Connecticut Property & Casualty Insurance License, Practice Exams

How do CGL aggregate limits reinstate?

1. They reinstate automatically at the start of each new policy period (annual policy term) ✓
2. They reinstate in full after each covered occurrence, so every loss draws on a fresh aggregate
3. They never reinstate; the aggregate written at inception lasts for the life of the insured's business
4. They reinstate only after the insurer pays a claim in full and the insured pays a reinstatement premium

Why: Aggregate limits are the most paid during the policy period and reset at each new annual policy term, not after each claim.

38a-841(a)(1)(B) caps what the association owes on a covered claim, then adds two further limits of its own. What are they?

1. The association is never obliged to a claimant for more than the insolvent insurer owed under the policy form or coverage, and is not obliged on a claim filed more than two years after the declaration of insolvency unless it arose under a workers' compensation policy and was timely filed under section 31-294c. ✓
2. The association is never obliged to a claimant for more than the insolvent insurer owed under the policy form or coverage, and is not obliged on a claim filed more than two years after the declaration of insolvency, a workers' compensation claim being subject to the same two-year bar as every other kind of covered claim under the act.
3. The association is never obliged for more than the statutory ceiling applicable to the date of the insolvency whatever the policy provided, so that a claimant may recover the full ceiling even where the insolvent insurer's own limit was lower, and no claim may be filed more than one year after the declaration of insolvency.
4. The association is never obliged to a claimant for more than the insolvent insurer owed under the policy form or coverage, and is not obliged on any workers' compensation claim at all, those claims being met instead by the Second Injury Fund established in section 31-354.

Why: 38a-841(a)(1)(B) provides that the association SHALL PAY THE FULL AMOUNT OF ANY SUCH CLAIM ARISING OUT OF A WORKERS' COMPENSATION POLICY, PROVIDED IN NO EVENT SHALL SAID ASSOCIATION BE OBLIGATED (I) TO ANY CLAIMANT IN AN AMOUNT IN EXCESS OF THE OBLIGATION OF THE INSOLVENT INSURER UNDER THE POLICY FORM OR COVERAGE FROM WHICH THE CLAIM ARISES, OR (II) FOR ANY CLAIM FILED WITH THE ASSOCIATION AFTER THE EXPIRATION OF TWO YEARS FROM THE DATE OF THE DECLARATION OF INSOLVENCY UNLESS SUCH CLAIM AROSE OUT OF A WORKERS' COMPENSATION POLICY AND WAS TIMELY FILED IN ACCORDANCE WITH SECTION 31-294c. Workers' compensation is treated twice over: it escapes the dollar ceiling and it escapes the two-year bar. The association never owes more than the insolvent insurer would have owed.

In a competitive state fund jurisdiction, the state fund:

1. Writes only Employers Liability, leaving benefits to carriers
2. Is the only lawful source of workers compensation coverage
3. Competes with private insurers as one option among many ✓
4. Is reserved for federal employees covered by the FECA program

Why: A competitive state fund operates alongside private insurers; employers may buy WC from the state fund or from private carriers.

How much notice of a hearing under 38a-990(a) must the commissioner give, and what may prompt the hearing?

1. Not less than twenty days from the date of service; conduct in this state violating the chapter, or any complaint made to the Division of Consumer Affairs about an insurer's handling of personal information.
2. Not less than thirty days from the date of service; conduct in this state violating the chapter, or conduct outside it by an insurance-support organisation affecting a resident of this state. ✓
3. Not less than ten days from the date of service; conduct in this state violating the chapter, whether by an insurer, an agent or an insurance-support organisation wherever that organisation is located.
4. Not less than thirty days from the date of service; conduct anywhere by an insurer licensed in this state, whether or not the conduct has any effect on a resident of this state.

Why: 38a-990(a): where the commissioner has reason to believe that an insurance institution, agent or insurance-support organization has engaged or is engaging in conduct in this state violating the chapter, or that an insurance-support organization has engaged or is engaging in conduct OUTSIDE this state which has an effect on a resident of this state and violates the sections, the commissioner shall serve a statement of charges and a notice of hearing, the date of which shall not be less than thirty days after the date of service.

'Perils of the sea' in ocean marine refers to:

1. Negligence by the master or crew in navigating the vessel, standing alone
2. Fortuitous accidents or casualties of the sea, such as heavy weather, sinking, and stranding ✓
3. Every cause of loss arising on a voyage, including inherent vice of the cargo and delay in delivery
4. Ordinary wear and tear on hull and rigging from the normal action of wind and waves

Why: Perils of the sea are extraordinary, fortuitous events peculiar to the sea, like storms, stranding, collision, and sinking—not the ordinary action of wind and waves.

Transportation expenses coverage under PAP Part D typically reimburses the insured for:

1. Rental/temporary transportation costs after a covered loss, subject to a daily and total maximum ✓
2. Lost wages for the days the insured cannot drive to work while the auto is repaired
3. Towing and labor at the scene of any mechanical breakdown, whether or not a loss occurred
4. The full daily cost of a rental car until the insured chooses to return it

Why: Transportation expenses coverage pays temporary transportation (e.g., rental) costs following a covered Part D loss, subject to per-day and per-occurrence limits.

Supplementary payments in a liability policy typically include:

1. The insured's lost earnings for every day spent assisting with the defense, with no dollar cap
2. Defense costs, bail bond premiums, and reasonable expenses incurred at the insurer's request ✓
3. Punitive damages awarded against the insured, paid in addition to the applicable limit of liability
4. The replacement cost of property the insured damaged

Why: Supplementary (additional) payments cover items like defense costs, certain bonds, and the insured's expenses incurred assisting the defense, often beyond the limit.

38a-702a(6) defines an INSURANCE PRODUCER. What does the definition turn on?

1. A person required to be licensed under the laws of this state to sell, solicit or negotiate insurance. ✓
2. A person who receives a commission from an insurer for the placement of insurance in this state.
3. A person appointed by an insurer to act on its behalf in dealings with the insuring public.
4. A person who holds a licence issued by the commissioner for one or more lines of authority.

Why: 38a-702a(6): insurance producer or producer means a person required to be licensed under the laws of this state to sell, solicit or negotiate insurance. A person appointed by an insurer to act on its behalf is an AGENT under 38a-702a(1).

After a hearing the commissioner finds that a person has violated 38a-816. What monetary penalties may the commissioner order under 38a-817(b)?

