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Montana Casualty Practice Exam

20 exam-style questions drawn from the same bank as our full Montana Casualty course (Montana Insurance Producer - Casualty - Exam Prep). Answer all 20, then grade yourself — most state exams require 70% to pass. Explanations for every question are part of the full course.

1. A claims-made E&O policy has a retroactive date of 1/1/2022 and a policy period of 1/1/2026 to 1/1/2027. An alleged wrongful act occurred on 3/15/2021, and the claim is first made against the insured on 6/10/2026. Is this claim covered?
No, the wrongful act occurred BEFORE the retroactive date, so coverage is barred even though the claim is made in the policy period.Yes, because the claim was first made during the policy period, which is the only requirement on a claims-made policy.No, because the claim was made more than five years after the wrongful act took place, past the claims-made limit.Yes, because wrongful acts within one year before the retroactive date are covered automatically under claims-made forms.
2. Which body of law does the Montana outline cite for the principal producer relationship?
The rating chapter in Title 33The general agency law in Title 28The unfair practices chapterThe licensing chapter in Title 33
3. Whom does a public adjuster represent?
The insuredThe CommissionerThe insurerThe repair contractor
4. What ordinarily happens where a policy contains a provision the code prohibits?
The insurer loses its certificateThe premium must be refundedThe provision is unenforceableThe whole policy fails
5. Performance bonds, payment bonds, and bid bonds are all examples of:
Workers' compensation Part One self-insurance bondsAuto liability financial-responsibility surety filingsFidelity bonds protecting against employee dishonestyContract surety bonds used in construction
6. A contractor's employee negligently drops a steel beam off a scaffold, striking and injuring four pedestrians simultaneously. The CGL has a $1M per-occurrence limit and a $2M general aggregate. How should the event be characterized, and what is the maximum the insurer will pay for this incident?
Four occurrences and one claim; up to $2M, bounded by the aggregateFour occurrences and four claims; up to $4M total ($1M per occurrence × 4)One occurrence and one claim; up to $1M, then the aggregate appliesOne occurrence and four claims; up to $1M total, capped by the per-occurrence limit
7. Where an individual disputes recorded information and the insurer refuses to change it, what follows?
A statement of dispute is filed with itThe policy must be cancelledThe information must be deletedThe Commissioner decides the dispute
8. An insurer secretly limits a producer's binding authority. An insured relies on a binder. What doctrine applies?
Express authorityImplied authorityRatificationApparent authority
9. A landscaper accidentally drives a stake through a buried fiber-optic cable, knocking out internet service to a neighboring office building for two days. The building owner sues for $40,000 in lost rents from tenants who could not work. Which CGL coverage element is triggered?
Bodily injury, economic harm to the tenants under the broad-form mental-anguish extensionPersonal and advertising injury under Coverage B because the cable interruption affected the tenants' published communicationsMedical payments under Coverage C as a no-fault response to third-party economic harm at the insured siteProperty damage, loss of use of tangible property that was not physically injured
10. Which section carries the Montana diligent effort condition for surplus lines?
33-2-30733-2-30133-2-30833-2-302
11. What is the entire text of Mont. Code Ann. 33-16-221?
The age threshold for the discountThe approved course standardsA short title for the ActThe discount percentage required
12. The Business Owners Policy (BOP, BP 00 03) automatically includes which coverage that the CPP does NOT include without scheduling?
Statutory workers' compensation Part One benefits for injured employees12 months of business income with no separate dollar limitCommercial auto liability for owned, hired, and non-owned autosStand-alone pollution liability with full-limit environmental restoration
13. A plaintiff proves $40,000 in medical expenses and $60,000 in lost wages. The jury also awards $100,000 for 'pain and suffering.' How are these damages categorized?
$60,000 is economic/special; $140,000 is non-economic/general; no punitive.$200,000 is all economic/special; none is non-economic; no punitive.$100,000 is economic/special; $100,000 is punitive; no non-economic.$100,000 is economic/special; $100,000 is non-economic/general; no punitive.
14. An endorsement is best described as:
A written amendment that adds, removes, or modifies coverage on the existing policyA premium-discount document that lowers the premium but has no other effect on the policyA separate stand-alone policy issued in addition to the underlying policy for the same riskAn advertising or marketing brochure distributed by the appointed agent to describe coverage
15. Which of the following is typically EXCLUDED under a professional liability policy?
Dishonest, fraudulent, criminal, or intentionally wrongful acts.Clerical errors in preparing client documents.Negligent advice given to a client.Failure to perform services within industry standards.
16. Which power belongs to the FIRST named insured alone?
Cancelling the policy and receiving the cancellation noticeMaking a first-party claim under the policy conditionsBeing defended by the company against a covered suitBeing named on a certificate of insurance for a job
17. On the Business Auto form, 'covered pollution cost or expense' is generally:
Fully insured under Business Auto liability with no exclusion, a reading that ignores the broad pollution exclusion the CA 00 01 actually containsExcluded except for pollution arising out of fuels, lubricants, fluids, or other operating fluids that are escaping/discharged from a covered autoIncluded only for vehicles that are in transit on a public road during the loss event, a narrow framing that does not match the actual operating-fluids carve-backSubject to a sub-limit of $1 million per occurrence regardless of the underlying liability limits on the policy, which is not part of any standard pollution carve-back
18. An 'affirmative' warranty in casualty insurance is a statement that:
Is true at the time the contract is madeWill become true at some future point in the termHas nothing to do with the terms of the policyIs unenforceable against the named insured
19. A 'forgery or alteration' crime insuring agreement covers:
Loss resulting from the insured's acceptance of a customer's forged check in payment for goods, including any related bank fees and the merchandise released to the customer.Loss resulting directly from forgery or alteration of checks, drafts, promissory notes, or similar written promises/orders/directions to pay money (that the insured issues or that purport to be issued).Loss resulting from an employee who forges the insured's signature to embezzle funds, which is covered only under this agreement and never under the employee theft agreement.Loss resulting from counterfeit currency the insured accepts in good faith from customers in exchange for merchandise, services, or change during regular business hours.
20. The Law of Large Numbers is fundamental to casualty insurance because it allows insurers to:
Avoid paying any claims at all under the contract, because the pool absorbs every loss that occursPredict aggregate losses for a class of insureds with reasonable accuracy when the pool is large enoughCharge unlimited premiums above the filed manual rates, because a large pool justifies any rate levelEliminate underwriting entirely and accept every applicant on the same terms, since losses average out

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