Property & Casualty Insurance Practice Test
P&C Insurance Commercial Property & BOP Practice Questions
Commercial Property & BOP makes up 8 of every 50 questions on a Tigertest P&C Insurance practice test. Here are 10 of the 32 questions on it, each with the answer and the reason.
Updated by the Tigertest team. Based on the general (national) portion of the property and casualty producer exam outlines. State laws and the state portion are not covered.
1. A Commercial Package Policy must include:
- A.At least five coverage parts
- B.Two or more coverage parts
- C.Both a property and an auto coverage part
- D.A business income coverage form
Answer: B. A CPP is built from common declarations and conditions plus any two or more coverage parts, such as property and general liability. A single coverage part is a monoline policy.
2. Which of the following is one of the Common Policy Conditions of a CPP?
- A.Duties in the event of loss or damage
- B.Insurance under two or more coverages
- C.Mortgageholders
- D.Examination of books and records
Answer: D. The common conditions are cancellation, changes, examination of your books and records, inspections and surveys, premiums, and transfer of rights. Duties in the event of loss, insurance under two or more coverages and mortgageholders are conditions of the commercial property forms.
3. Under the Common Policy Conditions, which party may cancel the policy by mailing notice or returning the policy?
- A.The first named insured
- B.The mortgagee
- C.Any insured shown on the policy
- D.The producer of record
Answer: A. The first named insured is the insurer's point of contact for cancellation, changes and premium. Other insureds do not have that authority.
4. Under the Building and Personal Property Coverage Form, 'Building' includes:
- A.Accounts receivable records
- B.Tenant's improvements and betterments
- C.Permanently installed fixtures
- D.Stock held for sale
Answer: C. Building includes the structure, completed additions, permanently installed fixtures and equipment, and maintenance property such as fire extinguishers. Stock and improvements by a tenant are business personal property.
5. Business personal property under the BPP form is covered while in the building or within how far of the described premises?
- A.Only inside the building
- B.500 feet
- C.100 feet
- D.1,000 feet
Answer: C. Business personal property is covered in the building and in the open or in a vehicle within 100 feet of the building or premises. Property farther away needs inland marine coverage.
6. Which is 'property not covered' under the BPP form?
- A.Money and securities
- B.Office furniture
- C.Permanently installed machinery
- D.Stock held for sale
Answer: A. Money, securities, accounts, bills, land, autos held for sale and growing crops are not covered. Money and securities are insured through commercial crime forms.
7. Under the BPP vacancy condition, if a building has been vacant more than 60 consecutive days, losses from vandalism, sprinkler leakage, glass breakage, water damage, theft and attempted theft are:
- A.Covered for the building only
- B.Covered, but reduced by 50 percent
- C.Covered in full with no vacancy penalty
- D.Excluded, other losses cut 15 percent
Answer: D. Vacancy increases risk, so the listed perils are not covered and all other covered losses are reduced by 15 percent. A building is vacant when less than 31 percent of its area is rented or used.
8. Which perils are covered by the Causes of Loss Basic Form?
- A.All direct physical loss except what is excluded
- B.Fire, vandalism and sprinkler leakage
- C.Flood, earthquake and collapse
- D.Falling objects, weight of ice and snow, and water damage
Answer: B. The basic form lists eleven named perils: fire, lightning, explosion, windstorm or hail, smoke, aircraft or vehicles, riot or civil commotion, vandalism, sprinkler leakage, sinkhole collapse and volcanic action. Falling objects, weight of ice and snow, and water damage are added by the broad form, and the special form is open perils.
9. Which peril is covered under the Causes of Loss Broad Form but not the Basic Form?
- A.Sprinkler leakage
- B.Weight of ice, snow or sleet
- C.Vandalism
- D.Windstorm or hail
Answer: B. The broad form adds falling objects, weight of ice, snow or sleet, and water damage, plus collapse as an additional coverage. Windstorm, vandalism and sprinkler leakage are already in the basic form.
10. Under the Causes of Loss Special Form, theft of business personal property is:
- A.Covered only by endorsement
- B.Covered only for stock held for sale
- C.Excluded entirely as a cause of loss
- D.Covered, subject to special limits
Answer: D. The special form is open perils, so theft is covered because it is not excluded, subject to special limits such as $2,500 for furs and jewelry. Employee dishonesty, however, is excluded and needs crime coverage.
Practice all 32 commercial property & bop questions, and the rest of the 200-question bank, in the free P&C Insurance training sets. Questions you miss come back until you have mastered them.
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