1. Not more than five thousand dollars for each act or violation, subject to an aggregate of twenty-five thousand dollars; or, where the person knew or reasonably should have known of the violation, not more than fifty thousand dollars for each act, subject to an aggregate of two hundred fifty thousand dollars in any twelve-month period.
2. Not more than five thousand dollars for each act or violation, subject to an aggregate of fifty thousand dollars; or, where the person knew or reasonably should have known of the violation, not more than twenty-five thousand dollars for each act, subject to an aggregate of two hundred fifty thousand dollars in any six-month period. ✓
3. Not more than fifty thousand dollars for each act or violation without any aggregate limit, whether or not the person knew or reasonably should have known of the violation, the person's state of knowledge going only to whether the commissioner may also suspend or revoke the person's licence for the violation.
4. Not more than twenty-five thousand dollars for each act or violation, subject to an aggregate of fifty thousand dollars in any six-month period, together with restitution of any sums obtained in violation of the act, which the commissioner must order in every case in which a monetary penalty is imposed.

Why: 38a-817(b) requires written findings and a cease and desist order, and where the practice violates 38a-816 permits the commissioner to order (1) PAYMENT OF A MONETARY PENALTY OF NOT MORE THAN FIVE THOUSAND DOLLARS FOR EACH ACT OR VIOLATION BUT NOT TO EXCEED AN AGGREGATE PENALTY OF FIFTY THOUSAND DOLLARS UNLESS THE PERSON KNEW OR REASONABLY SHOULD HAVE KNOWN THAT THE PERSON WAS IN VIOLATION ..., IN WHICH CASE THE PENALTY SHALL BE NOT MORE THAN TWENTY-FIVE THOUSAND DOLLARS FOR EACH ACT OR VIOLATION BUT NOT TO EXCEED AN AGGREGATE PENALTY OF TWO HUNDRED FIFTY THOUSAND DOLLARS IN ANY SIX-MONTH PERIOD; (2) SUSPENSION OR REVOCATION OF THE PERSON'S LICENSE IF THE PERSON KNEW OR REASONABLY SHOULD HAVE KNOWN ...; OR (3) RESTITUTION OF ANY SUMS SHOWN TO HAVE BEEN OBTAINED IN VIOLATION. Restitution is discretionary, not mandatory, and the six-month window attaches only to the two hundred fifty thousand dollar aggregate.

Which of the following is generally TRUE about the relationship between the surety and the principal after the surety pays a loss to the obligee?

1. The obligee must repay the surety within 90 days of the payment
2. The surety has the right to seek reimbursement (subrogation/indemnity) from the principal ✓
3. The surety absorbs the loss with no recourse, because the premium it charged was calculated to fund defaults of exactly this kind
4. The bond is automatically cancelled and the unearned premium refunded

Why: After paying the obligee, the surety has a right of indemnity/subrogation against the principal, reflecting surety's guarantee nature.

A products liability claim alleges a manufactured part injured a user three years after sale. This is covered under the CGL as:

1. Premises and operations, because the part injured the user away from the insured's premises
2. Damage to premises rented to the insured, subject to the fire damage sublimit
3. Coverage B, because selling a defective part is an advertising injury offense
4. Products and completed operations, subject to that separate aggregate ✓

Why: Injury from a sold product is a products liability claim subject to the Products-Completed Operations Aggregate.

An insured runs a small in-home daycare for several children. The appropriate way to address the liability and incidental property exposure is the:

1. Mortgage clause, which extends the policy's protection to everyone lawfully on the premises
2. Home Day Care / business pursuits-type endorsement ✓
3. Inflation guard endorsement, raising the limits as the number of children enrolled grows
4. Personal Injury endorsement, which covers bodily injury to children left in the insured's care

Why: A home day care endorsement (a form of permitted incidental occupancy/business endorsement) addresses the liability and limited property exposure of running a daycare from the home.

Suitability in insurance sales means a producer should:

1. Always place the client with whichever carrier pays the highest commission on that line
2. Recommend products appropriate to the client's needs and circumstances ✓
3. Offer only the one product line the producer knows best, whatever the client actually owns
4. Avoid asking about the client's finances, since gathering that detail creates a fiduciary duty

Why: Suitability requires that recommendations fit the client's actual needs, financial situation, and objectives rather than the producer's compensation.

The Motor Carrier Act and related federal regulations require interstate motor carriers to maintain:

1. Workers compensation coverage on all drivers and nothing more, since federal rules leave liability limits to each state
2. Minimum levels of public liability (financial responsibility) coverage based on cargo type ✓
3. Comprehensive and collision coverage on every power unit and trailer in the fleet, at limits set by the FMCSA
4. No federal filing at all when the truck is owner-operated, because an owner-operator is not classed as a motor carrier

Why: Federal law sets minimum public liability limits for interstate carriers, which vary by the type and hazard of cargo transported (e.g., higher for hazardous materials).

How long does a named insured's selection of uninsured and underinsured motorist coverage last, under 38a-336(a)(1)(B)?

1. It applies to the policy period for which it was made only, the insurer being required to obtain a fresh written selection from the named insured before each renewal of the policy takes effect.
2. It applies to all subsequent renewals and to all policies or endorsements that extend, change, supersede or replace the existing policy, unless changed in writing by any named insured. ✓
3. It applies until the policy is replaced by a policy issued by a different insurer, at which point the new insurer must obtain its own written selection from the named insured before cover attaches.
4. It applies to all subsequent renewals, but lapses automatically if the named insured adds or removes a vehicle from the policy or changes the bodily injury liability limits carried under it.

Why: 38a-336(a)(1)(B) provides that THE INSURED'S SELECTION OF UNINSURED AND UNDERINSURED MOTORIST COVERAGE SHALL APPLY TO ALL SUBSEQUENT RENEWALS OF COVERAGE AND TO ALL POLICIES OR ENDORSEMENTS THAT EXTEND, CHANGE, SUPERSEDE OR REPLACE AN EXISTING POLICY ISSUED TO THE NAMED INSURED, UNLESS CHANGED IN WRITING BY ANY NAMED INSURED. The selection carries forward until it is changed in writing.

What notice of a 38a-9(b) arbitration hearing must the parties have, and what powers support the hearing?

1. Written notice at least thirty days before the hearing date; the arbitrator may issue subpoenas to compel attendance and the production of documents, and may consult an independent expert of the arbitrator's own choosing where technical expertise is necessary to decide the case before the arbitrator.
2. Written notice at least ten days before the hearing date; no subpoena may issue in support of the procedure, which is voluntary, and the arbitrator must decide on the papers the parties have filed with the department without consulting any person outside the arbitration on any question arising in it.
3. Written notice at least ten days before the hearing date; the commissioner may issue subpoenas on the arbitrator's behalf to compel attendance and the production of documents, and the arbitrator may consult an independent expert recommended by the commissioner where technical expertise is necessary. ✓
4. Written notice at least ten days before the hearing date; the commissioner may issue subpoenas on the arbitrator's behalf, and the arbitrator may take into account any evidence the department gathered when investigating the complaint whether or not it is presented at the hearing.

