IPCI - Indiana Property and Casualty Insurance Exam

Question 1: An insured is struck by a driver whose liability insurer has just been declared insolvent and cannot pay any part of the claim. The insured carries both uninsured and underinsured motorists coverage. Which coverage responds, and for what reason?

Underinsured, because limits proved inadequate

Uninsured, because the coverage is invalid

Neither, since a policy existed

Both, split evenly between the coverages

Question 2: Two armed men confronted a shipping clerk who was stacking boxes in a warehouse, threatened him with harm, and emptied the shelves while he stood by. Which crime definition matches property taken this way from a person's care and custody?

Safe burglary of a vault

Forgery of a shipping document

Robbery of the clerk

Shoplifting by a customer

Question 3: An architect asks why her commercial general liability policy will not respond to a claim that her design specifications were faulty and left a client with added building costs, and what form of policy she needs instead. Which statement about professional liability insurance answers her question?

Separate policies cover it, usually claims-made

It attaches to the general liability policy

It covers intentional acts such as fraud

It applies only to medical professionals

Question 4: A bank buys protection against dishonest acts by its own tellers and officers. A paving firm posts a bond promising a city it will finish a job. Which statement correctly captures how a fidelity bond differs from a surety bond?

Both are purchased by the principal

Fidelity bonds guarantee construction contracts

The obligee purchases the fidelity bond

Surety bonds cover employee dishonesty losses

Question 5: Stockholders sue the board members of a corporation as individuals, claiming their decisions damaged the value of the company. Neither the corporate general liability policy nor a homeowners policy will help them. Which coverage is designed for this exposure?

Fiduciary liability insurance

Directors and officers liability insurance

Commercial umbrella liability insurance

Employment practices liability insurance

Question 6: An auto liability policy shows three separate figures: a maximum for bodily injury to any one person, a maximum for bodily injury in any one accident, and a maximum for property damage per accident. Which limit structure is displayed?

Combined single limit

Aggregate limit

Split limits

Per occurrence limit only

Question 7: One section of the commercial general liability policy reimburses medical expenses for a person hurt in an accident on the insured's premises or arising from its operations, and it pays those expenses without any finding that the insured was at fault. Which coverage is this?

Coverage C medical payments

Coverage A bodily injury liability

Coverage B personal injury liability

Damage to premises rented to you

Question 8: Three shoppers are hurt in one accident at an insured store, and each needs treatment. Coverage C contains a ceiling that applies separately to all medical expenses for bodily injury sustained by any one person. Which limit of insurance is described?

The each occurrence limit

The medical expense limit

The general aggregate limit

The damage to premises rented limit

Question 9: A landscaping contractor insured for operations in its home state wins a contract that will send crews across the border into a neighboring state next month. Which part of the workers compensation and employers liability policy is designed to extend benefits there?

Part Three, other states insurance

Part One, workers compensation insurance

Part Four, duties if injury occurs

Part Six, conditions

Question 10: The insured loses control on a curve and her sedan rolls onto its side in a ditch without striking any other vehicle or object. Which physical damage coverage on the personal auto policy pays to repair her overturned sedan?

Other than collision coverage

Specified causes of loss coverage

Towing and labor costs coverage

Collision coverage

Question 11: An insured carried a claims-made policy that expired June thirtieth, and a covered loss occurred on May thirtieth. The replacement claims-made policy began July first with a retroactive date equal to its own effective date. A claim was first presented September thirtieth. What is the result?

The expired policy covers the loss

No coverage under either policy

The new policy covers the loss

Both policies share the loss equally

Question 12: A producer compares two commercial forms for a client: one lets the insured select coverages from a long menu, while the other builds property, liability and other coverages into a single package for small businesses. Which statement describes the businessowners policy?

It is a monoline liability contract

It is assembled from selected coverages

It is written only for manufacturers

It includes property and liability automatically

Question 13: The insured runs a stop sign and strikes another car, injuring both his own passenger and two occupants of the other vehicle. His policy carries medical payments coverage. Which group collects its medical expenses under Part B of his own policy?

Occupants of the other car only

His own passenger only

Everyone injured in both vehicles

Nobody, because the insured was at fault

Question 14: Three employees at one plant develop the same lung condition from a chemical used in production, and each sues the employer at common law. The employers liability limit that caps what the insurer pays any single one of them is which limit?

Bodily injury by accident, each accident

Bodily injury by disease, policy limit

Annual aggregate for all accidents combined

Bodily injury by disease, each employee

Question 15: A business wants its auto liability to reach every vehicle it might use during the policy year, including owned, leased, hired, rented and borrowed autos. Which covered auto designation on the business auto declarations delivers that broadest possible protection?

Symbol one, any auto

Symbol seven, specifically described autos

Symbol eight, hired autos only

Symbol nine, nonowned autos only

Question 16: A machine shop takes a customer's engine into its bay for rebuilding, and an employee drops the engine and ruins it. The shop expects its commercial general liability Coverage A to pay. How does the policy treat this claim?

Covered, since a customer suffered a loss

Covered under the medical expense limit

Excluded because the shop rents its bay

Excluded as property in the insured's care

Question 17: A vendor altered the dollar amount written on a check the insured company had issued to it, then cashed the changed instrument at a bank and kept the difference. Which commercial crime coverage pays the company for this loss?

Forgery or alteration coverage

Inside the premises theft of money

Funds transfer fraud coverage

Extortion coverage for commercial entities

Question 18: A diner serves a chowder that has spoiled, and a seated customer becomes seriously ill before leaving the building. The restaurant's owner assumes the loss belongs to the premises exposure because it happened indoors. Under a commercial general liability policy, how is this loss classified?

A premises exposure, since injury occurred indoors

An independent contractor exposure

A contractual liability exposure

A products exposure, despite the indoor injury

Question 19: The insured's listed sedan is in the shop for transmission repairs, and the repair shop lends him another car to drive for three days while the work is finished. Which category of covered auto best describes the loaner vehicle here?

A newly acquired auto

A hired auto

A temporary substitute auto

An owned trailer

Question 20: A construction firm's bulldozer is chained to a flatbed truck the firm owns and, during transport, the bulldozer breaks loose and injures a bystander. Under the business auto coverage form, how is that piece of mobile equipment treated for liability purposes?

It is excluded from the form entirely

It is treated as a temporary substitute

It is covered only for physical damage

It is a covered auto for liability

IPCI Indiana Property and Casualty Insurance Exam - Set 4 - Part 1