Policy Analysis & Evaluation Flashcards
7 cards from real ACE practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Policy Analysis & Evaluation flashcards as text
Which component of a policy is considered the primary document that outlines the insurer's basic promises and the insured's duties?
Answer: Insuring agreement
The insuring agreement sets forth what the insurer promises to pay or do and the broad scope of coverage granted.
Under ACORD standards, what is the primary purpose of the ACORD 140 form?
Answer: To submit a property section of a commercial insurance application
The ACORD 140 is the Commercial Property Section application form used to collect property coverage information.
A claims-made policy is triggered when:
Answer: A claim is first made against the insured during the policy period
Claims-made policies are triggered by when the claim is first made against the insured, not when the underlying act occurred.
What is the primary function of a retroactive date on a claims-made policy?
Answer: It establishes the earliest date that a covered act can have occurred
The retroactive date limits claims-made coverage to acts that occurred on or after that date, preventing coverage for pre-existing incidents.
An insured requests an Extended Reporting Period (ERP) endorsement. What does this provision primarily allow?
Answer: Reporting claims after policy expiration for acts that occurred before expiration
An ERP (or 'tail') allows the insured to report claims after the policy expires as long as the underlying acts occurred before expiration.
When analyzing policy limits under a CGL policy, what does 'per occurrence' limit mean?
Answer: The maximum the insurer will pay for all damages arising from a single occurrence
The per-occurrence limit caps the insurer's total payment for all bodily injury and property damage arising from any one occurrence.
Which evaluation factor is MOST critical when reviewing an inland marine floater policy for a contractor's equipment?
Answer: Whether the covered property is scheduled or blanket and the basis of valuation
Scheduled vs. blanket coverage and the valuation method (ACV vs. RCV) directly determine how much the insurer pays when equipment is lost or damaged.