Why: 38a-9(b)(2) provides that PARTIES TO THE DISPUTE SHALL BE PROVIDED WRITTEN NOTICE OF THE HEARING AT LEAST TEN DAYS PRIOR TO THE HEARING DATE, that THE COMMISSIONER MAY ISSUE SUBPOENAS ON BEHALF OF THE ARBITRATOR TO COMPEL THE ATTENDANCE OF WITNESSES AND THE PRODUCTION OF DOCUMENTS, PAPERS AND RECORDS RELEVANT TO THE DISPUTE, that DECISIONS SHALL BE MADE ON THE BASIS OF THE EVIDENCE PRESENTED AT THE ARBITRATION HEARING, and that WHERE THE ARBITRATOR BELIEVES THAT TECHNICAL EXPERTISE IS NECESSARY TO DECIDE A CASE, SUCH ARBITRATOR MAY CONSULT WITH AN INDEPENDENT EXPERT RECOMMENDED BY THE COMMISSIONER. The arbitrator and any expert are PAID BY THE DEPARTMENT ON A PER DISPUTE BASIS AS ESTABLISHED BY THE COMMISSIONER. The subpoena power belongs to the commissioner, exercised for the arbitrator, and the decision rests on what was presented at the hearing.

Besides enforcing the title, 38a-8(a) gives the commissioner one procedural power useful in investigations and hearings. What is it?

1. The commissioner may sit as a judge of the Superior Court for insurance matters.
2. The commissioner may hold witnesses in contempt and commit them without a court order.
3. The commissioner may arrest any person who refuses to produce insurance records.
4. The commissioner may administer oaths in the discharge of the commissioner's duties. ✓

Why: 38a-8(a): the commissioner may administer oaths in the discharge of the commissioner's duties. Contempt and enforcement of production orders belong to the Superior Court under 38a-16.

Most Professional Liability/E&O and D&O policies are written on what kind of trigger?

1. Claims-made ✓
2. Named perils
3. Open peril
4. Occurrence

Why: Professional and management liability lines are typically claims-made, with a retroactive date and ERP options.

A physical damage dispute is referred to arbitration under 38a-9(b). What must the insurance company do on being notified of the referral, and what is the effect on the claimant?

1. It must pay the claimant the undisputed amount of the claim upon written notification from the department that the complaint has been referred to arbitration, and that payment does not affect any right of the claimant to pursue the disputed amount. ✓
2. It must pay the claimant the undisputed amount of the claim upon written notification from the department that the complaint has been referred to arbitration, and that payment is in full and final settlement of the claim unless the claimant expressly reserves the right to pursue the disputed amount in writing before accepting it.
3. It must deposit the undisputed amount of the claim with the department pending the outcome of the arbitration, the money being paid over to the claimant with the arbitrator's award if the decision favours the claimant and returned to the company if it does not favour the claimant.
4. It need pay nothing until the arbitrator has rendered a written decision, at which point it must pay the whole of the award together with interest at fifteen per cent per year running from the date on which the claimant first presented the claim to the company for payment under the policy.

Why: 38a-9(b)(1) provides that THE INSURANCE COMPANY SHALL PAY THE CLAIMANT THE UNDISPUTED AMOUNT OF THE CLAIM UPON WRITTEN NOTIFICATION FROM THE DEPARTMENT THAT THE COMPLAINT HAS BEEN REFERRED TO ARBITRATION. SUCH PAYMENT SHALL NOT AFFECT ANY RIGHT OF THE CLAIMANT TO PURSUE THE DISPUTED AMOUNT OF THE CLAIM. It is not an accord and satisfaction, and the date of that payment matters later: 38a-9(b)(2) runs the fifteen per cent interest on any award RETROACTIVE TO THE DATE OF PAYMENT FOR THE UNDISPUTED AMOUNT OF THE CLAIM.

NFIP flood insurance provides which type of loss settlement for personal property (contents)?

1. Replacement cost
2. Agreed value
3. Stated amount
4. Actual cash value ✓

Why: Contents under the NFIP are always settled on an actual cash value basis, while only the building under certain conditions may be settled at replacement cost.

Which of the following best states the purpose of the deductible in Section I of a Homeowners policy?

1. To pay the mortgagee its share of the loss before the insured receives any portion of the settlement
2. To increase coverage by the deductible amount at each renewal
3. To cover liability claims under Section ii before Coverage E responds
4. To eliminate small claims and reduce premium by having the insured retain part of each loss ✓

Why: The Section I property deductible has the insured retain a portion of each loss, discouraging small claims and lowering premium; it does not apply to Section II liability.

When two policies cover the same loss and an 'other insurance' clause requires each to pay a share proportional to its limit, this is:

1. Nonconcurrency
2. Primary and excess
3. Pro rata (proportional) sharing ✓
4. Contribution by equal shares

Why: Pro rata sharing divides the loss among insurers in proportion to each policy's limit relative to total coverage.

A coal miner who develops pneumoconiosis (black lung disease) from workplace dust exposure may receive benefits under:

1. The Defense Base Act, which covers respiratory illness in workers at government-contracted sites
2. The Jones Act, for dust below decks
3. The Black Lung Benefits Act (Federal Mine Safety) ✓
4. FELA, on proof of employer negligence

Why: The Black Lung Benefits Act provides compensation to coal miners who are totally disabled by pneumoconiosis (black lung) arising from mine employment.

Under the Dwelling Policy, if no liability supplement is attached, an injured visitor's medical bills are:

1. Paid under Coverage E, which every Dwelling Policy includes for injuries on the premises
2. Not covered, because the Dwelling Policy has no liability or med pay by default ✓
3. Paid automatically under Coverage M up to $1,000 per injured person without regard to fault
4. Paid from the Coverage A dwelling limit

Why: The basic Dwelling Policy contains no liability or medical payments coverage; these must be added via the personal liability supplement.

What programme does 38a-8(e) require the commissioner to establish?

1. One that reviews every complaint received by the Division of Consumer Affairs within thirty days and publishes the outcome on the department's web site.
2. One that reduces costs and increases efficiency through electronic transmission of documents, including policy form and rate filings, to and from insurers. ✓
3. One that trains newly licensed producers in the insurance laws of the state during their first year of licensure, funded by the examination fee.
4. One that shares the financial examination reports of domestic insurers with the guaranty associations before the reports are made public.

