Questions

Engineering Insurances
1.
Which one of the following is not operational cover under Engineering Insurance
a)Boiler
b)Machinery c) Storage-cum Erection
d) Electronic
insurance
Breakdown
Insurance
Equipment
Insurance
Insurance
2
Following is not an annual policy strictly
a) MI
b) B.P.P
c) EAR
d) EEI
3.
Under EAR/CAR POLICY installment of premium facility is allowed only,
if the period is more than
a.
TEN b. SIX MONTHS
c. NINE MONTHS
D.
TWELVE
MONTHS
MONTHS.
4.
Incase of EAR/CAR Policy the risk commences from the
a)
Date
of b.
DATE
OF c.
DATE
OF d) none
Unloading of 1st PROPOSAL
SHIPMENTS/DESPATCH
consignment
OF
PROJECT
AT SITE
MATERIAL
5.
Sum Insured under MI/EEI Policy should be
a) MARKET
b. WRITTEN
c. PRESENT DAY NEW
d. PRESENT
VALUE
DOWN VALUE
REPLACEMENT
VALUE
VALUE
6.

QUESTION DELETED

7.

For determining Premium Rates for a project insurance the following information
is essentially required
a) Nature of the
b) Limit of third
C) Both above
d) None of the
project, duration party liability,
above
of the project,
additional custom
testing period
duty to be
duration
covered, S.I.
under marine
cover)
8.
The advanced loss of profit policy covers
a)
Loss
of
projected profit
due
to
interruption
&
delay of project,
by an insured
peril

b)
Loss
of
turnover after the
commencement of
project

c) Loss of projected profit d) None of the

due to non-completion of above
project due to financial
bankruptcy

Close Proximity is applicable to a claim occurring within ---- days of policy

commencement
a) THREE DAYS b) FIVE DAYS
c) SEVEN DAYS
d) TEN DAYS
10. Which one of the following is not underwritten in Engg. Dept.
a) CAR
b) EAR
c) IAR
d) CECR
11
Which policy is not issued for a period of more than 12 months?
a) CAR
b) MCE
c) SCE
d) CPM
12
CPM can be covered under
a) EAR or CAR
b) Separate
c) both are correct
d) both are
policy when the
policy should be
incorrect
value of CPM
taken for any
does not exceed
CPM machinery if
specified limit
the Sum Insured
exceeds specified
limit
13
Excess is not related to claim amount in case of claims under
a) EAR policy
b) EEI policy
c) CAR policy
d) MBD policy
14
Which of the following is not an add on cover under a project policy
a) Surrounding
b) Third party
c) Off site storage and
d) Debris of
property
liability
fabrication
uninsured
property
15

In which of the following testing is an inbuilt cover

a) CAR
b) CECR
c) EAR
16
Maximum permissible escalation under an EAR policy is
a) 25%
b) 50%
c) 75%

d) MBD
d) none

17
Which of the following is not a standing charge for LOP / ALOP
a) Insurance
b) Advertisement c) Rent and Tenants
d) Direct
premium
& publicity
Material cost

18

Eng. Insurance covers except one of following , choose correct answer

a) Damage or b) Normal wear

breakdown
of and tear
plant
and
machinery

d) Legal liability
for damage to
surround property
of others caused
by damage to
plant
and
machinery
19
Which of the following is operational phase policy and not construction phase
policy under engineering insurance
a) Contractors
b) Electronic
c) Erection All Risk
d)
MarineAll Risk
Equipment
cum-Erection
20
Machinery Loss of Profits Policy (MLOP) does not provides indemnity against
which one of the following
a) Loss of net b)
Insured c) Increased cost of d)
Civil
profit
standing charges
working
engineering
works
21
It is advisable to cover permanent and temporary works including liability and
all material at a contract work site under:
a) Standard Fire b) Machinery
c) BPP Policy
d) EAR Policy
Policy
Insurance
22
Which of the following statement is true
In the contractor all risk insurance, the excess or deductible applies separately
for ------a) Storage &
b) Maintenance
c) Major perils claims
d) All the above
construction
period
claims
23
Which of the following policy normally cover Lift Cranes, Material handling
plant and equipment in the construction and project sites
a) Contractor
b) Contractor
c) Marine cum erection
d) Erection All
Plant &
All Risk
Policy
Risk
Machinery
24
Project Policies are
a) All risk policy
b) Named Perils
25
CPM is
a) All risk policy
b) All risk
with inclusion of
policy with
Breakdown
exclusion of
breakdown

