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

Name: 2023 CIC Commercial Multiline Exam with Answers (110 Solved Questions)
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CIC Commercial Multiline Exam 2023
Identify and describe the three primary purposes of excess liability/umbrella policies (LO1) -
ANSWER 1. Provide additional limits that are excess over underlying limits of insurance
2. Provide primary coverage when underlying poliy does not respond beacuse its aggregate
limits of insruance are exhausted.
3. Provide broader coverage than the exsiting underlying insurance
excess liability coverage forms and commercial umbrella liability policy - ANSWER 1. follow
forms
- hella short
- "basically what underlying says but more money"
- does NOT provide broader coverage
2. excess liability
- own insuring agreement and stuff
- could be the same, narrower, broader
3. commercial umbrella liability policy
- own insuring agreement and stuff
- broader coverage
Define "Self-Insured Retention" (SIR) and apply it (LO2) - ANSWER SIR is the dolllar amount
listed in the declarations paid by the named insured before the excess insurance becomes
applicable
Applies only when the excess policy provide broader insurance protection
Does not apply when the umbrella drops down over exhausted limits or when exceee over
underlying limits.
SIR may be written per occurrence or policy period basis
Explain the importance of concurrent dates and be able to provide solutions for
non-concurrency situations (LO3) - ANSWER Concurrent dates means the policy period of

the excess/umbrella policy are the same as those of the underlying insurance policies
The declarations of the excess liability has a schedule of underlying insurance that indicates
the 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 liability
Describe the underlying insurance requirements of excess liability/commercial umbrella
policies and apply the in a practical applications. (LO4)*** - ANSWER Coverage
Most insures typically require CGL, Business Auto and Employer Liability
Other liability policies may be required for other known exposure such as aircraft, Iiquor
liability, watercraft
Limits of Insruance
limits required by varies by insurer
Some exposures require higher underlying limits
The required limits must be in full effect at the effective date of the policy period
Compare and contract the insuring agreement known as pay on behalf and indemnify (LO5) -
ANSWER Pay 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 coverage
Indemnify
- 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 legal
obligation to pay - insurer write checks to insured)
types of damages, defense costs, and ultimate net loss in Excess liability and umbrella policies
what is the coverage area - ANSWER damages
- follow form follows underlying
- excess liability/commercial umbrella (pay because of bodily injury and property damage as
defined or pays because of personal advertising injury as defined)

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 defense
ultimate 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 damages
coverage area
- worldwide or anywhere in universe, could also be limited
exclusions 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 practices
layering options for excess liability and umbrella policies - ANSWER 1. single
2. layering
3. quota share
4. buffer layer

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/or
communications 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 Laws
reasons for cyber coverage - ANSWER - everyone uses the internet
- for those who have data in their CCC
- the policies are flexible
coverage for cyber includes assets and intellectual property
Possible third party losses (not all covered by insurance) - ANSWER - Unintended disclosure
of information
- Disclosure of incorrect or damaging information or information that could result in a
violation 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

- Liability claims/lawsuits alleging violation of state, federal and other country statutes,
especially those associated with non-personally identifiable financial, health of other sensitive
information.
what are DOS and DDOS - ANSWER DOS (denial of service)- attack from one source to
prevent access to computer system
DDOS (distributed denial of service)-attack from more than one source or/and more than one
location at the same time
Possible first part losses (not all covered by insurance) - ANSWER - a security breach
typically 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 business
interruption, 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 cause
Identify and apply the common exclusion or limitation in the ISO BOP policy. - ANSWER
Electronic 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 party
losses (LO4) - ANSWER 1. Security Breach Expense

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A. Typically includes the costs to notify affected parties and may also include the cost to
investigate the cause of a security break.
B. May also provide for other reasonable expenses sud as identify theft protections or credit
monitoring.
2. Business Income and Extra Expense
A. Pays for loss due to an interruption to the named insureds computer system resulting
from 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 or
series of them and in the even of a regulatory proceeding
4. Extortion Threat, Ransom or Reward Payment
A. Pays for loss due to an extortion threat
5. Public Relations Expense (Crisis Management Expense)
A. Pays for the cost of retaining a public relations firm to protect or restore the named
insured reputation due to negative publicity resulting directly from a cyber-related event or
security breach.
6. Replacement or Restoration of Electronic Data
A. 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) - ANSWER
Named Insured
Named Insured former, current, and future employees
Subsidiary employees but only while acting with the scope of their duties
Some may include independent contractors or per written contract.
Identify and apply the insuring agreements under the ISO commercial cyber insurance policy
to a loss (LO6) - ANSWER Six Insuring Agreements:
Security Breach Expense

