Inland Marine
Practice questions on inland marine for the property exam, each with an answer and explanation.
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Study questions and answers
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1. Which document is used to define what kinds of property may be insured under marine and inland marine policies?
- The Nationwide Marine Definition
- The Uniform Commercial Code
- The Standard Fire Policy
- The Insurance Services Office rating manual
Show answer
The Nationwide Marine Definition, developed through the NAIC, describes the classes of property that may be written as marine or inland marine insurance.
2. Which of the following would be considered an instrumentality of transportation or communication that can be covered by inland marine insurance?
- An office building
- A bridge
- Retail store stock
- A private passenger auto
Show answer
Bridges, tunnels, pipelines, piers, and radio and television towers are instrumentalities of transportation and communication under the marine definition.
3. A business's records are destroyed in a fire and it cannot collect amounts its customers owe. Which inland marine coverage pays for the uncollectible balances?
- Valuable papers and records
- Bailees customers
- Accounts receivable
- Commercial articles
Show answer
Accounts receivable coverage pays sums the insured cannot collect because records were damaged, plus collection expenses and the cost to reconstruct records.
4. A dry cleaner wants to cover customers' garments while they are in its care. Which coverage fits best?
- Bailees customers coverage
- Jewelers block
- Floor plan coverage
- Motor truck cargo
Show answer
A bailee holds property of others for service or storage. Bailees customers coverage protects customers' property in the insured's care, regardless of liability.
5. A contractor owns bulldozers and backhoes that move from job site to job site. Which coverage is designed for this equipment?
- Builders risk
- Installation floater
- Equipment breakdown
- Contractors equipment floater
Show answer
The contractors equipment floater covers mobile equipment and tools wherever they are located, including while moving between jobs.
6. A retail jeweler wants coverage for its own stock and for customers' jewelry left for repair. Which form is designed for this?
- Commercial articles
- Jewelers block
- Personal articles floater
- Signs coverage
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Jewelers block covers a jeweler's stock and property of others in its care on an open perils basis, subject to exclusions.
7. An appliance dealer's inventory was bought with a lender's financing and is held for sale. Which inland marine form covers this merchandise for both the dealer and the lender?
- Equipment dealers
- Accounts receivable
- Floor plan coverage
- Mail coverage
Show answer
Floor plan coverage insures merchandise held for sale that is financed by a lender, protecting the interests of both the dealer and the lender.
8. An electrical contractor installs a new generator at a customer's building. Which coverage protects the generator until installation is complete and accepted?
- Installation floater
- Valuable papers
- Contractors equipment floater
- Bailees customers
Show answer
An installation floater covers property the contractor is installing, from transit to the site through the time the work is accepted.
9. Motor truck cargo coverage is primarily designed to cover:
- Damage to the truck itself
- Bodily injury to the truck driver
- The trucker's liability for goods it is hauling for others
- Fuel and repair costs
Show answer
Motor truck cargo coverage protects a trucker's legal liability for damage to cargo it is carrying for customers. Physical damage to the truck is an auto coverage.