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Florida 2-20 Agents License Exam

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Which of the following is/are not a "your covered auto" under a Personal Auto Policy for Liability? -----CORRECT ANSWER---------The 1990 Chevy 22 days after you purchase it as an additional vehicle for your son who just got his license. Joe has a Personal Auto Policy with one car with liability of 10/20/10, basic PIP, 10/ UM and no Med Pay. His Florida neighbor has an identical policy on her care. Joe is driving her car, loses control; and hits a tree. Joe is hurt with $15,000 in medical bills. What is the maximum Joe can collect from UM from all sources from this accident? ----- CORRECT ANSWER---------$ Keith commutes into the city in his car, and he provides a ride to two co-workers who live near him. Every other week, the co-workers take turns buying the gasoline for Keith's car. Does this activity create a public or livery conveyance situation that would preclude liability coverage under Keith's Personal Auto Policy (PAP)? -----CORRECT ANSWER---------No, because Keith is involved in a share-the-expense car pool. An insured covers his owned auto with more than one Personal Auto Policy (PAP), each from a different insurer. In the event of a claim for medical payments coverage, ----- CORRECT ANSWER---------Each insurer pays its pro rata share based on the proportion that its limit of liability bears to the total of applicable limits. The Insuring Agreement in Part A - Liability Coverage of the Personal Auto Policy contains descriptions of all of the following EXCEPT: -----CORRECT ANSWER--------- Limit of Liability Tom and Martha insure their house with an unendorsed HO- 3 —Special Form (HO-3) with a Coverage A—Dwelling limit of $300,000, which is the replacement cost of the house. A thief breaks into the house while Tom and Martha are on vacation and steals the following items: •$500 cash•$50,000 stock certificates. Ignoring any deductible that

may apply, how much, if any, will Tom and Martha's insurer pay for the loss of the items? -----CORRECT ANSWER---------$1, Which one of the following statements is correct with respect to the Newly Acquired or Constructed Property extension of coverage of the Building and Personal Property Coverage Form (BPP)? -----CORRECT ANSWER---------It covers newly acquired buildings, provided the purpose of the newly acquired building is similar to the use of the building described in the declarations. Which one of the following is a covered cause of loss under the Causes of Loss—Basic Form? -----CORRECT ANSWER---------Volcanic action Which one of the statements is correct with respect to the Building and Personal Property Coverage Form (BPP)? -----CORRECT ANSWER---------Some property, such as building foundations below the lowest basement floor, is excluded because it may not be subject to loss by the perils insured against. Which one of the following statements best describes the Causes of Loss - Special Form? -----CORRECT ANSWER---------The Special Form provides coverage for any risk of loss other than those that are specifically excluded. Which one of the following statements is correct with respect to the business personal property coverage provided by the Building and Personal Property Coverage Form (BPP)? -----CORRECT ANSWER---------'Your business personal property' specifically excludes labor, materials, or services furnished by the insured on the personal property of others. The Florida Surplus Service Lines Office (FSLSO) was created to -----CORRECT ANSWER---------oversee the surplus lines industry in the state Which of the following is NOT a required qualification for a General Lines Agent: ----- CORRECT ANSWER---------Seeking the license only to write controlled business The Department of Financial Services performs the following, EXCEPT: -----CORRECT ANSWER---------Pays insurance claims Once license, you have how long to obtain an appointment? -----CORRECT ANSWER-- -------48 months

Which of the following is NOT a duty of the Office of Insurance Regulation? ----- CORRECT ANSWER---------Submit rate filings and underwriting rules for approval Which one of the following statements is correct? -----CORRECT ANSWER--------- Contractors must usually provide evidence of liability insurance before a construction contract is granted. From a risk management viewpoint, insurance is used to -----CORRECT ANSWER------- --Transfer the cost of losses. Liability coverage for loss exposures arising from a business organization's premises and operations, its products, or its completed work is typically provided by ----- CORRECT ANSWER---------Commercial general liability insurance. Which one of the following statements is correct regarding the benefits provided by insurance? -----CORRECT ANSWER---------Insurance helps reduce the financial burden to society by compensating accident victims. Insurance is not the only risk management transfer technique. When circumstances are appropriate, transfer can be accomplished through -----CORRECT ANSWER--------- Noninsurance transfer techniques. Oscar's custom-built vehicle looks like a sausage sandwich on wheels. He plans to drive it to special events at schools around the country where it will serve as a mobile billboard to promote his product. Oscar is surprised to learn that insurers are reluctant to insure his vehicle because it fails to meet one of the ideal characteristics of an insurable risk. Which characteristic is Oscar's vehicle least likely to meet? -----CORRECT ANSWER---------Large number of similar exposure units Liability coverage to individuals and families for bodily injury and property damage arising from the insured's personal premises or activities is typically provided by ----- CORRECT ANSWER---------Personal liability insurance. Sally is a recent college graduate who lives in the suburbs and drives to work daily in the city. She recognizes that owning a car creates both property damage and liability exposures for her and at the same time she has the burden of student loans. For

someone in Sally's circumstances the most practical risk management technique for dealing with her auto-related loss exposures is -----CORRECT ANSWER---------Risk transfer. One of the costs of insurance is said to be opportunity costs. This means that if capital and labor were not being used in the insurance business, they could be used elsewhere and making other productive contributions to -----CORRECT ANSWER---------Society Retention is often used in combination with insurance as a way of treating loss exposures. One of the major downsides of individuals using retention alone is ----- CORRECT ANSWER---------The potential for financial ruin. The process of restoring an individual or organization to a pre-loss financial condition is the process of -----CORRECT ANSWER---------Indemnification Sometimes the existence of insurance encourages losses. The result of this phenomenon is that it -----CORRECT ANSWER---------Increases the total cost of insurance A small business owner concerned about something happening and not being able to work or earn a living for an extended period of time due to an accident should purchase -----CORRECT ANSWER---------Disability insurance. Under the HO- 3 —Special Form (HO- 3 ) Section I—Conditions, the Loss Settlement condition -----CORRECT ANSWER---------Establishes the process for determining the amount to be paid for a property loss. Property described in Coverages A, B, and C of an HO- 3 —Special Form (HO-3) that is destroyed, confiscated, or seized by order of any governmental or public authority is ----

