Free CII Liability insurances (E96) Practice Questions

Sample Practice Questions

Try these 10 sample questions from the CII Liability insurances (E96) practice bank. Each includes the answer and explanation. Continue with the interactive practice above to review the full question set.

1. 1A liability risk assessment identifies exposed moving machinery. In risk-management terminology, what is the machinery in this assessment?

   1. A.A hazard capable of causing harmCorrect answer: A
   2. B.A measure of the likelihood of harm
   3. C.An estimate of financial claim severity
   4. D.A control reducing the chance of harm

   Explanation: HSE states: "identify what could cause injury or illness in your business (hazards)". The machinery is the source of possible injury. Likelihood and financial severity evaluate consequences; a control reduces the exposure.

   Reference: HSE Managing risks and risk assessment at work — 1. Overview

2. 2A liability operative clause requires injury to occur during the period of insurance. A visitor is injured during that period but first submits a claim the following year. Which date satisfies this timing requirement?

   1. A.The date the claimant sends a demand
   2. B.The date the visitor sustained the injuryCorrect answer: B
   3. C.The date the insurer sets its reserve
   4. D.The date compensation is finally paid

   Explanation: The source states: "occurring within the Territorial Limits during the Period of Insurance in connection with the Business.". The occurrence requirement concerns when injury occurs, rather than when a demand, reserve or payment occurs. Other coverage conditions remain to be checked.

   Reference: Allianz Public and Products Liability Section LP0013_1 — p. 3, Cover

3. 3Under section 2(1) of the Health and Safety at Work etc. Act 1974, what qualification applies to an employer's general duty to employees?

   1. A.Subject to the employee buying personal insurance
   2. B.Only after an inspector issues a formal notice
   3. C.So far as is reasonably practicableCorrect answer: C
   4. D.Only where a previous injury has occurred

   Explanation: The official text states: "so far as is reasonably practicable". The statutory standard applies proactively and is not conditional on insurance, inspection or a previous accident.

   Reference: Health and Safety at Work etc. Act 1974 — s. 2(1)

4. 4A visitor claims compensation after slipping on an inadequately maintained shop floor. Which liability exposure is primarily illustrated?

   1. A.A professional's negligent advice to a client
   2. B.An occupier's liability for injury on the premisesCorrect answer: B
   3. C.A director's liability for a misleading annual report
   4. D.A producer's liability for goods supplied to a customer

   Explanation: The controlling text states: "the visitor will be reasonably safe in using the premises". This is a premises/occupiers exposure within public liability. It is distinct from professional advice, corporate governance and supplied products.

   Reference: Occupiers’ Liability Act 1957 — s. 2(2)

5. 5Why might a company purchase D&O insurance even though it has separate insurance protecting its physical assets?

   1. A.Property insurance also pays the personal managerial liabilities of all directors
   2. B.Directors may face personal claims for negligent managerial decisionsCorrect answer: B
   3. C.D&O cover is limited to the company's ownership of tangible property
   4. D.A company's separate legal identity removes all personal director exposure

   Explanation: The source states: "the directors can be sued directly for negligent decisions and actions that have been taken.". Property cover addresses physical assets; D&O addresses potential personal managerial liability. Neither corporate personality nor property insurance automatically removes it.

   Reference: CII M96 Specimen coursework assignment — explanatory answers — p. 13, Answer 5(a)

6. 6When a professional provides specialist instruction to a client, which standard is relevant to whether the advice is negligent?

   1. A.The care expected of an ordinary unskilled person doing a favour
   2. B.The care and skill expected of a competent member of the relevant professionCorrect answer: B
   3. C.The highest standard achieved by any specialist regardless of the engagement
   4. D.The client's desired outcome regardless of reasonable professional practice

   Explanation: The source states: "up to the standard of other massage therapists in the profession.". The relevant professional standard governs. Ordinary unskilled assistance understates it; the world's highest specialist standard or any desired outcome overstates it.

   Reference: CII M96 Specimen coursework assignment — explanatory answers — p. 16, Answer 6(a)

7. 7When evaluating a liability risk, which combination expresses the risk of harm rather than simply identifying its source?

   1. A.The policy excess and indemnity limit
   2. B.The likelihood and seriousness of harmCorrect answer: B
   3. C.The survey date and inspection frequency
   4. D.The premium rate and declared turnover

   Explanation: HSE states: "decide how likely it is that someone could be harmed and how seriously (the risk)". Risk evaluation combines probability and severity. Policy financial terms, inspection frequency and premium inputs do not themselves measure that combination.

   Reference: HSE Managing risks and risk assessment at work — 1. Overview

8. 8What obligation is central to the indemnity in a liability insurance operative clause?

   1. A.Replacing the insured's own damaged equipment
   2. B.Refunding every dissatisfied customer's purchase
   3. C.Reimbursing a fall in the insured's sales revenue
   4. D.Paying compensation for the insured's legal liabilityCorrect answer: D

   Explanation: The source states: "The Insurer will indemnify the Insured against legal liability to pay compensation and claimants’ costs and expenses". Liability indemnity addresses legal liability to others. Own property loss, purchase refunds and declining revenue are different exposures.

   Reference: Allianz Public and Products Liability Section LP0013_1 — p. 3, Cover

9. 9An employee moves to unfamiliar machinery. Which section 2 duty specifically addresses ensuring they can operate it safely?

   1. A.Providing necessary instruction, training and supervisionCorrect answer: A
   2. B.Restricting safety instruction to experienced employees
   3. C.Replacing operator instruction with an insurance policy
   4. D.Leaving supervision entirely to the equipment seller

   Explanation: The official text states: "the provision of such information, instruction, training and supervision as is necessary". The duty directly concerns employees' ability to work safely. Experience does not remove the need for necessary instruction; insurance or a seller's role does not discharge it.

   Reference: Health and Safety at Work etc. Act 1974 — s. 2(2)(c)

10. 10Why can faulty safety instructions supplied with a product create a products liability exposure?

    1. A.Safety instructions are separate from the supplied product under every policy
    2. B.Instruction errors can create liability only while the goods remain in the factory
    3. C.Product definitions can include labelling and instructions accompanying the goodsCorrect answer: C
    4. D.Providing any instruction transfers product safety responsibility to the purchaser

    Explanation: The source states: "including their containers, packaging, labelling and instructions for use". The cited definition includes instructions and labels with products. They are not invariably separate, confined to the factory or an automatic transfer of safety responsibility.

    Reference: Allianz Public and Products Liability Section LP0013_1 — p. 2, Definition 8 Products