ICS01 Principles and Practice of Insurance and Survey and Loss Assessment Mock Test 20
These questions cover important concepts in insurance claims, salvage management, stock valuation, surveyor skills, profits policies, products liability, crime insurance, marine hull insurance, risk, and insurable interest. Key areas include factors affecting claim admissibility, the meaning and importance of “As is, where is” in salvage sales, and valuation of stocks based on the type of business. The questions also examine communication skills required by surveyors to resolve disputes, standing charges under profits policies, indemnity provided by Products Liability Insurance, factors used to determine Crime Insurance rates, types of vessels covered under Marine Hull Insurance, the broad meaning of risk, and insurable interest between spouses.
Q1. Which of the following is NOT a factor affecting the admissibility of a claim?
a) Verification of policy contents
b) Verification of multiple coverage by different policies
c) Operation of exclusions
d) Examination of warranties
e) Calculation of depreciation
Q2. What is the significance of the "As is, where is" basis in the sale by tender system?
a) It allows negotiation between the seller and buyer.
b) It ensures the salvage is sold at the highest market price.
c) It provides an opportunity for buyers to inspect the salvage.
d) It protects the seller from any legal disputes.
e) It guarantees a fixed selling price for the salvage.
Q3. What aspect affects the basis of valuation for stocks/merchandise in insurance policies?
a) The historical cost of the items
b) The emotional attachment of the policyholder
c) The type of insurance policy purchased
d) Whether the goods are manufacturer's, wholesaler's, or retailer's stocks
e) The depreciation rate of the items
Q4. Which of the following skills is crucial for a surveyor to effectively resolve disputes between the insurer and the insured?
a) Conflict avoidance and evasion tactics
b) Assertiveness and dominance in negotiations
c) Active listening and empathy
d) Intimidation and coercion techniques
e) Passive compliance and acquiescence to insurer demands
Q5. Which of the following is an example of a standing charge in a profits policy?
a) Sales revenue
b) Purchase of raw materials
c) Salaries to permanent staff
d) Variable production costs
e) Marketing expenses
Q6. What does a Products Liability Policy provide indemnity for?
a) Legal liability for injury or damage to property arising out of defects in specified products
b) Legal liability for injury or damage to property caused by pollution
c) Costs of repair or replacement of defective products
d) Claims for failure of products to fulfill their purpose
e) Legal liability for injury or damage to property during transportation
Q7. How are rates for Crime Insurance typically determined?
a) Based on the insured property value.
b) Based on the geographical location of the insured premises.
c) Based on the extent of employee wages.
d) Based on the number of employees.
e) Based on the insured's credit score.
Q8. Which types of vessels are covered under Marine Hull Insurance?
a) Only ocean-going ships
b) Only fishing vessels and sailing vessels
c) Only inland vessels like barges and pontoons
d) Various types including fishing vessels, sailing vessels, inland vessels, and dredgers
e) Only jetties, pontoons, and wharves
Q9. What is the broad sense of the term "risk"?
a) Exposure to danger
b) Chance of bad consequences
c) Exposure to mischance
d) Exposure to events which cannot be predicted with absolute certainty
e) Hazardous situations
Q10. In which scenario is a husband and wife's relationship considered to constitute insurable interest?
a) Any financial transaction
b) In the event of an accident
c) In all insurance policies
d) Only in personal accident policies
e) Only in life insurance policies
