Other Than Life (OTL) Practice Exam

Which of the following is a feature common to both Boiler and Pressure Vessels and Machinery policies?

1. Regular inspections by insurance company engineers

2. Rates are determined by territory

3. Coverage cannot be suspended or canceled

4. Neither may be purchased on a replacement cost basis

The correct answer is: Coverage cannot be suspended or canceled

The feature that is common to both Boiler and Pressure Vessels and Machinery policies is that coverage cannot be suspended or canceled. This is significant because these types of insurance are designed to protect essential equipment that is critical to operations and safety in various industries. They generally provide coverage for equipment that is often in constant use and vital for business continuity. This aspect of the policies ensures that businesses maintain necessary protection for their operations, as losing coverage could lead to significant financial loss due to equipment failure or other covered events. Stability in coverage allows businesses to focus on their operations, knowing their critical machinery and equipment are protected without interruption. The other options, while related to insurance practices, do not apply universally across both types of policies. Regular inspections by insurance company engineers can vary based on specific insurance agreements or regulations applicable to the industry. Rates may be affected by various factors including but not limited to territory, and both types of insurance can often be purchased on a replacement cost basis, depending on the policy terms selected.