• CORRECT ANSWER---------Excluded. Adam and his insurer disagree on the amount of a loss covered by his homeowners policy. Adam wants the insurer to pay $10,000 toward the loss. The insurer's representative feels that the loss should be valued at $5,000. How could the appraisal process resolve this situation? -----CORRECT ANSWER---------Adam and the insurer will each select an appraiser, and the two appraisers will submit their differences to an impartial umpire who will reach a resolution.

Which one of the following has special limits of liability within Coverage C of the HO- 3 — Special Form (HO-3)? -----CORRECT ANSWER---------Theft of firearms A storm causes power lines to break ten miles from the insured's premises. The loss of electrical power causes food in the insured's freezer to thaw and spoil. Coverage for this loss is -----CORRECT ANSWER---------Excluded because the power failure occurred off the residence premises. If law enforcement officials seize an insured's personal computer to search for files that might be related to a crime, the insured under an HO- 3 —Special Form (HO-3) may be unsuccessful in claiming a theft loss on the computer due to the -----CORRECT ANSWER---------Governmental Action exclusion. Sam and Sophia insure their house with an unendorsed HO- 3 —Special Form (HO-3) policy. Sam stores a small fishing boat and trailer behind the house. While they are out for the evening, a fire destroys most of their kitchen and completely destroys the boat and trailer. Assuming Sam's boat and trailer are valued at $4,000 and ignoring any deductible that may apply, what amount will their HO-3 insurer pay for the loss of the boat and trailer? -----CORRECT ANSWER---------$1, The Florida Valued Policy Law applies to: -----CORRECT ANSWER---------mobile homes For a Dwelling Flood policy, which is correct: -----CORRECT ANSWER---------Primary residences are covered at replacement cost on building losses. Sally insures her house with an unendorsed HO- 3 —Special Form (HO-3) with a Coverage A—Dwelling limit of $275,000, which is the replacement cost of the house. A fire destroys the house including a collection of blueprints belonging to Sally's employer, valued at $10,000. Sally was storing the blueprints at her home while her office was changing locations. Assuming no deductible applies, how much, if any, will Sally's HO- 3 insurer pay to replace the blueprints? -----CORRECT ANSWER---------$ One of the main factors used in developing a base premium for a homeowners policy is -----CORRECT ANSWER---------The public protection class.

Bert and Maggie insure their house with an unendorsed HO- 3 —Special Form (HO-3) with a Coverage A—Dwelling limit of $300,000, which is the replacement cost of the house. A fire destroys their detached garage. The cost to replace the garage is $35,000. Ignoring any deductible that may apply, how much will Bert and Maggie's insurer pay to replace the detached garage? -----CORRECT ANSWER---------$30, Coverage for other structures is automatically provided under the HO- 3 —Special Form (HO-3) policy with a limit that is -----CORRECT ANSWER---------10 percent of the Coverage A limit Renee is an insured under an unendorsed HO- 3 —Special Form (HO-3) with a Coverage C—Personal Property limit of $100,000. She owns a secondary residence that contains $15,000 of personal property. Only her primary residence is listed on the declarations page of the HO-3 policy. A fire destroys all of Renee's personal property at her secondary residence. How much of this loss will be paid by Renee's HO-3 policy? -- ---CORRECT ANSWER---------$10, A homeowners policy premium is determined by first developing the base premium. The base premium is influenced by certain factors, including which one of the following? ----- CORRECT ANSWER---------Dwelling location Ralph has an unendorsed HO- 3 —Special Form (HO-3) policy. While coming home from a coin show, Ralph discovers that his automobile was broken into and a package containing $2,000 in coins, some tools, and groceries was stolen. Disregarding any deductible that may apply, will Ralph's HO-3 insurer pay for the loss of the coins? ----- CORRECT ANSWER---------Yes, the coins are covered up to a specified limit. Jim and Sue, a young married couple, are under contract to purchase a condominium unit. Which one of the following ISO policy forms is best designed to meet their homeowners insurance needs? -----CORRECT ANSWER---------HO- 6 —Unit-Owners Form Allen, a sole proprietor, is crossing the street when he is struck by a passing uninsured auto. He sustains $2,500 in medical bills, $3,000 damage to the laptop he was carrying, and $1,000 in lost wages. Allen's business auto policy has $100,000 liability limit and $5,000 medical payments limit. Assuming there is no other coverage, how much will his business auto policy pay? -----CORRECT ANSWER---------$2,

