ICS01 Principles and Practice of Insurance and Survey and Loss Assessment Mock Test 15

Q1. What is the source document for recording goods returned to the supplier in the Purchase Returns Book?

a) Invoice
b) Debit Note
c) Credit Note
d) Cash Receipt
e) Payment Voucher

Q2. Which extension applies if the insured building becomes unfit for occupation due to damage by an insured peril?

a) Spoilage Material Damage
b) Leakage and Contamination
c) Start-up Expenses
d) Loss of Rent
e) Additional expenses for Alternate accommodation

Q3. In what circumstance is the Bankers Indemnity Policy not liable to cover losses?

a) Losses caused by the negligence of bank employees
b) Losses due to trading activities of the bank
c) Losses caused by natural disasters
d) Losses arising from fraudulent use of computer programs
e) Losses resulting from theft of goods hypothecated to the bank

Q4. Which additional risks can be covered on payment of extra premium?

a) Theft and burglary
b) Natural disasters
c) War, strikes, riots, and civic commotion (S.R.C.C.)
d) Fire and explosion
e) Cyberattacks

Q5. In insurance proposal forms, what is the effect of the declaration regarding the accuracy of the information provided?

a) It converts representations into warranties
b) It invalidates the contract entirely
c) It reduces the insurer's liability
d) It transfers the risk to the policyholder
e) It imposes additional premiums on the policyholder

Q6. What distinguishes pure risks or static risks from other types of risks?

a) Pure risks occur with a degree of regularity and are generally predictable based on past experience and statistical techniques.
b) Pure risks occur randomly and are unpredictable.
c) Pure risks are always avoidable.
d) Pure risks are always covered by insurance policies.
e) Pure risks always result in profit.

Q7. What happens if the original insured had committed a breach of utmost good faith?

a) The assignee is not affected by the breach
b) The insurer must pay the claim without considering the breach
c) The insurer can raise that defence against claims preferred by the assignee
d) The assignee can sue the insurer for damages
e) The policy is automatically cancelled

Q8. What is the measure of indemnity for machinery damaged in a fire, according to insurance practices?

a) Selling price of new machinery
b) Original purchase price of the machinery
c) Replacement price at the place and time of fire, less depreciation
d) Cost of repairs
e) Market value at the time and place of the fire

Q9. According to the text, how does the legal doctrine of proximate cause define "proximate"?

a) Proximate in time
b) Proximate in space
c) Proximate in efficiency
d) Proximate in quantity
e) Proximate in value

Q10. What is considered a general average act according to Section 66 (2) of the Act?

a) Any loss incurred during a voyage
b) Any expenditure made by the ship owner
c) Any extraordinary sacrifice or expenditure made voluntarily and reasonably in time of peril to preserve the imperiled property
d) Any loss caused by natural disasters
e) Any loss of cargo during transportation