Essential Skills for the Insurance Broker and Agent

Question 1

In law, what does the term prescription mean?

A. Committing to an automatic renewal process

B. Limited time after which a cause of action ceases

C. Guidelines relating to the acceptability of a class of risk

D. Transferring of the rights for action against the responsible party to the insurer

Correct Answer: B

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Question 2

What should a broker do when selecting coverage for a client?

A. Compare wordings based on an analysis of the client's needs

B. Ensure that only standard policy wordings are used

C. Overinsure the client to protect the broker from an errors and omissions claim

D. Place the policy with the insurer that has the most legally-worded policies

Correct Answer: A

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Question 3

A tenant's negligence causes a fire in the dwelling they rent. Typically, who is initially responsible for paying the damage?

A. The dwelling's owner who is responsible for the tenant's actions

B. The tenant who negligently caused the fire

C. The insurer that issued the tenant's legal liability policy

D. The insurer that issued the homeowners policy

Correct Answer: D

Question 4

What is an agent's primary duty to the insurer?

A. Quote the client with maximum amounts of liability coverage

B. Bind the policy with the insurer they have the best relationship with

C. Provide the insurer with all relevant material facts

D. Provide the insurer with the insured's finances upon request

Correct Answer: C

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Question 5

What should the intermediary do if the person reporting the claim is not named on the insurance policy?

A. Attempt to discuss the matter with the client

B. Contact the police

C. Send the client a statement of claim

D. Ask the insurer to add the interested party as an additional insured

Correct Answer: A

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Question 6

Why is the precedent-setting case Fine's Flowers Ltd. et al. v. General Accident Assurance Co. of Canada et al. significant?

A. Defined special risks and the responsibility the insurer has to limit the intermediary's authority

B. Restructured the content of agency contracts between insurers and intermediaries

C. Outlined the intermediary's stringent duty of care owed to clients

D. Established that intermediaries will be held accountable if they provide legal advice

Correct Answer: C

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Question 7

Mikayla is an independent contractor who uses her own vehicle to deliver pizza. She is compensated by the number of pizzas she can deliver. If she is involved in an accident where she injures a third party, which coverage could respond?

A. The pizza company's non-owned automobile policy

B. Mikayla's employer's liability coverage from its tenant's legal liability

C. Mikayla's homeowners policy

D. The pizza company's professional liability policy

Correct Answer: A

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Question 8

When does a minimum retained premium apply to a policy?

A. When the insured moves the policy at renewal to another insurer

B. When the insurer cancels the policy at any time

C. When the policy has been voided for misrepresentation

D. When the insured cancels the policy midterm

Correct Answer: D

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IIC Essential Skills for the Insurance Broker and Agent - C130 Exam Practice Test

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