failure, electrical disturbance, and damage do electronic data when covered equipment breaks down Installation floater 8-38 - Correct Answer-Policy that covers a contractor's interest in building supplies or fixtures that the contractor has been hired to install

Bailee 8-39 - Correct Answer-The party temporarily possessing the personal property in a bailment Bailor 8-40 - Correct Answer-The owner of the personal property in a bailment Warehouse Opearators Legal Liability policy 8-41 - Correct Answer-Policy that covers warehouse operators against liability for damage to the property of others being stored in the operators' warehouses Bailees' customers policy 8-42 - Correct Answer-A policy that covers damage to customers' goods while in the possession of the insured, regardless of whether the insured is legally liable for the damage Pattern and Die floater 8-43 - Correct Answer-A policy that covers the insured's patterns and died while located at the premises of others and also while in transit to and from those premises Processing Floater 8-44 - Correct Answer-a policy that covers the insured's goods while being worked on at a subcontractor's or processor's premises and while in transit to and from those premises Dealers policy 8-45 - Correct Answer-A Policy that covers the inventory and other property of any of the types of dealers that qualify for inland marine coverage (such as jewelers, equipment dealers, fine arts dealers, and furriers) Block policy 8-46 - Correct Answer-A dealers policy, particularly one written for a jeweler or furrier Signs Coverage Form 8-47 - Correct Answer-Form that covers neon, fluorescent, automatic, or mechanical signs. Accounts Receivable insurance 8-48 - Correct Answer-Insurance that covers the sums the insured is unable to colelct when records of accounts receivable are destroyed by a covered cause of loss Valuable Papers and Records Insurance 8-49 - Correct Answer-Insurance that covers direct physical loss to valuable papers and records, such as architects' blueprints and plans Discovery Form 9-1 - Correct Answer-Form that covers losses discovered during the policy period even though they might have occurred before the policy period Robbery 9-2 - Correct Answer-The unlawful taking of property from the care and custody of a person by who has caused or threatened to cause that person bodily harm; includes situations in which the thief commits an obviously unlawful act that is witnessed

by the custodian o fthe stolen property (such as an observed "smash and grab" theft from a shop window) Computer Fraud coverage 9-3 - Correct Answer-Coverage for loss covered property due to the use of a computer to fraudulently transfer covered property to the wrongoer. Loss Sustained form 9-4 - Correct Answer-Form that covers losses actually sustained during the policy period and discovered no later than one year after policy expiration Extended Discovery Period 9-5 - Correct Answer-A specified period following the cancellation of a commercial crime policy; If discovered by the insured during this period, a loss that occurred before the cancellation date will be covered under the cancelled policy Boiler 10-1 - Correct Answer-A fired pressure vessel constructed of cast iron or steel in which water is heated to produce steam or hot water Fire Pressure Vessel 10-2 - Correct Answer-A closed container that is heated by the direct fire of burning fuel and can withstand internal pressure Unfired Pressure Vessel 10-3 - Correct Answer-A closed vessel that can withstand internal pressure or vacuum but is not heated by the direct fire of burning fuel Expediting expenses 10-4 - Correct Answer-Expenses incurred to speed up the repair or replacement of covered property Suspension Condition 10-5 - Correct Answer-Condition that allows the insurer to immediately suspend equipment breakdown insurance on an item of equipment that the insurer determines to be in a dangerous condition Joint or Disbuted Loss Agreement 10-6 - Correct Answer-Condition that addresses claim situations in which the insured's equipment breakdown insurer and the insured's commercial property insurer disagree on which insurer covers a loss; each insurer pays half the loss to quickly indemnify the insured; insurers then resolve their differences Jurisdictional Inspections condition 10-7 - Correct Answer-A condition in equipment breakdown policies that provides that the insurer will perform required inspections of boilers and other equipment on the insured's behalf Seasonal Increase provision 11-1 - Correct Answer-A provision commonly included in BOPs that addresses fluctuationg personal property values by automatically increasing the amount of insurance for certain time periods. Crop Hail Insurance 12-1 - Correct Answer-Insurance offered by private insurers that covers crops agains loss caused by hail and often other perils

