Assignment 11 – Flashcards
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Regarding coverage for foreign operations, which one of the following statements is true?
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Each insurer in the foreign voluntary workers compensation insurance market develops its own policy wording
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A company that needs coverage for theft of money and securities resulting from computer fraud should choose which one of the following insuring agreements in a cyber risk insurance policy
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Cyber crime
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Ace Builders is considering purchasing a large tract of land where a local fuel oil company had its storage facility for more than 100 years. Ace knows that because of the long-time operation at the site, some environmental clean-up will be necessary. However, the amount of clean-up and its cost are unknown and cannot precisely be estimated. What is a specific policy that Ace should consider purchasing to address clean-up costs in excess of what it might estimate?
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A remediation stop-loss policy
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Which one of the following statements concerning site-specific environmental impairment liability insurance policies is most accurate?
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Site-specific environmental liability policies typically cover only losses that arise from pollution conditions beyond the policy site listed in the declarations, but may be endorsed to cover on-site cleanup.
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Drop-down coverage in an umbrella liability policy is provided for claims that are which one of the following?
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Not covered by an underlying policy, including claims not covered due to the depletion of the underlying policy's aggregate limits.
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Which one of the following statements best describes the purpose of a remediation stop-loss policy?
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The purpose of remediation stop-loss insurance is to facilitate real estate sales where there is known pollution contamination on the property, the the totral cleanup costs are unknown.
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Insurance agreements that are commonly found in cyber risk insurance policies include many categories, one of which is coverage for electreonic data protection. Which one of the following losses would be covered by an electronic data protection insuring agreement?
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An employee of the insured gains unauthorized access to the insured's accounting system and diverts funds from the insured's cash account into the employee's private bank account.
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To meet the needs of firms with foreign loss exposures, some insurers offer a variety of specialized coverages, including all of the following, EXCEPT:
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Foreigh pollution liability
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Although sometimes included in the definition of professional liability insurance, coverages such as directors and officers liability, employment practices liability, employee benefits liability, and fiduciary liability are now commonly referred to as
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Management liability insurance.
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The two most common aircraft hull coverages are all risks-ground and flight and
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All risks-not in motion.
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Insurers in a particular nation selling insurance in that same nation are known as admitted insurers. These admitted insurers provide which one of the following
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Admitted coverage
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A multinational enterprise may purchase coverages and combine them with a difference in conditions (DIC) policy written to wrap around the admitted coverages, thereby accomplishing which one of the following?
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Maintaining uniform coverage for all the insured's locations.
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ISO has developed standard endorsements to help insurers comply with the provisions of the Terrorism Risk Insurance Act (TRIA). When a policyholder accepts certified acts of terrorism coverage, the ISOCommercial Lines Manual requires the insurer to attach a cap endorsement for the applicable coverages. The purpose of the cap endorsement is to
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Identify the $100 billion cap on annual aggregate insured losses that can be paid by the federal government and to outline the limitations of the insurer's obligations under the law.
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A self-insured retention (SIR) in an umbrella liability policy is which one of the following?
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An amount that is deducted from claims that are payable under an umbrella liability policy and that are not covered at all by any primary policy.
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An excess policy that covers a loss that exceeds the limit of the underlying policy only if it is also covered under the terms of the excess policy is known as a
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Self-contained policy.
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A network administrator assists a client in performing upgrades to its computer hardware. The administrator makes several errors during the process and the client loses money when its system malfunctions repeatedly for eht next two weeks. The client sues the network administrator and his company for loss of business income. Which one of the following insuring agreements is necessary to cover the administrator and his company against the suit under the cyber liability insurance policy?
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Technology errors and omissions liability.
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A contract bond is a surety bond that can be used to guarantee the fulfillment of obligations under which one of the following?
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Construction contracts
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A commercial airplane is taxiing on the approach to the runway when it collides with a stationary object, causing damage to its wing. The plane is insured by an all risks-ground and flight aircraft hull policy. Which one of the following statement is true regarding coverage for damage to the plane's wing?
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The loss is covered because the all risks-ground and flight policy covers losses while the plane is in motion.
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Like auto liability insurance, aircraft liability coverage is usually not subject to which one of the following?
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An aggregate limit
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Except for policies covering airlines, aircraft policies cover which one of the following?
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Only the plane or planes described specifically in the policy.
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Aircraft medical payments coverage is similar to the medical payments coverage available in which other type of insurance policy?
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Auto
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One of the purposes of the Terrorism Risk Insurance Act (TRIA) aggregate endorsement is to limit the insurer's exposure. What is the other purpose of the TRIA aggregate limt endorsement?
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To provide limited coverage for acts of terrorism at a reduced premium
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Which one of the following statements concerning site-specific environmental impairment liability insurance policies is most accurate?
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Site-specific environmental impairment liability policies typically cover only losses that arise from pollution conditions beyond the policy site listed in the declarations, but may be endorsed to cover on-site cleanup.
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The coverage that an umbrella liability policy provides for claims not covered at all by the underlying policies is called
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Drop-down coverage
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Many of the provisions in professional liability policies resemble those found in commercial general liability policies. However, some of the provisions differ in key ways such as the
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Use of a claims-made trigger.
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Diduciary liability insurance covers which one of the following?
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Fiduciaries of employee benefit plans for breach of fiduciary duties involving discretionary judgements.
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What is the two-fold purpose of a Terrorism Risk Insurance Act (TRIA) aggregate limit endorsement?
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To limit the insurer's exposure and to provide limited coverage for acts of terrorism at a reduced premium.
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Which one of the following statements is true of a contractors pollution liability (CPL) policy?
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It addresses the environmental insurance needs of contractors performing environmental remediation services on contaminated sites.
