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1.

TRANSFER OF RISK IS CALLED INSURANCE


2. FIRE COVERS 12 PERILS
3. FIRE MEANS… OTHER THAN SPONTANEOUS COMBUSTION, OTHER THAN
SUBSTANCE OF INHERENT IN NATURE, OTHER THAN OWN FERMENTATION
4. WE CAN AVOID , FIRE, BY REMOVING SOURCE OF IGNITION.
5. EXPLOSION/IMPLOSION (OTHER THAN INDUSTRIAL BOILER)..MEANS ONLY
DOMESTIC BOILER IS COVERED
6. SPONTANEOUS COMBUSTION 2 TYPES: NON FIRE DAMAGES & FIRE
DAMAGES
7. SPRINKLER INSTALLATION DAMAGE DUE TO REPAIRING OF BUILDING
NEARBY IS NOT PAYABLE IN FIRE CLAIM
8. WE CANNOT REDUCE THE NUMBER OF PERILS NOT BELOW 10 (EVEN IT IS
DETARIFF)
9. FIRE DETARIFF FROM : 01.01.2007 *PRICE REDUCTION IS DONE
10. FROM -1.4.08 – PRODUCT VARIATION
11. CASH – SPECIFICALLY MENTIONED ONLY IS COVERED
12. SUM INSURED IN FIRE : MARKET VALUE
13. WE CANNOT INSURED FOR : CAPITAL COST (IT SHOULD INCLUDE LAND
VALUE ALSO)
14. WE CANNOT INSURED FOR : BOOK VALUE/AUDITED ACCOUNTS COST
ALSO
15. FIRE POLICY COVERS ONLY SUPERSTRUCTURE OF THE BUILDING
16. STOCKS INSURED BY INVOICE VALUE
17. FIRE POLICY CAN BE INSURED AS VALUED POLICY FOR : VERY OLD
MACHINERY … MEANS MARKET VALUE CANNOT BE ASCERTAINED.
18. PROPORTIONATE PREMIUM : MEANS.. PRO-RATA PREMIUM
19. CANCELLATION IN FIRE POLICY: 15 DAYS NOTICE PERIOD
20. INSURED SHOULD INTIMATE THE INSURER TO REINSTATE OR
REPAIR(WITHIN 30 DAYS)
21. ARBITRATION CLAUSE ARISES ONLY IF LIABILITY IS ADMITTED
22. DIFF. IN DISPUTES IN QUANTUM ONLY REFERRED TO ARBITRATION
23. ELECL. INSTALLATION… FORMING PART OF BUILDING SUM INSURED
24. PROFIT PORTION NOT TO BE INCLUDED IN SFPP
25. LOCAL AUTHORITIES CLAUSE INCLUDES: SOLAR PANEL/RAIN WATER
HARVESTING
26. RIV POLICY : MODIFIED INDEMNITY POLICY
27. ESCALATION CAN BE GIVEN INCONJUCTION WITH RIV POLICY: FALSE
28. IN BOTH RIV & ESCALATION: ..NO STOCK IS COVERED
29. ESCALATION SUM: SUM INSURED: RS.10,00,000 , ESC: 25%,
25/100 X 10,00,000 = 250000 , PREMIUM CHARGED AS 50% OF APPLICABLE
RATE
30. IN RIV POLICY : UNDER INSURANCE APPLICABLE (MEANS ADEQUATE SI TO
BE MENTIONED)
IC-57 FIRE AND CONSEQUENTIAL LOSS
INSURANCE CHAPTER 2
26/11/2018

We are providing FIRE-Chapter-02 MCQ questions which helps in all insurance promotional
exams as well as in III examination Licentiate Associate Fellowship.

