QUESTION What is the name for the professional liability insurance doctors and dentists carry? Give an example of a situation that would make use of such insurance. What will be an ideal response? ANSWER Answer: Doctors and dentists carry malpractice insurance. Sample example: A dentist who removed a healthy tooth instead of the rotten […]
QUESTION Which of the following is an example of risks covered under public liability? A) Raymond slipped and fell on ice in the parking lot at the factory where he worked. B) Cindy works as a technician at a tire service center. Her colleague neglected to put a car in park, and the car ran […]
QUESTION Which of the following is NOT an example of a risk covered under product liability insurance? A) Baby Jessica was found suffocated in her crib, with her face pressed up against the crib’s bumper pad. B) Gene was born with an undeveloped arm and ear on the left side of his body. His deformities […]
QUESTION Wayne and his buddies were angry and frustrated that their favorite football team lost the Super Bowl. Full of frustration and energy, the friends and dozens of other disappointed fans went around town smashing windows and looting local businesses. Which type of insurance covers this risk? A) public liability B) theft, burglary, robbery C) […]
QUESTION Which situation is NOT insurable? A) Rita wants to be sure to insure her new riverside cottage from flood damage. B) Trevor wants to purchase hurricane insurance to cover the spectacular ocean view he has from his new home. C) Chad wants to be sure his cattle barns in Kansas are covered in the […]
QUESTION Which situation is insurable? A) Eileen wants to insure her sister’s house against termite damage. B) Billy wants to help his father by holding the workers’ accident insurance for his father’s steel working company. C) Robert wants to take out a policy to protect his nephew’s store from theft. D) Maxine wants to insure […]
QUESTION Which of the following is NOT an insurer’s requirement for coverage? A) The policyholder must have an insurable interest. B) The loss should be accidental. C) The loss should be very great. D) The insurer is able to spread the risk widely. E) The loss must be measurable. ANSWER Answer: C Explanation: C) […]
QUESTION Which of the following is an uninsurable risk? A) theft B) homicide C) tornados D) wildfires E) wear and tear ANSWER Answer: E Explanation: E) Personal risks, market risks, and political risks are uninsurable risks. Other uninsurable risks are wars, recessions, strikes, and gradual rusting or wear and tear.
QUESTION Which of the following is an insurable risk? A) a tsunami B) being fired or laid off C) business competition undercutting you on price D) a regime change in the Middle East E) a war in Africa ANSWER Answer: A Explanation: A) A tsunami is an insurable risk because it meets the insurer’s […]
QUESTION Which insurance term is correctly paired with its definition? A) premium: a notice by the insured to the insurer that payment is expected to cover a loss B) reserves: the specified amount that a policyholder must pay toward a loss before the insurer will pay anything C) deductible: funds received from premiums and left […]
