Understanding Insurance: Loss Prevention, Coverage, and Liability, Exams of Nursing

Download Understanding Insurance: Loss Prevention, Coverage, and Liability and more Exams Nursing in PDF only on Docsity! Fundamentals Of Insurance (BC) -with 100% verified solutions 2024-2025-tutor verified 117Q&A Insurance plays an important role in managing financial risk. The main purpose of Insurance is to: A. Enable the consumer to obtain loan or mortgage. B. Provide employment and investment capital. C. Allow spread of risk. D. Reduce losses through loss prevention and loss reduction. C. Allow spread of risk. When the insurer terminates an insurance policy, ALL of the following conditions apply, EXCEPT one. Pick the exception: A. The insured is entitled to 15 days' written notice of termination sent by registered mail of 5 days' written notice personally delivered. B. The refund due to the insured shall be calculated on a short rate basis. C. Unless otherwise stated, the refund shall accompany the notice of termination. D. The refund shall be in the form of money, postal or express company money order or cheque payable at par. B. The refund due to the insured shall be calculated on a short rate basis. The major function of insurance is to: A. Reduce the cost of losses. B. Share the losses of the few among many. C. Safeguard the interest of the mortgagees D. Serve as the basis of the existing credit system. B. Share the losses of the few among many. Under the policy of "fire" insurance, the insurer would be obligated to pay the following loss only: A. Fire damage caused to appliance following a sudden power surge. B. Fire damage to insured buildings occurring during a rebellion. C. Damage to insured property due to radioactive contamination. D. Loss of property caused by a process involving the application of heat. B. Fire damage to insured buildings occurring during a rebellion. Generally, all of the following, except one, are seen to be "incompetent" or lacking the legal capacity to contract. Pick the exception: A. A corporation. B. A child. C. A trade name. D. A senile person. A. A corporation. If a burning log rolls out of your clients fireplace grate across the hearth and onto the rug in front, the loss to the rug is considered to be the result of a(n): A. Direct fire. B. Indirect fire C. Friendly fire D. Hostile fire D. Hostile fire Statutory Condition Five: Termination, sets out the provisions for cancellation of a contract of insurance that must be compiled with by the insured and the insurer. All of the following provisions regarding termination by the insurer are true, except one. Select the exception: A. Damage to personal property during transportation to the insured's new principal residence located in Sydney, Nova Scotia, which is to be occupied by the insured within the next 10 days. B. The cost of repair the "tear out" damage to the insured's driveway that was necessarily caused to replace the ruptured water main. C. The cost to replace the insured's freezer food that was spoiled as a result of a power failure caused by lightening. D. Loss of the insured's indoor trees and plants due to exposure to extreme temperatures after a severe storm damaged part of the roof. B. The cost of repair the "tear out" damage to the insured's driveway that was necessarily caused to replace the ruptured water main. The Basis of Claim Payment is the same for all Homeowners Forms. All of these statements regarding the Basis of Claim Payment are true, except one. Pick the EXCEPTION: A. Dwelling Building and Detached Private Structures are covered on a Replacement Cost Basis. B. Personal Property is insured for Replacement Cost except electronic media and books of account, which are subject to a special basis of settlement. C. Artwork, antiques, memorabilia, and souvenirs are covered on Actual Cash Value Basis. D. Dwelling Building and Detached Private Structures are covered on a Replacement Cost Basis, which includes any increased cost of construction to the enforcement of by-laws. D. Dwelling Building and Detached Private Structures are covered on a Replacement Cost Basis, which includes any increased cost of construction to the enforcement of by-laws. Under all Homeowners Forms, the coverage for certain Personal Property articles is restricted to "Special Limits Of Insurance", unless the insured has purchased additional insurance. All of the following objects are subject to "Special Limits," except one. Pick the EXCEPTION: A. Computer games and other software with a combined value of $3,600. B. A mountain bike valued at $6,000. C. A coin collection valued at $1,200. D. A gold watch valued at $1,800. D. A gold watch valued at $1,800. The windstorm or hail only provided by the Homeowners' Basic Form (IBC 1151) would pay for the loss or damage to: A. Dwelling building shingles. B. Satellite dish. C. Interior of building by rain which entered through an open window. D. Insured's waterfront dwelling caused by high waves which resulted directly from a severe windstorm. A. Dwelling building