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
A subrogation clause in a property policy gives the insurer the right to:
Answer: Pursue recovery from a negligent third party after paying the insured's claim
Subrogation allows the insurer to 'step into the insured's shoes' and recover amounts paid from the negligent third party who caused the loss.
Under a business owners policy (BOP), which of the following losses is typically EXCLUDED?
Answer: Flood damage to the building
Standard BOPs exclude flood damage; flood coverage requires a separate policy, typically through the NFIP or private flood insurer.
When evaluating business income coverage under a commercial property policy, the 'period of restoration' is defined as:
Answer: The time required to repair or replace the damaged property and resume normal operations
The period of restoration runs from the date of the direct physical loss to the date the property is repaired, rebuilt, or replaced and operations can resume.
What is the significance of the 'coinsurance clause' in a commercial property policy?
Answer: It requires the insured to carry coverage equal to a specified percentage of the property's value or share in losses proportionally
A coinsurance clause penalizes underinsurance by requiring the insured to bear a proportional share of any loss if they insure below the required percentage of value.
Under the ACORD data standards framework, what does the term 'ACORD XML' primarily refer to?
Answer: A standardized data schema enabling electronic exchange of insurance transactions between carriers and agents
ACORD XML defines standardized data elements and message formats so that industry participants can exchange insurance data electronically without custom integration.
A commercial auto policy's 'symbol 1' designation on the declarations page means:
Answer: Coverage applies to any auto
Symbol 1 ('Any Auto') provides the broadest coverage, extending to owned, hired, non-owned, and newly acquired vehicles.
When analyzing a professional liability (E&O) policy, the term 'wrongful act' typically encompasses:
Answer: A negligent act, error, or omission in the performance of professional services
Professional liability policies define 'wrongful act' broadly to include negligent acts, errors, and omissions that cause financial harm to clients.