CPCU 552 Module 10 Test Bank

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1. The need for excess or umbrella liability insurance is closely related to three basic issues involved in the use of liability insurance. Those three issues include all of the following, EXCEPT:

2. Which one of the following statements is correct regarding the need for excess or umbrella liability coverage?

3. Because of the difficulty in estimating the maximum possible loss for liability claims, many insureds should consider:

4. Which one of the following statements is correct regarding excess liability insurance and umbrella liability insurance?

5. Which one of the following represents a difference between an excess policy and an umbrella liability policy?

6. A risk manager for a large manufacturing company has determined that the company needs $50,000,000 of liability insurance coverage. However, no single insurer is willing to write a $50,000,000 policy. The risk manager designed the following insurance plan:
  • ABC Insurance Company – $5,000,000 policy.
  • DEF Insurance Company – $10,000,000 policy.
  • GHI Insurance Company – $15,000,000 policy.
  • JKL Insurance Company – $20,000,000 policy.
Which one of the following represents the best description of this type of insurance plan?

7. ABC Company incurred a liability loss that is not covered under their primary liability insurance policy. Which one of the following statements is correct regarding coverages under either an excess or umbrella liability policy?

8. Which one of the following types of insurance policies provides coverage that is more broad than commercial excess liability insurance?

9. Which one of the following statements is correct regarding a following-form excess liability policy?

10. Which one of the following statements is correct regarding a self-contained excess liability policy?