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Florida 2-20 Agents License exam|
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The Florida Surplus Service Lines Office (FSLSO) was created to - Answer--oversee the surplus lines industry in the state
Which of the following is NOT a required qualification for a General Lines Agent: - Answer--Seeking the license only to write controlled business
The Department of Financial Services performs the following, EXCEPT: - Answer--Pays insurance claims
Once license, you have how long to obtain an appointment? - Answer--48 months
Which of the following is NOT a duty of the Office of Insurance Regulation? - Answer--Submit rate filings and underwriting rules for approval
Which one of the following statements is correct? - Answer--Contractors must usually provide evidence of liability insurance before a construction contract is granted.
From a risk management viewpoint, insurance is used to - Answer--Transfer the cost of losses.
Liability coverage for loss exposures arising from a business organization's premises and operations, its products, or its completed work is typically provided by - Answer--Commercial general liability insurance.
Which one of the following statements is correct regarding the benefits provided by insurance? - Answer--Insurance helps reduce the financial burden to society by compensating accident victims.
Which of the following is/are not a "your covered auto" under a Personal Auto Policy for Liability? - Answer--The 1990 Chevy 22 days after you purchase it as an additional vehicle for your son who just got his license.
Joe has a Personal Auto Policy with one car with liability of 10/20/10, basic PIP, 10/20 UM and no Med Pay. His Florida neighbor has an identical policy on her care. Joe is driving her car, loses control; and hits a tree. Joe is hurt with $15,000 in medical bills. What is the maximum Joe can collect from UM from all sources from this accident? - Answer--$
Keith commutes into the city in his car, and he provides a ride to two co-workers who live near him. Every other week, the co-workers take turns buying the gasoline for Keith's car. Does this activity create a public or livery conveyance situation that would preclude liability coverage under Keith's Personal Auto Policy (PAP)? - Answer--No, because Keith is involved in a share-the-expense car pool.
An insured covers his owned auto with more than one Personal Auto Policy (PAP), each from a different insurer. In the event of a claim for medical payments coverage, - Answer--Each insurer pays its pro rata share based on the proportion that its limit of liability bears to the total of applicable limits.
The Insuring Agreement in Part A - Liability Coverage of the Personal Auto Policy contains descriptions of all of the following EXCEPT: - Answer--Limit of Liability
The process of restoring an individual or organization to a pre-loss financial condition is the process of - Answer--Indemnification
Sometimes the existence of insurance encourages losses. The result of this phenomenon is that it - Answer--Increases the total cost of insurance
A small business owner concerned about something happening and not being able to work or earn a living for an extended period of time due to an accident should purchase - Answer--Disability insurance.
Under the HO-3—Special Form (HO-3) Section I—Conditions, the Loss Settlement condition - Answer-- Establishes the process for determining the amount to be paid for a property loss.
Property described in Coverages A, B, and C of an HO-3—Special Form (HO-3) that is destroyed, confiscated, or seized by order of any governmental or public authority is - Answer--Excluded.
Adam and his insurer disagree on the amount of a loss covered by his homeowners policy. Adam wants the insurer to pay $10,000 toward the loss. The insurer's representative feels that the loss should be valued at $5,000. How could the appraisal process resolve this situation? - Answer--Adam and the insurer will each select an appraiser, and the two appraisers will submit their differences to an impartial umpire who will reach a resolution.
Which one of the following has special limits of liability within Coverage C of the HO-3—Special Form (HO-3)? - Answer--Theft of firearms
A storm causes power lines to break ten miles from the insured's premises. The loss of electrical power causes food in the insured's freezer to thaw and spoil. Coverage for this loss is - Answer--Excluded because the power failure occurred off the residence premises.
If law enforcement officials seize an insured's personal computer to search for files that might be related to a crime, the insured under an HO-3—Special Form (HO-3) may be unsuccessful in claiming a theft loss on the computer due to the - Answer--Governmental Action exclusion.
Sam and Sophia insure their house with an unendorsed HO-3—Special Form (HO-3) policy. Sam stores a small fishing boat and trailer behind the house. While they are out for the evening, a fire destroys most of their kitchen and completely destroys the boat and trailer. Assuming Sam's boat and trailer are valued at $4,000 and ignoring any deductible that may apply, what amount will their HO-3 insurer pay for the loss of the boat and trailer? - Answer--$1,
Which one of the following statements is correct with respect to the Commercial Property Conditions? - Answer--They apply to all coverage forms included in a commercial property coverage part, unless a coverage form contains a condition to the contrary.