c) Legal liability for injury

caused by damage or
breakdown of plant

c) Consequential Loss
c) a policy which
covers Self propelled
machineries on Public /
Private Road

d) Agreed Value
d) None of the
above

26. Loss covering accidental failure Of Electricity Supply is an extension under:

a) CPM
b) CAR
c) DOS
d) MBD
27. In insurance parlance DSU stands for
a) Delay in start up ( insurance)
b) Derivatives stock units
c) Dead stock under insurance
d) Diluted stock undertaking.
28.The adjustment of sum insured in EAR policy is not done in respect of
a) freight and handling charges
b) custom duties
c) cost of erection
d) increase or decrease in prime cost of plant and machinery
29.Standby machinery in MBD is
a) not covered
b) covered at a discount of 50% in rate
c) discount of 75%
d) only covered when it is put to use
30. Delay in Start Up insurance cover is granted for the:a) New projects to the cover the loss of profits on account of any delay in start up
b) New projects to cover the loss of profits on account of insured losses and
consequent delay in start up
c) Commissioned projects to cover the loss of profits on account of delay in start up
after a breakdown of machinery
d) Existing projects, to cover the loss of profits of the future
31.In Erection All Risk insurance liability of the insurers commence from
a. The time of loading the machinery at the port of loading
b. The time of unloading the machinery at the port of discharge
c. The time of unloading the 1st consignment at the site of erection
d.The time of machinery leaves the warehouse of the supplier

32.In a EAR policy an indigenous made compressor covered under the policy got
damaged while being shifted from storage yard to site of erection within the campus.
New value of the compressor is Rs.1crore. Repair/replacement cost of parts Rs 50
Lacs. Salvage value of damaged parts Rs 2 lacs. Policy excess Rs 1 lac during storage
erection. Rs 5 lacs during testing. Rs 10 lacs for act of god perils. No under insurance.
Insurance company will settle the loss for
a.Rs 48 Lacs
b.Rs 47 Lacs
c.Rs 45 lacs
d.Rs 43 Lacs
33.Which of the following is not an exclusion under Contractors All Risk Insurance
Policy
a.The first amount of the loss arising out of each and every occurrence shown as
Excess in the Schedule;
b.Accidental loss/damage during erection of plant and machinery;
c.Normal wear and tear, gradual deterioration due to atmospheric conditions or lack
of use or obsolescence or otherwise, rust, scratching of painted or polished surfaces or
breakage of glass;
d.Loss or damage due to faulty design;
34 .ALOP can be issued in the name of
a.Principal, contractors, subcontractors and third parties
b.Principal, contractors and subcontractors
c.Principal & contractors
d.Principal

35
Which of the following is excluded under Electronic Equipment Policy?
a) Riot
b) Theft
c) Consequential
d) Fire
Loss

36

Match the followings

1.
2.
3.
4.

Gross profit
Net profit
Turnover
Standing charges

a) 1-a, 2-b,3-c, 4-d

a) net trading profit

b) total over head cost
c) net profit plus total standing charges
d) total output during the financial year

b) 1- c,2- d,3-b,4-a

c) 1-c, 2-a,3-d,4-b

d) 1-d,2-c,3-a,4-b

37.After completion of contractor all risk insurance, which policy is suitable for completed project?
a) EAR

b) Standard Fire

c) CPM

d) CECR

38.Which policy covers humidity and moisture as inbuilt overages?

