Property & Casualty Insurance License Test Casualty Insurance Policies Questions and Answers

Question 1

A contractor incorrectly installs a new roof on a home.
One week after the job is finished, a heavy rainstorm causes the roof to leak, resulting in significant water damage to the home's interior and contents.
Under the contractor's Commercial General Liability (CGL) policy, which hazard category would cover this loss?

Accepted Answer

Products-Completed Operations

Answer

Premises Liability

Answer

Operations Liability

Answer

Contractual Liability

Question 2

Which of the following is a key feature of Uninsured Motorist (UM) coverage in a Personal Auto Policy?

Accepted Answer

It pays for the insured's bodily injuries caused by a driver who has no liability insurance.

Answer

It covers damage to the at-fault driver's vehicle.

Answer

It is mandatory in all states without exception.

Answer

It primarily covers property damage to the insured's vehicle, with a high standard deductible.

Question 3

An employee is injured while operating machinery at work. The employer has a Workers' Compensation policy in force. The 'exclusive remedy' doctrine in Workers' Compensation means that:

Accepted Answer

The employer is protected from lawsuits by the injured employee, as workers' compensation is generally the employee's only recourse.

Answer

The employee can choose to receive workers' compensation benefits or sue the employer for a larger sum.

Answer

The employee can sue a third party, such as the machine manufacturer, but cannot receive any workers' compensation benefits.

Answer

The employer can be sued for negligence in addition to the workers' compensation claim if safety violations are found.

Question 4

All of the following are typically included under Supplementary Payments in a Commercial General Liability policy EXCEPT:

Accepted Answer

Settlement amounts or judgments up to the policy limit.

Answer

The cost of bail bonds up to a specified limit.

Answer

Reasonable expenses incurred by the insured at the insurer's request.

Answer

Pre-judgment and post-judgment interest.

Question 5

After a covered auto accident, the insured is required to promptly inform the insurance company, protect the vehicle from further damage, and cooperate with the insurer's investigation. These responsibilities are detailed in which section of the Personal Auto Policy?

Accepted Answer

Conditions

Answer

Insuring Agreement

Answer

Exclusions

Answer

Declarations

Question 6

A customer is injured when they slip and fall on a wet floor at a grocery store. The store's Commercial General Liability policy includes Coverage C - Medical Payments. Which statement about this coverage is true?

Accepted Answer

It pays for medical and funeral expenses incurred within one year of the accident, regardless of fault.

Answer

It covers medical expenses for an employee injured on the job.

Answer

It requires the injured customer to prove the store was legally negligent.

Answer

It has a very high limit, typically matching the policy's overall liability limit.