CPIA Flashcards
7 cards from real CPSA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 CPIA flashcards as text
Which type of reinsurance agreement covers all risks within a defined category automatically, without the ceding company needing to submit individual risks for approval?
Answer: Treaty reinsurance
Treaty reinsurance is a standing agreement under which the reinsurer automatically accepts all risks meeting the treaty criteria without case-by-case negotiation.
An insured's $1 million CGL policy has a $1,000 per-occurrence SIR. How does a self-insured retention (SIR) differ from a deductible?
Answer: With an SIR, the insured handles and pays claims up to the retention amount before the insurer's duty to defend arises
Under an SIR, the insured bears the full cost and responsibility for claims below the retention threshold, including defense costs, before the insurer's obligations begin.
Which inland marine coverage would protect a contractor's tools and equipment while being transported between job sites?
Answer: Contractors equipment floater
A contractors equipment floater provides mobile coverage for tools, machinery, and equipment used by contractors at various locations and in transit.
Under a personal auto policy (PAP), which coverage pays for damage to the insured's own vehicle caused by collision with another object?
Answer: Collision coverage
Collision coverage pays for damage to the insured vehicle resulting from its collision with another vehicle or object, subject to the deductible.
Which of the following best describes 'moral hazard' in the insurance context?
Answer: A dishonest tendency or character flaw that increases the probability of loss or exaggerated claims
Moral hazard arises from character-based tendencies — such as dishonesty or carelessness — that increase the likelihood or severity of a loss.
A surety bond in which a contractor guarantees completion of a project according to contract specifications is called a:
Answer: Performance bond
A performance bond guarantees that the principal (contractor) will fulfill the terms of the contract with the obligee (project owner).
Under workers compensation insurance, 'exclusive remedy' means:
Answer: Workers comp benefits are the sole legal remedy against the employer for work-related injuries
The exclusive remedy doctrine bars injured employees from suing their employer in tort; workers comp benefits are their only recourse against the employer.