Client Advisory & Consultation Flashcards
7 cards from real TRIP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Client Advisory & Consultation flashcards as text
A client is considering self-insuring their cargo exposures. What is the MOST important caveat an advisor should communicate about self-insurance?
Answer: The client must have sufficient financial reserves to absorb worst-case cargo losses without threatening business solvency
Self-insurance transfers the full financial burden of cargo losses to the client, and inadequate reserves can destabilize the business if a large or catastrophic loss occurs.
A motor carrier client is expanding into Mexico cross-border operations. Which coverage issue should an advisor address FIRST?
Answer: US auto and cargo policies typically do not cover operations in Mexico, requiring Mexican admitted policies
US insurance policies generally do not provide valid coverage in Mexico; Mexican law requires locally admitted policies, and operating without them exposes the carrier to significant uninsured liability.
A client's policy is subject to a 'sue and labor' clause. What does this clause require the insured to do?
Answer: Take reasonable steps to protect covered property from further loss after a covered peril occurs
The sue and labor clause obligates the insured to take reasonable actions to minimize or prevent further loss after a covered event, and failure to do so can reduce or void the claim payment.
An advisor discovers that a client's cargo policy has a per-shipment limit lower than the value of their highest-value single loads. What is the BEST advisory action?
Answer: Recommend increasing the per-shipment limit or adding a declaration of value endorsement for high-value loads
When a single shipment's value exceeds the per-shipment limit, the insured is a co-insurer for the difference; increasing the limit or declaring higher values ensures full recovery.
During a coverage consultation, a client presents a shipper contract requiring them to waive subrogation. What should the advisor explain about this requirement?
Answer: The insurer must be notified and agree to the waiver; unauthorized waivers can void coverage or create uninsured gaps
Waiving the insurer's subrogation rights without prior approval can violate policy conditions, potentially voiding coverage; the advisor must obtain a waiver of subrogation endorsement from the insurer before signing such contracts.
A new transportation client has never had a formal risk management program. What is the FIRST step an advisor should recommend?
Answer: Conduct a comprehensive risk identification and assessment to understand the client's specific exposures before recommending coverage
A thorough risk assessment is the foundational step in risk management, allowing the advisor to prioritize exposures and design a cost-effective, tailored insurance and risk control program.
A client asks about the impact of a 'named peril' versus an 'all risk' (open peril) cargo policy. Which statement BEST describes the key difference?
Answer: All risk policies cover any cause of loss not specifically excluded, while named peril policies only cover losses from explicitly listed causes
All risk (open peril) cargo policies cover any loss unless excluded, placing the burden on the insurer to prove exclusion; named peril policies require the insured to prove the loss resulted from a listed peril.