Why: 38a-8(e): the commissioner shall establish a program to reduce costs and increase efficiency through the use of electronic methods to transmit documents, including policy form and rate filings, to and from insurers and the Insurance Department.

Which loss would be covered under HO-3 on the dwelling but NOT on personal property, due to the difference in covered perils?

1. A fire loss originating in the home's attached garage
2. An accidental, non-named-peril physical loss to the structure ✓
3. A lightning strike that damages the roof
4. A windstorm loss to the siding and shingles

Why: HO-3 covers the dwelling open-peril, so an accidental loss not on the named-perils list is covered for the structure but not for Coverage C personal property, which is named-peril only.

A crew member (seaman) injured aboard a vessel in navigation would most likely pursue a claim under which law?

1. The Defense Base Act
2. The Jones Act ✓
3. FECA
4. FELA

Why: The Jones Act protects seamen (crew members of vessels in navigation), allowing them to sue their employer for injuries caused by negligence, borrowing FELA's fault-based framework.

Loss of use (transportation expenses) coverage in the PAP for a theft loss typically begins:

1. After a waiting period (e.g., 48 hours) following the theft ✓
2. At the moment the auto is stolen, with no waiting period, provided the theft is reported to police
3. Never for theft losses, since transportation expense follows only collision repairs to the covered auto
4. Only once the stolen auto is recovered and the insured learns how long the repairs will take

Why: For a theft of the covered auto, transportation expense coverage typically begins a set number of hours (e.g., 48) after the theft is reported.

The Watercraft endorsement on a Homeowners policy is generally used to:

1. Schedule jewelry and other valuables that the insured keeps aboard the boat
2. Extend limited liability for certain larger boats otherwise excluded ✓
3. Insure large yachts for both hull damage and liability without a separate marine policy
4. Cover flood damage to the home when rising water reaches it from the adjoining lake

Why: The watercraft endorsement extends Section II liability for boats that exceed the size/horsepower thresholds otherwise excluded by the base policy.

Under the CGL Supplementary Payments, the insurer will pay up to how much per day for the insured's loss of earnings while attending a trial at the insurer's request?

1. $1,000
2. $100
3. $250 ✓
4. $500

Why: Supplementary Payments include up to $250 per day for the insured's actual loss of earnings due to attendance at hearings or trials at the insurer's request.

The Information Page of the Workers Compensation policy is most analogous to which component of other commercial policies?

1. The endorsement schedule
2. The declarations page ✓
3. The exclusions section
4. The conditions section

Why: The Information Page functions like a declarations page, showing the insured, policy period, listed states, classifications, premium basis, and limits for Part Two.

The Motor Carrier Coverage Form is most appropriate for:

1. An individual insuring the family sedan for commuting
2. A business that transports goods or people for hire (trucking) ✓
3. A homeowner adding coverage for a car kept in the garage
4. A motorcycle dealership that sells and services bikes

Why: The Motor Carrier Coverage Form is tailored for businesses that haul property or passengers for others, addressing trucking-specific exposures.

Homeowners Coverage C contains special limits of liability. The special limit on theft of jewelry, watches, and furs is commonly:

1. $2,500
2. $200
3. Unlimited
4. $1,000 to $1,500 ✓

Why: There is a special sublimit (commonly $1,500) for theft of jewelry, watches, and furs under Coverage C; higher amounts require scheduling.

In ocean marine, Freight coverage protects:

1. Port fees and wharfage charges billed at each call
2. The cargo owner's anticipated profit once the goods reach market
3. The crew's wages, provisions, and repatriation expenses if the voyage is abandoned midway
4. The shipowner's loss of earnings/freight revenue if cargo is not delivered ✓

Why: Freight insurance covers the shipowner's potential loss of freight income (the money earned for transporting cargo) if a covered loss prevents delivery.

How does R.C.S.A. 38a-782a-1 define a BIENNIUM, and what is a CREDIT HOUR worth?

1. The two-year period ending on the expiration date of the producer's insurance licence; a credit hour is a value assigned to an approved course equal to fifty minutes of classroom instruction. ✓
2. The two-year period beginning on the first day of February in each even-numbered year; a credit hour is a value assigned to an approved course equivalent to sixty minutes of classroom instruction.
3. The two calendar years preceding the producer's renewal application; a credit hour is a value assigned by the sponsor equivalent to one hour of classroom instruction, including any break time.
4. The two-year period ending on the producer's birthday in each even-numbered year; a credit hour is a value assigned by the commissioner equivalent to forty-five minutes of instruction.

Why: R.C.S.A. 38a-782a-1(2): biennium means, with respect to each individual producer, the two-year period ending on the expiration date of the producer's insurance license. 38a-782a-1(7): credit hour means a value assigned to a course approved by the commissioner that is equivalent to fifty minutes of classroom instruction.

An insured carries $80,000 on contents valued at $100,000 with an 80% coinsurance clause. A $10,000 partial loss occurs (no deductible). The insurer pays:

1. $8,000
2. $9,000
3. $7,500
4. $10,000 ✓

Why: Required = 80% × $100,000 = $80,000. Insurance carried equals the requirement, so the full $10,000 loss is paid.

How does 38a-336(e) define an underinsured motor vehicle, and how does that differ from the definition used for conversion coverage in 38a-336a(e)?

1. Under 38a-336(e) the vehicle is underinsured if the payments actually received from the tortfeasor are less than the covered person's fair, just and reasonable damages; under 38a-336a(e) it is underinsured if the sum of the tortfeasor's applicable liability limits is less than the limits of the policy claimed against.
2. Both sections use the same test, comparing the sum of the tortfeasor's applicable liability limits against the uninsured motorist limits of the policy claimed against; what conversion coverage changes is the order of payment, not the definition of an underinsured motor vehicle at all.
3. Under 38a-336(e) the vehicle is underinsured if its liability limits are below the minimum required by section 14-112(a); under 38a-336a(e) it is underinsured if its limits are at or above that minimum but below the limits carried by the policy against which the claim is made.
4. Under 38a-336(e) the vehicle is underinsured if the sum of the tortfeasor's applicable liability limits is less than the uninsured motorist limits of the policy claimed against; under 38a-336a(e) it is underinsured if the payments actually received from the tortfeasor are less than the covered person's damages. ✓

Why: 38a-336(e) provides that an UNDERINSURED MOTOR VEHICLE MEANS A MOTOR VEHICLE WITH RESPECT TO WHICH THE SUM OF THE LIMITS OF LIABILITY UNDER ALL BODILY INJURY LIABILITY BONDS AND INSURANCE POLICIES APPLICABLE AT THE TIME OF THE ACCIDENT IS LESS THAN THE APPLICABLE LIMITS OF LIABILITY UNDER THE UNINSURED MOTORIST PORTION OF THE POLICY AGAINST WHICH CLAIM IS MADE. 38a-336a(e) instead provides that for conversion coverage the vehicle is underinsured where THE SUM OF ALL PAYMENTS RECEIVED BY OR ON BEHALF OF THE COVERED PERSON FROM OR ON BEHALF OF THE TORTFEASOR ARE LESS THAN THE FAIR, JUST AND REASONABLE DAMAGES OF THE COVERED PERSON. Limits against limits in one, payments against damages in the other.

