Property And Casualty Insurance License Casualty Insurance Basics 1 — Questions and Answers
Question 1: What does a Commercial General Liability (CGL) policy primarily cover?
- Property damage to the insured's business assets
- Third-party bodily injury and property damage claims arising from business operations (Correct answer)
- Employee injuries on the job
- Directors and officers liability
Correct answer: Third-party bodily injury and property damage claims arising from business operations
A CGL policy protects businesses against third-party claims for bodily injury, property damage, personal injury, and advertising injury arising from business operations.
Question 2: Under a personal auto policy, which coverage pays for damage to the insured's own vehicle caused by a collision?
- Liability
- Comprehensive
- Collision (Correct answer)
- Uninsured motorist
Correct answer: Collision
Collision coverage pays for damage to the insured's vehicle resulting from contact with another vehicle or object, regardless of fault.
Question 3: Which coverage on a personal auto policy pays for injuries to others when the insured is at fault in an accident?
- Medical payments
- Collision
- Bodily injury liability (Correct answer)
- Personal injury protection
Correct answer: Bodily injury liability
Bodily injury liability coverage pays for injuries suffered by third parties when the insured driver is legally responsible for the accident.
Question 4: What does 'uninsured motorist' (UM) coverage protect against?
- Accidents caused by the insured while uninsured
- Injuries to the insured caused by a driver who has no liability insurance (Correct answer)
- Damage to the insured's vehicle from a hit-and-run
- Medical expenses for the insured's passengers
Correct answer: Injuries to the insured caused by a driver who has no liability insurance
UM coverage compensates the insured for bodily injuries caused by a driver who carries no liability insurance or by a hit-and-run driver.
Question 5: Workers' compensation insurance provides benefits for:
- Only fatal occupational injuries
- Job-related injuries and occupational diseases suffered by employees (Correct answer)
- Voluntary overtime injuries only
- Injuries occurring outside of work hours
Correct answer: Job-related injuries and occupational diseases suffered by employees
Workers' compensation covers medical expenses, lost wages, and rehabilitation costs for employees who are injured or become ill as a result of their employment.
Question 6: What is 'products liability' coverage designed to protect against?
- Damage to the insured's products in storage
- Claims arising from bodily injury or property damage caused by the insured's product after it has been sold (Correct answer)
- The cost of recalling defective products
- Theft of finished goods
Correct answer: Claims arising from bodily injury or property damage caused by the insured's product after it has been sold
Products liability covers the insured's legal liability for harm caused to third parties by a defective product they manufactured, distributed, or sold.
Property And Casualty Insurance License Casualty Insurance Basics 1
What does a Commercial General Liability (CGL) policy primarily cover?