IC-57 FIRE AND CONSEQUENTIAL LOSS INSURANCE

CHAPTER 2

ADD ON COVERS AND SPECIAL POLICIES

1. Sum Insured of Add On Peril should be

A. 50% of Basic Sum Insured

B. 10% of Basic Sum Insured

C. Same As Basic Sum Insured

D. Any of Above

2. Spontaneous Combustion Covers Damages

A. Fire Only

B. All Perils

C. Fire and Shock

D. All of Above

3. Earthquake cover granted

A. If Entire property in one complex / compound only.

B. If property is on different locations


C. If stock is in godown only

D. If stock is in open only

4. Earthquake clause does not cover the losses covered by

A. RSMD

B. STFI

C. Impact Damage

D. None of Above

5. Acronyms of FLEXA is

A. Fire Loss Excess Amount

B. Fire Lightning Excess Amount

C. Fire Lightning Explosion Aircraft

D. Fire Lightning Exclusive Amount

6. Excess Clause of Earthquake clause is

A. Rs. 10,000/- of each claim

B. 10% of each claim

C. 5% of Net claim amount under the Add-on

D. No Excess

7. Impact Damage Add-on does not include

A. Loss due to Insured’s own Animal

B. Loss due Insured’s own driven vehicle

C. Loss due to articles dropped from cranes

D. Due to Insured’s own forklifts

8. Deterioration of stocks in cold storage premises due to accidental power failure does
not cover
A. If such failure is due to deliberate act of Govt, Municipal / Local Authority