shingles. The following loss is insured under the Homeowners' Basic Form (IBC 1151): A. Water Hammer B. Rupture of a heating, plumbing or air conditioning system. C. Smoke from a fireplace. D. Death of a family pet by vehicle impact. B. Rupture of a heating, plumbing or air conditioning system. Your client is the owner of a condominium and is currently covered under a Condominium Unit Owner's Package (IBC 1165), which includes Loss Assessment Coverage. She doesn't believe that this coverage is important. You advise her that the Loss Assessment Coverage would respond to all the following claims, except one. Pick the EXCEPTION: A. The portion of the cost to replace personal property damaged by fire because of an inadequate limit under her own policy. B. Payment to cover a portion of a water damage loss to common area, because of a high deductible under the condominium corporation's policy. C. Payment for a loss to collectively owned property, which was not covered under the condominium corporation's policy. D. Assessment to cover a portion of an insured loss to the building due to the co-insurance penalty imposed on the corporation by its insurer. A. The portion of the cost to replace personal property damaged by fire because of an inadequate limit under her own policy. The loss of money due to actual destruction, disappearance or wrongful abstraction would be property insured under the following policy: A. Burglary Policy B. Robbery Policy C. Interior Messenger and Paymaster Robbery (Hold-Up) Policy. D. Money and Securities (Broad Form) D. Money and Securities (Broad Form) The installation Floater is designed for contractors that specialize in the installation of machinery and equipment. The following property is not covered under this floater: C. If the amount of insurance is less than 80% of the value of the property, payment may be less than the actual loss. Insureds generally will receive a rate credit when property protection systems are installed on the premises. As a condition of coverage, the insured must notify the insurer immediately when certain conditions exist. Which is the following statements is not true in respect of this policy condition: A. The insureds shall notify the insurer of any interruptions to such system(s) of which they are aware. B. The insureds shall advise the insurer of the existence of any municipal by-law or ordinance related to such system(s) C. The insureds shall advise the insurer when any contract providing monitoring or maintenance services has been cancelled. D. The insureds shall advise the insurer when they have been provided with notification of the suspension of police services in response to any such system(s) B. The insureds shall advise the insurer of the existence of any municipal by-law or ordinance related to such system(s) According to the Canadian Legal System, the Insurance Act is: A. A part of the criminal code. B. A precedent established by common law. C. A part of the Civil Code. D. A statute law. D. A statute law. An insured' s liability for sickness, disease or death caused to third parties is insured by liability policies under the coverages provided for: A. Personal Liability B. Bodily Injury C. Medical Payments D. Supplementary Payments. C. Medical Payments The Commercial General Liability (CGL) Policy insured the liability exposures common to most businesses. Your client is an electrical contractor, who replaced the wiring in a customer's building. Two days after the work was finished, a fire broke out, and the fire chief determined that it was caused by a faulty connection. Which liability coverage in the CGL Policy would respond to this claim? A. Premises and Operations Liability B. Products Liability C. Completed Operations Liability D. Personal Injury Liability C. Completed Operations Liability The Homeowners' Comprehensive Form (IBC 1155) insures the following loss or damage only: A. Loss to sporting equipment during its use. B. Damage caused by birds. C. Breakdown of dishwasher motor. D. Damage due to smoke from fireplace. D. Damage due to smoke from fireplace. Under the Homeowner's Basic Form (IBC 1151) the following loss is not insured: A. Roof damage caused by falling object which strikes the dwelling building. B. Damage caused to the dwelling building by an automobile driven by a neighbour. C. Wind damage to building siding. D. Damage caused by vandalism to a dwelling building in the course of construction. D. Damage caused by vandalism to a dwelling building in the course of construction. The following claim would be insured by the Homeowners' Basic Form (IBC 1151) under the peril of theft: A. Theft of insured's registered black Labrador dog. B. Damage to door and lock by persons attempting to break-in to the insured's dwelling. C. Theft to personal property from a seasonal dwelling owned by the insured and which had not been occupied by the insured for almost two months. D. Theft of building materials from site of insured's new dwelling prior to its completion. B. Damage to door and lock by persons