NPCI Nevada Property and Casualty Insurance Exam - Set 4 - 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: Workers compensation premiums for a larger employer are adjusted based on that employer's own past loss record compared with others in the same job classification. An employer with worse-than-average losses sees its premium adjusted in which direction through the experience modification factor applied to it?

Left completely unchanged

Decreased, through a credit modification

Increased, through a debit modification

Waived for the entire period

Question 42: Before workers compensation laws existed, an injured employee had to sue the employer and overcome several common-law defenses that made recovery quite difficult. Which of the following was one of those traditional common-law defenses that workers compensation laws effectively took away from employers?

The rule against perpetuities

The doctrine of utmost good faith

The parol evidence rule

The fellow servant rule

Question 43: A surety bond is a three-party agreement, which distinguishes it from an ordinary two-party insurance contract between an insured and an insurer. In a surety bond, the party who promises to perform an obligation and is required to post the bond is known by which of the following terms?

The principal

The obligee

The surety

The beneficiary

Question 44: Suretyship differs from ordinary insurance in a basic structural way that the licensing exam frequently tests directly. Considering the number of parties involved in each arrangement, how does a surety bond differ from a standard insurance policy such as a homeowners or personal auto policy?

Both have two parties

Bond two parties; insurance three

Bond three parties; insurance two

Both have three parties

Question 45: Construction contractors are frequently required to post surety bonds that guarantee different obligations during the course of a building project for the owner. Which of the following correctly describes a performance bond among the common contract surety bonds used on construction projects today?

It guarantees the owner pays

It guarantees the lowest bid

It guarantees payment to the architect

It guarantees the contractor completes the work

Question 46: An employer wants protection against financial loss caused by the dishonest acts of its own employees, such as theft or embezzlement of funds from the business. Which of the following instruments is designed to protect an employer against such employee dishonesty in the workplace?

A performance bond

A fidelity bond

A bid bond

A public official bond

Question 47: Commercial crime insurance carefully distinguishes among several crimes, and burglary carries a specific defining requirement that separates it clearly from the other offenses. For a loss to qualify as burglary under a crime policy, what must generally be present at the scene of the loss?

Visible signs of forcible entry or exit

A threat of harm to a person

An unexplained disappearance of property

A forged signature on a document

Question 48: Commercial crime coverage separates robbery from both burglary and theft based on the particular way in which the property is taken from the victim. Which of the following situations best fits the definition of robbery as that term is used in commercial crime insurance policies?

Shoplifting merchandise by stealth

Entering through a broken window

Taking property by force against a person

Property vanishing with no explanation

Question 49: Among the various crimes addressed by commercial crime insurance, one particular term is the broadest and actually encompasses the others as well as additional conduct. Which crime is defined most broadly, so that it includes burglary and robbery along with takings by stealth such as ordinary shoplifting?

Forgery

Burglary

Robbery

Theft

Question 50: A business buys a commercial umbrella liability policy in order to provide high catastrophic limits sitting above its other liability coverages. Before an insurer will issue such an umbrella, what must the business generally already have in place regarding its primary underlying liability coverages first?

A fully paid property policy

Underlying coverage like CGL or auto

A surety bond posted with the state

A workers compensation experience credit

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