An animal damaged the interior of an insured's automobile while it was parked with the windows down. Which one of the following types of physical damage coverage under the Business Auto Coverage Form would cover this loss? -----CORRECT ANSWER------ ---Comprehensive Martha drives her auto, which is insured under a Business Auto Coverage Form, outside the state in which it is licensed. The other state requires a $25,000 bodily injury limit for underinsured motorists coverage. Martha's policy does not provide underinsured motorists coverage but does provide a $15,000 liability limit for uninsured motorists coverage. How would Martha's Business Auto Coverage Form respond to a $30,000 underinsured motorists bodily injury claim in the other state? -----CORRECT ANSWER---------Martha's policy would provide the $25,000 bodily injury limit required by the other state for underinsured motorists coverage. Bilo Manufacturing is weighing whether to lease vehicles for its employees or have them drive their own autos while on company business. Which one of the following exposures is created if Bilo decides in favor of employee-owned autos? -----CORRECT ANSWER-- -------Employer's Nonownership Liability Joe's New Cars, Inc. has a Business Auto Policy (BAP). The owner, Joe, owns no car himself since he always drives a company car. If you were the agent, what coverage would you add to the BAP to give Joe liability coverage while he drives a car not owned by the corporation? -----CORRECT ANSWER---------Other Car coverage Which one of the following losses would be covered by the business auto policy? ----- CORRECT ANSWER---------The insured has agreed to pay for liability losses caused by the insured's negligence that a shipper may incur while the insured is hauling goods for the shipper. For commercial auto insurance, a truck, tractor, or trailer is non-zone rated if it is ----- CORRECT ANSWER---------A light truck operating over any distance. Mitchell is a highway contractor whose company is covered with a workers compensation policy and an unendorsed business auto policy. Which one of the following losses would be covered by his business auto policy? -----CORRECT ANSWER---------An employee runs over a subcontractor's equipment with an owned auto.

Joe Motors, which services automobiles, wants to maintain the goodwill of its customers. This is best accomplished by -----CORRECT ANSWER---------Purchasing garagekeepers insurance. Wilson was driving his business auto when it was struck by a hit-and-run driver. He looked to his business auto policy for coverage for his injuries. Which one of the following symbols shown on his policy automatically provides such coverage? ----- CORRECT ANSWER---------Symbol 6-Owned Autos Subject to a Compulsory Uninsured Motorists Law Kenneth, the named insured under a Business Auto Coverage Form with symbol 1 shown for liability coverage, causes an automobile accident while driving a rental car on a business trip. Is Kenneth covered under the liability insuring agreement of his Business Auto Coverage Form for this accident? -----CORRECT ANSWER---------Yes, because Kenneth, the named insured, is an insured for any auto. Bob, an employee of Tank's Trucks, is backing one of Tank's trucks toward the loading dock on the insured premises. Bob accidentally strikes Alice, another employee, while she is directing Bob toward the loading dock. Alice sues Bob for her injuries. Is Bob covered under Tank's Trucks' unendorsed Business Auto Coverage Form for liability coverage? -----CORRECT ANSWER---------No, because fellow employees' suits are excluded. The insured has a business auto policy. Vandals break a window in the insured's pickup truck. While the insured is waiting for the insurance company to appraise the claim, rain enters through the broken window and causes additional damage. What is the insurance company's liability for the loss? -----CORRECT ANSWER---------The insurance company is liable for the damage by the vandals but not the damage from the rain. If an insured has failed to cooperate with an insurer in the settlement of a claim, which one of the following policy conditions prevents the insured from suing the insurer if the insured is not satisfied with the insurer's handling of the claim? -----CORRECT ANSWER---------Legal Action Against the Insurer Joan has a business auto policy. Which one of the following losses would be covered as auto physical damage? -----CORRECT ANSWER---------The cost to repair vehicle damage that results from hitting a deer

In the liability coverage agreement of the business auto policy, the insurer expresses its three distinct duties. Which one of the following is among these duties? -----CORRECT ANSWER---------A duty to pay covered pollution cost Which one of the following statements is correct with respect to the Building and Personal Property Coverage Form (BPP) deductible? -----CORRECT ANSWER--------- The insurer is not obligated to pay anything to the insured unless the loss exceeds the deductible. An exclusion contained in the Causes of Loss—Basic Form eliminates coverage for damage caused by which one of the following? -----CORRECT ANSWER--------- Mechanical breakdown, including rupture or bursting caused by centrifugal force Under which one of the following provisions of the Building and Personal Property Coverage Form (BPP) is the maximum payment $10,000 or five percent of the building limit, whichever is less? -----CORRECT ANSWER---------Increased Cost of Construction additional coverage Alterations or additions made to the building at the expense of an insured who does not own the building and who cannot legally remove them are referred to as -----CORRECT ANSWER---------Improvements and betterments. Which one of the following statements is correct with respect to the Non-Owned Detached Trailers coverage extension of the Building and Personal Property Coverage Form (BPP)? -----CORRECT ANSWER---------It permits the insured to extend 'your business personal property' to include trailers leased to expand office space or to provide additional storage or work areas. Which one of the following statements is correct with respect to the Commercial Property Conditions? -----CORRECT ANSWER---------They apply to all coverage forms included in a commercial property coverage part, unless a coverage form contains a condition to the contrary. The owners of Uncle Reggie's Steakhouse are insured under a Building and Personal Property Coverage Form (BPP) that covers their building and business personal property for $350,000 and $100,000, respectively. The policy has a $2,500 deductible. A fire results in $350,000 worth of damage to the building and a $70,000 loss of business personal property. In what amounts should the policy provide coverage for this loss? -----CORRECT ANSWER---------$347,500 Building and $70,000 Property