The owners of Uncle Reggie's Steakhouse are insured under a Building and Personal Property Coverage Form (BPP) that covers their building and business personal property for $350,000 and $100,000, respectively. The policy has a $2,500 deductible. A fire results in $350,000 worth of damage to the building and a $70,000 loss of business personal property. In what amounts should the policy provide coverage for this loss? - Answer--$347,500 Building and $70,000 Property
A Commercial Package Policy (CPP) premium may be modified by a package modification factor. This factor - Answer--Is a discount justified by the greater efficiency in providing a package policy.
Worldwide Warehousing has a Building and Personal Property Coverage Form (BPP) with a $1,000, limit on a building and a $5,000 deductible. The warehouse suffers a $1,010,000 fire loss. Which one of the following amounts will Worldwide's insurer pay? - Answer--$1,000,
The Causes of Loss—Basic Form differs from the Causes of Loss—Broad Form in which one of the following ways? - Answer--The Broad Form provides coverage for loss caused by collapse of a building or personal property resulting from specified perils.
A description of the property insured, a list of mortgagees, and the applicable coinsurance percentage(s) are shown on which one of the following documents? - Answer--Commercial property declarations
An exclusion contained in the Causes of Loss—Basic Form eliminates coverage for damage caused by which one of the following? - Answer--Mechanical breakdown, including rupture or bursting caused by centrifugal force
Which one of the following statements is correct with respect to the Newly Acquired or Constructed Property extension of coverage of the Building and Personal Property Coverage Form (BPP)? - Answer--It covers newly acquired buildings, provided the purpose of the newly acquired building is similar to the use of the building described in the declarations.
Which one of the following is a covered cause of loss under the Causes of Loss—Basic Form? - Answer-- Volcanic action
Which one of the statements is correct with respect to the Building and Personal Property Coverage Form (BPP)? - Answer--Some property, such as building foundations below the lowest basement floor, is excluded because it may not be subject to loss by the perils insured against.
Which one of the following statements best describes the Causes of Loss - Special Form? - Answer--The Special Form provides coverage for any risk of loss other than those that are specifically excluded.
Which one of the following statements is correct with respect to the business personal property coverage provided by the Building and Personal Property Coverage Form (BPP)? - Answer--'Your business personal property' specifically excludes labor, materials, or services furnished by the insured on the personal property of others.
Under which one of the following provisions of the Building and Personal Property Coverage Form (BPP) is the maximum payment $10,000 or five percent of the building limit, whichever is less? - Answer-- Increased Cost of Construction additional coverage
Alterations or additions made to the building at the expense of an insured who does not own the building and who cannot legally remove them are referred to as - Answer--Improvements and betterments.
Which one of the following statements is correct with respect to the Non-Owned Detached Trailers coverage extension of the Building and Personal Property Coverage Form (BPP)? - Answer--It permits the insured to extend 'your business personal property' to include trailers leased to expand office space or to provide additional storage or work areas.
Which one of the following statements is correct with regard to the Causes of Loss—Broad Form? - Answer--The weight of snow, ice, or sleet cause of loss does not cover damage to personal property in the open.
Which one of the following statements is correct with respect to Property Not Covered under the Building and Personal Property Coverage Form (BPP) - Answer--Only contraband or property in the course of illegal transportation or trade is totally uninsurable by endorsement or in other policies.
Which one of the following is an exclusion unique to the Causes of Loss—Special Form? - Answer--Smog
Smith Construction Company is covered under an unendorsed Commercial General Liability (CGL) Coverage Form. While working at a job site, Smith ruptured a natural gas line causing a small fire to a neighboring retail store. The following claims have been made against Smith due to this occurrence: Fire damage to the neighboring store, Pain and suffering claimed by the store owner, Loss of income by the store owner until repairs are made to the store, and Fire damage to the backhoe owned by Smith. Which one of the following statements is correct? - Answer--The backhoe is property owned and is excluded.
Which one of the following is true of the supplementary payments in the Commercial General Liability (CGL) Coverage Form? - Answer--The obligation to pay these supplementary payments ends when the limit of insurance is exhausted.