An insured damages a friend's mailbox and fence while backing out of a driveway in the covered auto. This is covered under:

1. Part A — Property Damage Liability ✓
2. Part D — Collision
3. Part B — Medical Payments
4. Part C — Uninsured Motorists

Why: Damage to another person's property (mailbox, fence) for which the insured is legally liable is covered under Part A property damage liability.

What advance notice does 38a-343(a) require before cancellation of a motor vehicle policy to which 38a-342 applies, and what are the two shorter periods?

1. At least thirty days; but at least fifteen days where cancellation is for nonpayment of the first premium on a new policy, and at least ten days where it is for nonpayment of any other premium or for material misrepresentation by the named insured in obtaining coverage under the policy.
2. At least forty-five days; but at least fifteen days where cancellation is for nonpayment of the first premium on a new policy, and at least ten days where it is for nonpayment of any other premium, each of the two shorter notices being accompanied by a statement specifying the reason for it. ✓
3. At least forty-five days; but at least twenty days where cancellation is for nonpayment of the first premium on a new policy, and at least fifteen days where it is for nonpayment of any other premium, no notice at all being required where the policy has been in effect for less than sixty days.
4. At least sixty days; but at least fifteen days where cancellation is for nonpayment of the first premium on a new policy, and at least ten days where it is for nonpayment of any other premium, the longer period matching the notice required to refuse to renew the policy under 38a-323(a)(1).

Why: 38a-343(a) makes no notice of cancellation effective unless delivered or sent to the named insured, and any third party designated under 38a-323a, BY REGISTERED MAIL, CERTIFIED MAIL, MAIL EVIDENCED BY A CERTIFICATE OF MAILING OR, IF AGREED ..., BY ELECTRONIC MEANS, AT LEAST FORTY-FIVE DAYS BEFORE THE EFFECTIVE DATE OF CANCELLATION, EXCEPT THAT (1) WHERE CANCELLATION IS FOR NONPAYMENT OF THE FIRST PREMIUM ON A NEW POLICY, AT LEAST FIFTEEN DAYS' NOTICE ... ACCOMPANIED BY THE REASON FOR CANCELLATION SHALL BE GIVEN, AND (2) WHERE CANCELLATION IS FOR NONPAYMENT OF ANY OTHER PREMIUM, AT LEAST TEN DAYS' NOTICE ... SHALL BE GIVEN. For a policy IN EFFECT FOR LESS THAN SIXTY DAYS the same periods apply except that the ten-day group also picks up MATERIAL MISREPRESENTATION. A notice for nonpayment of the first premium on a new policy MAY BE RETROACTIVE TO THE EFFECTIVE DATE OF SUCH POLICY, provided the fifteen days were given and the premium was not paid in that period.

38a-358 prohibits declination, cancellation or nonrenewal of private passenger nonfleet automobile insurance on certain bases. Which is prohibited outright?

1. The race, religion, nationality or ethnic group of the applicant or of the named insured, an absolute prohibition to which the subdivision attaches no qualification or exception at all. ✓
2. The lawful occupation or profession of the applicant, without exception, so that an insurer may never take an insured's trade or calling into account in any circumstances whatever.
3. The principal location of the insured motor vehicle, without exception, territory being excluded entirely from the underwriting of private passenger nonfleet automobile risks in this state.
4. The age of the applicant, without exception, so that no insurer within a group may treat the age of a driver as relevant to the acceptance of a private passenger nonfleet automobile risk.

Why: 38a-358(1) prohibits a decision based ON THE RACE, RELIGION, NATIONALITY OR ETHNICITY OF THE APPLICANT OR NAMED INSURED - flat, with no proviso. Contrast the qualified grounds: (2) SOLELY ON THE LAWFUL OCCUPATION OR PROFESSION, EXCEPT ... ANY INSURER WHICH LIMITS ITS MARKET TO ONE LAWFUL OCCUPATION; (3) ON THE PRINCIPAL LOCATION ... UNLESS SUCH DECISION IS FOR A BUSINESS PURPOSE WHICH IS NOT A MERE PRETEXT FOR UNFAIR DISCRIMINATION; and (4) SOLELY ON THE AGE, SEX, GENDER IDENTITY OR EXPRESSION, MARITAL STATUS OR ERASED CRIMINAL HISTORY RECORD INFORMATION, with a group exception. The word SOLELY and the provisos are what distinguish them.

To add liability protection to a Dwelling Policy, which is typically attached?

1. Ordinance or Law endorsement
2. Inflation guard endorsement
3. Personal Liability Supplement ✓
4. Scheduled Personal Property endorsement

Why: Because the Dwelling Policy has no built-in liability, a Personal Liability Supplement is added to provide Coverage L (liability) and Coverage M (medical payments).

In Business Income coverage, the 'period of restoration' begins:

1. 72 hours after the time of direct physical loss ✓
2. At the time of direct physical loss caused by a covered peril
3. When the policy is purchased
4. When the business reopens

Why: Business income payments are subject to the standard 72-hour waiting period in the ISO form (CP 00 30): although measured from the direct physical loss, coverage does not begin paying until 72 hours after the loss.

Under the PAP, a trailer owned by the named insured is:

1. Covered only under Part B, because a trailer has no separate liability exposure of its own while in tow
2. Never covered unless a separate trailer policy is purchased
3. Covered only if it is used for commercial hauling and rated as a commercial unit on the declarations
4. A covered auto for liability (and physical damage if scheduled), within policy terms ✓

Why: Owned trailers are included as covered autos for liability; physical damage on a trailer generally requires it to be scheduled.

38a-336a(a) requires each insurer licensed to write automobile liability insurance in this state to do something about conversion coverage. What, and what must it tell a buyer of a new policy?