A Commercial Package Policy (CPP) premium may be modified by a package modification factor. This factor -----CORRECT ANSWER---------Is a discount justified by the greater efficiency in providing a package policy. Worldwide Warehousing has a Building and Personal Property Coverage Form (BPP) with a $1,000,000 limit on a building and a $5,000 deductible. The warehouse suffers a $1,010,000 fire loss. Which one of the following amounts will Worldwide's insurer pay? - ----CORRECT ANSWER---------$1,000, The Causes of Loss—Basic Form differs from the Causes of Loss—Broad Form in which one of the following ways? -----CORRECT ANSWER---------The Broad Form provides coverage for loss caused by collapse of a building or personal property resulting from specified perils. A description of the property insured, a list of mortgagees, and the applicable coinsurance percentage(s) are shown on which one of the following documents? ----- CORRECT ANSWER---------Commercial property declarations Which one of the following statements is correct with respect to the Building and Personal Property (BPP) Coverage Form? -----CORRECT ANSWER---------The BPP lists several types of classes of property that do not qualify as covered property. Which one of the following statements is correct with regard to the Causes of Loss— Broad Form? -----CORRECT ANSWER---------The weight of snow, ice, or sleet cause of loss does not cover damage to personal property in the open. Which one of the following statements is correct with respect to Property Not Covered under the Building and Personal Property Coverage Form (BPP) -----CORRECT ANSWER---------Only contraband or property in the course of illegal transportation or trade is totally uninsurable by endorsement or in other policies. Which one of the following is an exclusion unique to the Causes of Loss—Special Form? -----CORRECT ANSWER---------Smog Smith Construction Company is covered under an unendorsed Commercial General Liability (CGL) Coverage Form. While working at a job site, Smith ruptured a natural gas

line causing a small fire to a neighboring retail store. The following claims have been made against Smith due to this occurrence: Fire damage to the neighboring store, Pain and suffering claimed by the store owner, Loss of income by the store owner until repairs are made to the store, and Fire damage to the backhoe owned by Smith. Which one of the following statements is correct? -----CORRECT ANSWER---------The backhoe is property owned and is excluded. Which one of the following is true of the supplementary payments in the Commercial General Liability (CGL) Coverage Form? -----CORRECT ANSWER---------The obligation to pay these supplementary payments ends when the limit of insurance is exhausted. Internet blogger Tom operates a public interest group on the Internet. In posting his opinions, Tom falsely accused the governor of his state of criminal behavior. Tom's Commercial General Liability (CGL) Coverage Form will most likely exclude coverage for any resulting damage based on which one of the following exclusions? ----- CORRECT ANSWER---------Electronic chatrooms or bulletin boards exclusion Which one of the following claims would be covered under Coverage B - Personal and Advertising Injury Liability of the Commercial General Liability Coverage Form (CGL)? -- ---CORRECT ANSWER---------A store manager accuses a young man of shoplifting, apprehends him, and locks him in a storage room until the police arrive. When it is discovered that the young man is innocent, he files a claim against the store. Which one of the following statements is true regarding Coverage C—Medical Payments of the Commercial General Liability policy? -----CORRECT ANSWER--------- Medical payments coverage is a means of making prompt settlements. Betty's Birdhouses constructs and sells birdhouses. Betty discovered a fungus in the wood used to construct the birdhouses that would kill birds. Betty withdrew her entire stock of birdhouses to avoid any claims from environmental organizations for loss to wildlife. Does Betty's Commercial General Liability (CGL) Coverage Form cover the cost to withdraw the birdhouses and feeders? -----CORRECT ANSWER---------No, because the cost to withdraw Betty's product is excluded The Business Auto Coverage form has no provision for what is known as "bobtailing." The motor carrier's coverage form does provide coverage for bobtailing. Which of the following activities is considered "bobtailing" as it relates to an owner-operator's liability coverage? -----CORRECT ANSWER---------Operating a power unit without a trailer

Under the Commercial General Liability (CGL) Coverage Form, medical payments coverage applies to which one of the following? -----CORRECT ANSWER---------A volunteer worker of the named insured. Shady Stories, a tabloid newspaper, prints a false story about a local politician. Shady knows the story is false but thinks it will sell a lot of papers. The politician claims damages from Shady. Shady's Commercial General Liability (CGL) Coverage Form excludes coverage for this loss because the claim arose out of which one of the following? -----CORRECT ANSWER---------Written material that was known to be false Carl's Cabinets sells and installs cabinets in apartment buildings. After installation but before an apartment is occupied, two of the cabinets are damaged when they fall from the wall as a result of improper installation. Carl's Commercial General Liability (CGL) Coverage Form excludes coverage for the damage to the cabinets because of which one of the following exclusions? -----CORRECT ANSWER---------Damage to Your Work Morgan Company is involved in a lawsuit that is covered under its unendorsed Commercial General Liability (CGL) Coverage Form. Which one of the following would be covered under the supplementary payments section of the CGL policy? ----- CORRECT ANSWER---------Post judgment interest awarded by the judge Northern Company (Northern) uses a large forklift in its operations. The forklift is subject to the state compulsory auto insurance law and has a license tag. In the process of moving some items on Northern's premises, the operator loses control of the forklift and runs into a car owned by a customer. Which one of the following statements is true regarding coverage for this loss under Northern's Commercial General Liability (CGL) Coverage Form? -----CORRECT ANSWER---------No coverage applies under the CGL Coverage Form because the forklift is considered to be an 'auto,' and coverage would be provided by a commercial auto policy. International Toys (IT) manufactures toys in South Carolina and sells them to stores around the world. A customer in Europe is injured when one of the toys malfunctions and severs the customer's hand. The customer files suit in the United States. If IT is found liable, does its Commercial General Liability (CGL) Coverage Form cover the customer's claim? -----CORRECT ANSWER---------Yes, because the toys were manufactured in the United States The Random Bookstore (Random) is covered by an unendorsed Commercial General Liability (CGL) Coverage Form. A customer in the store tripped over her untied shoelace and fell, breaking her right arm. Which one of the following is a reason Random's