B. If such failures exceeds 24 Hrs

C. Only B

D. Both A & B

9. Architect Fee clause covers Fee

A. 3% of claim amount

B. 7.5% of claim amount

C. 10% of claim amount

D. 1% of claim amount

10. Under Omission to Insure, Additions, Alterations / Extension clause , declaration


needs to submit

A. On the last day of every month

B. On every 10th of each month

C. Within 30 days of expiry of policy

D. Any time during policy period

11. Omission to Insure, Additions, Alterations / Extension clause does not cover

A. Plant and Machinery

B. Stock

C. Building

D. Furniture and Fixture

12. Under Omission to Insure, Additions, Alterations / Extension clause, how much
premium is

A. 5% of extra premium of Sum Insured in Advance

B. 5% of Extra Premium at the time of addition of property


C. 50% Premium of Basic Sum Insured in Advance

D. 50% premium of Basic Sum Insured at the time of addition of property

13. Spoilage Material damage clause covers

A. Loss of stock in process

B. Damage to machinery, Containers and Equipment

C. Furniture & Fixture

D. A & B Only

14. Maximum Sum Insure allowed under Escalation clause is

A. 10% of Basic Sum Insured

B. 25% of Basic Sum Insured

C. 50% of Basic Sum Insured

D. 100% of Basic Sum Insured

15. Escalation clause is applicable on

A. Building

B. Machinery & Accessories

C. Stocks

D. Only A & B

16. Reinstatement Value Policies does not cover

A. Plant & Machinery

B. Furniture & Fixture

C. Building

D. Stock

17. Premium for Local Authorities Clause is


A. No additional premium

B. 5% of Basic Premium

C. 10% of Basic Premium

D. Flat Rs. 500/-

18. Basis of valuation for declaration in declaration policy is

A. Reinstatement Value

B. Market value

C. Book value

D. All of Above

19. In declaration policy, refund of premium cannot be more than

A. 50% of Provisional SI

B. 20% of Provisional SI

C. 80% of Provisional SI

D. No Refund

20. If at the time of loss, there is any other policy than declaration policy then

A. Declaration policy act first

B. That policy act first

C. Share loss in proportion

D. Any of Above

21. Minimum SI for Declaration policy is

A. 1 Cr

B. 2 Cr

C. 50 Cr
D. 100 Cr

22. Which is true about declaration policy

A. Increase in SI is not allowed

B. Reduction in SI is not allowed

C. Reduction in SI is allowed

D. Minimum SI is 2 Cr

23. Declaration policy cannot be issued for

A. Insurance required for short period

B. Stocks undergoing process

C. Stocks at railway sidings

D. All of Above

24. Sum Insured for Floater declaration policy is

A. 1 Cr

B. 2 Cr

C. 50 Cr

D. 100 Cr

25. Calculation of premium in floater policy

A. On the rating of building

B. On the rating of stock

C. Highest rate applicable to Insured’s property at one location

D. Any of Above

26. Contact Price Insurance Clause

A. Only for Local Manufactured Goods


B. Only for Imported Goods

C. Both A & B

D. None of Above

Answers Key

1. C

2. A

3. A

4. B

5. C

6. C

7. A

8. D

9. B

10. C

11. B

12. A

13. D

14. B

15. D

16. D

17. A

18. B

19. A
20. B

21. A

22. B

23. D

24. B

25. C

26. B

IC-57 FIRE AND CONSEQUENTIAL LOSS INSURANCE

CHAPTER 3

Fire Hazards and Fire Prevention

1. Which of the following is a type of hazard?

A. Originating

B. Contributing

C. Arising from Construction

D. All of Above

2. Leading cause of Industrial fire is

A. Mechanical

B. Electrical

C. Electronics

D. None

3. Discipline, Controls and Education of Employee minimize which hazard

A. Friction
B. Smoking

C. Hot surface

D. All of above

4. Regular Inspection, maintenance and adequate lubrication reduce

A. Combustion sparks

B. Hot surface

C. Smoking

D. Friction

5. Which of the following are common cause of burner flames?

A. Improper use of portable torches

B. Portable Heating Unit

C. Both A & B

D. None

6. Spontaneous Combustion Exist in

A. Oily and rubbish waste

B. Deposits in driers

C. Industrial waste

D. All of Above

7. Spontaneous Combustion can be prevented from

A. Control and Education of Employee

B. Proper Process operations and good housekeeping

C. Both A & B

D. None
8. What is Incendiarism?

A. Fire due to bad housekeeping

B. Fire due to Spontaneous Combustion

C. Fire maliciously set by Intruders, Disgruntled Employee and Arsonists

D. All of Above

9. Which of the following comes under contributory hazard?

A. Absence of people to raise the alarm in case of fire

B. Locked or Inaccessible premises or isolated premises

C. Location in conflagration area

D. All of Above

10. What is Fire load?

Ans. Quantity of heat liberated, per unit of floor area when a building and its contents are
completely burnt.

11. What comes under low fire load?

A. Retail shops & Factory buildings

B. Residential buildings, offices and hotels

C. Bulk storage godown or warehouse

D. All of Above

12. What is fire resistance?

Ans. Time span during which a construction offers resistance to a standard fire.

13. National fire code of India classified Fire Resistance of Building in how many classes

A. 2

B. 3

C. 4
D. 5

14. Fire resistance of Class III building is

A. 3 Hour

B. 1 Hour

C. 2 Hour

D. 4 Hour

15. What is Exposure Hazard?

Ans. A building or its contents causing damages or ignited due to fire in Neighboring / Adjoining
Building.

16. Main factor in the consideration of Exposure Hazard is

A. Constructional Features

B. Distance from Other Buildings

C. Conditions Existing between buildings

D. All of Above

17. Which of the following have High Fire Resistance?

A. Brick Wall

B. Timbers

C. Concrete / Reinforced cement

D. All of above

18. What are Perfect Party Walls?

A. Which goes upto the roof

B. 2 feet above the roof

C. 5 feet above the roof

D. None
19. Minimum thickness of Perfect Party Walls

A. 100 MM

B. 200 MM

C. 400 MM

D. None

20. What is shed structure?

A. Single storey building having ground floor only

B. Two Story building with Perfect Party Walls

C. Multi storey building with Party Walls

D. Any of Above

21. What is silent risk?

A. A residential building not occupied more than 30 days

B. Stock godown not having stock more than 30 days

C. A manufacturing unit not used for manufacturing or storage purpose

D. All of above

22. What is suitable measure of the ease of ignition?

A. Black point

B. Flash point

C. White point

D. All of above

23. Hazards arising from goods are?

A. Ease of ignition

B. Speed and intensity of burning


C. Method of packing

D. All of Above

24. Precautions to check spontaneous combustion are?

A. Stocks should not be over 10ft in height

B. There should not be more than 200 tons in any stack

C. Ample ventilation

D. All of above

Fire – Chapter 3 Download PDF

Answers Key

1.D
2.B
3.B
4.D
5.C
6.D
8.C
9.D
11.B
13.C
14.C
16.D
17.C
18.B
19.C
20.A
21.C
22.B
23.D
24.D