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100+ Free III IC-74 Practice Questions

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2026 Statistics

Key Facts: III IC-74 Exam

100

Online MCQs per paper

III Examination Handbook

2 hours

Exam duration

III Examination Handbook

60%

Passing mark (75% Distinction)

III Examination Handbook

30

Credit points for IC-74

III credit-point system

INR 600

India paper fee (30 credits) w.e.f. 1.4.2026

III Table of Fees

INR 800

Fresh registration (India) w.e.f. 1.4.2026

III Table of Fees

III IC-74 is a 100-question, 2-hour online MCQ paper on Liability Insurance. Passing requires 60% (Distinction from 75%). India paper enrollment for this 30-credit subject is INR 600 w.e.f. 1.4.2026, plus INR 800 registration for fresh candidates (taxes extra).

Sample III IC-74 Practice Questions

Try these sample questions to test your III IC-74 exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1Under the law of torts, which of the following best defines 'negligence' in the context of liability insurance?
A.The breach of a legal duty to take care, resulting in damage to the claimant
B.The intentional causing of harm to another person's property
C.The failure to fulfill contractual obligations within a specified time
D.The strict liability imposed on ultra-hazardous activities without proof of fault
Explanation: In tort law, negligence is defined as the breach of a legal duty to take care owed by the defendant to the claimant, which results in unintended damage to the claimant.
2What is the primary purpose of a Public Liability Insurance Act (PLIA) policy in India?
A.To provide mandatory cover for professional errors made by medical practitioners
B.To provide relief to persons affected by accidents occurring while handling any hazardous substance
C.To protect directors against claims arising from wrongful acts in management
D.To compensate employees for injuries suffered in the course of their employment
Explanation: The Public Liability Insurance Act (1991) makes it mandatory for owners handling hazardous substances to take out insurance policies to provide relief to victims of accidents involving such substances.
3In a Claims-Made liability policy, when must the claim be reported for the policy to respond?
A.Before the policy starts, to cover pre-existing liabilities
B.Within ten years of the incident occurring, regardless of the active policy
C.During the policy period or any applicable extended reporting period
D.Only at the time the injury actually occurs
Explanation: A Claims-Made policy provides coverage for claims that are made (reported) during the active policy period or an extended reporting period, regardless of when the incident occurred, provided it happened after the retroactive date.
4Which of the following is typically excluded under a standard Product Liability insurance policy?
A.Bodily injury to a consumer caused by a defective product
B.Legal defense costs incurred in defending a product liability claim
C.Property damage caused by the malfunction of the insured's product
D.The cost of repairing or replacing the defective product itself
Explanation: Product Liability insurance covers third-party bodily injury or property damage caused by a defective product. It typically excludes the cost of recalling, repairing, or replacing the defective product itself.
5The concept of 'vicarious liability' is most relevant in which of the following scenarios?
A.An employer being held liable for the negligent actions of an employee performed during the course of employment
B.A manufacturer being sued for a design defect in their product
C.A professional being sued for rendering incorrect advice to a client
D.A director being held personally liable for a breach of fiduciary duty
Explanation: Vicarious liability refers to a situation where someone is held responsible for the actions or omissions of another person. In the workplace, an employer can be held vicariously liable for the negligent acts of their employees during their employment.
6What does a 'Retroactive Date' in a Professional Indemnity policy signify?
A.The date when the insurance premium was paid
B.The date from which acts, errors, or omissions are covered, provided the claim is made during the policy period
C.The date when the claim is finally settled by the insurance company
D.The date the professional obtained their license or qualification
Explanation: The retroactive date in a claims-made policy is the date from which the insured is covered. Any acts, errors, or omissions that occurred on or after this date will be covered, as long as the claim is reported during the current policy period.
7Which of the following professionals would typically require a Directors and Officers (D&O) Liability policy rather than a standard Professional Indemnity policy?
A.A civil engineer designing a bridge
B.A medical surgeon performing operations
C.A board member of a publicly traded company making strategic decisions
D.An architect drawing up blueprints for a commercial building
Explanation: D&O Liability insurance protects corporate directors and officers from personal losses if they are sued as a result of serving as leaders of a company. Engineers, surgeons, and architects require Professional Indemnity insurance for errors in their specialized services.
8In the context of product liability, what does the term 'privity of contract' imply?
A.That the manufacturer is strictly liable to anyone who uses the product
B.That an oral agreement is as binding as a written contract in product sales
C.That the retailer is the only party who can be sued for a defective product
D.That a contract cannot confer rights or impose obligations upon any person who is not a party to the contract
Explanation: Privity of contract is a common law principle which provides that a contract cannot confer rights or impose obligations upon anyone who is not a party to it. Historically, this meant a consumer could only sue the retailer, not the manufacturer, but modern tort law (like Donoghue v Stevenson) bypasses this requirement for negligence.
9What is the primary function of the 'Any One Accident' (AOA) limit in a Public Liability policy?
A.It represents the maximum liability of the insurer for a single accident or occurrence
B.It caps the total premium that an insured must pay for the policy
C.It limits the maximum amount payable for all claims aggregated over the policy year
D.It defines the maximum number of accidents that can be covered in a year
Explanation: The Any One Accident (AOA) limit specifies the maximum amount the insurer will pay for any one single event or occurrence that results in a claim during the policy period.
10Which act in India provides for compensation to workers for injuries sustained by accident arising out of and in the course of employment?
A.The Factories Act, 1948
B.The Employees' Compensation Act, 1923 (formerly Workmen's Compensation Act)
C.The Industrial Disputes Act, 1947
D.The Payment of Wages Act, 1936
Explanation: The Employees' Compensation Act, 1923, imposes statutory liability on employers to pay compensation to employees who suffer fatal or non-fatal injuries due to accidents arising out of and in the course of their employment.

