PGI Commercial Lines Underwriting 1

Question 1

What factors does an underwriter consider when assessing a commercial property risk in Singapore?

Accepted Answer

Construction type, occupancy, fire protection, exposure to neighboring risks, management quality, and claims history

Answer

Only the sum insured and location

Answer

Only the insured's credit rating

Answer

Only the age of the building

Question 2

What is 'highly protected risk' (HPR) designation in commercial property insurance?

Accepted Answer

Property with superior fire protection systems and management quality, qualifying for preferred underwriting terms

Answer

Property in government-protected areas

Answer

Property insured for very high sums

Answer

Property owned by financial institutions

Question 3

In marine cargo underwriting, what does 'inherent vice' mean?

Accepted Answer

The natural tendency of certain goods to deteriorate or cause loss without external cause

Answer

Criminal activity during cargo transit

Answer

Vice found in marine vessel crews

Answer

Intentional damage to cargo

Question 4

What is 'accumulation risk' in underwriting and why is it a concern?

Accepted Answer

The concentration of insured risk in one location or from one peril, which could cause multiple policies to produce large simultaneous losses

Answer

Risk of accumulating too many renewal policies

Answer

Risk of accumulating unpaid premiums

Answer

The risk of agents accumulating too many clients

Question 5

What is 'industrial all risks' (IAR) insurance and what does it typically cover?

Accepted Answer

Comprehensive property coverage for industrial plants, machinery, and equipment against accidental physical damage, with optional business interruption

Answer

Insurance for industrial workers only

Answer

Coverage only for machinery breakdown

Answer

Fire and flood coverage for factories only

Question 6

What is 'terrorism cover' in a commercial property policy and why is it often excluded in standard policies?

Accepted Answer

Terrorism damage is excluded from standard property policies due to potential catastrophic scale and unpredictability, requiring separate terrorism coverage

Answer

It is always included as standard coverage

Answer

Terrorism is covered under war risk extensions

Answer

Terrorism coverage is mandatory in Singapore