Insurance Licensing Updated NY-Independent-General-Adjuster Exam Questions and Answers by zian

The correct answer is A — Cargo. Marine Cargo Insurance protects goods or merchandise against covered physical loss or damage while those goods are being transported. Although historically associated primarily with ocean voyages, contemporary cargo policies can cover transit by sea, air, road, rail, or combinations of these methods.

Major marine insurers describe cargo coverage specifically as insurance for goods in transit, including movements by sea. Thus, when the exposure is physical loss of merchandise being transported over water, cargo insurance is the correct form.

“Freight,” option C, ordinarily refers to transportation charges or, in marine terminology, the financial interest associated with earning freight charges. It does not identify the insurance protecting the goods themselves. Protection and Indemnity, option D, is principally maritime liability insurance for vessel owners and operators, addressing exposures such as third-party bodily injury, property damage, crew liability, collision liabilities, and related maritime obligations. “Piracy” is a peril or specialized exposure rather than the general policy classification requested.

An independent adjuster must distinguish hull, cargo, freight, and protection-and-indemnity interests because each represents a different insurable interest within ocean marine insurance.

Therefore, goods transported over water are insured under Cargo Insurance, making A correct.

The correct answer is A. The Hired Auto and Non-Owned Auto Liability endorsement extends a Businessowners Policy's liability protection to specified automobile exposures that otherwise fall within the BOP's auto exclusion.

A non-owned auto is generally an automobile the business does not own, lease, hire, rent, or borrow but that is used in connection with the business. An employee's personally owned automobile being used for company business is the classic example. New York BOP rating material describes Non-Owned Auto Liability as protection for automobiles not owned, borrowed, or hired by the insured, while court decisions applying the endorsement confirm coverage for bodily injury or property damage arising from use of qualifying non-owned autos in the business.

Technically, the endorsement principally protects the business's liability arising from that use; it should not be interpreted as automatically providing personal liability or physical-damage protection to the employee-owner of the vehicle.

Options B, C, and D involve a company-owned automobile. A business-owned van or auto normally requires appropriate commercial automobile insurance and does not become a hired or non-owned auto simply because an employee or customer is driving it.

The Series 17-70 outline specifically includes Businessowners coverage and associated liability concepts.

Therefore, A is correct.

The correct examination answer is D — Franchise auto dealer. The traditional ISO Garage Coverage Form was developed specifically for automobile dealerships and related garage operations because such businesses combine exposures arising from owned autos, customers' autos, premises operations, products/completed operations, and automobile liability.

Under the legacy Garage Coverage Form used in the Series 17-70 commercial-auto syllabus, franchised and nonfranchised automobile dealerships are classic eligible garage operations. The Series 17-70 outline expressly identifies the Garage Coverage Form, Garagekeepers Coverage, liability coverage, physical damage, exclusions, conditions, and definitions as tested commercial-auto subjects.

A moving company is ordinarily handled through commercial auto/motor-carrier arrangements. An auto-parts store does not automatically create the combined dealership exposure contemplated by a garage form. A purely self-service carwash also does not present the same dealer exposure identified by the question.

There is an edition issue worth understanding: ISO replaced the dealer portion of the older CA 00 05 Garage Coverage Form with the modern CA 00 25 Auto Dealers Coverage Form beginning with its 2013 commercial-auto revision. Current Auto Dealers eligibility expressly includes franchised automobile dealerships. The Series 17-70 outline, however, explicitly tests the 2010 commercial-auto Garage form.

Therefore, for this examination, D is correct.

The correct answer is C. Employment Practices Liability Insurance (EPLI) is specifically designed to address claims arising from wrongful employment-related conduct. Core exposures include wrongful termination, workplace discrimination, sexual harassment, retaliation, and other specified employment practices. Current EPLI coverage descriptions expressly identify discrimination, harassment, and wrongful termination as principal covered allegations.

Option A is incorrect because EPLI may be written as a standalone policy or incorporated within broader management-liability programs. It is not restricted to being an endorsement to Directors and Officers insurance.

Option B is incorrect because the standard Commercial General Liability policy is not basic professional or employment-practices liability insurance. In fact, many employment-related practices exposures are specifically excluded or inadequately addressed under conventional CGL coverage.

Option D concerns occupational bodily injury. An employee physically injured in the course of employment would ordinarily look to Workers Compensation and Employers Liability, not EPLI. EPLI primarily addresses wrongful employment decisions and conduct rather than workplace accident injuries.

The adjuster must therefore distinguish an employment-practices wrongful act from an employment-related bodily injury. One is principally a management/professional liability exposure; the other is a Workers Compensation/employers liability exposure.

Therefore, C accurately describes the purpose of EPLI.