attempting to break-in to the insured's dwelling. When one person, (the plaintiff), sues the other person, the defendant, for damages, before awarding damages, the courts require the plaintiff to prove all the following elements, except one. Pick the exception: a. the defendant had a moral duty to defend the plaintiff'f well-being b.the defendant owed the plaintiff a legal duty of care c the defendant breached the legal duty of care d. damages were suffered as the proximate result of the defendant's action a. the defendant had a moral duty to defend the plaintiff'f well-being Your client operates a medical clinic near your office. She was recently sued by a customer who broke her back when the rail leading to a second floor office gave away, causing her to fall a distance of 5 meters to the floor below. This is an example of: a. a premises liability claim, b. a professional liability claim. c. A products liability claims d. a completed operations liability claims a. a premises liability claim, Businesses have some unique liability exposures which need to be properly insured. Your client sells toasters on a mail order basis. Which one of the following liability coverages would be most important for such a business? a. premises liability b. operations liability c. products liability d. completed operations c. products liability In general, liabilities policies are designed to respond (if a claim is made against an insured for bodily injury or property damage caused to a third party. All of the following would be considered "bodily injury" claims under liability insurance, except one. Pick the exception a. a friends child was bitten by the insured's dog and required stitches to close the wound b. a letter carrier died as a result of a fall on icy steps on the insured's premises c. a neighbour is suffering from emotional trauma having witnesses the insured shooting a bear that has wandered into the insured's yard. d. a customer contracted food poisoning after eating improperly cooked meat in the insured's restaurant. c. a neighbour is suffering from emotional trauma having witnesses the insured shooting a bear that has wandered into the insured's yard. All of the following statement respecting voluntary medical payment coverage, which is provided on all homeowners forms, are true except 1. Pick the exception. a. are limited as to amount b. is not a requirement that the insured be legally liable for the injury before payment will be made c. are payable for up to 5 years from the date of the accident d. are deigned to pay surgical, medical, hospital and other expenses. c. are payable for up to 5 years from the date of the accident A lawsuit alleging damage to a neighbouring property during excavation work was filed against the property owner and the contractor. All of the following statements regarding the legal liability for injury or property damage arising out of the work performed by a contractor are true. Except one. a. the owner will not be held legally liable if the owner hired a contractor having the necessary expertise in performing the work b. the owner will not be legally liable if the work is considered reasonable c. the owner and contractor will share the liability if the work was dangerous d. the owner will always be held liable for injury or property damage resulting from the work performed by the contractor. d. the owner will always be held liable for injury or property damage resulting from the work performed by the contractor. Civil law, also called private law, is the body of law that addresses disputes between individuals and other legal entities. Civil law is divided into two branches, contract law and tort law. Civil law defines a tort as: a. a failure to meet obligations under a contract b. a private wrong or injury other than a breach of contract. c. a criminal wring that must be punished. d. a failure to exercise that degree of care, which an ordinary person with reasonable prudence would under the same circumstances. b. a private wrong or injury other than a breach of contract. Most liability policies provide coverage on an occurrence basis. All of the following statememts, except one, correctly describes what the policy covers. Select the statement which is incorrect. a. the amount of insurance stated on the policy is the maximum amount payable for all occurrences, which happened during the policy period. b. the policy covers bodily injury or property damage resulting from an accident. c. the policy covers bodily injury or property damage caused by an exposure to a harmful condition over a long period of time. d. the amount of insurance stated on the policy is available for each occurrences during the policy period. b. explosion c. smoke from a fireplace d. water damage c. smoke from a fireplace The professional liability exposure of insurance brokers is only insured under a policy of: a. personal liability insurance b. commercial general liability insurance c. Malpractice insurance. d. errors and omissions insurance. d. errors and omissions insurance. In