1. It must offer conversion coverage for an additional premium in addition to ordinary underinsured motorist coverage rather than in place of it, and must disclose the availability and premium cost of the coverage at each renewal of the policy as well as at the time of sale or issuance of it.
2. It must include conversion coverage in every new policy at no additional premium unless a named insured rejects it in writing, and must disclose the amount by which the premium would fall if the named insured were to reject the coverage and take ordinary underinsured motorist coverage instead.
3. It must offer conversion coverage only to an applicant whose bodily injury liability limits are at least twice the limits specified in section 14-112(a), and must disclose the availability and premium cost of the coverage in the notice of cancellation or nonrenewal of any policy it declines to renew.
4. It must offer conversion coverage for an additional premium, the purchase being in lieu of ordinary underinsured motorist coverage, and must disclose at the time of sale or issuance the availability, the premium cost and a description of the coverage. ✓

Why: 38a-336a(a) requires each such insurer to OFFER, FOR AN ADDITIONAL PREMIUM, UNDERINSURED MOTORIST CONVERSION COVERAGE WITH LIMITS IN ACCORDANCE WITH SECTION 38a-336, and provides that THE PURCHASE OF SUCH ... COVERAGE SHALL BE IN LIEU OF UNDERINSURED MOTORIST COVERAGE PURSUANT TO SECTION 38a-336. For each NEW policy the insurer SHALL DISCLOSE TO AN INSURED AT THE TIME OF SALE OR ISSUANCE THE AVAILABILITY OF, THE PREMIUM COST AND A DESCRIPTION OF UNDERINSURED MOTORIST CONVERSION COVERAGE, and that description must be included IN A CONSPICUOUS MANNER WITH THE INFORMED CONSENT FORM SPECIFIED IN 38a-336(a)(2). In lieu of, not in addition to.

What does 38a-316b require of an insurer writing homeowners cover on a residential dwelling?

1. To offer a premium discount, based on sound actuarial principles, to any homeowner who submits proof of installation of permanent storm shutters or impact-resistant glass. ✓
2. To offer a premium discount of at least five per cent to any homeowner who submits proof of installation of permanent storm shutters, impact-resistant glass or a roof meeting a standard the commissioner prescribes by regulation.
3. To inspect the dwelling on request and advise the homeowner what mitigation measures would reduce the premium, the insurer being free to decide afterwards whether to grant any reduction at all.
4. To offer a premium discount to any homeowner in a coastal area who installs permanent storm shutters, the requirement not extending to dwellings situated inland from the coastal boundary.

Why: 38a-316b requires each insurer that delivers, issues for delivery, renews, amends or endorses a homeowners policy for a residential dwelling to OFFER A PREMIUM DISCOUNT ON ANY SUCH POLICY TO ANY HOMEOWNER WHO SUBMITS TO SUCH INSURER PROOF OF INSTALLATION OF PERMANENT STORM SHUTTERS OR IMPACT-RESISTANT GLASS ON HIS OR HER DWELLING AS A MEANS OF MITIGATING LOSS FROM HURRICANES OR OTHER SEVERE STORMS, and provides that SUCH DISCOUNT SHALL BE BASED ON SOUND ACTUARIAL PRINCIPLES. No fixed percentage is prescribed.

Which Homeowners form provides the narrowest, modified settlement and is limited in covered perils for the dwelling?

1. HO-2
2. HO-3
3. HO-8 ✓
4. HO-6

Why: HO-8 is the Modified Coverage Form with restricted perils and functional/repair-cost settlement, designed for older homes; it is narrower than HO-2 or HO-3.

Within compensatory damages, payments for tangible, measurable losses such as medical bills and lost wages are called:

1. Punitive damages
2. General damages
3. Nominal damages
4. Special damages ✓

Why: Special damages are specific, quantifiable economic losses such as medical expenses and lost income.

Several businesses pool their funds to collectively cover one another's losses without buying commercial insurance. This best illustrates risk:

1. Transfer to an insurer
2. Reduction
3. Avoidance
4. Sharing ✓

Why: Risk sharing or pooling spreads the cost of losses among a group of similarly exposed parties.

Because an insurance policy is a contract of adhesion, any ambiguity in its wording is generally:

1. Considered void and unenforceable, so the provision containing it is struck out
2. Resolved in favor of the insured, against the insurer who drafted it ✓
3. Sent to the state insurance department for an authoritative interpretation
4. Resolved in favor of the insurer who drafted it, since it chose the wording

Why: Since the insurer drafts the contract, ambiguities are construed against the drafter and in favor of the insured.

How is a member insurer's assessment calculated under 38a-841(a)(3), how much notice must it have, and what caps it?

1. In the proportion that its net direct written premiums for the calendar year in which the assessment is levied on the kinds of insurance in that account bear to those of all member insurers; notice not later than sixty days before it is due; and no more than two per cent of those premiums in any year across all three accounts together.
2. In equal shares among all member insurers writing the kinds of insurance in that account, whatever their respective volumes of business; notice not later than thirty days before it is due; and no more than five per cent of the member insurer's net direct written premiums in any year on any one account.
3. In the proportion that its net direct written premiums for the calendar year preceding the assessment on the kinds of insurance in that account bear to those of all member insurers; notice not later than thirty days before it is due; and no more than two per cent of those premiums in any year on any account. ✓
4. In the proportion that its admitted assets bear to the admitted assets of all member insurers writing the kinds of insurance in that account; notice not later than thirty days before it is due; and no more than two per cent of the member insurer's net direct written premiums for the preceding calendar year on any account.

Why: 38a-841(a)(3) requires the association to allocate claims paid and expenses among the three accounts separately and to assess members separately for each account, and provides that THE ASSESSMENTS OF EACH MEMBER INSURER SHALL BE IN THE PROPORTION THAT THE NET DIRECT WRITTEN PREMIUMS OF SUCH MEMBER INSURER FOR THE CALENDAR YEAR PRECEDING THE ASSESSMENT ON THE KINDS OF INSURANCE IN SUCH ACCOUNT BEARS TO THE NET DIRECT WRITTEN PREMIUMS OF ALL MEMBER INSURERS FOR THE CALENDAR YEAR PRECEDING THE ASSESSMENT ON THE KINDS OF INSURANCE IN SUCH ACCOUNT. EACH MEMBER INSURER SHALL BE NOTIFIED OF ITS ASSESSMENT NOT LATER THAN THIRTY DAYS BEFORE IT IS DUE. NO MEMBER INSURER MAY BE ASSESSED IN ANY YEAR ON ANY ACCOUNT AN AMOUNT GREATER THAN TWO PER CENT OF THAT MEMBER INSURER'S NET DIRECT WRITTEN PREMIUMS FOR THE CALENDAR YEAR PRECEDING THE ASSESSMENT ON THE KINDS OF INSURANCE IN SAID ACCOUNT. Preceding year, premiums not assets, and two per cent PER ACCOUNT rather than in total. The assessment pays the obligations under 38a-841(a)(1), the expenses of handling covered claims, the cost of examinations under 38a-846 and other authorised expenses.