a) MB

b) CAR

c) EEI

d) EEI and BPPI

39.Maintenance Visit Covers are available as add-on covers under which two policies?
a) CAR and BPPI

b) EAR and MB

c) CAR & EAR

d) EAR & CPM

40.Cross liability cover can be taken as add-on cover under project insurance only against
a) Third party

b) Only the
c) Named employees
d) For all the parties
contractors
of the principle only
named in the policy
permanent employees
41. Third party sum insured should not be exceeded by the following percentages
a) 15 % of total sum
insured

b) 11 % of total sum
insured

c) 10% of total sum

insured

d) 9% of total sum
insured

42. Under project insurance, which cover we can offer to the client as first loss basis?
a) Mechanical
breakdown

b) Faulty
workmanship

c) Earthquake

d) Theft and burglary

43.QUESTION DELETED
44. The basic premium under EAR policy is for period comprisinga) Two months testing b) One month
c) two months
period
erection and one
erection period.
month testing
period
45. Which policy is generally suitable for bio-medical equipments?
a) EEI
b) CAR
c) MB

d) Three months
erection period
including one months
testing period.
d) CECR

46.) Floater option is generally available under which policy for movable machineries?
a) CPM

b) BE

c) EAR

d) EEI

47. Marine and transit risks can be an extended under which of the two engineering policies?
a) CAR and CPM

b) EAR and CECR

c) CAR and EAR

d) CAR & MB

48.Under CPM policy if insured has opted for floater cover then which loss under the same is not
payable.
a) Unforeseen
damage

b) Sudden
physical loss

c) Accident cover whilst transit

from one location to another
location

d) Collision
damage

49.Which policy is suitable for storage of potatoes under engineering departments?

a) CPM
b) BE
c) EAR
d) DOS
50. While machinery insurance covers accidental damage to machinery then MLOP indemnifies
a) Capital loss

b) Loss of Gross
Profit

c) Only standing
charges loss

d) Only material
damage loss

c) EAR policy

d) MLOP policy

3. subsidence

Inundation

51. Time excess is related to

a) MB policy

b) CAR policy

52. Acts of god perils does not include

a) Riot

b). Storm

53. Which of the following parameters are needed for installment premium collection under
project insurance?
1.
2.
3.
4.

Entire premium to be collected 6 months before expiry of the policy

1st installment more by 5% of total premium
Policy period should be more than 12 months
Interval between successive installments is minimum 3 months.

a) All

b) Only 2 &3

c) 3&4

d) 2,3, &4

c) On the basis of
year ending balance
sheet only, material
damage not needed

d) on the basis of
capital loss only

54. Consequential loss (MLOP)will be entertained

a) When material
damage claim under
Machinery policy is
admissible.

b) even if Claim under

Material damage
Policy is not
admissible

55. Match the correct option

1. Boiler
a) an explosion of ignited gases in the furnaces or flue of the
Boiler
2. Collapse
b) an explosion arising out of chemical reaction in any plant
3. Chemical Explosion

c) any fired closed vessel or a combined container piping

System in which is generated under pressure

4. Flu gas explosion

d) sudden and dangerous distortion of any part of Boiler by

Bending or crushing caused by steam gas

a) 1-a, 2-b,3-c, 4-d

b) 1- c,2- d,3-b,4-a

c) 1-b, 2-c,3-d,4-a

d) 1-d,2-c,3-a,4-b

56. Sum Insured under project insurance corresponds to

a) contract price of b) Estimated
c) agreed value d) none of the above
the project
Complete erected
value of the project
57
Which is not an exclusion in the CAR policy?
a) Loss discovered B )Loss or damage due c) theft and
d) packing materials
at the time of
to faulty design
burglary
inventory
58
CAR policy is subject to
a) Re-instatement b) Re-instatement of
c) Sum Insured d) none of the above
of sum insured
sum insured is
is reduced by
after payment of
automatic without
the claim
claim . additional payment of additional
amount
prorate premium premium
from DOL to
DOE
59
In CAR policy which of the following is true?
a) Extended
b) Maintenance visit
c) extended
d) none of the above
maintenance is
cover is wider than
maintenance
wider cover then
extended maintenance
cover and
maintenance
cover
maintenance
visited cover
visit covers are
identical
60
Statement 1..CAR policy excludes loss / damage due to faulty design
Statement 2. EAR policy also excludes loss due to faulty design but shall be
limited only to the item effected and shall not exclude loss to other insured items
affected , answer whether
a) Statement 1 is
b) Statement 2 is only
c) both the
d) none of the
only true
true
statements are statements are true
true
61
Contract works policy generally given to Hydro-electric Project denotes for
a)CAR Policy
b) CPM Policy
c)Combination d) combination of
of CAR &
CAR & CPM Policy
EAR policy
62
Under MB Policy damage caused to
a) the
b) all the electrical
c) non-electrical d) Both, electrical and
immediately
parts, where fire
parts only is
non-electrical parts is
effected electrical originated or reached
covered.
equally covered.
part where fire
subsequently, are
has originated, is covered.
covered