the event of an occurrence, claim or action, the insured under a liability policy must do of the following, except one. a. provide the insurer with prompt notification of any accident or occurrence which may lead to a claim. b. immediately forward to the insurer copies of any legal paper received. c. make such voluntary payments on behalf of the insurer as are required interim to satisfy the plaintiff. d. assist the insurer in in the investigation, settlement or defence of the claim or action c. make such voluntary payments on behalf of the insurer as are required interim to satisfy the plaintiff. While in the majority of cases law considers a person "innocent until proven guilty" there are circumstances in which the courts deem the defendant " guilty until proved innocent" . this approach is referred to as "strict liability and apply to all of the following actions , except one. a. the defendant made a fire on his property to burn yard waste and the fire spread to neighbouring property where it destroyed an outbuilding. b. the defendant set off fireworks, which seriously injured a bystander. c. the defendant, who lives in a multi-storey building, caused serious water damage to the unit below when the bathtub overflowed. d. the defendant, who piloted an airplane, crashed into a building. c. the defendant, who lives in a multi-storey building, caused serious water damage to the unit below when the bathtub overflowed. When an applicant for supplementary travel insurance has pre-existing condition, coverage is: a. unavailable in all situations b. may be available in Canada only c. may be available only if the applicant has returned to work d. maybe available if the condition had been under control for a period of time, three or six months depending on the condition. d. maybe available if the condition had been under control for a period of time, three or six months depending on the condition. A doctor's visit or hospitalization while travelling outside the provinces of Canada could be catastrophic if there is no insurance to cover medical expenses. As a broker you would strongly advise our clients to purchase travel insurance, which is designed to pay all of the following expenses, except 1. a. the cost of X-ray and other diagnostics related to an accident. b. the cost of pre-arranged medical procedure at a health clinic abroad c. the cost of prescription drugs d. the cost of the air ambulance to transfer the person to a hospital in their home province. b. the cost of pre-arranged medical procedure at a health clinic abroad The insurance act requires that all people who sell insurance be licensed. All of the following statements are true except one. a. to obtain an initial license an applicant must pass an approved examination b. the initial license authorizes the licensee to sell any and all classes of insurance. c. brokers / salespersons must be licensed in each province in which they do business d. a license may be terminated when the licensee proves to be incompetent or untrustworthy b. the initial license authorizes the licensee to sell any and all classes of insurance. Insurance agents and brokers must comply with the licensing regulations under the insurance act in their respective province. To qualify for a license, insurance agents / brokers must: a. undergo an examination under oath to prove that they are of good character b. undertake and successfully pass a provincial licensing examination. c. provide proof that they are an employee of a brokerage for at least one year d. provide proof that they are sponsored by an insurance company. b. undertake and successfully pass a provincial licensing examination. The premium for a "single trip" travel policy is based on all the following factors, except one. a. the distance between the applicants home address and and the final destination b. the number of days the applicant is travelling c. the number of persons insured under the travel policy C. Own Damage All of the following statements respecting Autoplan are true except one. Pick the Exception. A. People moving within British Columbia to take up permanent residence must purchase Autoplan Coverages within 30 days of their arrival. B. Unlicensed vehicles such as snowmobiles, dirt bikes, and all terrain vehicles are not permitted to be used on public roads and as such do not require Autoplan Coverages. C. All vehicles brought into British Columbia from outside the province need a mechanical inspection before they can be registered or insured. D. All vehicles brought into British Columbia must pass an annual Air Care inspection before being permitted to renew their license and insurance. D. All vehicles brought into British Columbia must pass an annual Air Care inspection before being permitted to renew their license and insurance. When an at-fault driver does not have enough insurance to pay the full amount the bodily injury or death claim Basic Autoplan will cover the excess amount of the claim to a maximum of $1 million per person. This Autoplan coverage is called: A. Excess Third Party Liability Coverage B. Underinsured Motorist Protection C. Inverse Liability D. Accident Benifits B. Underinsured Motorist Protection The Unlicensed Motor Vehicle Policy can be purchased to provide coverage for: A. An unlicensed dump truck in storage. B. An unlicensed dump truck worth in an off-highway gravel pit. C. A modified racing car. D. An unlicensed 350 cc motorcycle used in a public park by a 14 year old. A. An unlicensed dump truck in storage. All of the following factors will affect the premium to be charged for Autoplan except one. Pick the Exception. A. Rate class or use of the vehicle. B. Age of the applicant. C. Territory in which the automobile is chiefly being used. D. Make, model and year of vehicle being insured (when Own Damage Coverage option is selected) B. Age of the applicant. Insurance plays an important role in managing financial risk. The main purpose4 of insurance is to a. Enable the consumer to obtain a loan or mortgage b. Provide employment and investment capital c. Allow the spread of risk d. Reduce losses through loss prevention and loss reduction c. Allow the spread of risk The definition of insurance in the Insurance Act includes all of the following important points, except one. Pick the exception: a. Payment is made only when a certain peril has damaged the object of insurance b. Payment is limited to the actual amount of the loss - no more and no less c. There is no payment for losses that are deliberately caused by an insured d. The indemnity must always be in the form of a sum of money; no other method is permitted by law d. The indemnity must always be in the form of a sum of money; no other method is permitted by law The majority of insurance companies use independent brokers to sell their insurance policies to the public. Which of the following statements does NOT apply to this system of distribution? a. Independent brokers are employees of the insurance companies they represent b. Independent brokers receive commissions from their insurers for the business they produce c. Independent brokers can represent more than one insurance company d. Independent brokers own all of their client files a. Independent brokers are employees of the insurance companies they represent When dealing with financial risk a person has several options available. In your opinion, which of the following is the best option for most people? a. Avoidance of risk b. Restitution c. Subrogation d. Mediation c. Subrogation The Insurance Act provides that a policy insuring the peril of "fire" must also include coverage for a. Windstorm and Lightning b. Lightning, including damage to electrical appliances and devices c. Lightning and all types of Explosion d. Explosion of natural, coal or manufactured gas and Lightning, excluding damage to electrical appliances and devices d. Explosion of natural, coal or manufactured gas and Lightning, excluding damage to electrical appliances and devices All of the following statements apply to the Statutory Conditions, except one. Pick the exception: a. After a loss has been reported the insurer has the immediate right of access and entry to the property to investigate the loss. b. When the insurer elects to repair or rebuild the damaged property, it must give written notice to the insured within thirty (30) days after receipt of the Proof of Loss. c. When the insured is unable to notify the insurer of a loss and provide Proof of Loss, an agent of the insured is permitted to give notice and proof. d. Even if the insured had a reasonable chance to protect property from loss but failed to do any such thing, this usually does not affect the claim settlement. d. Even if the insured had a reasonable chance to protect property from loss but failed to do any such thing, this usually does not affect the claim settlement. The role of agents and brokers is to serve as an intermediary between the client and the insurer. Which of the following best reflects the duties of the broker? a) A broker acts exclusively in the best interest of the client b) A broker must always place insurance with the insurer that charges the lowest premium. c) A broker must always present the client's risk truthfully and disclose all material facts to the insurer. d) A broker does not owe any duty to the insurer he or she represents. c) A broker must always present the client's risk truthfully and disclose all material facts to the insurer. The law requires that insurance brokers exercise "reasonable skill, care and diligence" in carrying out their duties. Failure to do so can result in an Errors and Omissions claim against the broker. The main reason for Errors and Omissions claims is due to a) Providing the client with coverage he doesn't need. b) The failure to properly identify the client's loss exposures and offering the required coverages c) The failure to cancel the policy when requested by the insured d) A violation of the Agency Agreement b) The failure to properly identify the client's loss exposures and offering the required