Multiple Peril Crop Insurance (MPCI) 12-2 - Correct Answer-Insurance offered by the federal government that covers unexpected crop production losses due to natural causes such as drought, excessive moisture, hail, windstorm, and flood Feedlot Insurance 12-3 - Correct Answer-A specialized type of livestock coverage that covers animals while in the custody of a commercial feedlot operator Financial Institution Bond 12-4 - Correct Answer-A policy that covers the crime loss exposures of financial institutions such as banks, savings and loan institutions, and insurance companies Combination Safe Depository Policy 12-5 - Correct Answer-A policy that enables a financial institutionn to cover loss of or damage to its customers' property in the insured's safe-depository facilities and damage to the insured's premises Mortgage Impairment insurance 12-6 - Correct Answer-Insurance that protects a lending institution or mortgage servicing agency against losses arising out of the insured's failure to maintain insurance protecting mortgaged property, as well as other exposures connected with servicing mortgages Mortgage Guarantee Insurance (PMI) 12-7 - Correct Answer-Insurance that protects mortgage holders from loss if the borrower fails to repay the mortgage loan Title Insurance 12-8 - Correct Answer-Insurance tha protects against loss resulting from defects in a title to real property Surety Bond 13-1 - Correct Answer-A written contract that expresses one party's promise to answer for another party's failure to do something as promised Principal 13-2 - Correct Answer-The party to a surety whose obligation or performance the surety guarantees Obligee 13-3 - Correct Answer-The party to a surety bond who receives the surety's guarantee that the principal will fulfill an obligation or perform as promised Surety 13-4 - Correct Answer-The party (usually an insurer) to a surety bond that guarantees to the obligee that the principal will fulfill an obligation or perform as required by the underlying contract, permit, or law Suretyship 13-5 - Correct Answer-The obligation of one entity to answer fo rthe debt, default, or miscarriage of perfomance of duties by another entity Contract Bond 13-6 - Correct Answer-a surety bond guaranteeing the fulfillment of obligations under construction contracts or other types of contracts

Bid Bond 13-7 - Correct Answer-a contract bond guaranteeing that a contractor bidding on a construction or supply contract will enter into the contract and will provide a performance bond of the bid is accepted Performance Bond 13-8 - Correct Answer-A contract bond guaranteeing that a contractor's work will be completed according to plans and specifications Payment Bond 13-9 - Correct Answer-a contract bond guaranteeing that the project will be free of liens Maintenance Bond 13-10 - Correct Answer-A contract bond guaranteeing that the work will be free of defects in materials and workmanship for a specified period of time after the project is complete Subdivision Bond 13-11 - Correct Answer-A contract bond guaranteeing a local government authority that a subdivision developer will complete the subdivision in accordance with approved propals and at the developer's expense Supply Contract Bond 13-12 - Correct Answer-A contract bond guaranteeing that a supplier will perform the designated supply contract according to specifications License and Permit Bonds 13-13 - Correct Answer-Surety bonds that provide payment to the obligee (state, city, or other public entity) for loss or damage resulting from violations of the duties and obligations imposed on the licensee or permit holder. Public Official Bond 13-14 - Correct Answer-Commercial surety bond guaranteeing that a public official will perform his or her duties faithfully and honestly Court Bonds 13-15 - Correct Answer-A classification of surety bonds guaranteeing that a person or organization will faithfully perform certain duties prescribed by law or by a court or will demonstrate financial responsibility for the benefit of another until the final outcome of a court's decision Attachment Bond 13-16 - Correct Answer-A judicial bond guaranteeing that, if the court decides against a plaintiff who has requested attachment of the defendant's property, the defendant will be paid any damages that result from the property attachment. Release of Attachment Bond 13-17 - Correct Answer-A bond that guarantees that the insured will pay any damages and court costs if the court should decide in the claimant's favor Appeal Bond 13-18 - Correct Answer-A judicial bond guaranteeing that a plaintiff who appeals an adverse decision to a higher court will pay all court costs of the appeal Defendant's Appeal Bond (supersedas bond) 13-19 - Correct Answer-A judicial bond guaranteeing that a defendant who appeals an adverse decision to a higher court will

pay the entire judgement, plus court costs and interest, should the higher court sustain the initial judgement for the plaintiff Fiduciary Bond 13-20 - Correct Answer-A court bond guaranteeing that a person appointed by a court to administer the property or interests of others will faithfully perform his or her duties Miscellaneous Bond 13-21 - Correct Answer-Any bond that does not fit well under the other pimary categories of surety bonds formulated by the Surety and Fidelity Association of America