Wisconsin Property & Casualty Insurance License Exam — All Questions

Commercial General Liability (CGL) coverage most typically protects a business against:

• a.Third-party bodily injury and property damage claims arising from its operations, products, or premises✓
• b.Damage to the business's own building
• c.Injuries to its own employees on the job
• d.Loss of the business's own inventory to fire

Commercial General Liability covers a business's legal liability to third parties for bodily injury and property damage arising from its premises, operations, products, and completed work, plus personal and advertising injury. Damage to the company's own building or inventory is covered by commercial property insurance, and on-the-job injuries to the company's employees are handled by workers compensation, not CGL.

A Businessowners Policy (BOP) is best described as:

• a.A standalone workers compensation policy
• b.A package policy combining property and liability coverage for eligible small to mid-sized businesses✓
• c.A policy that covers only commercial auto exposures
• d.A life insurance product for business owners

A Businessowners Policy is a packaged commercial policy that bundles commercial property and general liability coverage (and often business income) tailored for eligible small and mid-sized businesses. It is convenient and cost-effective but has eligibility restrictions. Workers compensation and commercial auto are generally written separately, not inside a BOP.

Business income (business interruption) coverage is designed to pay for:

• a.Physical repairs to the damaged building only
• b.Liability claims from customers
• c.The cost of replacing stolen inventory
• d.Lost net income and continuing expenses while operations are suspended by a covered loss✓

Business income coverage replaces the net income the business would have earned and pays continuing normal operating expenses (such as payroll and rent) during the period of restoration after a covered physical loss suspends operations. It addresses the indirect financial consequences of a loss, complementing the direct property coverage that pays to repair or replace the damaged property itself.

An inland marine policy is typically used to cover:

• a.Movable or transportable property and property in transit over land✓
• b.Ocean-going cargo on international voyages only
• c.A building's permanent foundation
• d.An employee's health expenses

Inland marine coverage evolved from ocean marine to insure property that moves over land or is otherwise mobile or in transit, as well as certain fixed property tied to transportation or communication (such as bridges) and hard-to-value items like fine art and contractors' equipment. Ocean marine covers vessels and cargo on the water; buildings and employee health are covered by other lines.