Commercial Insurance Quiz

Which of the following is an example of Computer Fraud?

• A hacker transfers funds from the business account

• A bookkeeper forges the owner’s signature on checks

• A courier is robbed en route to the bank

• A safe is broken into overnight

Answer explanation

The correct choice, 'A hacker transfers funds from the business account', is a clear example of computer fraud, as it involves unauthorized access to financial systems to steal money.

What does the Ordinance or Law (CP 04 05) endorsement cover?

• Fluctuating inventory values

• Temporary increase in personal property limits

• Increased costs due to building code enforcement after a covered loss

• Spoilage of perishable goods

Answer explanation

The Ordinance or Law (CP 04 05) endorsement specifically covers increased costs due to building code enforcement after a covered loss, ensuring compliance with updated regulations during repairs.

Which of the following is an example of a loss covered under the Loss Sustained Form?

• A loss discovered after the policy period

• A loss that occurs before the policy period

• A loss that occurs and is discovered during the policy period (or within 1 year after expiration)

• A loss discovered during the policy period, regardless of when it occurred

Answer explanation

The correct choice is a loss that occurs and is discovered during the policy period (or within 1 year after expiration), as this aligns with the Loss Sustained Form's coverage criteria.

Which of the following is an example of Bodily Injury and Property Damage Liability?

• A visitor trips over a display and sprains an ankle

• A customer slips in a store and breaks a leg

• A business is sued for using a competitor’s slogan

• A contractor injures a passerby while working on-site

Answer explanation

A customer slipping and breaking a leg is a clear case of Bodily Injury, as it involves physical harm to a person. This scenario directly relates to liability for injuries occurring on business premises.

Which of the following is an example of a peril covered under the Special Causes of Loss Form?

• Wear and tear

• Flood

• Theft unless specifically excluded

• Earthquake

Answer explanation

Theft unless specifically excluded is covered under the Special Causes of Loss Form, as it includes various risks unless stated otherwise. In contrast, wear and tear, flood, and earthquake are typically excluded.

Which of the following is an example of a loss covered under the Discovery Form?

• A loss discovered after the policy period

• A loss that occurs before the policy period

• A loss that occurs and is discovered during the policy period

• A loss discovered during the policy period, regardless of when it occurred

Answer explanation

The correct choice is a loss discovered during the policy period, regardless of when it occurred, as the Discovery Form covers losses identified within the policy timeframe, ensuring timely reporting and coverage.

Who is considered an insured under a CGL policy?

• Only the named insured

• Named insured, partners, employees, volunteers, and others

• Only employees

• Only directors and officers

Answer explanation

Under a CGL policy, the insured includes the named insured, their partners, employees, volunteers, and others as specified in the policy. This broad coverage ensures protection for various individuals associated with the business.

What does the Employee Theft coverage protect against?

• Robbery of a courier

• Theft of money, securities, or property by employees

• Forgery or alteration of checks

• Computer fraud

Answer explanation

Employee Theft coverage specifically protects against the theft of money, securities, or property by employees, making it the correct choice. Other options like robbery or forgery are not covered under this specific policy.

What does the Occurrence Form (CG 00 01) cover?

• Claims from events during the policy period, regardless of when reported

• Claims made during the policy period, subject to retroactive date

• Only bodily injury claims

• Only property damage claims

Answer explanation

The Occurrence Form (CG 00 01) covers claims arising from events that occur during the policy period, regardless of when those claims are reported. This makes it distinct from claims-made policies.

What is the purpose of the Retroactive Date in a Claims-Made policy?

• To specify the reporting requirements

• To define the policy expiration date

• To set the earliest date an event can occur and still be covered

• To determine the premium amount

Answer explanation

The Retroactive Date in a Claims-Made policy sets the earliest date an event can occur and still be covered. This means claims for incidents occurring after this date are eligible for coverage under the policy.