Commercial Liability Insurance

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Question 1
Free
Multiple Choice

The phrase "general liability" is used to refer to the legal liability of a business arising from all of the following EXCEPT

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A

employees injured on the job.

B

defective products.

C

liability assumed by contract.

D

completed operations.

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Question 2
Free
Multiple Choice

Liability arising out of work performed by independent contractors is referred to as

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A

contractual liability.

B

contingent liability.

C

care, custody, and control liability.

D

customer's liability.

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Question 3
Free
Multiple Choice

A customer was injured when a furnace exploded following its faulty installation by a heating and cooling business. For the heating and cooling business, this is an example of

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A

contingent liability.

B

completed operations liability.

C

products liability.

D

contractual liability.

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Question 4
Free
Multiple Choice

The Commercial General Liability (CGL) Policy covers liability for which of the following loss exposures?
I)Bodily injury of an employee of the insured arising out of and in the course of employment
II)Bodily injury of a customer injured by a defective product manufactured by the insured

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A

I only

B

II only

C

both I and II

D

neither I nor II

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Question 5
Free
Multiple Choice

Which of the following exposures is covered under a Commercial General Liability Policy with no endorsements?

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A

liability arising out of seepage of pollutants

B

employment-related practices liability

C

personal injury liability

D

aircraft liability

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Question 6
Multiple Choice

Bay Gallery owns a building on Wharf Street. Bay Gallery purchased a Commercial General Liability Policy with no endorsements. All of the following claims would be covered under the policy EXCEPT

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A
An artist sued the gallery for slander after an employee of the gallery said the artist's work looks like it was painted by an intoxicated monkey.
B
A customer is injured when a painting falls from the wall and strikes the customer.
C
A customer is injured after falling on a slippery floor at the gallery.
D
An employee of the gallery accidentally started a fire that caused extensive damage to the building.
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Question 7
Multiple Choice

Which of the following losses would be covered under a Commercial General Liability Policy that has no endorsements?
I)The named insured rented a building and an employee of the named insured negligently started a fire at the rented building.
II)The cost to recall defective products

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A
I only
B
II only
C
both I and II
D
neither I nor II
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Question 8
Multiple Choice

Which of the following is (are) covered under an unendorsed Commercial General Liability Policy?
I)False arrest of a customer wrongly accused of shoplifting
II)Publication of material that violates an individual's right to privacy

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A
I only
B
II only
C
both I and II
D
neither I nor II
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Question 9
Multiple Choice

In addition to the named insured, all of the following are insureds under the Commercial General Liability Policy EXCEPT

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A
suppliers of products to the named insured's business.
B
the insured's employees while acting within the scope of their employment.
C
the manager of the insured's real estate.
D
partners of the named insured.
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Question 10
Multiple Choice

Which of the following is (are) covered under a claims-made policy?
I)Claims arising out of occurrences which take place during the policy period, regardless of when the claim is made
II)Claims first reported during the policy period, provided the event occurred after a retroactive date stated in the policy

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A
I only
B
II only
C
both I and II
D
neither I nor II
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Question 11
Multiple Choice

A provision included in a claims-made commercial general liability policy provides coverage for claims filed after the policy has expired. This provision is called a(n)

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A
extended reporting period provision.
B
agreed amount endorsement.
C
retroactive date provision.
D
per-occurrence limit clause.
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Question 12
Multiple Choice

Which of the following statements about workers compensation insurance is (are) true?
I)Under the workers compensation part of the policy, the insurer agrees to pay the benefits required by the workers compensation law of any state listed in the policy declarations.
II)The employers liability part of the policy provides workers compensation benefits when employees are working in states other than those listed in the policy declarations.

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A
I only
B
II only
C
both I and II
D
neither I nor II
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Question 13
Multiple Choice

Which of the following statements regarding employer liability insurance under the workers compensation insurance coverage form is (are) true?
I)Employer liability insurance covers an employee injury that occurs on the job but may not be considered work-related.
II)If an injured employee sues a negligent third-party, and the third-party sues the employer for contributory negligence, the lawsuit is covered under employer liability insurance.

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A
I only
B
II only
C
both I and II
D
neither I nor II
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Question 14
Multiple Choice

An employee of Nelson Manufacturing was injured by a defective machine Nelson purchased from Clark Corporation. The employee's tort action against Clark was successful. Clark, in turn, sued Nelson, alleging that Nelson failed to provide proper operating instructions to the employee. This claim (Clark vs. Nelson) is covered under Part Two of Nelson's workers compensation and employer liability policy. Such claims are called

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A
third-party over cases.
B
absolute liability cases.
C
joint-and-several liability cases.
D
mass tort cases.
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Question 15
Multiple Choice

All of the following are coverage options under the physical damage coverage in the Business Auto Coverage Form EXCEPT

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A
comprehensive coverage.
B
specified causes-of-loss coverage.
C
collision coverage.
D
property damage liability coverage.
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Question 16
Multiple Choice

Which of the following statements about the liability coverage of the Business Auto Coverage Form is (are) true?
I)The insurer agrees to defend the insured and pay all legal defense costs arising out of an accident involving a covered auto.
II)The insured is covered for property damage and bodily injury arising out of the use of a covered auto.

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A
I only
B
II only
C
both I and II
D
neither I nor II
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Question 17
Multiple Choice

The auto dealers coverage form pays for damages that the insured is legally obligated to pay because of damage to a customer's auto left in the insured's car while it is being serviced or repaired. This coverage is called

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A
garagekeepers coverage.
B
general liability coverage.
C
other-than-collision loss coverage.
D
acts, errors or omissions liability coverage.
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Question 18
Multiple Choice

All of the following statements about aviation insurance are true EXCEPT

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A
Physical damage coverage can be written on an "all-risks" basis.
B
Liability coverage also applies to bodily injury arising out of the premises where the aircraft is stored.
C
Liability coverage applies to liability arising out of a workers compensation law.
D
Aviation insurance is a highly-specialized market with relatively few insurers.
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Question 19
Multiple Choice

Which of the following statements is (are) true concerning the self-insured retention (SIR) under a commercial umbrella liability policy?
I)The SIR applies to claims covered by the umbrella policy but not by any underlying insurance.
II)The SIR only applies to those claims for which the underlying policy has paid first, and the umbrella policy is paying on an excess basis.

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A
I only
B
II only
C
Both I and II
D
Neither I nor II
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Question 20
Multiple Choice

Which of the following statements about the typical commercial umbrella policy is (are) true?
I)The policy is designed to cover only those loss exposures specifically excluded by the underlying insurance contracts.
II)The policy is excess over the required underlying coverages.

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A
I only
B
II only
C
both I and II
D
neither I nor II
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