2023 CIC Commercial Multiline Exam with Answers (110 Solved Questions)

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CIC Commercial Multiline Exam 2023Identify and describe the three primary purposes of excess liability/umbrella policies (LO1) -ANSWER1. Provide additional limits that are excess over underlying limits of insurance2. Provide primary coverage when underlying poliy does not respond beacuse its aggregatelimits of insruance are exhausted.3. Provide broader coverage than the exsiting underlying insuranceexcess liability coverage forms and commercial umbrella liability policy - ANSWER1. followforms- hella short- "basically what underlying says but more money"- does NOT provide broader coverage2. excess liability- own insuring agreement and stuff- could be the same, narrower, broader3. commercial umbrella liability policy- own insuring agreement and stuff- broader coverageDefine "Self-Insured Retention" (SIR) and apply it (LO2) - ANSWERSIR is the dolllar amountlisted in the declarations paid by the named insured before the excess insurance becomesapplicableApplies only when the excess policy provide broader insurance protectionDoes not apply when the umbrella drops down over exhausted limits or when exceee overunderlying limits.SIR may be written per occurrence or policy period basisExplain the importance of concurrent dates and be able to provide solutions fornon-concurrency situations (LO3) - ANSWERConcurrent dates means the policy period of

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the excess/umbrella policy are the same as those of the underlying insurance policiesThe declarations of the excess liability has a schedule of underlying insurance that indicatesthe required limits that are to be in effect at its effective date.The underlying limits must be unimpaired at the effective debate of the excess liabilityDescribe the underlying insurance requirements of excess liability/commercial umbrellapolicies and apply the in a practical applications. (LO4)*** - ANSWERCoverageMost insures typically require CGL, Business Auto and Employer LiabilityOther liability policies may be required for other known exposure such as aircraft, Iiquorliability, watercraftLimits of Insruancelimits required by varies by insurerSome exposures require higher underlying limitsThe required limits must be in full effect at the effective date of the policy periodCompare and contract the insuring agreement known as pay on behalf and indemnify (LO5) -ANSWERPay on Behalf of- The insure has stricter control of defense, investigation or settlements- The insurer pays damages directly to third party on behalf of-The insure has the duty to defend when the underlying does not provide coverageIndemnify- strict indemnity (insured uses their own funds directly to pay claims and insurer reimburses)- based on legal obligations to pay (insured still has control but indemnity is based on legalobligation to pay - insurer write checks to insured)types of damages, defense costs, and ultimate net loss in Excess liability and umbrella policieswhat is the coverage area - ANSWERdamages- follow form follows underlying- excess liability/commercial umbrella (pay because of bodily injury and property damage asdefined or pays because of personal advertising injury as defined)

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defense- duty to defend- not duty to defend in some cases (still right to defend)- defense cost included within the SIR is often referred to as first dollar defenseultimate net loss (different ways to pay this- what the court says must be paid)- all sums paid or payable in settlement- all sums paid or payable as damagescoverage area- worldwide or anywhere in universe, could also be limitedexclusions for excess and umbrella - ANSWER- aircraft- watercraft- contractual liability- liquor liability- pollution- damage to property- damage to your work- imparted property- electronic data liability- professional- uninsured and underinsured motorists- Employment related practiceslayering options for excess liability and umbrella policies - ANSWER1. single2. layering3. quota share4. buffer layer

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Identify common cyber exposures (LO1) - ANSWER- data storage both active and at rest- collection of private information on employees, clients, vendors, etc- A website and or social media presence- Access to the internet and integration, sharing or transmission of dates and/orcommunications with others vita the internet- E-commerce business transactions- Credit card transactions- E&O or professional liability- Internet of Things- Subject to State and Federal Lawsreasons for cyber coverage - ANSWER- everyone uses the internet- for those who have data in their CCC- the policies are flexiblecoverage for cyber includes assets and intellectual propertyPossible third party losses (not all covered by insurance) - ANSWER- Unintended disclosureof information- Disclosure of incorrect or damaging information or information that could result in aviolation of privacy.- Infringement of copyright, intellectual property rights, etc....- Publications that slander, libel, or disparage- Transmittal of a virus, malicious code, malware, ransom ware- Access and disclosure by and unauthorized user- Denial of service (DoS) attack or DDos (distributed denial of service)- Programming errors- Data entry errors