insurer might refuse to pay any damages under Random's CGL policy? -----CORRECT ANSWER---------The insured must be legally obligated before the insurer has the duty of paying. Chuckie's chicken distributor researches the benefits of consuming chicken versus consuming beef. In November 2011, Chuckie's publishes a brochure outlining the potential health hazards of consuming beef and explaining why chicken is a healthier alternative. Chuckie continues to publish and distribute the same brochure for six months. In March 2012, several beef distributors file a suit against Chuckie's for personal and advertising injury. Which one of the following exclusions would apply to this claim under Coverage B of Chuckie's Commercial General Liability Coverage Form (CGL) with a policy period of January 2012 - January 2013? -----CORRECT ANSWER-- -------Material published prior to the policy period Upon entering a restaurant, a customer grasped a handrail that broke off, causing the customer to fall and break his wrist. This is an example of which one of the following types of commercial general liability loss? -----CORRECT ANSWER---------Premises and operations liability The supplementary payments section of the Commercial General Liability (CGL) Coverage Form describes which one of the following? -----CORRECT ANSWER--------- Specific items to be paid in addition to damages. Which one of the following is an example of injury or damage arising from an occurrence that would be covered by the products and completed operations liability portion of the Commercial General Liability (CGL) Coverage Form? -----CORRECT ANSWER---------A defective gas range manufactured by the insured explodes causing injury. Which one of the following types of risks generally would be eligible for the businessowners policy program? -----CORRECT ANSWER---------A clothing store. Which one of the following statements is correct with respect to the liability coverage provided by the businessowners policy (BOP)? -----CORRECT ANSWER---------BOP liability coverage closely resembles the coverage provided by the occurrence version of the CGL coverage form. Which one of the following statements is correct with respect to eligibility for coverage under a businessowners policy (BOP)? -----CORRECT ANSWER---------Some insurers

have expanded the eligibility for their BOP programs to include restaurants and contractors. Which one of the following is true with regard to the coverage limits in the liability section of the businessowners policy (BOP)? -----CORRECT ANSWER---------Maximum limits are more restricted than the CGL; few insurers offer per occurrence limits over $ million in their BOPs. Which one of the following best describes the "property not covered" provisions of the businessowners policy (BOP)? -----CORRECT ANSWER---------The BOP has a relatively short list of 'property not covered' because the insureds eligible for a BOP are generally lower-risk, more homogenous types of businesses. Which one of the following statements is correct with respect to rating a businessowners policy (BOP)? -----CORRECT ANSWER---------It is usually much simpler than rating a comparable commercial package policy. Which one of the following property coverages is often included or available as an option in a businessowners policy (BOP)? -----CORRECT ANSWER---------Employee dishonesty Under the businessowners policy (BOP) - ----CORRECT ANSWER---------Many coverages that would require separate policies or coverage parts in the commercial package program are either included or available as options. Which one of the following statements is correct with respect to the liability coverage available under a businessowners policy (BOP)? -----CORRECT ANSWER---------Both ISO and AAIS offer BOP endorsements adding employee benefit liability coverage and employment practices liability coverage. A Commercial Package policy may include the following coverage types EXCEPT: ----- CORRECT ANSWER---------Health Which one of the following types of business is usually eligible for coverage under a businessowners policy? -----CORRECT ANSWER---------Apartment building

Which one of the following best describes one of the major differences between liability coverage provided by the typical businessowners policy (BOP) and the Insurance Services Office (ISO) Commercial General Liability (CGL) Coverage Form? ----- CORRECT ANSWER---------Hired and nonowned autos liability coverage is usually offered by BOPs, either as part of the form or by endorsement. Which one of the following statements best describes how businessowners policies (BOP) coverages compare with those provided by commercial package policies? ----- CORRECT ANSWER---------The BOP coverages are similar to the coverages provided under commercial package policies. Which one of the following is correct with respect to the professional liability coverage available under the businessowners policy (BOP) and the Commercial General Liability (CGL) Coverage Form? -----CORRECT ANSWER---------An important difference between the BOP's liability coverage and the CGL's is the availability of optional professional liability coverage endorsements for use with BOP. Which one of the following statements is correct with respect to the liability coverage available under businessowners policies (BOPs)? -----CORRECT ANSWER--------- Certain liability coverage options are not part of most BOP programs because the insureds that need them generally do not qualify for BOPs. Federal workers compensation statutes apply to which one of the following workers? ----

• CORRECT ANSWER---------An interstate railroad worker Part One of the Workers Compensation and Employers Liability Insurance Policy provides that the insured will reimburse the insurer for which one of the following? ----- CORRECT ANSWER---------Penalties required under a workers compensation law because of the employer's willful misconduct. Which one of the following best explains why the premium discount plan for workers compensation insurance provides an increasing credit for premiums in excess of a certain minimum? -----CORRECT ANSWER---------Many of the expenses of providing workers compensation insurance do not increase proportionately with increases in premium. The workers compensation laws of some states are inapplicable to which one of the following? -----CORRECT ANSWER---------Partners, sole proprietors, or executive officers.