coverages An underwriter is required to perform numerous task, however, the primary function of an Underwriter is to a) Select those risks that are most likely to be profitable to the insurer b) Bind coverage on all risks the insurer accepts c) Set the premium rates mostly for commercial risks d) Process cancellation certificates and issue premium refund cheques a) Select those risks that are most likely to be profitable to the insurer Determining whether a risk meets the criteria for insurance the Underwriter must assess the hazards that could cause a peril to occur. When checking into an applicant's prior claims history or financial condition the Underwriter is concerned about the existence of a) Other parties with an insurable interest b) Abnormal physical hazards c) A moral hazard d) Smoking material on the premises c) A moral hazard The indemnity Agreement describes how the amount of a loss settlement is determined. One of the following values is not a factor in arriving at the amount of the settlement. Select this value: a. Replacement cost of the lost or damaged property less depreciation b. The financial interest of the insured in the property that was lost or damaged c. The future investment value of the property that was lost or damaged d. The amount of insurance purchased on the property that was lost or damaged C. Replacement of the insured's ANTIQUE doll house which was smashed by burglars. D. Reconstruction of the fence which was blown over by a windstorm. C. Replacement of the insured's ANTIQUE doll house which was smashed by burglars. All of the following statements regarding Coverage F - Voluntary Medical Payments are true, except one. Select a statement, which is false: A. There is no need to establish the insured's negligence before payment is made to cover medical expenses of an injured third party. B. Payments for medical expenses are made for up to one year from the date of accident. C. Coverage is provided only when the third party does not have other health insurance, which would pay the medical expenses. D. Coverage is provided for medical payment incurred by an insured while travelling outside Canada D. Coverage is provided for medical payment incurred by an insured while travelling outside Canada Coverage G- Voluntary Payment for Damage to Property would respond to pay in the following instance only: A. The insured smashed the computer at work in the fit of rage, the employer is demanding to be reimbursed for the damage. B. The insured's 10-year old son deliberately threw a rock into the neighbour's window because he was chastised for swearing. C. The insured's 14-year old son spray- painted the neighbour's garage door just for fun. D. The insured damaged his own riding lawn mower and was denied a claim under Section 1 of Homeowners Policy. B. The insured's 10-year old son deliberately threw a rock into the neighbour's window because he was chastised for swearing. Your client, who owns and operates a Pizza Take-out and Delivery Service has just received notice of a bodily injury claim by a customer against his business. The customer alleges that he bit on a chicken bone in the topping of his pizza and broke a tooth, which required substantial dental work. His business liability exposures are covered under Commercial General Liability Policy. Which of the following coverages under this policy would respond to this claim? A. Premises and Operations Liability B. Personal Injury Liability C. Products Liability D. Completed Operations Liability C. Products Liability A business may be liable for causing a Personal Injury to a Third Party. All of the following are "Personal Injury" claims, except one. Select the one, which is not a Personal Injury Claim. A. Claim for a broken hip caused by the collapse of a display chair the customer sat on. B. Claim by a tenant against the landlord for wrongful entry into the tenant's apartment. C. Claim for false arrest by a customer, who was wrongfully detained for shoplifting. D. Claim against a business owner by a competitor for making slanderous remarks about his business practices. A. Claim for a broken hip caused by the collapse of a display chair the customer sat on. Professionals require a special liability policy, which covers claims arising out of the rendering or failure to render professional services. A doctor would require this particular liability insurance: A. Personal Injury Liability Policy B. Malpractice Liability Insurance C. Errors and Omissions Liability Insurance D. Medical Expenses Insurance B. Malpractice Liability Insurance Insureds, who wish to obtain the best own damage coverage on their vehicle, would purchase Collision and Comprehensive Coverages. Only one of the following losses is considered a "Comprehensive Claim". A. Damage to the vehicle when the insured hit a pothole in the road. B. Damage to the vehicle when a dear jumped in from of the vehicle. C. Damage to the vehicle when the insured swerved to avoid hitting a moose. D. Damage to the vehicle when a cyclist moved into the path of