Download The Institutes : CPCU-500 Fragen & Antworten als PDF & Test Software

No-Flame Company installs fire suppressant systems in newly constructed buildings. No-Flame has an occurrence version of the Commercial General Liability Coverage Form. The first day the owners occupied a new building, the fire suppressant system installed by No-Flame malfunctioned. The building owner sustained personal property damage, and the chemicals released by the system caused minor injuries to three of the building owner's employees. No-Flame publicly accused the building owner of setting the suppressant system off in order to collect the insurance proceeds, although No-Flame knew that its systems had defects. The owner sued No-Flame for damages. Which one of the following statements best describes how No-Flame's CGL insurer will respond to the lawsuit?

• A. The insurer will cite the exclusion under Coverage A Bodily Injury and Property Damage Liability that is titled Damage to Impaired Property or Property Not Physically Injured.
• B. The insurer will cite the exclusion under Coverage B Personal and Advertising Injury Liability related to injury arising out of oral or written publication of material done by the insured with knowledge of its falsity.
• C. The insurer will cite the exclusion under Coverage A Bodily Injury and Property Damage Liability that is titled Expected or Intended Injury.
• D. The insurer will deny the entire lawsuit because the allegations involve both bodily injury and personal and advertising injury.

Bobbie works for Triple Hills Associates and is gathering current information to consider the application of a new account. She asks Reggie, a junior underwriter, to gather as much information as he can from public sources about the account to help in her analysis, but to be careful of bias and credibility issues. Which one of the following situations might Reggie avoid reporting to Bobbie due to the informational hazards she mentioned?

• A. A former employee posted negative comments about management on a public website.
• B. An online map search of the headquarters revealed they are located in a large corporate building with a number of other companies.
• C. Reggie discovered a police report involving one of the account's truck drivers indicating he did not have a proper CDL license.
• D. Reggie discovered offices from the account's website that are located in an area known for flooding.

George is CFO of XYZ Medical and has just learned that the company is about to announce a major breach into its customer database. Two days before the proposed announcement date, George sells a 10,000 share block of his stock in XYZ Medical. After the hacking is announced, the share price falls by 27%. George's actions likely constitute

• A. Outside trading.
• B. Business judgment.
• C. Insider trading.
• D. Reasonable care.

Thomas is the commercial lines underwriter for Shelton Manufacturing. Critical thinking helped him suggest that the insured consider a blanket business personal property limit for its three locations. This critical thinking will help Thomas to

• A. Collect additional premium.
• B. Widen the insurer's reach.
• C. Cement his relationship as a risk management partner.
• D. Avoid an errors and omissions lawsuit.

Blithe Insurance is a large commercial lines insurer that has been in business for over thirty years. Blithe's corporate goals are simply stated and have remained fairly constant over the years:
Maintain a superior financial rating
Respond to customer needs
Operate with a high degree of integrity
Blithe's senior management team develops business strategies on an annual basis to direct the organization toward meeting these goals. Which one of the following strategies would help the organization accomplish its goal of maintaining a superior financial rating?

• A. Acknowledge every claim within twenty-four hours of receiving notification
• B. Conduct internal market audits twice a year
• C. Achieve an all lines combined ratio of 95% or less
• D. Achieve an "exceeded expectations" rating on at least 90% of customer service surveys