RIMS Insurance Policies & Coverage Analysis 2

Question 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?

Accepted Answer

$150,000

Answer

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

Question 2

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

Accepted Answer

Duties after loss condition

Answer

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

Question 3

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

Accepted Answer

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

Answer

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

Question 4

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

Accepted Answer

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

Answer

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

Question 5

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

Accepted Answer

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

Answer

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

(RIMS) Risk and Insurance Management Society Certification Practice Test

(RIMS) Risk and Insurance Management Society Certification Practice Test

RIMS Insurance Policies & Coverage Analysis 2