the vehicle. B. Damage to the vehicle when a dear jumped in from of the vehicle. The Roadstar Package, which ICBC offers to eligible insureds, includes all of the following coverages, except one. Select the one, which is not covered. A. Loss of Use coverage up to $800 - for motor homes $1000, subject to a daily limit. A. Damage to the exterior and interior during a severe windstorm which had ripped off a section of the roof on the insured's house B• The radio and TV antennae permanently installed on the insured's property collapsed during a storm C• Collapse of the insured's storage shed caused by the accumulation of snow during a snowstorm with winds reaching 50 km/hr D• Damage to the interior of the house caused by heavy rain that entered through a window, which was left open by the insured. A. Damage to the exterior and interior during a severe windstorm which had ripped off a section of the roof on the insured's house The Homeowners Basic Form (IBC1151) provides coverage for Glass Breakage. Under this peril all of the following losses, except one are insured. Select the loss for which coverage is excluded under this form. a. While practicing his golf swing in the backyard a flying golf ball shattered a large pane of glass of the enclosed sunroom b. Accidental breakage occurred during a party when one of the guests stepped into the closed glass patio door. c. Breakage of the glass table top which slipped out of the helpers' hands during the move to the insured's new residence d. Breakage of the large picture window at the front of the insured's house caused by a rock thrown up by the wheels of a passing vehicle c. Breakage of the glass table top which slipped out of the helpers' hands during the move to the insured's new residence Although the Homeowners Comprehensive Form (IBC1155) insures on the basis of "all risks of direct physical loss or damage" coverage is subject to conditions and exclusions. All of the following losses, except one, are excluded; select the loss, which is covered by this form. A• Damage to the roof caused by raccoons, which tried to get into the attic B• Crack in the foundation wall due to the setting of the ground over time C• Wear and tear of the furniture upholstery due to continuous use D• Smoke damage to family room from the fireplace D• Smoke damage to family room from the fireplace Because of its broad coverage the Homeowners Comprehensive Form (IBC1155) offers many advantages to an insured. This form insures all of the following losses, except one. Select the loss that is not covered. A• Damage to the garage door when the insured accidentally backed into it B• Damage to carpeting when the insured spilled a gallon of paint on it C• Damage to the insured's dwelling caused by an earthquake tremor D• Loss of the insured's watch down a storm drain because the strap suddenly broke C• Damage to the insured's dwelling caused by an earthquake tremor Commercial property insurance policies are designed to insure property, which has a business or commercial use. The Commercial Property Insurance Broad Form (IBC4037) is the policy that provides commercial risks with the broadest coverage. It covers loss or damage from all of the following, except one. Select the one, which is not covered. A• All sources of smoke damage, except from agricultural smudging or industrial operations B• Vehicle impact damage to building even when operated by the insured or an employee of the insured C• Theft of money from a cash register D• Water damage resulting from the rupture or freezing of a water pipe C• Theft of money from a cash register When determining the required premium for insuring commercial property the underwriter, will first establish the fire rate. For this purpose the underwriter will consider all of the following factors, except one. Select the one, which is not a factor in determining the fire rate. A• The use of occupancy of the building by the insured and others B• The type of construction of the building C• The type of public and private fire protection D• The number of employees in the insured's business D• The number of employees in the insured's business All commercial property insurance policies describe the classes of property insured. Under "building" all of the following values, except one, are included. Select the value, which is not covered under "building". A• A large neon sign displaying the company name, which the insured erected on the premises B• Air conditioning units mounted on the roof of the building C• Building materials on the insured's premises for use in the construction of a new warehouse D• A live palm tree surrounded by other growing plants installed in the centre of the entrance of the insured's office building C• Building materials on the insured's premises for use in the construction of a new warehouse Your client is leasing retail space in the local shopping mall. Before she is ready to open her business she is renovating the premises and installing new floor covering, wall paneling, light fixtures and a security