Liability insurance policies are what kind of contracts - ANSWER-third party contracts
third party contracts do what - ANSWER-promise to pay on behalf
... [Show More] of the insured all damages
two forms of legal liability - ANSWER-civil and criminal liability
what is a tort - ANSWER-A civil wrong
who is the tortfeasor - ANSWER-someone who committed the tort
joint tortfeasor - ANSWER-two or more people who commit a single tort
in civil lawsuit, the tortfeasor is referred to as - ANSWER-the defendant
in civil law, the injured person bringing the suit is referred to as - ANSWER-the plantiff
how are torts addressed by insurance policies - ANSWER-intentional, unintentional or liability without fault
intentional tort acts are - ANSWER-committed with intent, may still be covered if consequences of the action were not intended
what are the 7 intentional torts - ANSWER-1. Battery
2. Assault
3. False Imprisonment
4. Intentional Infliction of Emotional Distress
5. Trespass to Land
6. Trespass to Chattels
7. Conversion
unintentional torts are known as - ANSWER-negligence
what is negligence - ANSWER-failure to use ordinary or reasonable care
Vicarious or imputed negligence is - ANSWER-unintentional tort where act is not directly attributable to the insured
common form of vicarious liability - ANSWER-relationship between employer and employee aka pizza delivery guy hitting pedestrian
strict or absolute liability - ANSWER-imposed by statutory law that involve inherent danger
activities involving inherent danger include - ANSWER-dangerous materials, hazardous operations or animals
Bodily injury is defined as - ANSWER-bodily harm,sickness, disease or death
property damage is defined as - ANSWER-direct physical damage to tangible property including the loss of use
to prove negligence what must be established - ANSWER-the actions not only caused injury or damage but also was the proximate cause of the loss
The foreseeability test is used to determine what - ANSWER-tests whether negligent party should have reasonably foreseen the consequences that resulted from action
common law consists of what - ANSWER-behaviors and customs that have never been written into the law
statute law is what - ANSWER-written law of states
For a liability policy to pay a claim, the person who is legally liable - ANSWER-must be insured under the policy
what are compensatory damages - ANSWER-damages awarded by the court to pay for actual losses by the plaintiff in a lawsuit
two categories of compensatory damages - ANSWER-special damages and general damages
what are compensatory special damages - ANSWER-awards for actual economic losses such as medical expenses , lost wages , and property damages caused by defendant
what are general compensatory damages - ANSWER-compensate for losses of intangible nature such as pain and suffering
do full tort coverages have a high or low premium - ANSWER-much higher premium than limited tort
what are punitive damages - ANSWER-damages exceeding simple compensation and awarded to punish the defendant.
contributory negligence - ANSWER-A common law defense stating that if individuals contribute to their own loss in any way, then the defendant cannot be held liable for the loss
many states have declared the contributory negligence rule as harsh and have adopted the - ANSWER-comparative negligence rule
comparative negligence - ANSWER-the purpose is to reduce a plaintiffs damage award by the plaintiffs percentage of negligence
if the plaintiff was awarded $50,000 in damages but found to be 10% negligent in the cause of loss, their award would be reduced to - ANSWER-50,000 X .10=5,000- 50,000= $45,000
Pure Comparative Negligence - ANSWER-reduced to the percentage of injured partys negligence
modified comparative negligence - ANSWER-if the plaintiff is 50% or more at fault for the loss, they cannot collect an award for damages
what are the 3 defenses against negligence - ANSWER-assumption of risk
intervening cause
statute of limitations
assumption of risk - ANSWER-A defense against negligence that can be used when the plaintiff was aware of a danger and voluntarily assumed the risk of injury from that danger.
