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67 Cards in this Set
- Front
- Back
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Explain the difference between a loss discovery form and a loss sustained form. |
The discovery form covers losses discovered during the policy period even though they may have occurred before the policy period (LOOK BACK). The loss sustained form covers losses actually sustained during the policy period and discovered no later than one year after the policy expiration. (LOOK FORWARD) |
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What organization developed financial institution bonds? |
The Surety & Fidelity Association of America (SFAA) |
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Why are financial institution bonds called "bonds"? |
Because one of the key coverages they provide is employee dishonesty insurance, which was traditionally called a "fidelity bond". |
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What are different types of financial institutions? |
Banks, savings and loan associations, credit unions, stockbrokers, finance companies, and insurance companies. |
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T or F: Entities eligible for financial institution bonds are also eligible for the ISO commercial crime program. |
F. |
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What is the most widely used financial institution bond? |
Standard Form No. 24, which is used to insure banks and savings & loans associations. |
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What was another name for Standard Form No. 24? |
"Bankers blanket bond" |
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How many insuring agreements does the ISO Commercial Crime Coverage Form offer? |
Seven [7]. |
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What are the insuring agreements included in the ISO Commercial Crime Coverage Form? (try to name them in numerical order as listed on the form) |
1. Employee Theft 2. Forgery or Alteration 3. Inside the Premises - Theft of Money and Securities 4. Inside the Premises - Robbery or Safe Burglary of Other Property 5. Outside the Premises 6. Computer and Funds Transfer Fraud 7. Money Orders and Counterfeit Money |
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T or F: A police report or criminal conviction is required for coverage to apply. |
F. |
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T or F: Forgery committed by an employee is covered under the Forgery or Alteration insuring agreement. |
F. Forgery by an employee qualifies as theft as defined by the Employee Theft insuring agreement and is therefore covered under the Employee Theft insuring agreement, NOT the Forgery or Alteration insuring agreement. |
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What is the regular coverage territory of the Employee Theft insuring agreement? |
The USA, including territories and possessions, Puerto Rico, and Canada |
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What territory extension does the Employee Theft insuring agreement offer? |
It extends territory to include loss caused by any employee while temporarily outside the regular policy territory for up to 90 consecutive days. |
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What is Insuring Agreement 2? |
Forgery or Alteration |
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F&A does not cover losses resulting from _______, or ________. |
1. Insured's knowing acceptance of instruments that have been forged or altered2. Dishonest acts of the insured or insured's employees/associates (covered under EE Theft) |
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Where does F&A coverage apply? |
Worldwide. |
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What must occur for the Inside the Premises - Theft of Money and Securities (IP:TMS) coverage or apply? |
The thief must be present inside the premises or the banking premises; theft committed through remote computers is not covered. |
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What is Insuring Agreement 3? |
Inside the Premises - Theft of Money and Securities. |
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What does the IP:TMS insuring agreement extend coverage to? |
It extends coverage to apply to loss or damage to the premises if the insured is the owner or liable for the damage and to containers that hold covered property if damage is caused by safe burglary/attempted safe burglary. |
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T or F: Disappearance or destruction includes losses REGARDLESS of whether they are caused by unlawful acts. |
T. |
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What is Insuring Agreement 4? |
Inside the Premises - Robbery or Safe Burglary of Other Property |
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What qualifies as a "custodian" of property under IP:RSB) |
Salesperson, cashier, janitor |
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What must be present for the "safe burglary" peril to be covered? |
Marks of forcible entry into the safe or vault. |
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What is Insuring Agreement 5? |
Outside the Premises |
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What does Outside the Premises cover? |
Property in the care of a "messenger" or armored vehicle company.
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What is Insuring Agreement 6? |
Computer and Funds Transfer Fraud |
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What does the first part of the Computer Funds and Transfer Fraud insuring agreement cover? |
Loss resulting directly from fraudulent entry of electronic data or computer program into a computer system owned/leased/operated by the named insured, entry or change which causes money to be transferred paid or delivered or the named insured's account to be debited or deleted. |
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What does the second part of the CFTF insuring agreement cover? |
Loss resulting directly from a fraudulent instruction causing a financial institution to debit the named insured's transfer account and do something with stuff from that account. |
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Where does coverage under Insuring Agreement 6 (CFTF) apply? |
Loss resulting directly from an occurrence taking place anywhere in the world. |
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What is Insuring Agreement 7? |
Money Orders and Counterfeit Money
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What does Money Orders and Counterfeit Money cover? |
Loss from money orders that are not paid when presented and "counterfeit money" that the insured has accepted in good faith in exchange for merchandise, money, or services. |
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What is the special limit of IP:RSB? |
$5000 per occurrence |
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What are the special limits for Outside the Premises and CFTF? |
$5000 per occurrence |
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What are the 11 general exclusions applicable to any of the crime insuring agreements? |
1. Acts Committed By You, Your Partners or Your Members 2. Acts Committed by Your Employees Learned of by You Prior to the Policy Period 3. Acts Committed by Your EE's, Managers, Directors, etc. 4. Confidential or Personal Information 5. Data Security Breach 6. Governmental Action 7. Indirect Loss 8. Legal Fees, Costs and Expenses 9. Nuclear Hazard 10. Pollution 11. War and Military Action |
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What exclusions apply only to the Employee Theft insuring agreement? |
1. Inventory Shortages 2. Trading 3. Warehouse Receipts |
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What eight exclusions apply specifically to Inside the Premises -- Theft of Money and Securities, Inside the Premises -- RSBOP, and Outside the Premises? |
