Virginia NASCLA Practice Exam

Question: 1 / 400

How much in premiums will a contractor save over a 3-year period if they have a defined safety program that yields a 20% reduction on an $8 per $1,000 coverage rate for $300,000?

Under $1,000

Between $1,001 and $1,500

To calculate the savings on premiums over a 3-year period, we start by determining the annual premium without the safety program. The coverage amount is $300,000, and the rate is $8 per $1,000.

First, we calculate the annual premium:

1. Divide the coverage amount by $1,000:

\[

\frac{300,000}{1,000} = 300

\]

2. Multiply this result by the coverage rate:

\[

300 \times 8 = 2,400

\]

Thus, the annual premium without the safety program is $2,400.

Next, with a defined safety program yielding a 20% reduction, we calculate the savings:

1. Determine the amount of the reduction:

\[

0.20 \times 2,400 = 480

\]

This means the reduced annual premium is:

\[

2,400 - 480 = 1,920

\]

2. Over a 3-year period, the savings can be calculated by multiplying the annual savings by 3:

\[

480 \times 3 = 1,440

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Between $1,501 and $2,000

Over $2,000

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