Dividends paid to the policyholders of a mutual insurer are:

1. Not guaranteed and are a return of surplus ✓
2. Guaranteed each year by contract
3. Taxable as ordinary income to the insured
4. Paid only to the stockholders

Why: Mutual policy dividends are not guaranteed; they represent a return of unused premium and are generally not taxable.

Which statement about how coverage parts combine in a CPP is correct?

1. Two or more coverage parts share the Common Declarations and Common Conditions to form a package ✓
2. A monoline policy brings every available coverage part together under one set of common declarations
3. A package may combine property coverage parts only, since liability parts must always be written by themselves
4. Each coverage part must be issued as a separate policy with its own declarations

Why: In a package, two or more coverage parts attach to common declarations and common conditions; a single coverage part written alone is monoline.

The policy section that defines the rights and duties of both parties, such as duties after a loss and cancellation, is the:

1. Insuring agreement
2. Declarations
3. Conditions ✓
4. Definitions

Why: The conditions section spells out the rules, rights, and duties governing how the policy operates for both insurer and insured.

The Automatic Increase in Insurance (inflation guard) endorsement on a dwelling policy does what?

1. Converts an actual cash value dwelling policy to replacement cost settlement at the next renewal
2. Periodically increases the Coverage A limit to keep pace with inflation ✓
3. Automatically adds theft coverage on the dwelling once the limit has risen above its original amount
4. Lowers the premium each year in which no claim is filed

Why: The inflation guard / automatic increase endorsement raises the dwelling limit at set intervals to help the amount of insurance keep up with rising construction costs.

Pure risk differs from speculative risk in that pure risk involves:

1. Only the chance of loss or no loss ✓
2. Voluntary participation for reward
3. Guaranteed profit
4. Both loss and gain possibilities

Why: Pure risk presents only the possibility of loss or no loss, with no opportunity for gain, making it the only insurable type of risk.

The Spoilage endorsement primarily covers:

1. Theft of packaged inventory from a walk-in cooler
2. Damage to the building's refrigeration room structure
3. Spoilage of perishable stock due to power outages or equipment breakdown ✓
4. Liability for customer illness caused by contaminated food sold

Why: The Spoilage endorsement covers loss to perishable stock from breakdown of refrigeration equipment or off-premises power interruption, depending on options selected.

The HO-3 (Special Form) covers the dwelling and personal property on what basis, respectively?

1. Named perils on the dwelling; open perils on personal property
2. Open perils on the dwelling; named (broad) perils on personal property ✓
3. Named perils on both
4. Open perils on both

Why: HO-3 insures the dwelling and other structures on an open-perils basis but covers personal property (Coverage C) on a named-perils (broad form) basis.

The premium basis for workers' compensation insurance is generally expressed as a rate applied to:

1. Square footage of the workplace
2. Gross sales revenue
3. Each employee per year
4. Each $100 of payroll ✓

Why: WC premium is calculated using rates per $100 of payroll for each job classification, then adjusted by other factors.

Garage coverage (now largely the Auto Dealers Coverage Form) is designed for:

1. Homeowners who keep a detached garage or workshop, insuring the structure and the tools stored inside it
2. Long-haul trucking fleets, replacing the Motor Carrier Coverage Form for carriers hauling freight for hire
3. Businesses in the auto sales/service trade, covering their operations and inventory exposures ✓
4. Individual motorcycle owners insuring a bike for pleasure use

Why: Garage/Auto Dealers coverage addresses the unique liability and physical damage exposures of dealers, repair shops, and service stations, including dealers' inventory.

A limit expressed as 'per occurrence' refers to:

1. The most paid for all damages arising from a single event ✓
2. The most paid for any one injured person's bodily injury
3. The deductible applied to each claim
4. The annual maximum for all claims combined

Why: A per-occurrence limit caps the total amount payable for all damages arising out of a single covered event.

In most liability policies, defense costs are:

1. Paid in addition to the limit of liability ✓
2. Deducted from the limit of liability
3. Paid by the insured
4. Never covered

Why: Defense costs are typically paid in addition to (outside) the policy limits in standard liability forms, though some forms erode limits.

What must the commissioner do after a hearing under 38a-990 where the charge is made out, and what where it is not, under 38a-992?

1. Where it is made out, impose the penalties provided by section 38a-993 and publish the order in a newspaper of the state; where it is not, notify the person charged that the charges have been dismissed and close the file.
2. Where it is made out, refer the matter to the Attorney General for an injunction; where it is not, prepare a written report of the findings and serve it on the person charged alone, the complainant having no further interest.
3. Where made out, reduce the findings to writing and serve them with a cease and desist order; where not, prepare a written report of the findings and conclusions and serve it on the person charged and on the person whose rights were allegedly violated. ✓
4. Where it is made out, suspend or revoke the licence of the person charged; where it is not, prepare a written report of the findings of fact and conclusions and file it with the Division of Consumer Affairs.

Why: 38a-992(a): where the commissioner determines that the person charged has engaged in conduct violating the sections, the commissioner shall reduce the findings to writing and issue and serve a copy of the findings with an order to cease and desist. 38a-992(b): where the commissioner determines that it has not, the commissioner shall prepare a written report setting out the findings of fact and conclusions, served on the person charged and on the person, if any, whose rights were allegedly violated.

A clothing store's stock is destroyed by fire. The BPP with the Special Causes of Loss form is in force. Coverage applies because:

1. The Basic form lists fire as a named peril and the Special form adopts that same list
2. A flood set off the fire, and the ensuing loss provision restores the water damage
3. Fire is not excluded under the open-perils form ✓
4. Theft is the cause of loss, and stock is insured against theft on all three forms

Why: Under the open-perils Special form, fire is a covered cause of loss because it is a risk of direct physical loss that is not excluded.

