SCPCIP - South Carolina Property and Casualty Insurance Producer Exam

Question 1: Two liability policies cover the same claim. One attaches immediately when the loss occurs and pays first; the other pays only what remains, up to its own limit. Which pair of labels correctly identifies these two policies in that order?

Excess policy, then primary policy

Pro rata policy, then equal shares

Primary policy, then excess policy

Umbrella policy, then underlying policy

Question 2: While rounding a curve too quickly, a covered auto slides sideways and flips onto its roof in a ditch. No other vehicle or object was struck before the vehicle overturned. Which of the following physical damage coverages pays for this loss?

Other than collision coverage

Collision coverage

Transportation expenses coverage

Towing and labor costs coverage

Question 3: Months after a crash, the insured learns that the at-fault driver's insurance company has been declared bankrupt and will pay nothing on the claim. The at-fault driver had a valid policy on the day of the accident. Which of the following coverages responds?

Part D collision coverage

Part A liability coverage

Uninsured motorists coverage

Supplementary payments under Part A

Question 4: A utility contractor operates a cherry picker permanently mounted on a truck chassis and a crawler-tread bulldozer. A trainee assumes both are mobile equipment. Under the definitions used in commercial policies, how are these two units actually classified for coverage purposes?

The cherry picker is an auto

Both are mobile equipment

Both are autos

The bulldozer is an auto

Question 5: An upholstery shop takes a customer's antique sofa into its workroom for repairs, and the sofa is ruined by a chemical spill. The shop turns to its commercial general liability policy. How does Coverage A treat this damage?

Covered under the medical expense limit

Covered as personal and advertising injury

Excluded as property in the insured's care

Covered under the products aggregate limit

Question 6: A businessowners policy insurer defends its insured against a covered suit and eventually pays a judgment that uses up the liability limit. Which statement correctly describes the treatment of defense costs and the end of the insurer's duty to defend?

Defense costs reduce the limit; defense continues

Defense costs are separate; defense then ends

Defense costs reduce the limit; defense ends

Defense costs are separate; defense continues forever

Question 7: A wholesale bakery wants its commercial auto declarations to reach every vehicle the business might use during the policy year, including autos it owns, leases, hires, rents or borrows. Which covered auto symbol on the business auto coverage form provides that broadest possible protection?

Symbol two, owned autos only

Symbol eight, hired autos only

Symbol seven, specifically described autos

Symbol one, any auto

Question 8: The declarations of a commercial general liability policy designate the named insured as a corporation. During a claim review the owner asks whether his wife, who takes no part in the business, is an insured. Which answer is correct?

Yes, spouses are always insureds

Yes, but only while conducting business

No, the spouse is not an insured

Yes, as a stockholder of the corporation

Question 9: A claims examiner reviewing a workers compensation file must decide whether an injury is compensable at all. Two tests must both be satisfied before benefits are owed, and examiners weigh time, place and circumstances. Which pair of tests governs that decision?

Negligence by the employer and damages

Arising out of and during employment

Full-time status and a written contract

Permanent disability and medical certification

Question 10: Attackers encrypt a company's files and demand payment, threatening to release customer information if the company refuses. The company wants coverage for the ransom and the expenses of dealing with the threat. Which internet liability and network protection coverage applies to that demand?

Website publishing liability

Network security liability

Replacement or restoration of electronic data

Cyber extortion coverage

Question 11: A named insured drives four coworkers to the office each morning and they take turns paying for fuel. A separate driver on the same block uses his sedan to carry paying fares dispatched by a taxi company. Which of the following statements is correct?

Only the taxi use is excluded

Only the carpool use is excluded

Both uses are excluded from Part A

Neither use is excluded from Part A

Question 12: A liability insurer defends its insured, pays the court costs taxed against him, and reimburses two hundred fifty dollars a day for earnings he lost helping with the defense. Which statement describes how these supplementary payments affect the policy limit?

They reduce the limit dollar for dollar

They are deducted from the aggregate first

They are paid without reducing the limit

They apply only after limits are exhausted

Question 13: A supplier deposits a company check on which the payee line and the amount were altered by an outsider, and the company absorbs the resulting loss. Which commercial crime coverage responds, and where in the world does it apply?

Employee theft, applying worldwide

Forgery or alteration, applying only onsite

Computer fraud, limited to banking premises

Forgery or alteration, applying worldwide

Question 14: A former employee sues a company and two of its managers, alleging she was denied promotion because of her age and was fired soon after she complained to human resources. Which policy is designed to answer claims of discrimination, retaliation, and wrongful termination?

Directors and officers liability

Employment practices liability

Fiduciary liability

Commercial umbrella liability

Question 15: An insurance producer is explaining to a manufacturing client the two conditions that ordinarily must both be present before a loss is treated as a products claim rather than a premises claim. Which pair of conditions is ordinarily required?

Loss on premises and product delivered

Loss during operations and product untested

Loss away from premises and customer possession

Loss after expiration and claim reported

Question 16: A thief breaks into a covered auto and takes a laptop computer, a suitcase of clothing and the car stereo that the manufacturer permanently installed in the dashboard. Which of the following correctly describes what Part D of the personal auto policy pays?

All three items are covered property

Only the laptop and clothing are covered

Nothing is covered because theft is excluded

Only the permanently installed stereo is covered

Question 17: An insured with both collision and other than collision coverage strikes a guardrail. The impact crumples a fender and shatters the windshield in the same event. Which of the following best describes how the glass damage may be handled to the insured's advantage?

Glass losses always waive every deductible

Glass may be treated as collision loss

Glass must be filed as comprehensive

Two deductibles always apply to glass

Question 18: A delivery service rents a box truck from a leasing company and lets a warehouse employee drive it on a route. After a crash, both the employee and the leasing company seek defense under the delivery service's business auto policy. Who qualifies as an insured?

Both the employee and the lessor

Only the leasing company

Neither the employee nor the lessor

Only the employee driving the truck

Question 19: The named insured runs a red light and strikes another car. Both his own passengers and the occupants of the other vehicle need hospital treatment. Which of the following correctly identifies where the occupants of the other vehicle collect from his policy?

Part B medical payments coverage

Part C uninsured motorists coverage