Property And Casualty Insurance License Commercial Lines Insurance 3

Question 1

A CGL policy's 'medical payments' coverage differs from bodily injury liability coverage primarily because:

Accepted Answer

Medical payments coverage pays regardless of fault and does not require a lawsuit

Answer

Medical payments under a CGL policy are paid on a no-fault basis to third parties injured on the insured's premises, without requiring proof of the insured's negligence.

Question 2

Under commercial property coverage, 'coinsurance' requires the insured to:

Accepted Answer

Insure the property to a specified percentage (e.g., 80%) of its replacement cost or face a penalty at loss

Answer

Coinsurance clauses penalize policyholders who insure property for less than the required percentage of value by reducing claim payments proportionally.

Question 3

Which of the following best describes 'extra expense' coverage in a commercial property context?

Accepted Answer

Coverage for additional costs incurred to continue or expedite operations after a covered loss

Answer

Extra expense coverage pays for additional costs beyond normal operating expenses that allow the business to continue operations or resume them more quickly after a covered loss.

Question 4

Under a commercial general liability policy, 'personal and advertising injury' coverage protects the insured from claims such as:

Accepted Answer

Libel, slander, copyright infringement in advertising, and false arrest

Answer

Personal and advertising injury coverage in a CGL addresses offenses such as libel, slander, defamation, malicious prosecution, copyright infringement in advertising, and wrongful eviction.

Question 5

A garage liability policy is specifically designed for:

Accepted Answer

Auto dealers and service operations such as repair shops to cover their garage operations and customer vehicles in their care

Answer

Garage liability policies cover the unique needs of auto dealers, service stations, and repair shops, including liability for their operations and coverage for customer vehicles in their care, custody, or control.

Property And Casualty Insurance License Practice Test

Property And Casualty Insurance License Practice Test

Property And Casualty Insurance License Commercial Lines Insurance 3