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Extortion Threats
Replacement or Restoration of Electronic Data
Business Income and Extra Expense
Public Relations Expense
Security Breach Liability (Third Party)
Extortion Threat (LO6) - ANSWER a threat to
-perpetrate a cyber incident
- disseminate, divulge info or weakness
- destroy, corrupt, or prevent access
- inflict ransomware
- publish personal information
Extra Expense does not include (LO6) - ANSWER 1.Upgrading, maintaining, repairing, re
mediating or improving a computer system as a result of a cyber incidents or extortion threat
2. Expenses covered un insurance agreement agreement 2 - extortion threat.
Security Breach - ANSWER - does not include confidential corporation information in the
CCC of the insured
- person not authorized has access to personal information
- authorized person uses personal information in an unauthorized way
Identify and apply the limits of insurance provision under the ISP commercial cyber insurance
policy to a loss. (LO7) - ANSWER Policy Aggregate Limit of Insurance
The most paid is the limit shown on deceleration page.
The insurer's obligation or liability of any kind ends when the policy aggregate limit of
insurance has been exhausted
Aggregate Sublimit(s) of Insurance
Subject 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 of
insurance
The insurer's obligation of liability of any kind ends when the aggregate Sublimit has been
exhausted
Identify and apply the deductibles of insurance provision under the ISP commercial cyber
insurance policy to a loss. (LO7) - ANSWER Insurance Agreement 1, 2, 3, and 5 pays only the
amount of loss in excess of the policy deductible amount shown in the declarations
Under insuring agreement 4 business income and extra expense pays only the amount of loss
that exceeds the greater of the deductible show or the amount of loss incurred the time
deductible
Underinsuring agreement 5 security breach liability pays only the amount of loss and defense
expense in excess of policy deductible amount shown in the declarations
Only the highest deductible amount applies in the even a loss is covered under more than one
insuring agreement.
Identify and apply the defense and settlement provision under the ISO commercial cyber
insurance policy (LO8) - ANSWER Only applies to insuring agreement 6 Security Breach
Liability
Insurer has the right and duty to defend
No coverage no defense
Defense expenses are payable within and not in addition to the limits
Identify and apply the exclusions under the ISO commercial cyber insurance policy. - ANSWER
Exclusions are numerous and vary by insurer
Lighting earthquake, hail, volcanic action or other acts of nature,
War warlike action or insurrection
Patogenic biological or chemical materials nuclear radiation

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Bodily injury or physical damage to or destruction of tangible property including loss of use
Unexplained or indeterminable failure malfunction or slowdown of the computer system or
inability to access electronic data
Any disruption due to insufficient capacity to process transaction or due to an overload of
activity on computer system or network other than a cyber incident.
Any disruption of internet service or external telecommunication network
Failure of reduction in or surge power
Violation of RICO and its amendments of similar law
Malfunction or failure of any atelier
Oral of written material published with knowledge of falsity
Contractual liability*****
Patent or trade secret violations
Pollutions or pollution related h
Prior or pending claims
Employment practices related liability
Awareness that any insured had prior to the effective date of the policy
conditions found in cyber policies by the insured and insurer before, during, and after a claim
or 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-related
practices claim. (LO1) - ANSWER A. Workplace Torts
- Workplace torts may be based on negligence(reasonable person: foreseeability) or
intentional 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 states
B. 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 exempt
Examples of workplace torts (LO1) - ANSWER - Bullying, humiliation or other types of
infliction 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 termination
Determine whether a person or organization qualifies as an insured person in the event of a
claim situation and whether an exclusion or limitation applies (LO2) - ANSWER Named
Insured Organization indicated on the declarations
Insured Persons
Directors, officers trustees of the organization
Employees
Volunteer or an intern
Independent contractors
Identify the key elements in an employment practices liability insurance policy insuring
agreement. (LO3) - ANSWER 1. Pays sums the insured becomes legally obligated to pay as
damages
2. Resulting from a "wrongful act"
3. Right and duty to defend any "suit" seeking damages for wrongful act
4. Consent to settle
Describe the insurance protection that may be provided for liability to third parties under and
EPLI policy. (LO4) - ANSWER 1. EPLI policies are typically written to provide coverage for
claims filed by employees.
2. Coverage may not apply to a claim against the insured by a third party. Which are usually
individuals 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 coverage
forms 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/or
harassment 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 violations
Apply the definition of wrongful act as contained in an EPLI policy. (LO5) - ANSWER Many
coverage broad range of wrongful acts, but each policy defines (named peril coverage)
wrongful acts no standard definition may include:
Discrimination
Sexual Harassment
Retaliation
Wrongful termination
Wrongful employment practices
Breach of employment
Failure to grant tenure
Workplace tort

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