About the III IC-74 Exam

The III IC-74 Liability Insurance exam evaluates candidate understanding of key principles and practical concepts in Liability Insurance. The syllabus encompasses various modules detailed below.

Assessment

100 objective multiple-choice questions in a single online paper. IC-74 is a 30-credit paper under the Insurance Institute of India (III) professional credit system.

Time Limit

2 hours

Passing Score

60% (Distinction at 75% or above)

Exam Fee

INR 600 per subject (30 credit points) for India candidates; fresh candidates also pay INR 800 registration (inclusive of life membership). Taxes extra. Fees w.e.f. 1.4.2026 per III Table of Fees. (Insurance Institute of India (III))

III IC-74 Exam Content Outline

26 questions

Legal Principles

Practice questions focusing on legal principles concepts.

21 questions

Public Liability

Practice questions focusing on public liability concepts.

15 questions

Product Liability

Practice questions focusing on product liability concepts.

14 questions

Employer Liability

Practice questions focusing on employer liability concepts.

12 questions

Professional Indemnity

Practice questions focusing on professional indemnity concepts.

12 questions

Directors And Officers Liability

Practice questions focusing on directors and officers liability concepts.

How to Pass the III IC-74 Exam

What You Need to Know

  • Passing score: 60% (Distinction at 75% or above)
  • Assessment: 100 objective multiple-choice questions in a single online paper. IC-74 is a 30-credit paper under the Insurance Institute of India (III) professional credit system.
  • Time limit: 2 hours
  • Exam fee: INR 600 per subject (30 credit points) for India candidates; fresh candidates also pay INR 800 registration (inclusive of life membership). Taxes extra. Fees w.e.f. 1.4.2026 per III Table of Fees.

Keys to Passing

  • Complete 500+ practice questions
  • Score 80%+ consistently before scheduling
  • Focus on highest-weighted sections
  • Use our AI tutor for tough concepts

III IC-74 Study Tips from Top Performers

1Study the official III IC-74 coursebook chapter by chapter before mixed mocks.
2Review the core regulations and guidelines relating to this paper.
3Sit full 100-question, 2-hour mocks aiming above 60%, with Distinction practice at 75%+.

Frequently Asked Questions

How many questions are on the III IC-74 exam?

The III objective papers, including IC-74, consist of 100 multiple-choice questions completed in 2 hours online.

What is the IC-74 passing score?

Passing marks for III online MCQ papers are 60% or above. Candidates scoring at least 75% earn Distinction in that subject.

How many credit points does IC-74 carry?

This paper (IC-74) carries 30 credit points under the Insurance Institute of India credit system.