CPCU 551 - Chapter 8 Latest Update 2024-2025 130+ Questions and 100% Verified Correct Answers Guaranteed A+ At First Attempt
- Interest charges on loans required to offset the uncollectible amounts
- Collection expenses in excess of normal collection expenses that were made
- Other reasonable expenses the insured incurs to reconstruct damage records. -
necessary by the damage to the records of accounts receivable.
CORRECT ANSWER: What does accounts receivable insurance cover in addition of
uncollectible accounts receivable?
A "loss of goodwill exposure" can result if the bailee does not pay customers for losses to their property that occur while the property is in the bailee's custody (regardless of whether the bailee is legally liable for the losses). The customers will probably take their business elsewhere. For most types of bailees, it has become customary to cover both the legal liability exposure and the good will exposure through a single policy called a bailees' customers policy. - CORRECT ANSWER: Describe the "loss of goodwill exposure" of bailees and how it can be avoided.
A builders risk policy is intended to cover an entire building throughout the course of construction. An installation floater is intended to cover property being installed at a
work site by a particular contractor. - CORRECT ANSWER: Compare the basic
purposes of builders risk policies and installation floaters.
A commercial bailee is usually legally liable for damage to customers' goods that results
from the bailee's negligence. - CORRECT ANSWER: Describe a commercial bailee's
potential liability for damage to customers' goods.
A dealers policy typically covers the insured's stock in trade (inventory) and similar property of others, whether on or away from the insured's premises. The form can usually be extended to cover furniture, fixtures, and office supplies; machinery, tools, and fittings; patterns, dies, molds, and models; and tenants' improvement and
betterments. - CORRECT ANSWER: What types of property can usually be insured
under an inland marine dealer policy?
- An organization that has frequent incoming and outgoing shipments is best served by
- An infrequent shipper is best served by trip transit coverage. - CORRECT ANSWER:
annual transit coverage
Describe the type of shipper best service by each of these:
- Annual transit coverage
- Trip transit coverage
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- Electronic data processing equipment policies are sometimes extended to cover time
- Inland marine builders' risk polices are frequently extended to cover time element
element losses resulting from damage to or destruction of the insured computer system or its data.
losses resulting from damage to or destruction of the insured building during the course of construction. - CORRECT ANSWER: Explain how some inland marine policies cover
loss of business income and extra expenses in these circumstances:
- Electronic data processing equipment policies
- Inland marine builders' risk polices
- Invoice value is likely to be used in policies covering property in transit between
- Agreed value approach is likely to be used when insuring fine arts or other property
- Invoice Value
- Agreed Value
buyers and sellers.
that is difficult to value objectively. - CORRECT ANSWER: Under what circumstances is an inland marine underwriter likely to use each of the following valuation provisions?
Acts of God Acts of public enemy Exercise of public authority Shipper's fault or neglect Inherent vice - CORRECT ANSWER: What are the 5 exceptions to cargo liability that apply to a common carrier or goods in surface (land) transit?
COGSA determines a carrier's liability for goods shipped in foreign trade to or from the United States by sea. By agreement between the shipper and the carrier, it can also be
applied to domestic shipments within the U.S. - CORRECT ANSWER: To what
shipments does COGSA apply?
Covers insured's patterns and dies while located at the premises of others (such as the premises of a manufacturer that is using the patterns and dies to make products for the insured). - CORRECT ANSWER: What is the basic purpose of a pattern and die floater?
EDP equipment policies can cover perils that are not covered under commercial property polices such as mechanical or electrical breakdown. EDP policies may also cover property while in transit which commercial property policies usually exclude.Because EDP policies are nonfiled inland marine in many states, other favorable provisions not found in filed commercial property policies may be added. - CORRECT ANSWER: What features are offered by a typical EDP equipment floater that are not found in commercial property policies?
General average charges for which the assured becomes liable
Sue and labor expenses - CORRECT ANSWER: What do open cargo policies cover in
addition to the assured's interest in the property being shipped?
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