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AINS 103 (Business Insurance) Stimulated Questions and Answers
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AINS 103 (Business Insurance) Stimulated Questions and Answers
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AINS 103 (Business Insurance) StimulatedQuestions and Answers
Sam is a risk manager and is reviewing his insurance program and
coverage options with his insurance broker. Because of fluctuations in
sales due to seasonal marketing promotions, the insurance broker
recommends adding Inflation Guard optional coverage to Sam's Building
and Personal Property Coverage Form (BPP). If Sam adds Inflation Guard
as an optional coverage which one of the following is true?
Correct Answer -It automatically increases the limit of insurance by the
percentage of annual increase shown in the declarations.
The insured is a sole proprietor who owns a business auto insured by a
Business Auto Coverage Form with a personal injury protection (PIP)
endorsement. While driving the car, she was in an accident in which the
following losses were incurred:
$2,000 housekeeper for one month
$3,000 physical therapy and rehabilitation
$4,000 damage to the covered auto
$10,000 hospital bills
$20,000 pain and suffering to the other driver
Assuming adequate limits and that no other insurance policies apply, how
much can she recover pursuant to the PIP endorsement?
Correct Answer -$15,000. Pain and suffering and auto physical damage
are not covered under PIP.
Charlene's Clothing is a retail store selling expensive women's clothing. It
is insured under an unendorsed Commercial General Liability (CGL)
Coverage Form. One day an employee suspects that a customer is about
to shoplift an expensive handbag, so she grabs the customer and detains
, her until the police arrive. The customer files a suit against Charlene's for
humiliation and minor bruising. This is an example of which one of the
following CGL loss exposures?
Correct Answer -Personal and advertising injury provides coverage for
injuries such as loss of reputation, humiliation, and economic loss arising
out of any of several offenses. False arrest is one of the offenses.
Joshua owns a mid-sized contracting company and was considering a job
on a multi-million-dollar project. Due to the size of the project, Joshua had
difficulty determining the maximum possible loss. Considering the size of
the project, Joshua should do which one of the following?
Correct Answer -Purchase excess limits provided by an excess or umbrella
liability policy.
To what extent are extra expenses covered under the ISO Business Income
Coverage (without Extra Expense) Coverage Form?
Correct Answer -Only to the extent that they actually reduce the business
income loss.
An injured customer sued the ABC General Store for damages resulting
from bodily injury sustained when the customer slipped and fell while
shopping in the hardware section. The customer suffered a knee and
elbow injury. ABC General is insured under a businessowners policy
(BOP) with a $500,000 liability and medical expense limit of insurance.
The insurer defended ABC General against the suit, but the court awarded
the customer $285,000 for his injury and prejudgment interest of $15,000.
The insurer's cost of defending the grocery store was $20,000. What is the
total amount that the BOP insurer will pay for this claim?
Correct Answer -$320,000.
Grace is injured at work, and her job responsibilities are reduced for 30
days, after which time she is permanently restricted by her doctor from
lifting greater than 25 pounds. This will eliminate one of her job duties
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