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An environmental insurance policy that covers the loss exposures of a contractor performing environmental remediation services on contaminated sites is a(n)
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Contractors pollution liability policy.
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A bond that guarantees that investors will be paid both the interest due on municipal bonds and the principal when the bond matures is a
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Credit enhancement financial guaranty bond.
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What type of bond guarantees that a construction contractor will enter into a contract?
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Bid bond
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ISO and NCCI have developed endorsements to help insurers comply with the provisions of the Terrorism Risk Insurance Act (TRIA). Which one of the following statements about workers compensation endorsements created to implement TRIA is most accurate?
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Unlike the disclosure endorsements developed by ISO for other lines of business, the NCCI disclosure endorsement incljdes acts of war among the losses that would be covered by workesr compensation insrance under TRIA.
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A payment bond is a contract bond guaranteeing which one of the following?
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The project will be free of liens.
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In many cases, the law of a particular nation requires that coverage for properties in that nation be purchased from which one of the following?
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Insurers licensed to engage in the insurance business in that nation
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Fiduciary liability insurance provides coverage for negligence involved in which one of the following
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Investment decisions in retirement plans.
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The human resources vice president of LZ Corporation (LZ) informed Barbara, a new employee, that she must wait sixty days to enroll in the company health insurance plan. The advice was incorrect, and Barbara was unable to obtain employer-sponsored health insurance until the next open enrollment period nine months later. Barbara sues LZ for the extra cost to purchase private health insurance for the nine-month period. Which one of the following types of insurance would cover LZ for this claim?
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Employee benefits liability
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Which one of the following is a characteristic of a site-specific environmental impairment liability policy?
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It provides coverage on a claims-made basis.
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Passenger voluntary settlement coverage, unique to aircraft insurance, is also known as
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Admitted liability coverage.
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Contractor Jerry provides a bid bond guaranteeing he will enter into a construction contract if his bid is accepted by business owner Sue. If Jerry's bid is accepted, but he fails to enter into a construction contract, the issuer of the bid bond would pay Sue which one of the following?
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The difference between the amount of Jerry's bid and the next lowest bid accepted plus additional expenses incurred due to Jerry's default
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Clarence entered into a contract bond that guarantees his insulation work will be free from defects in materials and workmanship for a specified period of five years after completion of the work. The type of bond used by Clarence is a
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Maintenance bond.
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Which one of the following statements is correct regarding the maintenance of underlying insurance condition of an umbrella liability insurance policy if the underlying insurance is not kept in force?
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The umbrella policy would cover claims that exceed the limits of the underlying policies as if they had been kept in force.
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An environmental insurance policy that covers the loss exposures of a contractor performing environmental remediation services on contaminated sites is a(n)
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Contractors pollution liability policy.
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A company that needs coverage for theft of money and securities resulting from computer fraud should choose which one of the following insuring agreements in a cyber risk insurance policy?
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Cyber crime
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What cause of loss is included as "terrorism" under workers compensation that is not included under any other line of insurance?
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War
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The two most common aircraft hull coverages are all risks-ground and flight and
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All risks-not in motion.
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Even when the duty to select investments for an employee benefits plan has been delegated to others, such as in a mutual fund or brokerage firm, the fiduciaries may be responsible for which one of the following?
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The errors or negligence of the investment managers
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Which one of the following statements is true regarding insurance coverage for foreign operations?
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Small to mid-sized businesses in the United States frequently must concern themselves with foreign exposures.
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Insurance agreements that are commonly found in cyber risk insurance policies include many categories, one of which is coverage for electronic data protection. Which one of the following losses would be covered by an electronic data protection insuring agreement?
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A computer virus corrupts the insured's software and database, requiring the insured to purchase replacement software and restore the corrupted data.
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A number of endorsements have been developed by ISO to implement the provisions of Terrorism Risk Insurance Act (TRIA), including the aggregate limit TRIA endorsement. The ISO aggregate limit TRIA endorsement is used to
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Limit the insurer's exposure and provide limited liability coverage for certified acts of terrorism at a reduced premium when the insured initially rejects certified acts of terrorism coverage.
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Directors and officers liability insurance is insurance that covers a corporation's directors and officers against liability for which one of the following?
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Wrongful acts that would be covered under the policy
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Fiduciary bonds are commonly required of a person who does which one of the following?
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Holds property in trust for the benefit of others
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Directors and officers liability insurance is insurance that covers a corporation's directors and officers against liability for which one of the following?
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Wrongful acts that would be covered under the policy
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Drop-down coverage in an umbrella liability policy is provided for claims that are which one of the following?
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Not covered by an underlying policy, including claims not covered due to the depletion of the underlying policy's aggregate limits
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CGL coverage differs from the liability coverage afforded to physicians as it relates to the source of liability. A physician's professional liability usually arises for professional practices or failure to act in a professional manner. An example of a medical error that causes injury and can result in liability is which one of the following?
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Failing to properly diagnose a disease
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Which one of the following statements concerning site-specific environmental impairment liability insurance policies is most accurate?
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Site-specific environmental impairment liability policies typically cover only losses that arise from pollution conditions beyond the policy site listed in the declarations, but may be endorsed to cover on-site cleanup.
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To provide protection against seizure of assets, currency inconvertibility, and interference with contractual performance, a firm conducting operations in a foreign country would purchase
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Political risk insurance.
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Which one of the following statements about umbrella liability insurance is true?
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It may contain exclusions more restrictive than those found in the primary policies.
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Officials generally required to obtain public official bonds include those whose duties involve which one of the following?
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Seizing or disposing of property.
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Aircraft passenger voluntary settlement coverage, also known as admitted liability coverage, pays benefits to a passenger only if the passenger released the insured from bodily injury liability and if
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The insured asks the insurer to pay them.
