Practice Test Geeks(RIMS) Risk and Insurance Management Society Certification Practice Test
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Insurance Policies & Coverage Analysis Flashcards

7 cards from real RIMS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 7 Insurance Policies & Coverage Analysis flashcards as text

  1. A commercial property policy contains a coinsurance clause requiring 80% coverage. If a building worth $1,000,000 is insured for only $600,000 and suffers a $200,000 loss, how much will the insurer pay?

    Answer: $150,000

    Using the coinsurance formula: ($600,000 / $800,000) × $200,000 = $150,000.

  2. Which policy condition requires an insured to take all reasonable steps to protect property from further damage after a covered loss occurs?

    Answer: Duties after loss condition

    The duties after loss condition obligates the insured to mitigate further damage following a covered loss.

  3. An 'occurrence' policy form covers claims for incidents that:

    Answer: Occur during the policy period regardless of when the claim is filed

    Occurrence policies trigger coverage based on when the injury or damage actually took place, not when the claim is made.

  4. What is the purpose of a 'separation of insureds' (cross-liability) clause in a general liability policy?

    Answer: It treats each insured separately so coverage applies as if each had its own policy

    A separation of insureds clause allows each insured to be treated independently, enabling coverage even when one insured sues another.

  5. Under a commercial general liability (CGL) policy, 'products-completed operations' coverage applies to bodily injury or property damage arising from:

    Answer: Products sold or work completed away from the insured's premises

    Products-completed operations covers liability for harm caused by the insured's products or completed work after they leave the insured's control.

  6. A 'manuscript policy' differs from standard insurance forms primarily because it is:

    Answer: Customized and individually negotiated for a specific insured

    Manuscript policies are uniquely drafted or heavily modified to meet the specific coverage needs of a particular insured.

  7. Which term describes the dollar amount of loss that must be sustained before the insurer becomes liable under a self-insured retention (SIR) structure?

    Answer: Self-insured retention

    The self-insured retention (SIR) is the amount the insured pays out of pocket before the insurer's obligation begins, differing from a deductible in that the insured handles claims below the SIR directly.