A lender requires flood insurance as a condition of a mortgage because the property is in a Special Flood Hazard Area. This requirement comes from:

1. The federal Do-Not-Call rules
2. State law, which conditions the recording of every mortgage on proof of flood insurance before the closing may occur
3. TRIA's make-available requirement
4. Federal flood law requiring federally regulated lenders to mandate flood coverage in high-risk zones ✓

Why: Federal law requires lenders regulated or insured by the federal government to require flood insurance on properties located in Special Flood Hazard Areas.

Under the CGL, 'property damage' is defined to include:

1. Physical injury to tangible property only, with any resulting loss of use expressly excluded
2. Purely economic loss such as lost profits and diminished market value, even where nothing tangible has been harmed, so long as the loss arises out of the insured's operations
3. Bodily injury, sickness, or disease sustained by a person
4. Physical injury to tangible property (including loss of use) and loss of use of tangible property that is not physically injured ✓

Why: Property damage means physical injury to tangible property including resulting loss of use, plus loss of use of undamaged tangible property.

Under the PAP, fire damage to the covered auto while parked in a garage is covered under:

1. Other Than Collision (comprehensive) ✓
2. Collision coverage under Part D of the pap
3. Liability coverage under Part A
4. Not covered without an endorsement

Why: Fire is a peril insured under Other Than Collision (comprehensive) coverage in Part D.

Under TRIA, federal sharing of terrorism losses is triggered only for a 'certified act of terrorism,' which is certified by:

1. FEMA, through its disaster declaration process
2. The individual insurer, once its deductible is exhausted
3. The insurance commissioner of the state where the loss occurred
4. The Secretary of the Treasury (in consultation with other officials) ✓

Why: A terrorism event must be certified by the Secretary of the Treasury, in consultation with designated officials, before TRIA's loss-sharing applies.

The implied warranty of 'no deviation' means:

1. The cargo cannot be repacked or transshipped en route
2. The premium cannot be adjusted once the voyage begins
3. The vessel must not depart from the customary or agreed route without necessity ✓
4. The vessel must sail under the flag of registry named in the declarations

Why: The warranty against deviation requires the vessel to follow the customary or agreed-upon route; unjustified departure can void coverage.

Which of the following is generally EXCLUDED from a standard Homeowners policy without an endorsement?

1. Fire damage to the dwelling under Coverage A
2. Wind damage to the roof shingles
3. Theft of insured personal property
4. Earth movement (earthquake) and flood ✓

Why: Earthquake and flood are standard exclusions; earthquake can be added by endorsement and flood is covered separately through the NFIP.

Which of the following is typically EXCLUDED under an NFIP flood policy?

1. The furnace and central air conditioner serving the dwelling, which NFIP building coverage insures even when they sit in a basement
2. Damage to finished basement improvements and personal property in a basement (with limited exceptions) ✓
3. The building's foundation walls, anchorage system, and staircases
4. A detached garage located on the same premises, which may draw up to ten percent of the building coverage limit

Why: The NFIP severely limits coverage in basements, generally excluding finished walls, floors, and most personal property below the lowest elevated floor.

Private crop-hail insurance is distinguished from federal MPCI in that crop-hail:

1. Covers every natural peril capable of reducing a crop yield, including drought and excess moisture
2. Covers only the farm dwelling and its contents
3. Is administered by FEMA alongside the National Flood Insurance Program for agricultural producers
4. Is a private, narrowly focused policy covering primarily hail (and often fire) damage to crops ✓

Why: Crop-hail is sold by private insurers and typically covers hail (often with fire) on a per-acre basis, separate from the broad federal MPCI program.

An insured with 50/100/25 split limits injures one person for $80,000. How much does the policy pay for that injured person?

1. $25,000
2. $80,000
3. $100,000
4. $50,000 ✓

Why: The per-person bodily injury limit is $50,000, so the most payable for one injured person is $50,000 regardless of the per-accident limit.

38a-832 restricts what an insurer may say to a person with a bodily injury or wrongful death claim against its insured. What is forbidden?

1. Any direct contact with the claimant before the claimant has had a reasonable opportunity to consult an attorney of the claimant's own choosing.
2. Any offer of settlement communicated before the claimant has had the opportunity to obtain independent legal advice about the value of the claim being made.
3. Any statement about the limits of the insured's liability policy, which may be disclosed only in response to a written request signed by the claimant or the claimant's representative.
4. Any written communication or oral statement that affirmatively advises against the need for, or discourages the retention of, an attorney to represent that person. ✓

Why: 38a-832(a) provides that NO INSURER LICENSED TO TRANSACT BUSINESS IN THIS STATE MAY, ON BEHALF OF ITSELF OR ITS INSURED, SEND OR KNOWINGLY PERMIT TO BE SENT ANY WRITTEN COMMUNICATION OR MAKE ANY ORAL STATEMENT TO ANY PERSON KNOWN OR BELIEVED TO HAVE A CLAIM FOR BODILY INJURY OR WRONGFUL DEATH AGAINST ONE OF ITS INSUREDS THAT AFFIRMATIVELY ADVISES AGAINST THE NEED FOR OR DISCOURAGES THE RETENTION OF AN ATTORNEY.

A 'valued policy law' in some states requires that, for a total loss to real property by a covered peril, the insurer pay:

1. The full face amount of the policy ✓
2. Replacement cost minus depreciation
3. The market value of the land
4. Actual cash value only

Why: Where valued policy laws apply, the insurer must pay the full policy face amount on a total loss of real property by a covered peril, regardless of actual value.

Protection and Indemnity (P&I) coverage in ocean marine provides:

1. Freight coverage on the shipowner's earnings if the cargo is never delivered to the consignee
2. Cargo coverage on the goods carried in the holds
3. Hull physical damage to the vessel, its machinery, and its equipment from perils of the sea
4. Third-party liability coverage for the shipowner (injury, cargo damage, etc.) ✓

Why: P&I provides broad third-party liability protection for shipowners, including bodily injury, illness of crew, damage to cargo, and other liabilities not covered by hull policies.

With auto liability split limits of 50/100/25, the maximum paid for bodily injury to any one person in an accident is:

1. $100,000
2. $50,000 ✓
3. $175,000
4. $25,000

Why: The first number (50) is the per-person bodily injury limit: $50,000.

A key feature of Coverage C — Medical Payments under the CGL is that it pays:

1. Regardless of the insured's legal liability, up to the medical expense limit ✓
2. Only after a court has found the insured legally liable for the injury
3. Only for the insured's own employees hurt on the job
4. Punitive damages awarded against the insured in addition to the medical bills incurred

Why: Medical Payments coverage is a goodwill, no-fault coverage paying medical expenses regardless of the insured's legal liability, within the medical expense limit.