Omicron Corporation currently does business in Colorado, Nebraska, and Kansas. These states are listed in Item 3.A on the Information Page of Omicron's Workers Compensation and Employers Liability Insurance Policy. The company is hoping to expand its operations into Utah, Arizona, and New Mexico during the next year. Which one of the following statements is correct with respect to workers compensation insurance in the states where Omicron hopes to expand? -----CORRECT ANSWER------ ---Omicron should include Utah, Arizona, and New Mexico in Item 3.C on the Information Page and advise the insurer immediately if the company begins operations in any of those states. Which one of the following would be covered under Part Two of the Workers Compensation and Employers Liability Insurance Policy? -----CORRECT ANSWER------ ---An employee is exposed to disease during the policy period but symptoms don't appear until after the employee is fired. With only a few exceptions, the premium base for workers compensation insurance is -- ---CORRECT ANSWER---------Payroll Which one of the following statements about employers liability coverage is true? ----- CORRECT ANSWER---------It does not cover punitive damages for injury or death of any illegally employed person. An employer that decides to purchase specific excess insurance to cover catastrophic workers compensation losses must pay losses that are which one of the following? ----- CORRECT ANSWER---------Up to the retention for one occurrence. When a worker is required to travel to another state and is injured in that other state, which one of the following is a typical consideration in determining which state's law applies for the purpose of determining workers compensation coverage? -----CORRECT ANSWER---------The worker's place of residence Which one of the following must an insurer pay on behalf of the insured according to Part One of the Workers Compensation and Employers Liability Insurance Policy? ----- CORRECT ANSWER---------Medical payments for a claimant who was exposed to a disease during the policy period but filed a claim two years after retiring

Before workers compensation statutes were enacted, what was the remedy for employees with work-related injuries? -----CORRECT ANSWER---------They had to establish that the employer was at fault to recover damages. Which one of the following statements is correct with respect to workers compensation premium adjustment through dividend plans? -----CORRECT ANSWER---------Under a sliding-scale dividend plan, the size of the dividend varies with the insured's own loss experience. Which one of the following statements is true with regard to workers compensation statutes? -----CORRECT ANSWER---------Federal government workers are excluded from workers compensation because they are covered under alternate plans. Crime loss exposures of financial institutions are covered by financial institution bonds. These policies were developed by -----CORRECT ANSWER---------The Surety and Fidelity Association of America (SFAA). Which one of the following is a type of covered property under employee theft coverage? -----CORRECT ANSWER---------Securities The XYZ Finance Company is insured under an ISO Commercial Crime policy. One month after the policy inception date, XYZ acquired ownership of a smaller finance company including its premises and employees. Which one of the following best describes XYZ's responsibility under the Consolidation—Merger or Acquisition condition of the policy? -----CORRECT ANSWER---------Coverage applies automatically for 90 days, but XYZ must promptly notify the insurer and pay the appropriate additional premium for coverage to continue beyond that time. The WB Bank (WBB) uses several outside companies to help process a large number of credit card transactions on a daily basis. WBB carries an ISO Commercial Crime Form with a Computer Fraud insuring agreement selected. After a recent audit, WBB becomes aware that a significant number of credit card transactions have somehow disappeared from the computer system. Which one of the following is most likely true regarding coverage under the Computer Fraud insuring agreement? -----CORRECT ANSWER---------Coverage is excluded for credit or debit card transactions. To coordinate with the Computer Fraud insuring agreement, the Funds Transfer Fraud coverage provided by the Computer Fraud insuring agreement of the ISO Commercial

Crime Coverage Form excludes -----CORRECT ANSWER---------Loss due to use of a computer to transfer money. Entities eligible for financial institution bonds are -----CORRECT ANSWER---------Not eligible for the ISO Commercial Crime Forms. Technical Corporation (TC) is covered by an ISO Commercial Crime Coverage Form with Inside the Premises and Outside the Premises insuring agreements. During a recent audit, TC discovered a significant monetary loss due to an accounting omission. Which of the following best explains the insurer's response to a claim presented by TC? -----CORRECT ANSWER---------Loss due to accounting omission is excluded. ABC, Inc., is a large, national retailer that sells a variety of consumer goods. ABC carries a Commercial Package Policy that includes Insurance Services Office's Commercial Crime Coverage Form (Loss Sustained) with the following insuring agreements: Employee Theft; Forgery or Alteration; Inside the Premises—Theft of Money and Securities; and Inside the Premises—Robbery or Safe Burglary of Other Property. The limit of insurance for each one of these insuring agreements is $100, and the deductible per occurrence for each one of these insuring agreements is $1,000. The policy year is 20X1. During 20X1, two employees, Beth and Jim, in collusion, stole money and merchandise from ABC. Beth and Jim stole money on May 1, 20X1 and August 13, 20X1. They also stole merchandise on January 15, 20X1 and September 29, 20X1. The amount of the money loss totaled $15,000 while the amount of the merchandise loss totaled $110,000. With respect to applying the limit of insurance applicable to the employee theft loss, how much will the insurer pay for the employee theft loss? -----CORRECT ANSWER---------$100, The Computer Store (TCS) brought a claim under the Employee Theft insuring agreement of its ISO Commercial Crime Coverage Form. TCS's claim is based on an inventory shortage. To overcome the inventory shortages policy exclusion, TCS must demonstrate that the -----CORRECT ANSWER---------Loss can be established wholly apart from inventory computations. A claim under an ISO Commercial Crime Coverage Form is subject to the Valuation— Settlement condition. Which one of the following is true regarding this Valuation— Settlement condition? -----CORRECT ANSWER---------Damaged property is valued at replacement cost or the insurer can repair or replace the property

