Claims Adjuster Test Commercial Lines Coverages Questions and Answers

Question 1

A restaurant is forced to close for one month for repairs after a kitchen fire, which is a covered peril under its Commercial Property Policy.
The policy includes Business Income coverage.
Which of the following losses would be covered under the Business Income portion of the policy?

Accepted Answer

The ongoing payroll for salaried employees and the net income that would have been earned during the closure.

Answer

The cost to repair the fire damage to the kitchen walls and equipment.

Answer

The anticipated profits the business would have made if it had launched a new, more expensive menu the week of the fire.

Answer

The full amount of gross sales the restaurant would have generated during the month of closure.

Question 2

Which statement best describes the coverage trigger for a Commercial General Liability (CGL) policy written on a 'claims-made' basis?

Accepted Answer

Coverage is triggered if the claim is first made against the insured during the policy period, even if the actual injury or damage occurred prior to the policy period (subject to a retroactive date).

Answer

The policy in effect when the bodily injury or property damage occurred will respond, regardless of when the claim is filed.

Answer

Coverage is triggered only if the claim is made and the injury/damage both occur within the same policy period.

Answer

The policy will only respond to claims filed within one year after the policy expires.

Question 3

A computer repair shop has a fire, and several customers' laptops that were in the shop for service are destroyed. The shop's standard Commercial Property Policy will likely not cover the customers' laptops. Which type of Inland Marine coverage is specifically designed to cover this loss?

Accepted Answer

Bailee's Customer Coverage

Answer

Motor Truck Cargo Coverage

Answer

Accounts Receivable Coverage

Answer

Equipment Floater

Question 4

In the context of Workers' Compensation insurance, what is the principle of 'exclusive remedy'?

Accepted Answer

It is a legal doctrine stating that an employee's sole recourse against their employer for a work-related injury is the benefits provided by the workers' compensation system.

Answer

It allows an injured employee to choose between receiving workers' compensation benefits or suing the employer for negligence.

Answer

It designates a single, approved medical provider that an injured employee must use for all treatments.

Answer

It grants the employer the exclusive right to dispute any claim filed by an employee.

Question 5

A manufacturing plant's main production machine suddenly stops working due to an internal electrical short circuit, causing significant damage to its motors and control panel. Which type of coverage is designed to respond to the cost of repairing the machine?

Accepted Answer

Equipment Breakdown Insurance

Answer

Commercial General Liability

Answer

Commercial Property Insurance

Answer

Business Income Insurance

Question 6

Which of the following losses would most likely be covered under the Employee Theft insuring agreement of a Commercial Crime policy?

Accepted Answer

An accountant embezzles company funds over a period of two years.

Answer

A customer's wallet is stolen from the premises by an unidentified person.

Answer

A hacker breaches the company's network and fraudulently transfers money to an offshore account.

Answer

The company's owner takes cash from the register for personal use.