1. Errors or Omissions
2. Exchanges or Purchases 3. Fire 4. Money Operated Devices 5. Motor Vehicle or Equipment and Accessories 6. Transfer or Surrender of Property 7. Vandalism 8. Voluntary Parting With Property |
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What five exclusions only apply to the Computer and Funds Transfer Fraud insuring agreement? |
1. Authorized Access 2. Credit Card Transactions 3. Exchanges or Purchases 4. Fraudulent Instructions 5. Inventory Shortages |
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What were the three types of insurance that US insurers were restricted to in the early 1900's? |
Fire insurance, casualty insurance, and marine insurance |
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T or F: Commercial inland and ocean marine insurance is subject to more rate and form regulation than other lines of insurance. |
F. Subject to less rate and form regulation. |
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What are the filed classes of inland marine business? |
Classes for which the policy forms and/or rates must be filed with the state insurance department. |
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What characterizes filed classes? |
Large number of potential insureds and reasonably homogeneous loss exposures. |
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What is an example of a filed class? |
Policy that covers musical instruments or photography equipment. |
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What are nonfiled classes of inland marine business? |
Classes for which neither policy forms nor rates must be filed with the state insurance department. These vary by state. |
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What characterizes nonfiled classes? |
Relatively small numbers of potential insureds; diverse loss exposures; or both. |
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What is judgment rating? |
A rating method used by underwriters to rate one-of-a-kind risks. Judgment rating requires a thorough knowledge of the class of business for which coverage is being written. |
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How is the size of the largest classes of inland marine business, aka traditionally nonfiled classes, measured? |
Measured by premiums written |
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What is the largest class of commercial inland marine business? |
Contractors equipment |
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What is covered under Builders Risk? |
Structure under construction, temporary structures at the building site, and building materials that have not yet become part of the building. Building materials ARE covered onsite, in transit, or in storage at another location. BIC may also be provided. |
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What perils basis is Builders Risk typically covered under? |
An open perils basis, typically excluding flood, earthquake, and theft of business materials that have not been installed |
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Why is the nonfiled approach to insuring Builders Risk preferred over being a component of a commercial property coverage part? |
The nonfiled approach allows more coverage and rating flexibility. |
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What are soft costs? |
Various incidental expenses that results from a physical loss to a building project i.e. additional interest, advertising expenses, or real estate taxes. |
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What are the two basic types of transit insurance and what are their meanings? |
Trip transit policy: covers a particular shipment of goods specified in the policy Annual transit policy: covers all shipments made or received by the insured throughout a one-year policy period |
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T or F: Flood and earthquake are not excluded by annual transit policies. |
True! Annual transit policies are mostly covered on an open perils basis and don't exclude those two common exclusions.. what? |
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What is the coverage territory of a transit policy? |
Continental US, Alaska , and Canada. NOTE: NOT Hawaii, Puerto Rico, or any overseas possessions. |
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T or F: DIC policies are a nonfiled class of inland marine insurance in most states. |
True. Insurers have great flexibility in arranging the insurance to the specific needs or exposures of their insureds. |
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What coverages can be added by endorsement to the Physicians and Surgeons Equipment filed class? |
- Office equipment while off premises for no more than thirty consecutive days - Extra expenses following a covered loss - Money and stamps on premises - Personal effects of the insured or others while on premises - Valuable records |
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Why is the Signs Coverage Form used by many businesses? |
Commercial property coverage forms severely limit coverage for signs. |
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Why might an insured include an Accounts Receivable Coverage Form in their package if they don't really need it? |
To raise the coverage limit to higher than it would be without LOL. |
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What are the three most common types of ocean marine insurance policies? |
Cargo, hull, and protection & indemnity |
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Who is included under the term cargo owner? |
"Shippers" include manufacturers, importers, and exporters |
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What advisory organization computes ocean marine loss costs? |
Trick question- no one! Ju-ju-judgment ratinnnnnng. |
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What is the formula for the typical valuation of an ocean shipment? |
Amount of invoice + Freight + 10% |
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What are the components of a general liability coverage part? |
1+ general liability declarations forms 1+ general liability coverage forms Any applicable endorsements |
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What does the condition on most GL declarations forms read? |
"In return for payment of the premium, and subject to all the terms of this policy, we agree with you to provide the insurance as stated in the policy." |
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What is included on the declarations page of a typical GL declarations page? |
- insurer and producer name - named insured's name and mailing address - policy inception and expiration dates - condition stating agreement - limits of insurance - description of the named insured's business - rating an premium auditing info - list of endorsements attached to policy |
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What purpose does the conditions section of a GL coverage form serve? |
It contains the various conditions/rules that the insurer and insured must abide by. |
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What are the seven conditions imposed on the insurer's duty to pay damages under occurrence version of the CGL coverage A? |
1. Insured must be legally obligated/liable to pay damages. 2. The damages must result from bodily injury or property damage as defined in the policy 3. The policy must apply to the bodily injury or property damage. 4. The occurrence must take place in the coverage territory. 5. The bodily injury or property damage must occur during the policy period. 6. The bodily injury or property damage must be caused by an occurrence. 7. The bodily injury or property damage must not be known to the named insured or certain other persons before the policy period. |