Internet blogger Tom operates a public interest group on the Internet. In posting his opinions, Tom falsely accused the governor of his state of criminal behavior. Tom's Commercial General Liability (CGL) Coverage Form will most likely exclude coverage for any resulting damage based on which one of the following exclusions? - Answer--Electronic chatrooms or bulletin boards exclusion
the damage to the cabinets because of which one of the following exclusions? - Answer--Damage to Your Work
Morgan Company is involved in a lawsuit that is covered under its unendorsed Commercial General Liability (CGL) Coverage Form. Which one of the following would be covered under the supplementary payments section of the CGL policy? - Answer--Post judgment interest awarded by the judge
Bert and Maggie insure their house with an unendorsed HO-3—Special Form (HO-3) with a Coverage A— Dwelling limit of $300,000, which is the replacement cost of the house. A fire destroys their detached garage. The cost to replace the garage is $35,000. Ignoring any deductible that may apply, how much will Bert and Maggie's insurer pay to replace the detached garage? - Answer--$30,
Coverage for other structures is automatically provided under the HO-3—Special Form (HO-3) policy with a limit that is - Answer--10 percent of the Coverage A limit
Renee is an insured under an unendorsed HO-3—Special Form (HO-3) with a Coverage C—Personal Property limit of $100,000. She owns a secondary residence that contains $15,000 of personal property. Only her primary residence is listed on the declarations page of the HO-3 policy. A fire destroys all of Renee's personal property at her secondary residence. How much of this loss will be paid by Renee's HO-3 policy? - Answer--$10,
A homeowners policy premium is determined by first developing the base premium. The base premium is influenced by certain factors, including which one of the following? - Answer--Dwelling location
Ralph has an unendorsed HO-3—Special Form (HO-3) policy. While coming home from a coin show, Ralph discovers that his automobile was broken into and a package containing $2,000 in coins, some tools, and groceries was stolen. Disregarding any deductible that may apply, will Ralph's HO-3 insurer pay for the loss of the coins? - Answer--Yes, the coins are covered up to a specified limit.
Jim and Sue, a young married couple, are under contract to purchase a condominium unit. Which one of the following ISO policy forms is best designed to meet their homeowners insurance needs? - Answer-- HO-6—Unit-Owners Form
Allen, a sole proprietor, is crossing the street when he is struck by a passing uninsured auto. He sustains $2,500 in medical bills, $3,000 damage to the laptop he was carrying, and $1,000 in lost wages. Allen's business auto policy has $100,000 liability limit and $5,000 medical payments limit. Assuming there is no other coverage, how much will his business auto policy pay? - Answer--$2,
An animal damaged the interior of an insured's automobile while it was parked with the windows down. Which one of the following types of physical damage coverage under the Business Auto Coverage Form would cover this loss? - Answer--Comprehensive
Martha drives her auto, which is insured under a Business Auto Coverage Form, outside the state in which it is licensed. The other state requires a $25,000 bodily injury limit for underinsured motorists coverage. Martha's policy does not provide underinsured motorists coverage but does provide a $15,000 liability limit for uninsured motorists coverage. How would Martha's Business Auto Coverage Form respond to a $30,000 underinsured motorists bodily injury claim in the other state? - Answer-- Martha's policy would provide the $25,000 bodily injury limit required by the other state for underinsured motorists coverage.
Bilo Manufacturing is weighing whether to lease vehicles for its employees or have them drive their own autos while on company business. Which one of the following exposures is created if Bilo decides in favor of employee-owned autos? - Answer--Employer's Nonownership Liability
Joe's New Cars, Inc. has a Business Auto Policy (BAP). The owner, Joe, owns no car himself since he always drives a company car. If you were the agent, what coverage would you add to the BAP to give Joe liability coverage while he drives a car not owned by the corporation? - Answer--Other Car coverage
Which one of the following losses would be covered by the business auto policy? - Answer--The insured has agreed to pay for liability losses caused by the insured's negligence that a shipper may incur while the insured is hauling goods for the shipper.
If an insured has failed to cooperate with an insurer in the settlement of a claim, which one of the following policy conditions prevents the insured from suing the insurer if the insured is not satisfied with the insurer's handling of the claim? - Answer--Legal Action Against the Insurer
Northern Company (Northern) uses a large forklift in its operations. The forklift is subject to the state compulsory auto insurance law and has a license tag. In the process of moving some items on Northern's premises, the operator loses control of the forklift and runs into a car owned by a customer. Which one of the following statements is true regarding coverage for this loss under Northern's Commercial General Liability (CGL) Coverage Form? - Answer--No coverage applies under the CGL Coverage Form because the forklift is considered to be an 'auto,' and coverage would be provided by a commercial auto policy.