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- Liability claims/lawsuits alleging violation of state, federal and other country statutes,especially those associated with non-personally identifiable financial, health of other sensitiveinformation.what are DOS and DDOS - ANSWERDOS (denial of service)- attack from one source toprevent access to computer systemDDOS (distributed denial of service)-attack from more than one source or/and more than onelocation at the same timePossible first part losses (not all covered by insurance) - ANSWER- a security breachtypically results in costs/expenses to investigate the source- virus can result in loss of or damage to electronic data- ransomware infection- unauthorized user could make an extortion demand (cyber extortion)- malware then you have to clean the website- unauthorized person can cause vandalism- if personal or confidential files are breached, cost to notify affected parties- security breaches that result in loss of income, expenses tot minimize a businessinterruption, loss to income due to reputation- theft of intellectual property- computer fraud- losses as a result of social engineering (voluntary party using a computer system)- DOS or DDOS to a website or social media that results in loss of income- costs due to mechanical breakdown and physical causeIdentify and apply the common exclusion or limitation in the ISO BOP policy. - ANSWERElectronic data is not covered property, except as provided under additional coverage.Identify and Describe the type of cyber insurance coverage that are available for first partylosses (LO4) - ANSWER1. Security Breach Expense

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A. Typically includes the costs to notify affected parties and may also include the cost toinvestigate the cause of a security break.B. May also provide for other reasonable expenses sud as identify theft protections or creditmonitoring.2. Business Income and Extra ExpenseA. Pays for loss due to an interruption to the named insureds computer system resultingfrom a cyber-related event.3. Security Breach Liability (ONLY THIRD PART INSURING AGREEMENT COVERAGE)a. pays loss for legal obligations and defense expense as a result of a claim for a wrong act orseries of them and in the even of a regulatory proceeding4. Extortion Threat, Ransom or Reward PaymentA. Pays for loss due to an extortion threat5. Public Relations Expense (Crisis Management Expense)A. Pays for the cost of retaining a public relations firm to protect or restore the namedinsured reputation due to negative publicity resulting directly from a cyber-related event orsecurity breach.6. Replacement or Restoration of Electronic DataA. Typically pays for cost to replace or restore the named insured's electronic data.Identify who is an insured under the ISO commercial Cyber Insurance Policy (LO5) - ANSWERNamed InsuredNamed Insured former, current, and future employeesSubsidiary employees but only while acting with the scope of their dutiesSome may include independent contractors or per written contract.Identify and apply the insuring agreements under the ISO commercial cyber insurance policyto a loss (LO6) - ANSWERSix Insuring Agreements:Security Breach Expense

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Extortion ThreatsReplacement or Restoration of Electronic DataBusiness Income and Extra ExpensePublic Relations ExpenseSecurity Breach Liability (Third Party)Extortion Threat (LO6) - ANSWERa threat to-perpetrate a cyber incident- disseminate, divulge info or weakness- destroy, corrupt, or prevent access- inflict ransomware- publish personal informationExtra Expense does not include (LO6) - ANSWER1.Upgrading, maintaining, repairing, remediating or improving a computer system as a result of a cyber incidents or extortion threat2. Expenses covered un insurance agreement agreement 2 - extortion threat.Security Breach - ANSWER- does not include confidential corporation information in theCCC of the insured- person not authorized has access to personal information- authorized person uses personal information in an unauthorized wayIdentify and apply the limits of insurance provision under the ISP commercial cyber insurancepolicy to a loss. (LO7) - ANSWERPolicy Aggregate Limit of InsuranceThe most paid is the limit shown on deceleration page.The insurer's obligation or liability of any kind ends when the policy aggregate limit ofinsurance has been exhaustedAggregate Sublimit(s) of InsuranceSubject to policy add grease limit of insurance

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Sublimit(s) shown in the dec page are not in addition to the policy aggregate limit ofinsuranceThe insurer's obligation of liability of any kind ends when the aggregate Sublimit has beenexhaustedIdentify and apply the deductibles of insurance provision under the ISP commercial cyberinsurance policy to a loss. (LO7) - ANSWERInsurance Agreement 1, 2, 3, and 5 pays only theamount of loss in excess of the policy deductible amount shown in the declarationsUnder insuring agreement 4 business income and extra expense pays only the amount of lossthat exceeds the greater of the deductible show or the amount of loss incurred the timedeductibleUnderinsuring agreement 5 security breach liability pays only the amount of loss and defenseexpense in excess of policy deductible amount shown in the declarationsOnly the highest deductible amount applies in the even a loss is covered under more than oneinsuring agreement.Identify and apply the defense and settlement provision under the ISO commercial cyberinsurance policy (LO8) - ANSWEROnly applies to insuring agreement 6 Security BreachLiabilityInsurer has the right and duty to defendNo coverage no defenseDefense expenses are payable within and not in addition to the limitsIdentify and apply the exclusions under the ISO commercial cyber insurance policy. - ANSWERExclusions are numerous and vary by insurerLighting earthquake, hail, volcanic action or other acts of nature,War warlike action or insurrectionPatogenic biological or chemical materials nuclear radiation

