P&C General Practice 4

Question 1

A contractor completes work on a building, and three months later a structural failure injures a tenant. Under a CGL policy, which coverage would respond to this claim?

Accepted Answer

Products and completed operations coverage

Answer

Products and completed operations coverage applies to bodily injury or property damage arising from work that has been completed or abandoned, making it the appropriate CGL coverage part here.

Question 2

Which of the following best describes the 'other insurance' provision in a property policy?

Accepted Answer

It specifies how payment is shared when two or more policies cover the same loss

Answer

The 'other insurance' provision coordinates payment between multiple policies covering the same loss, typically using contribution by equal shares or pro rata methods.

Question 3

An insurer that operates in a state without being licensed to do so is called a/an:

Accepted Answer

Non-admitted insurer

Answer

A non-admitted insurer has not received a certificate of authority from the state insurance department to transact business in that state.

Question 4

Under workers' compensation insurance, which benefit covers the cost of treating a work-related injury?

Accepted Answer

Medical benefits

Answer

Medical benefits under workers' compensation pay for all reasonable and necessary medical treatment related to a covered work injury or occupational disease.

Question 5

A building valued at $400,000 is insured for $240,000 under a policy with an 80% coinsurance requirement. If a $100,000 loss occurs, how much will the insurer pay?

Accepted Answer

$75,000

Answer

The coinsurance formula: (amount carried ÷ amount required) × loss = ($240,000 ÷ $320,000) × $100,000 = 0.75 × $100,000 = $75,000.

Property & Casualty Insurance License Test Practice Test

Property & Casualty Insurance License Test Practice Test

P&C General Practice 4