63
In MB policy incase of partial loss
a) reduction is
b) no reduction is
c) 10 %
d) it is left for the
made for Wear &
made due to wear &
deduction is
discretion of the
tear and
tear & depreciation
made for wear
surveyor.
depreciation
except for limited life & tear
parts
64
Sum Insured under MB policy is must be equal to
a) current new
b) replacement value
c) purchased
d) booked value
replacement value
price
64
The CPM policy is operative when the equipment are
a) at work or rest
b) at work or at rest
c) at work only d) none of the above
but does not cover and also whilst the
and whilst the
whilst the
equipment is being
equipment is
equipment is being dismantled
being
dismantled
dismantled
65
CPM policy covers following
a) loss due to
b) loss due to trade
c) both the
d) both a) & b) are
electrical &
related experiments or
above are
not covered
mechanical
overloads or similar
covered
breakdown or
test
internal explosions
66
Statement-1: A claim must first be admitted under the concurrent machinery
material damage policy before a claim becomes admissible under MLOP Policy
Statement-2 it is mandatory to have a concurrent Machinery material damage
policy irrespective of the fact whether any claim is admitted in MB (material
damage) policy before a claim becomes admissible under the MLOP policy
a) Statement-1 is
b) Statement-2 is only
c) both
d) both statements are
only correct
correct
statements are
incorrect
correct
67
The maximum permitted indemnity period under MLOP policy
a) 6 months
b) 12 months
c) 18 months
d) 24 months
68
Sum Insured (Gross Profit) under MLOP is subject to adjustment in the policy in
following manner
a) no adjustment is b) upward adjustment
c) downward
d) none of the above
allowed
up to 20% at the end of adjustment of
the policy period
the sum
insured up to
50% at the end
of policy
period
69
MLOP policy covers
a) Auditors charges b) Auditors charge to c) Auditors
d) none is correct
towards claim
wards claim
charges cannot
computation as
computation to be
be covered
built in cover
Insured as separate
item

70
The interest of project financer can be insured under
a) CAR/EAR
b) ALOP policy only
c) BOTH a) & d) NONE
Policy
b)
71
Annual turnover under ALOP denotes
a) Actual turnover b) the turnover which c) projected
d) none of the above
during 12 months
would have achieved
turnover for 12
after the
had the accident not
months after
completion of the
occurred during the
completion for
insured works
12 months after the
the project
planned date of the
completion of the
project
72
DOS covers fire and allied perils
a) True
b)False
c) can be
d) only fire peril is
covered as
covered
additional perils
73
Which policy is pre-requisite for issuing Deterioration Of Stocks policy
a) MB
b) BPP
c) EEI
d) CECR
74
Civil Engineering Completed Risk is a
a) named peril
b) unnamed perils
c) all risk policy d) tailor made policy
policy
policy
75
Sum Insured under Deterioration Of Stocks should be on the basis of
a) value of actual
b) value of stocks
c) value of
d) Sum insured is to be
stocks in cold
according to the full
declared stocks decided by the insured.
storage
storing capacity of
cold storage
76
Escalation benefit is not allowed in which of the following policy
a) MB
b) BPP
c) EEI
d) FIRE INSURANCE

77* Indemnity on total loss basis in respect of operational Engg. policy is

a) WITHOUT
b) WITH
c) POSSIBLE
d) EQUAL TO S.I.
DEPRECIATION
DEPRECIATION
FOR AMOUNT IRRESPECTIVE OF
MORE THAN
V.A.R.
S.I.
78
Burglary is not covered under which of the following policies?
a) EAR
b) EEI
c) MB
d) CPM
79
W.C Liability is covered under EAR Policy as
a) TPL
b) Cross liability
c) cannot be
d) add-on cover.
covered
80
Terrorism cover is inbuilt in case of the following Engg. policies?

