IIA Exam IIA-CFSA Topic 6 Question 36 Discussion

Actual exam question for IIA's IIA-CFSA exam

Question #: 36
Topic #: 6

A manufacturer wants to protect the company from financial loss resulting from third-party lawsuits. The manufacturer has learned of several recent jury awards over $7 million for product defects. The manufacturer currently has only $5 million in this type of coverage. The manufacturer has also learned that several automobile claims have been recently awarded against other company's cars in accidents over $1 million. The manufacturer has damaged his competition and the manufacturer wants to protect his company further than the current policy allows. What insurance coverage product will the manufacturer likely buy?

AA personal injury protection (PIP) policy to protect others from personal injury

BAn umbrella policy to place a protective umbrella over existing coverage.

CA surplus lines policy to protect against claims in surplus of the policy limits.

DA floater policy to float coverage where needed.

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Suggested Answer: C

by Hubert at Jul 28, 2023, 12:30 AM

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Curt

14 days ago

The manufacturer should definitely go for the umbrella policy. It's the perfect solution to beef up their existing coverage and protect against those massive jury awards.

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