Which one of the following is true regarding the ISO Commercial Crime Coverage Form Joint Insured condition? -----CORRECT ANSWER---------It appoints the first named insured as an agent for all insureds. James is in the process of forming his own brokerage company which will include several employees. James will be best protected by purchasing which one of the following to cover the crime loss exposures of his company? -----CORRECT ANSWER-- -------Financial Institution Bond. What type of bond is required to reissue a stock certificate? -----CORRECT ANSWER--- ------Lost Instrument Bond This type of Bond guarantees the appearance of a defendant in court. -----CORRECT ANSWER---------Bail Bond What type of bond guarantees all materials will be paid by the contractor upon completion? -----CORRECT ANSWER---------Payment Bond This type of bond is furnished by both the plaintiffs and defendants in litigation to protect the opposing party from loss in the event the principal fails to show a legal entitlement to the remedy sought. -----CORRECT ANSWER---------Court Bond The three parties to a contract suretyship are: -----CORRECT ANSWER---------Principal, Obligee, Surety An example of when a permit bond may be required , would be: -----CORRECT ANSWER---------An athletic event What type of bond guarantees the principal will uphold the oath of office and faithfully perform the duties of office? -----CORRECT ANSWER---------Public Official Bond This is a type of license bond that holds governmental body harmless from any injuries or damage caused by the principles activtities. -----CORRECT ANSWER--------- Indemnity Bond How many parties are there in a surety contract? -----CORRECT ANSWER---------Three

What type of bond guarantees if a bid is accepted, the bidder will satisfy further bonding requirements? -----CORRECT ANSWER---------Bid Bond A term used to indicate a partial loss resulting from a sacrifice of cargo to save remaining property (jettison) Each party then shares in the loss in proportion to their total interest in property being transported -----CORRECT ANSWER---------General Average This is a type of inland marine policy that is designed to cover equipment or machinery in transit to, or being installed in the course of construction or renovation: ----- CORRECT ANSWER---------Installation Floater Joe has Personal Articles Floater covering a musical keyboard he uses for personal use only. While away on vacation in Europe the keyboard is stolen. He had it scheduled for $1,000. To purchase a new keyboard the cost would be $1,250. The company could get the same item at a used musical store for $750. What would the policy pay? ----- CORRECT ANSWER---------$ Personal Inland Marine coverages are generally rated based on a rate per ______ dollars, varying by class. -----CORRECT ANSWER--------- 100 This is an uncontrolled form that protects the shipper or receiver of goods against loss to goods in transit throughout the year. -----CORRECT ANSWER---------Annual Transit Policy When cargo is shipped __________, the buyer assumes responsibility for the cargo once goods reach the designated point. -----CORRECT ANSWER---------Free on Board (FOB) The __________ is an uncontrolled form that covers heavy equipment, machinery and tools contractors used in the course of business. -----CORRECT ANSWER--------- Contractors Equipment Floater The controlled _______________from reimburses the insured for the cost of replacing damaged manuscripts, films, maps, drawings, deeds, books or other printed, inscribed

or written documents (other than money and securities). -----CORRECT ANSWER--------

• Valuable Papers Joe is out for an evening cruise on his 100 ft yacht. The fog rolls in and he loses all visability. Then suddenly slams into another boat moored nearby. The damage to the other boat is roughly $20,000. Under what section of Joe's Ocean Marine Policy would there be coverage for the other boat? -----CORRECT ANSWER---------Running Down Clause Frank has a Personal Articles Floater with a fine arts schedule covering a painting. Coverage is in the amount of $5,000. A three year old child comes in the house and ruins the painting by marking it up with a black marker. The painting is now worthless. The company has located the exact same painting for $2,000. What will the policy pay? -----CORRECT ANSWER---------$5,000 This coverage is written as an adjunct to Passenger Liability, not applicable to passengers carried for hire. -----CORRECT ANSWER---------Admitted Aircraft Liability Coverage Physical damage insurance provided to cover loss or damage to an insured aircraft, in motion, not in motion or both, is___________ insurance. -----CORRECT ANSWER------- --Aircraft Hull This form provides coverage for manufactures and sales or repair organizations against liability claims that are attributable to defective products or work. -----CORRECT ANSWER---------Product Liability This is a form of bailee insurance that covers the insured's liability for damage to aircraft stored for safekeeping or repair. -----CORRECT ANSWER---------Hangarkeepers Liability Coverage This coverage is written to cover public and passenger liability and property damage liability. -----CORRECT ANSWER---------Aircraft Liability This coverage provides protection very similar to premises and operations liability under a Commercial General Liability Policy. -----CORRECT ANSWER---------Airport and Air Meet Liability

