Florida All Lines Claims Adjuster Exam| 2023/2024 Newly Updated| Grade A Questions and Verified Answers
1. Which expense is NOT covered as property
... [Show More] damage by a business auto policy (BAP)?
Answer: damage to property transported in a covered auto
Rationale: The BAP excludes damage to property owned or transported by the insured or in the insured's care, custody, or control.
2. Sandy requires her employees to use their personal autos when calling on customers. If she adds the Employees as Insureds endorsement to her company's business auto policy (BAP), employees who use their personal cars for business calls will have:
Answer: excess coverage under the BAP for losses that exceed their personal auto liability limits
Rationale: The endorsed BAP will provide excess coverage over the employee's personal auto policy if an employee is liable for a loss involving the business use of his or her personal vehicle
3. Minestra Company produces a defective quantity of mushroom soup which results in the hospitalization of consumers who become ill from eating it. In anticipation of their claims, Minestra instructs retailers to remove its mushroom soup from their stores. Minestra asks its commercial general liability insurer to cover its expenses in removing the product from the market. Minestra's CGL policy will:
Answer: cover consumer claims but not recall expenses
Rationale: The recall of products exclusion in the CGL policy precludes coverage for recall expenses.
4. The difference between the Pollution Liability Coverage Form (CG 00 39) and the Pollution Liability Limited Coverage Form (CG 00 40) is that the Limited Coverage form:
Answer: does not cover cleanup costs
Rationale: CG 00 40 provides the same bodily injury and property damage liability coverage as CG 00 39 with the exception of coverage for cleanup costs.
5. For the past four years, Cheryl has insured her business with four different commercial general liability (CGL) insurance policies, each with an occurrence trigger. For a claim to be covered by Cheryl's current policy:
Answer: The injury or damage must have occurred during the current policy period.
Rationale: With an occurrence trigger, the date of the injury or damage- not the date of the event that results in bodily injury or property damage- triggers coverage.
6. The swimming pool in the atrium of the Highland Court Apartment Building creates a humid environment that encourages mold growth. To limit exposure to mold- related claims, what kind of endorsement should be added to the building's CGL policy?
Answer: limited fungi or bacteria coverage
Rationale: The limited fungi or bacteria coverage endorsement subjects mold coverage to a separate fungi and bacteria liability aggregate limit.
7. Banemore Manufacturing Company's operations involve hazardous materials and processes. Which situation does NOT involve a pollutant as defined in the pollution liability coverage forms?
Answer: Banemore's operations interfere with data transmissions in a nearby neighborhood.
8. Antoinette's Antiques is the named insured under an ISO pollution liability form. The form's extended reporting period option allows Antoinette to:
Answer: get an endorsement to cover claims reported within one year after the policy period ends
9. What does the limited pollution liability extension endorsement do when added to the CGL insurance policy?
Answer: It expands pollution coverage.
10. Marty drives to Ritzy Restaurant. After parking in a nearby lot, he slips on the icy pavement and breaks his ankle. Two months later, he submits his $1,000 medical bill to Ritzy Restaurant for payment. Why might Ritzy's commercial general liability insurer refuse to pay this claim under Coverage C- medical payments?
Answer: The injury occurred off the insured premises.
Rationale: Medical payments coverage is no- fault coverage that protects members of the public while on the insured's premises or exposed to the insured's operations. It applies without regard to the insured's legal liability.
11. Which activity would fall outside the definition of "farming" in the standard farm liability coverage form?
- Field irrigation
- Selling tee shirts at a farmer's market in the city
- Crop dusting
- Selling farm produce from a roadside stand
Answer: Selling tee shirts at a farmer's market in the city
Rationale: The farm liability coverage form defines "farming" as the operation of an agricultural or aquacultural enterprise, including the operation of roadside stands, on the farm premises, maintained for the sale of farm products produced primarily by the named insured. Farming usually does not include mechanized processing operations or retail activity other than that described.
12. Which coverages does the standard farm liability coverage form provide?
Answer: Bodily injury and prop
Rationale: The standard farm liability form provides coverage for bodily injury and property damage (Coverage H), personal injury and advertising injury (Coverage I), and medical payments (Coverage J), all on an occurrence basis.
13. As defined in the farm liability coverage form, farming does NOT include:
Answer: mechanized processing operations
Rationale: Unless otherwise indicated on the declarations, farming does not include mechanized processing operations.
14. The farm insurance bodily injury and property damage liability form (Coverage H) contains exclusions for all the following losses EXCEPT:
Answer: loss of use
Rationale: Coverage H includes the other party's loss of use of tangible property that is not physically damaged.
15. Colin hires Sal, a retired farmer, to help him with the harvest. Sal is seriously injured when he falls off the tractor he was operating in Colin's field. Colin's farm liability coverage form:
Answer: covers Sal's injuries as long as the loss is not subject to the state's workers compensation laws
Rationale: The workers compensation exclusion precludes coverage if state law requires Colin to provide Sal with workers compensation benefits, which is usually done by purchasing workers compensation insurance.
16. Which of the following activities, if located on the farm premises, would NOT be considered a farming operation covered by the farm liability coverage form?
a. harvesting of shellfish
b. cultivation of aquatic plants
c. roadside produce stand
d. gift shop
Answer: gift shop
Rationale: The form defines "farming" as an agricultural or aquacultural enterprise, including the operation of roadside stands, on the farm premises. It typically does not include retail activity.
17. Which of the following activities is covered under the basic farm liability coverage form (FL 00 20)?
Answer: Farmer operates a mower mounted on his tractor in his own hay field.
Rationale: Although the farm liability coverage form contains an exclusion for mobile equipment, that applies only to the transportation of mobile equipment by a motor vehicle. No coverage is provided for losses due to custom farming, aircraft discharge (crop dusting), or use of livestock to provide rides for a fee or in connection with a charitable function.
18. Al's farm does not produce enough income to support his family, so he supplements his farming income by working as a carpenter. Which exclusion in Al's farm liability coverage form precludes coverage for any loss resulting from his carpentry activities?
Answer: business pursuits
Rationale: No coverage applies to losses arising out of non- farming business pursuits engaged in by the insured.
19. As an attorney, Ben has lawyers professional liability insurance that provides him with liability coverage for clients' claims arising out of all the following, EXCEPT:
Answer: property damage liability
Rationale: Ben should have a commercial general liability policy to cover himself against liability claims for damage to the property of others [Show Less]