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1. Jim owns a metal factory. Which question should Jim's broker ask to best understand the commercial occupancy of the company?
A) How is your factory protected against fire?
B) What is the total number of your staff?
C) Is your factory left unattended for long periods of time?
D) What does a typical day look like in your factory?
2. An insurer issues a special clause on a property policy for a restaurant which denies coverage unless a sprinkler system is installed and active in the kitchen at the time of a fire loss. What type of clause has the insurer issued?
A) Exclusion
B) Requirement
C) Condition
D) Subscription
3. Which statement about the expiry dates of binders is correct?
A) To minimize the risk of overlooking an expiring binder, the expiry date should fall on a business day.
B) An open expiry date should be used in case the delivery of the formal policy is delayed.
C) Binders must include the statement "valid for one year."
D) The expiry date must automatically be 30 days from the effective date of the policy.
4. In law, what does the term prescription mean?
A) Committing to an automatic renewal process
B) Guidelines relating to the acceptability of a class of risk
C) Limited time after which a cause of action ceases
D) Transferring of the rights for action against the responsible party to the insurer
5. Brenda works as a property and casualty underwriter in an industry that has some staged claims. Her accounts have a poor loss ratio and she has been put on a performance plan. She recently shadowed a senior broker for training purposes. He advised her on qualifying the client to establish whether the client and the brokerage can form a mutually beneficial business relationship.
She has just been approached by a new client, who would be the largest client in her portfolio. Describe what Brenda should keep in mind for her process regarding this client. How can Brenda qualify the client? Provide two questions she could ask if she suspects a moral hazard.
Solutions:
| Question # 1 Answer: D | Question # 2 Answer: C | Question # 3 Answer: A | Question # 4 Answer: C | Question # 5 Answer: Only visible for members |
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