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Bodily injury or physical damage to or destruction of tangible property including loss of useUnexplained or indeterminable failure malfunction or slowdown of the computer system orinability to access electronic dataAny disruption due to insufficient capacity to process transaction or due to an overload ofactivity on computer system or network other than a cyber incident.Any disruption of internet service or external telecommunication networkFailure of reduction in or surge powerViolation of RICO and its amendments of similar lawMalfunction or failure of any atelierOral of written material published with knowledge of falsityContractual liability*****Patent or trade secret violationsPollutions or pollution related hPrior or pending claimsEmployment practices related liabilityAwareness that any insured had prior to the effective date of the policyconditions found in cyber policies by the insured and insurer before, during, and after a claimor loss - ANSWER- subrogation- representations (must be correct)- changes in exposure (acquisitions or creation of organization, acquisition of named insured,cessation of subsidiaries)- other insurance (may be excess coverage)- separation of insureds (2 named insureds for ex)- duties in the event of claim or loss- valuation (USD)

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- confidentiality (cannot say you have extortion coverage)- territory (worldwide, limited worldwide, universe)Identify and describe the sources of liability that can result in an employee not-relatedpractices claim. (LO1) - ANSWERA. Workplace Torts- Workplace torts may be based on negligence(reasonable person: foreseeability) orintentional torts- Preserves full right of action if a federal case falters- Too many think it is only a federal issue and "right-to-work" protect them in certain statesB. Breach of Contract- Written contacts (including employment contract and collective bargaining agreements)- Implied contracts (job offer letter, employee manual, oral promises, evaluations, tenure)C. Violation of Statutes Regarding Employment Practices- some small businesses are exemptExamples of workplace torts (LO1) - ANSWER- Bullying, humiliation or other types ofinfliction of emotional distress- Invasion of privacy- Coercion- Libel, slander, defamation of character- Negligent hiring practices- Negligent supervision- Retaliation- Wrongful or negligent evaluations, criticism, demotions, discipline

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- Wrongful detention or imprisonment- Wrongful terminationDetermine whether a person or organization qualifies as an insured person in the event of aclaim situation and whether an exclusion or limitation applies (LO2) - ANSWERNamedInsured Organization indicated on the declarationsInsured PersonsDirectors, officers trustees of the organizationEmployeesVolunteer or an internIndependent contractorsIdentify the key elements in an employment practices liability insurance policy insuringagreement. (LO3) - ANSWER1. Pays sums the insured becomes legally obligated to pay asdamages2. Resulting from a "wrongful act"3. Right and duty to defend any "suit" seeking damages for wrongful act4. Consent to settleDescribe the insurance protection that may be provided for liability to third parties under andEPLI policy. (LO4) - ANSWER1. EPLI policies are typically written to provide coverage forclaims filed by employees.2. Coverage may not apply to a claim against the insured by a third party. Which are usuallyindividuals that the business have contact with such as customer clients, vendors, contractors,volunteers ....3. Some EPLI policies provide this coverage by endorsement while the majority of coverageforms have a sepearte insuring agreement for third party liability.4. Coverage may be limited to only certain types of third parties and not all third parties.

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5. BEWARE coverage may be limited to certain wrongful acts such as discrimination and/orharassment claims.exclusions for EPLI - ANSWER- criminal, fraud, malicious acts- contractual liability- workers comp, disability benefits, and similar laws- violations of certain federal acts- strikes and lockouts- prior or pending litigation- prior events or activities- wage and hour violationsApply the definition of wrongful act as contained in an EPLI policy. (LO5) - ANSWERManycoverage broad range of wrongful acts, but each policy defines (named peril coverage)wrongful acts no standard definition may include:DiscriminationSexual HarassmentRetaliationWrongful terminationWrongful employment practicesBreach of employmentFailure to grant tenureWorkplace tort

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