a) MB

b) BPP

c) NONE OF
d) DOS
THE
POLICIES
81
Sum Insured under EAR Policy should be
a) reinstatement
b) Completely Erected c) market value d)none
value
value of the project.
82
Which of the following statement is true
a) short circuiting
b) Short circuiting of c) cannot be
d) it is sufficient to
of lighting arrester lighting arrester is
covered under
cover lightning arrester
is covered under
covered under MBD
both
under one policy to
fire policy
policy.
claim any type of loss.
83
Sum Insured under CAR Policy should not include
a) site
b) escalation cost
c) temporary
d) all of above
preparation cost
civil
construction
cost
84
Surrounding property covers means
a) property belong b) property belonging c) any property d) none of the a, b, c
to other than
to and in the custody
insured
and control of insured
85
There is a sum insured limitation for TPL cover under EAR & CAR policy due to
a) Company does
b) coverage available
c) Red) restriction imposed
not want to more
under other policies
Insurance
by IRDA
than specified
arrangement
limit of the TPL
are effected
for long term
based on the
policies
cover available
and retention
capacities
86
Off-shore structure and equipments under construction are covered under
a) CAR
b) MCE
c) Marine
d) None of the a, b, c
Policy
87
The EAR Policy covers
a) faulty design
b) loss falling under
c) faulty design d) loss falling under
without any
manufacturers
is NOT
contractual liability
stipulation
Guarantee.
covered but
exclusion is
limited to the
item affected
but resultant
LOSS is
covered
88
The CAR Policy EXCLUDES
a)Normal wear &
b) Penalties on A/C of
c) Both (a) &
d) none of the above
Tear , rusting
insured non-fulfilment (b)
of terms of delivery

89
Cold testing means
a) Commissioning b) Testing under no
of parts
load condition

c) no load
testing
permitting
Indirect heat or
feed stock
usage

d) testing for attaining

specification
requirement

90
Testing under EAR Policy
a) has to be
b) can be utilized
c) can be
d)none of the above
continuous
within broken periods postponed
viz suspension of
indefinitely
testing period
91
ALOP Policy can have number of claims under the policy
a) Any numbers of b) single claim
c) numbers
d) none of the above
claims
corresponding
to numbers of
claims under
MD policy
92
Which of the following machines should not be covered under MB policy
a) Stone crushers b)Air compressor
c)Electric
d) DG sets
motors
93
Depreciation on glass lined Vessels under MB policy
a) 25% per annum b) 20% per annum
c) 10% per
d) As technically assed
annum
by the surveyors
94
Under BE insurance , refund of premium for standstill period is considered when
the minimum stand still period is
a) 3 months
b) 4 months
c)1 months
d)none of the above
95
CECR policy is not suitable for following risks
a) runways
b) bridge
c) tunnels
d) completed engg.
projects
96
Estimated maximum loss/PML is the concept used
a) in fire Insurance b) in Engineering
c) in ALOP
d) as a tool of risk
only
Insurance only
policy
management
97
Risk management includes
a) risk reduction
b) risk avoidance
c) loss
d) all the above
minimization
98
Mutual Aid scheme is applicable in
a) FEA
b) Loss control
c) part of risk
d)none of the above
programme
measures
management
99
what is the minimum policy period for DOS Policy
a) 3 MONTHS
b) 5 MONTHS
c) 7 MONTHS d) 12 MONTHS
100 Under EAR policy, premium should be collected for both erection and testing
period & for additional testing period if opted

a) TRUE

101

c) NOT
d) NONE
applicable
under EAR
policy
Under DOS Policy for granting FOES Extension
Statement-1: Machinery breakdown should be there at electricity supply station by
an insured peril of MB policy
Statement-2: Stand by DG set should be installed as per plant requirement of
electricity

a) statement-1 is
only correct

b) FALSE

b) statement-2 is only
correct

c) both the
d) none
statements are
correct
102 Extended Maintenance cover in project policies will be effective from
a) only after
b) concurrent with the
c) only after
d) all are correct
Erection is over
erection cover
Erection &
Testing are
over

All the best