QUESTION NO: 1
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 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?
Correct Answer: D
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QUESTION NO: 2
After examining an organization's financial statements and accounting records, a broker decides that they would like to take the company on as a client. What did the broker determine during their examination that helped make this decision?
After examining an organization's financial statements and accounting records, a broker decides that they would like to take the company on as a client. What did the broker determine during their examination that helped make this decision?
Correct Answer: A
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QUESTION NO: 3
Which peril is commonly excluded under the commercial property broad form (CPBF)?
Which peril is commonly excluded under the commercial property broad form (CPBF)?
Correct Answer: C
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QUESTION NO: 4
XYZ Insurer is known for using the first-in principle. If multiple brokers request quotations for a new applicant, how does XYZ Insurer respond?
XYZ Insurer is known for using the first-in principle. If multiple brokers request quotations for a new applicant, how does XYZ Insurer respond?
Correct Answer: B
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QUESTION NO: 5
An individual who uses public transit rather than buying a car is managing their risk using which risk management technique?
An individual who uses public transit rather than buying a car is managing their risk using which risk management technique?
Correct Answer: A
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QUESTION NO: 6
A broker is using their prior market knowledge to place a risk with an insurer who accepts luxury log cabins.
Which insurer aspect is the broker considering?
A broker is using their prior market knowledge to place a risk with an insurer who accepts luxury log cabins.
Which insurer aspect is the broker considering?
Correct Answer: B
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QUESTION NO: 7
Peter, a broker, has been approached by a new client, Western Grocers Inc., an import-export company that distributes wholesale meats and seafood. The company has a main operating warehouse where a wide variety of products are stored. The company's president is concerned that the property insurance premiums are too high. She wants to remove the equipment breakdown coverage from the policy to save money. Discuss the information Peter would provide to the president regarding the need for an equipment breakdown insurance policy.
Peter, a broker, has been approached by a new client, Western Grocers Inc., an import-export company that distributes wholesale meats and seafood. The company has a main operating warehouse where a wide variety of products are stored. The company's president is concerned that the property insurance premiums are too high. She wants to remove the equipment breakdown coverage from the policy to save money. Discuss the information Peter would provide to the president regarding the need for an equipment breakdown insurance policy.
Correct Answer:
see the Explanation for Detailed Solution.
Explanation:
Peter should advise the president that removing equipment breakdown insurance would be a poor risk decision for a business storing meats and seafood. Western Grocers depends on refrigeration, electrical systems, compressors, motors, control panels, pressure equipment, and possibly boilers or other mechanical systems. If any of this equipment suddenly breaks down, the loss may not be covered by an ordinary commercial property policy because standard property insurance responds to insured perils such as fire or theft, not necessarily mechanical or electrical breakdown.
The largest exposure is not only repair of the damaged equipment. The more serious loss could be spoilage of refrigerated or frozen meat and seafood, interruption of warehouse operations, extra expense to move stock, emergency repairs, loss of income, customer contract problems, and reputational damage. For an import- export food distributor, even a short refrigeration failure can create a major financial loss.
Peter should explain that EBI supports business continuity by covering sudden and accidental breakdown of insured equipment and related losses, depending on policy wording. Instead of deleting coverage, Peter should recommend reviewing limits, deductibles, maintenance procedures, inspection records, and risk- control improvements to manage premium. Course topic reference: Property Coverages; Equipment Breakdown Insurance; Business Interruption; Perishable Stock; Risk Management .
Explanation:
Peter should advise the president that removing equipment breakdown insurance would be a poor risk decision for a business storing meats and seafood. Western Grocers depends on refrigeration, electrical systems, compressors, motors, control panels, pressure equipment, and possibly boilers or other mechanical systems. If any of this equipment suddenly breaks down, the loss may not be covered by an ordinary commercial property policy because standard property insurance responds to insured perils such as fire or theft, not necessarily mechanical or electrical breakdown.
The largest exposure is not only repair of the damaged equipment. The more serious loss could be spoilage of refrigerated or frozen meat and seafood, interruption of warehouse operations, extra expense to move stock, emergency repairs, loss of income, customer contract problems, and reputational damage. For an import- export food distributor, even a short refrigeration failure can create a major financial loss.
Peter should explain that EBI supports business continuity by covering sudden and accidental breakdown of insured equipment and related losses, depending on policy wording. Instead of deleting coverage, Peter should recommend reviewing limits, deductibles, maintenance procedures, inspection records, and risk- control improvements to manage premium. Course topic reference: Property Coverages; Equipment Breakdown Insurance; Business Interruption; Perishable Stock; Risk Management .
QUESTION NO: 8
Which phrase will best help an intermediary close a sale, after presenting the proposal to a client?
Which phrase will best help an intermediary close a sale, after presenting the proposal to a client?
Correct Answer: C
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