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| Section | Weight | Objectives |
|---|---|---|
| Insuring Manufacturers & Distributors | 15% | |
| Insuring Contractors & Construction Risks | 15% | - Builders Risk Insurance - Contractors' Exposures |
| Risk Management Principles | 15% | - Selecting Risk Management Techniques - Analyzing Risk Exposures - Developing Risk Management Plans |
| Commercial Liability Coverages | 15% | - General Liability - Errors and Omissions |
| Monitoring and Modifying Risk Plans | 5% | |
| Specialty Lines: Auto, Crime, and Surety Bonds | 10% | |
| Introduction to Commercial Insurance | 10% | |
| Commercial Property Coverages | 15% | - Policy Wordings and Clauses - Business Interruption Insurance |
Jeremy is a new electrical contractor. He needs some special documentation before he can practise his trade, to be compliant with territorial regulations. Which special documentation will the broker arrange for Jeremy?
Correct Answer: B 🗳️
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A broker is emailed by a prospect looking to cover his three stores that do not hold title to any goods, and can never be held contractually responsible for those goods. What type of stores are these?
Correct Answer: A 🗳️
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Jeff, an intermediary who specializes in complex industrial risks, is reviewing a new request for insurance.
The client is a major construction company who is building a bridge, and wants insurance from end to end of the construction process, including property, liability, and other specialty coverages. From the preliminary information received on the new risk, Jeff understands that the risk CANNOT be placed with just one insurer.
Identify and discuss TWO different coverage options that Jeff can use to arrange coverage for this risk.
Correct Answer:
see the Explanation for Detailed Solution.
Explanation:
Jeff can use a subscription placement and a layered placement . A subscription placement allows several insurers to participate on the same policy. One insurer usually acts as the lead market and sets the main wording, pricing, conditions, and claims-handling approach. Other insurers then subscribe for agreed percentages of the risk. This works well for a bridge project because the total values, construction hazards, liability exposures, and possible loss severity may be too large for one insurer's capacity.
Jeff can also arrange a layered insurance program . In this structure, one insurer provides the primary layer up to a specific limit, and other insurers provide excess layers above that amount. For example, one insurer may cover the first layer of loss, while additional insurers cover higher layers if the loss exceeds the primary limit. This is common for major construction and infrastructure projects where high limits are required.
The project may also require builders risk/course of construction, wrap-up liability, equipment, delay in start- up, environmental, and specialty coverages. The key is that Jeff must spread the risk among insurers while ensuring the coverage works together without dangerous gaps. Course topic reference: Builders Risk; Contractors; Complex Industrial Risks; Subscription Insurance; Layered Insurance Programs .
How can world events, such as climate change and flood, affect insurance?
Correct Answer: C 🗳️
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Insurance premiums on automobile fleet policies are based on which factor?
Correct Answer: B 🗳️
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