Question 1

Coverage can be procured under a comprehensive general liability policy to include payment for expenses to recall and replace a product that has proved to be defective.

Accepted Answer

A) True 
 B)False

Question 2

Salvage Yard obtains an insurance policy to protect against losses incurred by the firm as a result of being held liable for personal injuries or property damage sustained by others. This is

Accepted Answer

A)  casualty insurance.
B)  fire insurance.
C)  major medical insurance.
D)  malpractice insurance.E) None of the above
F) All of the above

Question 3

Because types of losses that are expected and types that are foreseeable vary with the nature of an activity, insurance is classified according to the nature of the risk involved.

Accepted Answer

A) True 
 B)False

Question 4

Liability coverage under a homeowner's insurance policy normally does not apply to liability that arises from business or professional activities.

Accepted Answer

A) True 
 B)False

Question 5

Architecture P.A. obtains an insurance policy that protects its professionals against negligence claims by their clients. This is

Accepted Answer

A)  product liability insurance.
B)  general liability insurance.
C)  professional malpractice insurance.
D)  workers' compensation insurance.E) A) and D)
F) B) and C)

Question 6

Without an insurable interest, there can be no enforceable insurance contract.

Accepted Answer

A) True 
 B)False

Question 7

Gus obtains an insurance policy from Health Insurance Inc. The policy includes an incontestability clause. Under this clause, after the policy has been in force for two or three years

Accepted Answer

A)  Gus cannot contest Health's insurable interest.
B)  Gus cannot contest Health's refusal to pay a claim under the policy.
C)  Health cannot contest Gus's eligibility for continued coverage.
D)  Health cannot contest Gus's statements in the application.E) A) and D)
F) All of the above

Question 8

Commerce Insurance Inc. has a valid reason to cancel a policy issued to DIY Auto Parts LLC. In most states, the insurer could cancel the policy on

Accepted Answer

A)  advance oral or written notice.
B)  oral or written notice but only after arbitration.
C)  no notice.
D)  advance written-not oral-notice.E) A) and B)
F) B) and C)

Question 9

Riverside Storage obtains a fire insurance policy from Security Insurance Inc., on a $400,000 warehouse. The policy includes an 80-percent coinsurance clause. Riverside insures the property for $320,000. In a fire, the warehouse suffers $200,000 in damage. The insured can recover

Accepted Answer

A)  $400,000.
B)  $320,000.
C)  $200,000.
D)  $80,000.E) A) and B)
F) A) and C)

Question 10

An insured's interest in a life insurance policy is not generally an asset that can be subject to the rights of a judgment creditor.

Accepted Answer

A) True 
 B)False

Question 11

Rizzo obtains a fire insurance policy on his apartment building with Safe-wise Insurance Company. This policy is an arrangement for

Accepted Answer

A)  avoiding the assumption of responsibility.
B)  predicting a potential loss based on unknown factors.
C)  shifting the imposition of liability.
D)  transferring and allocating risk.E) A) and D)
F) None of the above

Question 12

Before a loss has occurred, a fire insurance policy is assignable without the consent of the insurer, because the policy is not regarded as a personal contract between the insurer and the insured.

Accepted Answer

A) True 
 B)False

Exam 47: Insurance

Architecture P.A. obtains an insurance policy that protects its professionals against negligence claims by their clients. This is

Correct Answer
verified

Liability coverage under a homeowner's insurance policy normally does not apply to liability that arises from business or professional activities.

Correct Answer
verified

Riverside Storage obtains a fire insurance policy from Security Insurance Inc., on a $400,000 warehouse. The policy includes an 80-percent coinsurance clause. Riverside insures the property for $320,000. In a fire, the warehouse suffers $200,000 in damage. The insured can recover

Correct Answer
verified

Before a loss has occurred, a fire insurance policy is assignable without the consent of the insurer, because the policy is not regarded as a personal contract between the insurer and the insured.

Correct Answer
verified

Commerce Insurance Inc. has a valid reason to cancel a policy issued to DIY Auto Parts LLC. In most states, the insurer could cancel the policy on

Correct Answer
verified

Without an insurable interest, there can be no enforceable insurance contract.

Correct Answer
verified

Salvage Yard obtains an insurance policy to protect against losses incurred by the firm as a result of being held liable for personal injuries or property damage sustained by others. This is

Correct Answer
verified

Because types of losses that are expected and types that are foreseeable vary with the nature of an activity, insurance is classified according to the nature of the risk involved.

Correct Answer
verified

An insured's interest in a life insurance policy is not generally an asset that can be subject to the rights of a judgment creditor.

Correct Answer
verified

Rizzo obtains a fire insurance policy on his apartment building with Safe-wise Insurance Company. This policy is an arrangement for

Correct Answer
verified

Gus obtains an insurance policy from Health Insurance Inc. The policy includes an incontestability clause. Under this clause, after the policy has been in force for two or three years

Correct Answer
verified

Coverage can be procured under a comprehensive general liability policy to include payment for expenses to recall and replace a product that has proved to be defective.

Correct Answer
verified

Exam 47: Insurance

Architecture P.A. obtains an insurance policy that protects its professionals against negligence claims by their clients. This is

Correct AnswerverifiedShow Answer

Liability coverage under a homeowner's insurance policy normally does not apply to liability that arises from business or professional activities.

Correct AnswerverifiedShow Answer

Riverside Storage obtains a fire insurance policy from Security Insurance Inc., on a $400,000 warehouse. The policy includes an 80-percent coinsurance clause. Riverside insures the property for $320,000. In a fire, the warehouse suffers $200,000 in damage. The insured can recover

Correct AnswerverifiedShow Answer

Before a loss has occurred, a fire insurance policy is assignable without the consent of the insurer, because the policy is not regarded as a personal contract between the insurer and the insured.

Correct AnswerverifiedShow Answer

Commerce Insurance Inc. has a valid reason to cancel a policy issued to DIY Auto Parts LLC. In most states, the insurer could cancel the policy on

Correct AnswerverifiedShow Answer

Without an insurable interest, there can be no enforceable insurance contract.

Correct AnswerverifiedShow Answer

Salvage Yard obtains an insurance policy to protect against losses incurred by the firm as a result of being held liable for personal injuries or property damage sustained by others. This is

Correct AnswerverifiedShow Answer

Because types of losses that are expected and types that are foreseeable vary with the nature of an activity, insurance is classified according to the nature of the risk involved.

Correct AnswerverifiedShow Answer

An insured's interest in a life insurance policy is not generally an asset that can be subject to the rights of a judgment creditor.

Correct AnswerverifiedShow Answer

Rizzo obtains a fire insurance policy on his apartment building with Safe-wise Insurance Company. This policy is an arrangement for

Correct AnswerverifiedShow Answer

Gus obtains an insurance policy from Health Insurance Inc. The policy includes an incontestability clause. Under this clause, after the policy has been in force for two or three years

Correct AnswerverifiedShow Answer

Coverage can be procured under a comprehensive general liability policy to include payment for expenses to recall and replace a product that has proved to be defective.

Correct AnswerverifiedShow Answer

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verified

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