Business Insurance Trivia Questions!

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  • 1/10 Questions

    This is a written form that verifies a policy has been written. It provides a summary of the coverage provided under the policy. What is it called?

    • Conditional Contract
    • Fidelity Bond
    • Certificate of Insurance
    • Claims-Made Form
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About This Quiz

Insurance is a means of protection from financial loss. It is a form of risk management, primarily used to hedge against the risk of a contingent or uncertain loss. Test your knowledge on this quiz by answering the following questions.

Business Insurance Trivia Questions! - Quiz

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  • 2. 
    The cost to replace an item of property at the time of loss, less an allowance for depreciation. - ProProfs

    The cost to replace an item of property at the time of loss, less an allowance for depreciation.

    • Actual Cash Value 

    • Absolute Liability

    • Replacement Cost

    • Apparent Authority

    Correct Answer
    A. Actual Cash Value 
    Explanation
    Actual Cash Value refers to the cost to replace an item of property at the time of loss, taking into account depreciation. This means that the value of the item is determined by considering its age, condition, and market value at the time of the loss. It is important to note that the Actual Cash Value is lower than the Replacement Cost, as it takes into account the wear and tear or depreciation of the item. Therefore, this option accurately describes the concept of Actual Cash Value.

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  • 3. 
    There is a section in any insurance policy which clarifies the meaning of certain terms used in the policy. What is this section referred to as? - ProProfs

    There is a section in any insurance policy which clarifies the meaning of certain terms used in the policy. What is this section referred to as?

    • Exclusions

    • Declarations

    • Agreements

    • Definitions

    Correct Answer
    A. Definitions
    Explanation
    The section in an insurance policy that clarifies the meaning of certain terms used in the policy is referred to as "Definitions". This section provides specific definitions for terms that may be used throughout the policy, ensuring that there is no confusion or ambiguity regarding the interpretation of these terms.

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  • 4. 
    A mutual insurance company is owned by who? - ProProfs

    A mutual insurance company is owned by who?

    • Executive Board

    • Stockholders

    • Insureds 

    • Reciprocals

    Correct Answer
    A. Insureds 
    Explanation
    A mutual insurance company is owned by the insureds. In a mutual insurance company, the policyholders are also the owners of the company. They pool their resources together by paying premiums and in return, they are provided with insurance coverage. The insureds have the power to elect the board of directors and have a say in the company's operations and decisions. The company's profits are typically returned to the insureds in the form of dividends or used to improve the company's services and offerings.

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  • 5. 
    Which of these is not an insurance company? - ProProfs

    Which of these is not an insurance company?

    • Fireman's Fund

    • Geico

    • Progressive

    • Lloyd's of London

    Correct Answer
    A. Fireman's Fund
    Explanation
    Fireman's Fund is not an insurance company because it is a subsidiary of Allianz, which is an insurance company. Fireman's Fund is a brand that specializes in providing insurance for high net worth individuals and businesses. However, it does not operate independently as its policies are underwritten by Allianz. Therefore, Fireman's Fund is not considered an insurance company itself.

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  • 6. 
    This general term is used to describe policy conditions that specify what the insured and insurer must do after a loss. - ProProfs

    This general term is used to describe policy conditions that specify what the insured and insurer must do after a loss.

    • Loss Sustained Condition

    • Loss Ratio

    • Loss Provisions 

    • Loss Conditions

    Correct Answer
    A. Loss Provisions 
    Explanation
    Loss provisions are a general term used to describe policy conditions that specify what the insured and insurer must do after a loss. These provisions outline the obligations and responsibilities of both parties in the event of a loss, such as reporting the loss, providing documentation, and cooperating with the insurer's investigation. Loss provisions help ensure that the claims process is fair and efficient, and that both the insured and insurer fulfill their obligations under the policy.

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  • 7. 
    What do you call a condition or situation that presents a possibility of loss? - ProProfs

    What do you call a condition or situation that presents a possibility of loss?

    • Speculative Risk

    • Pure Risk

    • Loss

    • Exposure 

    Correct Answer
    A. Exposure 
    Explanation
    Exposure refers to a condition or situation that presents a possibility of loss. It represents the vulnerability or susceptibility to potential risks or hazards that may result in financial or other types of losses. In this context, exposure is the most appropriate term to describe a condition or situation that poses a risk of loss.

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  • 8. 
    You own the home, but you rent it to others. What type of policy do you need? - ProProfs

    You own the home, but you rent it to others. What type of policy do you need?

    • Personal Umbrella 

    • Dwelling Fire

    • Homeowners

    • Renters

    Correct Answer
    A. Personal Umbrella 
    Explanation
    If you own a home but rent it to others, you would need a Personal Umbrella policy. This type of policy provides additional liability coverage beyond what is provided by your homeowners or dwelling fire policy. Since you are not living in the home yourself, a renters policy would not be appropriate.

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  • 9. 
    What two coverages are typically provided in Aviation policies? - ProProfs

    What two coverages are typically provided in Aviation policies?

    • Liability and Property of Others

    • Liability and Loss of Life

    • Physical Damage and Property of Others 

    • Physical Damage and Liability

    Correct Answer
    A. Physical Damage and Property of Others 
    Explanation
    Aviation policies typically provide coverage for physical damage to the insured aircraft (Physical Damage) and coverage for damage to property belonging to others (Property of Others). Physical Damage coverage protects against damage caused by accidents, while Property of Others coverage protects against damage caused to third-party property. This combination of coverages ensures that both the insured aircraft and any property that may be affected by it are protected in the event of an accident or incident.

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  • 10. 
    What is the role that insurance plays in financial planning? - ProProfs

    What is the role that insurance plays in financial planning?

    • It guarantees that income and assets are protected ✓

    • It helps build and maintain one's credit score

    • It helps cover day-to-day expenses

    • It grows in value and appreciates over time

    Correct Answer
    A. It helps cover day-to-day expenses
    Explanation
    Insurance plays a role in financial planning by helping to cover day-to-day expenses. This means that in the event of an unexpected event or emergency, insurance can provide financial support to help cover the costs of daily living expenses. This can help to ensure that individuals and families are able to maintain their financial stability and continue meeting their financial obligations even during difficult times.

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Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Mar 21, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Jul 06, 2019
    Quiz Created by
    AdewumiKoju
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