Advanced Skills for the Insurance Broker and Agent (C131) Free Practice Test

Question 1

A manufacturer had multiple experiences of missing inventory and suspects an employee may be involved.
Which coverage would a broker recommend for future occurrences?

A. Property coverage

B. 3-D policy

C. Liability coverage

D. Business interruption

Correct Answer: B

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Question 2

Two agents are discussing artificial intelligence being used more frequently in Canadian industries. They are enthusiastic to write these risks on behalf of their employer, who has relaxed its guidelines on niche risks.
Which type of market are they likely in?

A. Strong market

B. Weak market

C. Hard market

D. Soft market

Correct Answer: D

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Question 3

What type of property would be covered by mercantile stock burglary coverage under a crime insurance policy?

A. Paper currency

B. Securities

C. Furniture

D. Cheques

Correct Answer: C

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Question 4

How is the premium for a garage policy computed on a monthly average basis?

A. Provides an adjustment at year end after charging a 100 percent advance premium

B. Allows the insured to file quarterly reports detailing the actual monthly exposure

C. Permits the charging of an advance premium that is 75 percent of the annual premium

D. Requires that the insurer refund the insured if the total adjusted premium is greater than the advance premium

Correct Answer: A

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Question 5

A broker is preparing to meet with a prospective client, Queen Ice Cream, who manufactures and distributes ice cream to five different provinces. What can the broker ask to ensure a smooth transition for the client?

A. How many competitors are in the market?

B. Do all existing policies expire at the same time?

C. How many flavours of ice cream does the client sell?

D. How long has the client been in business?

Correct Answer: B

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Question 6

Helen, an agent for a marine insurer, is reviewing the renewal policy of her freight forwarding account. The firm has just expanded its operations to include United States exposure. Helen advises that a modification will be needed on both the current policy term and the renewal policy term. What is her reasoning to perform changes on both terms?

A. If the firm is importing and exporting American goods, the brokerage must attach a tariff disclaimer document to the policies.

B. As the firm did not advise the insurer in advance, the insurer can void coverage for misrepresentation.

C. If the firm has a claim in the United States, the insurer may deny coverage.

D. As the firm has expanded its area of exposure, a new policy will be required, and the renewal policy must be rescinded.

Correct Answer: C

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Question 7

The owner of a small bookstore arranges to have a reputable courier deliver an expensive set of antique encyclopedias to the store after it closes. The next morning, he notices several encyclopedias are missing from the set. He reports this situation to his broker, who advises that the loss will be covered under his commercial property broad form if he can provide which type of proof?

A. Declaration under oath confirming it was a fidelity loss

B. Documented evidence showing the encyclopedias were in the owner's care, custody, and control

C. Evidence that the loss occurred as a result of mysterious disappearance

D. Sworn statement from the courier that the set was delivered in its entirety

Correct Answer: D

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Question 8

What type of liability policy would cover a product liability exposure arising from an error in the manufacturing design of a product?

A. Directors and officers liability (D & O)

B. Commercial general liability (CGL)

C. Architect's liability

D. Garage liability

Correct Answer: B

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IIC Advanced Skills for the Insurance Broker and Agent (C131) Free Practice Test