CMCA CMCA - Certified Manager of Community Associations Risk Management and Insurance Questions and Answers 2

Question 1

Which type of insurance covers the association for claims arising from bodily injury or property damage occurring in common areas?

Accepted Answer

Commercial general liability

Answer

Directors and officers liability

Answer

Fidelity or crime insurance

Answer

Workers' compensation

Question 2

Directors and officers liability insurance protects:

Accepted Answer

Board members from personal liability for wrongful acts in their governance capacity

Answer

Homeowners from assessment increases

Answer

The association's physical property

Answer

Employees injured during the course of employment

Question 3

A community association's fidelity or crime insurance policy is specifically designed to cover:

Accepted Answer

Employee theft or dishonest acts that result in financial loss to the association

Answer

Physical damage to common area buildings

Answer

Homeowner slip-and-fall accidents

Answer

Legal costs for covenant enforcement lawsuits

Question 4

An umbrella or excess liability policy for a community association primarily provides:

Accepted Answer

Additional liability coverage above the limits of the underlying policies

Answer

Coverage for the first dollar of any claim

Answer

Coverage for events specifically excluded from the general liability policy

Answer

Workers' compensation for uninsured contractors

Question 5

Before purchasing property insurance, the association should determine the replacement cost value of insured structures. This value represents:

Accepted Answer

The cost to rebuild the structures at current construction prices without depreciation

Answer

The market value of the property including land

Answer

The original construction cost when the community was built

Answer

The assessed value used for property tax purposes

Question 6

An additional insured endorsement on a vendor's liability policy means:

Accepted Answer

The association is added to the vendor's policy, allowing the association to make claims directly under that policy

Answer

The vendor's employees are covered under the association's policy

Answer

The vendor can submit claims to the association's insurer

Answer

The association's coverage limits are transferred to the vendor