system, which is wired into the electrical system of the mall building. As her broker you advise her that these values. c. Payment under Business Interruption insurance is not restricted to the expiry of the policy d. Business Interruption insurance pays for the cost to order new equipment and supplies to restart the business as quickly as possible d. Business Interruption insurance pays for the cost to order new equipment and supplies to restart the business as quickly as possible One of the main differences between the Earnings and the Profits Form is how long the insurer will pay for loss of income. Your client has asked you to explain up to how long payment will be made under the Earnings Form. You give her the following answer: a. Payment under this Form starts on the date of the loss and continues until the property has been reinstated, however, not exceeding twelve (12) months b. Payment under this Form starts on the date of the loss and continues until the profits are at the same level as before the loss. c. Payment under this Form starts on the date of the loss and continues until the policy expires d. Payment under this Form starts on the date of the loss and continues until the end of twelve (12) months even if the insured has reopened the business after three months a. Payment under this Form starts on the date of the loss and continues until the property has been reinstated, however, not exceeding twelve (12) months Some businesses must resume operations as quickly as possible after a loss, which may lead to substantial expenses. This exposure can be insured under Extra Expense Insurance. Which of the following expenses is not covered by this insurance. a. Rental costs for a temporary location until the insured's premises have been restored b. Bonus paid to the contractor to prepare the temporary location for occupancy c. Mortgage payments on insured's building while it is being rebuild after a fire loss d. Overtime salaries paid to employees for the extra help required to resume operation c. Mortgage payments on insured's building while it is being rebuild after a fire loss Matters of legal liability have been established in precedents set by the courts. The following statements regarding legal liability are true, except one. Select the statement, which is false. a. An occupier who hires an independent contract is not liable for damages arising out of the contractor's actions, as long as care was taken in selecting the contractor and the work to be done was reasonable b. Generally, employers are responsible for the acts of their employees while in the course of their duties c. Bailees for hire who have temporary custody of a customer's personal property for the purpose of repair, must exercise the highest duty of care d. When two or more parties have acted negligently but cannot agree to share the liability equally, the courts will hold each party liable for the full amount of the damages c. Bailees for hire who have temporary custody of a customer's personal property for the purpose of repair, must exercise the highest duty of care All of the following statements are correct in respect to the legal precedents, except one. Select the statement, which is incorrect. a. Parents are always held legally liable for the acts of their children b. The owner of a building with multiple occupancies is responsible for the condition of the common areas only c. When protected under Workers Compensation employees do not retain the right to use the employer for injuries sustained in a work related accident d. Both the occupier and independent contractor must share the liability when the work performed by the contractor is inherently dangerous a. Parents are always held legally liable for the acts of their children The majority of liability policies have certain characteristics in common. All of the following characteristics, except one, apply to most liability policies. Select the one, which does not apply. a. The insurer covers the liability of the insured for bodily injury and property damage caused to a third party b. The liability policy covers payment for compensatory, exemplary and punitive damages and nominal damages awarded by the courts c. Payment is made only when the insured is found legally liable for bodily injury and property damage d. Payment of compensatory damages is made only for unintentional torts b. The liability policy covers payment for compensatory, exemplary and punitive damages and nominal damages awarded by the courts Most liability policies provide coverage on an occurrence basis. All of the following statements, except one, correctly describe what the policy covers. Select the statement, which is incorrect. a. The amount of insurance stated on the policy is the maximum amount payable for all occurrences, which happened during the policy period b. The policy covers bodily injury or property damage resulting from an accident c. The policy covers bodily injury or property damage caused by an exposure to a harmful condition over a long period of time.