AU 62 Chapter 2 Latest 2024 Exam Questions and Correct Answers (Graded A+)
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Course
AU 62
Institution
AU 62
AU 62 Chapter 2 Latest 2024 Exam Questions and Correct Answers (Graded A+)
Pedestrian Wilma was injured as a result of a contractor's negligence when the contractor failed to adequately warn the public of a hazard when paving a road. Any resulting liability claim by Wilma against the contractor wo...
AU 62 Chapter 2 Latest 2024 Exam
Questions and Correct Answers
(Graded A+)
Pedestrian Wilma was injured as a result of a contractor's negligence when the
contractor failed to adequately warn the public of a hazard when paving a road. Any
resulting liability claim by Wilma against the contractor would be considered to have
arisen from the contractor's
Select one:
A. Products and completed operations liability exposure.
B. Premises and operations liability exposure.
C. Personal liability exposure.
D. Absolute liability exposure. - Answer ✔ B. Premises and operations liability exposure.
The five classifications the Commercial Lines Manual (CLM) uses to refine the general
liability classification process include all of the following, EXCEPT:
Select one:
A. Manufacturing or process
B. Building or premises
C. Contracting or servicing
D. Not-for-profit - Answer ✔ D. Not-for-profit
When classifying and pricing manufacturing or processing operations, underwriters
should follow all of the following guidelines, EXCEPT:
Select one:
A. For pricing purposes, exclude the value of any transfers of component parts or
interim processes within the operations of the same named insured.
B. If a manufacturer sells its own products through its own retail operations, classify and
rate only the manufacturing operations.
C. Base classification on the final product, not on component parts or interim processes.
D. If an application lists more than one named insured, classify each named insured
separately. - Answer ✔ B. If a manufacturer sells its own products through its own retail
operations, classify and rate only the manufacturing operations.
Weaver Brothers owns three buildings in Boston. Each building contains eight
apartment units that are rented out to college students. Which one of the following major
business groups found in the Commercial Lines Manual (CLM) would apply for Weaver
Brothers' operations?
Select one:
, A. Manufacturing or processing
B. Contracting or servicing
C. Building or premises
D. Mercantile - Answer ✔ C. Building or premises
James Smith operates a wholesale nursery that sells only to retail nursery and garden
shops. In Commercial Lines Manual classification terminology, Mr. Smith is a
Select one:
A. Dealer.
B. Processor.
C. Contractor.
D. Distributor. - Answer ✔ D. Distributor.
Best Builders is a commercial building contractor. The company often hires
subcontractors to perform certain activities on a job. According to the Commercial Lines
Manual (CLM), the work performed by subcontractors should be separately classified
under Contractors - subcontracted work (91583) only if which one of the following is
true?
Select one:
A. The subcontractor performs less than 10 percent of the job
B. The subcontractor maintains adequate separate insurance coverage
C. Best Builders supplies the materials and equipment used by the subcontractors
D. The subcontractor performs less than 30 percent of the job - Answer ✔ B. The
subcontractor maintains adequate separate insurance coverage
A contractor was hired by a railroad to work on a bridge adjacent to railroad tracks.
Which one of the following types of insurance coverage would best respond to claims
against the railroad arising out of the contractor's work?
Select one:
A. A Commercial General liability (CGL) Coverage Form covering the contractor
B. A Commercial General liability (CGL) Coverage Form covering the railroad
C. A Railroad Protective Liability Coverage Form purchased by the contractor
D. An Owners and Contractors Protective Liability Coverage Form purchased by the
railroad - Answer ✔ C. A Railroad Protective Liability Coverage Form purchased by the
contractor
XYZ contractor, covered under an unendorsed Commercial General Liability (CGL)
Coverage Form, is installing kitchen cabinets in a customer's home. The contractor
manufactured the cabinets. While the contractor is fastening a cabinet, it falls and
injures the customer. Which one of the following best explains how coverage under the
contractor's CGL Coverage Form applies in this case?
Select one:
A. Premises and operations liability applies because the contractor was in the process
of installing the cabinets.
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