APCI Arizona Property and Casualty Insurance Exam - Set 5 - Part 3

Test your knowledge of technical writing concepts with these practice questions. Each question includes detailed explanations to help you understand the correct answers.

Question 41: An Arizona retailer insured under a businessowners policy notices that the building limit shown on its declarations page has risen slightly at each renewal without any request from the owner. Which feature of the form produces that particular result?

An automatic increase in the building limit

The liberalization clause

The coinsurance requirement

The optional coverages election

Question 42: An Arizona corporation buys a single policy protecting its board members and its senior executives against claims by shareholders alleging that their management decisions damaged the value of the company. Which of the following specialty liability coverages is that?

Employment practices liability

Directors and officers liability

Errors and omissions liability

Employee benefits liability

Question 43: An Arizona architectural firm is sued by a client who says the drawings the firm prepared were negligently done and ended up costing the client a substantial sum in rework and delay. Which specialty liability coverage responds to a claim of that kind?

Directors and officers liability

Employment practices liability

Errors and omissions liability

Cyber liability and network protection

Question 44: An Arizona employer is sued by a former employee alleging wrongful termination and separately by a job applicant alleging discriminatory hiring practices at the company's Tucson office. Which of the following specialty liability coverages is written for those two claims?

Employment practices liability

Directors and officers liability

Employee benefits liability

Errors and omissions liability

Question 45: An Arizona medical billing company suffers an intrusion into its network, and thousands of patient records are exposed. It now faces notification costs, credit monitoring expenses and claims from affected individuals. Which specialty coverage is designed for that event?

Errors and omissions liability

Cyber liability and network protection

Employee benefits liability

Directors and officers liability

Question 46: An Arizona contractor must guarantee to a project owner in Scottsdale that it will complete a building as agreed, and a third company issues the guarantee. Which of the following correctly names the three parties in the order of contractor, owner and guarantor?

Obligee, surety and principal

Surety, principal and obligee

Principal, surety and obligee

Principal, obligee and surety

Question 47: An Arizona producer explains to a client that although a surety bond is sold by insurance companies, it differs from insurance in one fundamental respect involving what happens after the guarantor pays a claim. Which of the following states that difference?

The surety expects reimbursement from the principal

The surety absorbs the loss

The surety collects from the obligee

The surety relies on reinsurers

Question 48: An Arizona manufacturer buys a commercial umbrella and the insurer requires stated amounts of underlying general liability and auto liability coverage. For one exposure the umbrella covers but the underlying policies do not, a different figure applies. Which of the following names it?

The aggregate limit

The retroactive date

The underlying limit

The self-insured retention

Question 49: An Arizona family owns a manufactured home on a rented lot in a Mohave County community and wants coverage on the home, their belongings and their personal liability. Which of the following policies is written for that situation?

A dwelling policy basic form

A mobile home policy

A commercial package policy

A builders risk policy

Question 50: An Arizona homeowner near Flagstaff adds earthquake coverage by endorsement and is told that the amount she must absorb before the insurer pays will be calculated quite differently from her ordinary policy deductible. Which of the following describes that calculation?

A flat dollar amount per building

A flat dollar amount per occurrence

A percentage of the applicable limit

No deductible applies at all

Congratulations!

You have completed all 5 question sets. Good job!

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