This coverage provides medical expenses for bodily injury by accident, without regard to legal liability. -----CORRECT ANSWER---------Medical Payments Coverage What is the dollar limit applicable to defense of the insured from claims or suits arising out of covered occurrences. -----CORRECT ANSWER---------No dollar limit Which of the following is an exclusion listed under Part B of the Boiler and Machinery Coverage form? -----CORRECT ANSWER---------War and Nuclear Hazards The valuation clause provides for placement cost coverage on all covered property, except if repair or replacement is not made within how long? -----CORRECT ANSWER-- -------18 months Which part of the Boiler & Machinery Coverage form lists the deductible provisions? ----- CORRECT ANSWER---------Part D Which part of the Boiler & Machinery Coverage Form provides information pertaining to policy limits. -----CORRECT ANSWER---------Part C When there is damage to covered property, reimbursement will be provided for the cost of temporary repairs and to expedite permanent repairs or replacement, based upon this coverage extension: -----CORRECT ANSWER---------Expediting Expenses How many days of automatic coverage are provided for an accident to an object at a newly acquired location, subject to the highest limit and deductible as stated in the Declarations for the same type of object? -----CORRECT ANSWER--------- 90 This policy is designed to provide indemnification to the insured for basic hospitalization expenses of room and board in the hospital, nursing care, lab fees, operating room, medical supplies and related items. -----CORRECT ANSWER---------Hospitalization Expense Insurance This provision allows the insured to return the policy within a certain number of days and receive a full refund. -----CORRECT ANSWER---------Free Look

This type of coverage pays a flat amount per day for hospitalization, regardless of expenses or other insurance. -----CORRECT ANSWER---------Hospital Indemnity Insurance This insurance covers fees of physicians for performing surgery, with a maximum amount payable for each procedure. -----CORRECT ANSWER---------Surgical Expense Insurance Florida law requires not less than a _________ day grace period for monthly premium policies. -----CORRECT ANSWER---------10 day This insurance provides coverage for expenses, including loss of income, arising from accidents. -----CORRECT ANSWER---------Accident Insurance This optional provision states that if the insured becomes totally disabled, premiums are waived but the coverage remains in force. -----CORRECT ANSWER---------Waiver of Premium Under this provision a health insurance company may not cancel during the policy term, but reserves the right to non-renew the policy at expiration. -----CORRECT ANSWER---- -----Optionally Renewable Health Insurance does not include _________________. -----CORRECT ANSWER------ ---Workers Compensation Florida Law requires not less than a ________ day notice for cancellation of a health insurance policy. -----CORRECT ANSWER---------20 day This insurance is designed to assist clients who are now dependable on others for care. -----CORRECT ANSWER---------Long term Care This is the fundamental purpose Medicare Supplement policies. -----CORRECT ANSWER---------Cover medical costs not payable under the Federal Medicare Program Which one of the following would NOT be eligible for coverage with the FAJUA? ----- CORRECT ANSWER---------A tourist renting a moped

To be eligible for Citizens, the applicant must certify they are unable to obtain and have not received an offer, for residential property insurance, from any authorized insurer that is less than ____________ percent higher than the price quoted through Citizens. ----- CORRECT ANSWER--------- 15 Citizens provides commercial coverage for which one of the following? -----CORRECT ANSWER---------Condo Associations All "keep-out" and "take-out" plans of Citizens are subject to the ___________ statute. -- ---CORRECT ANSWER---------Consumer Choice Which of the following is NOT a standard form that Citizens issues policies on? ----- CORRECT ANSWER---------HO- 5 The Florida Workers Compensation Joint Underwriting Association (FWCJUA) has how many different Tiers? -----CORRECT ANSWER--------- 3 Tier 1 rates are set at _________ above comparable voluntary market rates. ----- CORRECT ANSWER---------25 percent This is a market source in Florida for persons who are unable to purchase auto insurance through normal channels. -----CORRECT ANSWER---------Florida Automobile Joint Underwriting Association If the FWCJUA experiences a deficit in either Tier 1 or 2, funding would come from where? -----CORRECT ANSWER---------An assessment for 1 year on all WC policies in the voluntary market A policy with Citizens may be replaced with a policy from an authorized insurer at any time during the policy period with a ________day notice. -----CORRECT ANSWER------- -- 60 This Tier is for employers with an experience modification factor equal or greater than 1.0, but not greater than 1.10. -----CORRECT ANSWER---------Tier 2

Florida law states this a contract whereby one undertakes to indemnify another or pay or allow a specified amount or a determinable benefit upon determinable contingencies. -----CORRECT ANSWER---------Insurance As per Florida law, this includes every person engaged as indemnitor, surety, or contractor in the business of entering into contracts of insurance or of annuity. ----- CORRECT ANSWER---------insurer A _____________ is required in order for an insurer to transact insurance in Florida. ----

• CORRECT ANSWER---------Certificate if Authority This is the authority given by an insurer or employer to a licensee to transact insurance or adjust claims on behalf of an insurer or employer -----CORRECT ANSWER--------- appointment How long do appointments last? -----CORRECT ANSWER---------24 months Which statement is true concerning Liability coverage in a Personal Auto Policy? ----- CORRECT ANSWER---------It gives coverage only to those with the status of "insured". Which of the following is a supplemental payment benefit under a Personal Auto Policy> -----CORRECT ANSWER---------Interest accruing after judgement In a Personal Auto Policy, which of the following statements is incorrect? -----CORRECT ANSWER---------The maximum amount payable under the Supplementary Payments is $250 Joe works for Tastee Burger, Inc. As part if his compensation package, he is supplied with a company car that he gets to take home each night. Joe wants to make sure that the Liability coverage under his own Personal Auto Policy covers him while driving the company car. What should he ask his agent to add to his own policy? -----CORRECT ANSWER---------Extended Nonowned Liability coverage Joe has a Personal Auto Policy with Liability of 25/50/25. He hits a car with four (4) occupants from Minnesota, all of whom are hurt. They all sue. The first sues for $20,000; the second sues for $35,000; the third sues for $22,000; the fourth sues for