International Toys (IT) manufactures toys in South Carolina and sells them to stores around the world. A customer in Europe is injured when one of the toys malfunctions and severs the customer's hand. The customer files suit in the United States. If IT is found liable, does its Commercial General Liability (CGL) Coverage Form cover the customer's claim? - Answer--Yes, because the toys were manufactured in the United States
The Random Bookstore (Random) is covered by an unendorsed Commercial General Liability (CGL) Coverage Form. A customer in the store tripped over her untied shoelace and fell, breaking her right arm. Which one of the following is a reason Random's insurer might refuse to pay any damages under Random's CGL policy? - Answer--The insured must be legally obligated before the insurer has the duty of paying.
Chuckie's chicken distributor researches the benefits of consuming chicken versus consuming beef. In November 2011, Chuckie's publishes a brochure outlining the potential health hazards of consuming beef and explaining why chicken is a healthier alternative. Chuckie continues to publish and distribute the same brochure for six months. In March 2012, several beef distributors file a suit against Chuckie's for personal and advertising injury. Which one of the following exclusions would apply to this claim under Coverage B of Chuckie's Commercial General Liability Coverage Form (CGL) with a policy period of January 2012 - January 2013? - Answer--Material published prior to the policy period
Upon entering a restaurant, a customer grasped a handrail that broke off, causing the customer to fall and break his wrist. This is an example of which one of the following types of commercial general liability loss? - Answer--Premises and operations liability
The supplementary payments section of the Commercial General Liability (CGL) Coverage Form describes which one of the following? - Answer--Specific items to be paid in addition to damages.
Which one of the following is an example of injury or damage arising from an occurrence that would be covered by the products and completed operations liability portion of the Commercial General Liability (CGL) Coverage Form? - Answer--A defective gas range manufactured by the insured explodes causing injury.
Which one of the following types of risks generally would be eligible for the businessowners policy program? - Answer--A clothing store.
Which one of the following statements is correct with respect to the liability coverage provided by the businessowners policy (BOP)? - Answer--BOP liability coverage closely resembles the coverage provided by the occurrence version of the CGL coverage form.
Which one of the following statements is correct with respect to eligibility for coverage under a businessowners policy (BOP)? - Answer--Some insurers have expanded the eligibility for their BOP programs to include restaurants and contractors.
Which one of the following is true with regard to the coverage limits in the liability section of the businessowners policy (BOP)? - Answer--Maximum limits are more restricted than the CGL; few insurers offer per occurrence limits over $2 million in their BOPs.
Which one of the following best describes the "property not covered" provisions of the businessowners policy (BOP)? - Answer--The BOP has a relatively short list of 'property not covered' because the insureds eligible for a BOP are generally lower-risk, more homogenous types of businesses.
Which one of the following statements is true with regard to workers compensation statutes? - Answer-- Federal government workers are excluded from workers compensation because they are covered under alternate plans.
Crime loss exposures of financial institutions are covered by financial institution bonds. These policies were developed by - Answer--The Surety and Fidelity Association of America (SFAA).
Which one of the following is a type of covered property under employee theft coverage? - Answer-- Securities
The XYZ Finance Company is insured under an ISO Commercial Crime policy. One month after the policy inception date, XYZ acquired ownership of a smaller finance company including its premises and employees. Which one of the following best describes XYZ's responsibility under the Consolidation— Merger or Acquisition condition of the policy? - Answer--Coverage applies automatically for 90 days, but XYZ must promptly notify the insurer and pay the appropriate additional premium for coverage to continue beyond that time.
The WB Bank (WBB) uses several outside companies to help process a large number of credit card transactions on a daily basis. WBB carries an ISO Commercial Crime Form with a Computer Fraud insuring agreement selected. After a recent audit, WBB becomes aware that a significant number of credit card transactions have somehow disappeared from the computer system. Which one of the following is most likely true regarding coverage under the Computer Fraud insuring agreement? - Answer--Coverage is excluded for credit or debit card transactions.
To coordinate with the Computer Fraud insuring agreement, the Funds Transfer Fraud coverage provided by the Computer Fraud insuring agreement of the ISO Commercial Crime Coverage Form excludes - Answer--Loss due to use of a computer to transfer money.
Entities eligible for financial institution bonds are - Answer--Not eligible for the ISO Commercial Crime Forms.
Technical Corporation (TC) is covered by an ISO Commercial Crime Coverage Form with Inside the Premises and Outside the Premises insuring agreements. During a recent audit, TC discovered a
significant monetary loss due to an accounting omission. Which of the following best explains the insurer's response to a claim presented by TC? - Answer--Loss due to accounting omission is excluded.
ABC, Inc., is a large, national retailer that sells a variety of consumer goods. ABC carries a Commercial Package Policy that includes Insurance Services Office's Commercial Crime Coverage Form (Loss Sustained) with the following insuring agreements: Employee Theft; Forgery or Alteration; Inside the Premises—Theft of Money and Securities; and Inside the Premises—Robbery or Safe Burglary of Other Property. The limit of insurance for each one of these insuring agreements is $100,000 and the deductible per occurrence for each one of these insuring agreements is $1,000. The policy year is 20X1. During 20X1, two employees, Beth and Jim, in collusion, stole money and merchandise from ABC. Beth and Jim stole money on May 1, 20X1 and August 13, 20X1. They also stole merchandise on January 15, 20X1 and September 29, 20X1. The amount of the money loss totaled $15,000 while the amount of the merchandise loss totaled $110,000. W - Answer--$100,
The Computer Store (TCS) brought a claim under the Employee Theft insuring agreement of its ISO Commercial Crime Coverage Form. TCS's claim is based on an inventory shortage. To overcome the inventory shortages policy exclusion, TCS must demonstrate that the - Answer--Loss can be established wholly apart from inventory computations.
A claim under an ISO Commercial Crime Coverage Form is subject to the Valuation—Settlement condition. Which one of the following is true regarding this Valuation—Settlement condition? - Answer-- Damaged property is valued at replacement cost or the insurer can repair or replace the property
Which one of the following is true regarding the ISO Commercial Crime Coverage Form Joint Insured condition? - Answer--It appoints the first named insured as an agent for all insureds.
James is in the process of forming his own brokerage company which will include several employees. James will be best protected by purchasing which one of the following to cover the crime loss exposures of his company? - Answer--Financial Institution Bond.
What type of bond is required to reissue a stock certificate? - Answer--Lost Instrument Bond
This type of Bond guarantees the appearance of a defendant in court. - Answer--Bail Bond
Which one of the following statements best describes how businessowners policies (BOP) coverages compare with those provided by commercial package policies? - Answer--The BOP coverages are similar to the coverages provided under commercial package policies.
Which one of the following is correct with respect to the professional liability coverage available under the businessowners policy (BOP) and the Commercial General Liability (CGL) Coverage Form? - Answer-- An important difference between the BOP's liability coverage and the CGL's is the availability of optional professional liability coverage endorsements for use with BOP.
Which one of the following statements is correct with respect to the liability coverage available under businessowners policies (BOPs)? - Answer--Certain liability coverage options are not part of most BOP programs because the insureds that need them generally do not qualify for BOPs.
Federal workers compensation statutes apply to which one of the following workers? - Answer--An interstate railroad worker
Part One of the Workers Compensation and Employers Liability Insurance Policy provides that the insured will reimburse the insurer for which one of the following? - Answer--Penalties required under a workers compensation law because of the employer's willful misconduct.
Which one of the following best explains why the premium discount plan for workers compensation insurance provides an increasing credit for premiums in excess of a certain minimum? - Answer--Many of the expenses of providing workers compensation insurance do not increase proportionately with increases in premium.
The workers compensation laws of some states are inapplicable to which one of the following? - Answer--Partners, sole proprietors, or executive officers.
Omicron Corporation currently does business in Colorado, Nebraska, and Kansas. These states are listed in Item 3.A on the Information Page of Omicron's Workers Compensation and Employers Liability Insurance Policy. The company is hoping to expand its operations into Utah, Arizona, and New Mexico
during the next year. Which one of the following statements is correct with respect to workers compensation insurance in the states where Omicron hopes to expand? - Answer--Omicron should include Utah, Arizona, and New Mexico in Item 3.C on the Information Page and advise the insurer immediately if the company begins operations in any of those states.
The three parties to a contract suretyship are: - Answer--Principal, Obligee, Surety
An example of when a permit bond may be required , would be: - Answer--An athletic event
What type of bond guarantees the principal will uphold the oath of office and faithfully perform the duties of office? - Answer--Public Official Bond
This is a type of license bond that holds governmental body harmless from any injuries or damage caused by the principles activtities. - Answer--Indemnity Bond
How many parties are there in a surety contract? - Answer--Three
What type of bond guarantees if a bid is accepted, the bidder will satisfy further bonding requirements?
A term used to indicate a partial loss resulting from a sacrifice of cargo to save remaining property (jettison) Each party then shares in the loss in proportion to their total interest in property being transported - Answer--General Average
This is a type of inland marine policy that is designed to cover equipment or machinery in transit to, or being installed in the course of construction or renovation: - Answer--Installation Floater