what is intervening cause - ANSWER-An independent factor breaks the chain of causation and becomes the proximate cause of loss
what is statute of limitations - ANSWER-the statutory defense that imposes a time limit in which the plaintiff can file a lawsuit
what are the three types of limits expressed in liability policies - ANSWER-single limit, split limits and aggregate limits
"Single limit" in liability policies - ANSWER-highest amount the policy will pay for any one accident or occurrence, intended to cover Bodily injury and property damage
"Split limits" are most frequently used in what kind of policies - ANSWER-automobile policies
the first limit in the split limit policies is - ANSWER-the maximum amount paid for any one person for bodily injury per occurrence
the second limit in the split limit policies is - ANSWER-the maximum amount paid for ALL people injured per occurrence
the third limit in the split limit policies is - ANSWER-the maximum amount the policy will pay for property damage per occurrence
what is the aggregate limit in a liability policy - ANSWER-the maximum amount the policy will pay for all occurrences during the policy period
what happens what the insured reached the aggregate limit - ANSWER-the insured is without coverage
The definition of occurrence - ANSWER-a continuous or repeated exposure to an event that results in a financial loss
liability insurance policies are written on which two forms? - ANSWER-either a "claims-made" or "occurrence" form
Why would someone choose a liability insurance policy to be written on "occurrence forms" - ANSWER-to cover liability claims when the occurrence took place during the policy period regardless of when the claim was filed
why would someone choose a liability insurance policy to be written on a "claims-made form" - ANSWER-to provide coverage for claims only when both the occurrence and the resulting claim filling takes place during the policy period, if filed after the policy expiration date it will not be covered
what is the "duty to defend" - ANSWER-insurer has the right and duty to defend the insured, even if the claim is groundless, false or fraudulent
What is malfeasance? - ANSWER-legal term used in both civil and criminal law to describe an intentional act is illegal or morally wrong that contributes to the injury of another person
no-fault coverage - ANSWER-any type of insurance contract under which insureds are indemnified for losses, regardless of who was at fault
What is nonconcurrency - ANSWER-when an underlying liability policy and excess liability policy have different inception and expiration dates, a denial of a claim can occur
when can the excess liability policy occur - ANSWER-excess policy cannot pay on a claim until the underlying policy's limits have been exhausted
what are supplementary payments - ANSWER-items such as first aid expenses, premiums for bonds, pre- and post- judgement interest and travel expenses incurred by the insured at the request of the insurance company in defense of a claim
which type of insurance is not intended to indemnify the plaintiff? - ANSWER-punitive damages
this would be considered compensatory or special damages paid to an injured party when the insured is negligent and causes the injury? - ANSWER-lost wages
Eligible Dwelling Under a Homeowners Policy - ANSWER-owner or tenant occupied
1-4 family dwelling
up to 5 roomers or boarders
incidental business occupancy permitted
Mobile or trailer homes can be covered under which form - ANSWER-under the DP-1 form only if it is owner occupied and permanently installed
The DP-1 policy period for mobile or trailer homes cannot... - ANSWER-cannot exceed one year
Are farm dwellings eligible under dwelling insurance - ANSWER-Farm dwellings are NOT eligible
The personal automobile policy (PAP) is used to cover individuals and families for.. - ANSWER-liability they may incur for bodily injury or property damage they cause to another person and to cover their own car for damage caused by an accident
because the personal automobile policy provides both property and liability coverages, it is considered to be a .. - ANSWER-package policy
Part A coverage for personal automobile policy is - ANSWER-Part A-Liability
Part B coverage for personal automobile policy is - ANSWER-Part B- Medical Payments
Part C coverage for personal automobile policy is - ANSWER-Part C- Uninsured motorists
Part D coverage for personal automobile policy is - ANSWER-Part D- Coverage for damage to your auto (physical damage coverage)
Eligibility for personal automobile insurance - ANSWER--4 wheel motor vehicles owned or leased for at least 6 months
-private passenger autos that are 4 wheel motor vehicles,pickup trucks, and vans that are not over 10,000 lbs and not used for the delivery or transportation of goods
bodily injury means - ANSWER-bodily harm, sickness, or disease, including death
property damage means - ANSWER-Physical injury to, destruction of, or loss of use of tangible property.
the named insured's "covered auto" includes - ANSWER-any vehicle listed in the declarations
any "newly acquired auto" the insured obtains during the policy
any "trailer" owned by the named insured
What is a "temporary substitute vehicle" - ANSWER-any auto or trailer not owned by the named insured that is used as a temporary substitute vehicle that is out of service
Which of the following is NOT one of the primary insuring agreements found in a standardized Commercial Crime policy? - ANSWER-"Extortion" coverage may be added by endorsement but it is not one of the primary insuring agreements included on the form.
What kind of hazard would presented by applicants or insureds who would cheat, lie or commit other crimes to benefit from insurance coverage be - ANSWER-moral hazard
laziness and apathy are what kind of hazards - ANSWER-morale hazards
faulty wiring and electrical cords are what kind of hazards - ANSWER-physical hazards
The retroactive date is applicable only on - ANSWER-a claims-made CGL policy and it establishes the date when that coverage begins under the current policy.
are uninsured motorist first party or third party claims? - ANSWER-First party claims
With a Commercial Package Policy (CPP), "interline endorsements" are endorsements that - ANSWER-are written to change more than one coverage part that is included in a Commercial Package policy.
A performance bond guarantees - ANSWER-the owner that the bidder will complete the work at the price that was bid as per the contract specifications.
Someone breaks down the door to a store and steals merchandise. This loss is known as: - ANSWER-burglary
A "member" is defined as - ANSWER-a person serving in a directorial capacity for a limited liability company (LLC) under a standard Commercial Crime policy.
The DP-3 standard Dwelling form provides - ANSWER-Open peril coverage on the dwelling and other structures and broad form peril coverage on contents
Where in the insurance contract can an insured find the terms used throughout the policy and an explanation as to what they mean in the context of the policy? - ANSWER-The Definitions section
Which of the following is the additional limit provided by a standard Businessowners policy "Debris Removal" in the event that the policy limit is exhausted in paying the loss? - ANSWER-The additional limit is $25,000 when the basic coverage provided by the policy is not enough
If the Value Reporting Form Endorsement is attached to a Commercial Property policy, business personal property is covered at all of the following locations, EXCEPT - ANSWER-Exhibition locations are specifically excluded
A "dual capacity" claim in workers' compensation is filed: - ANSWER-against an employer that was acting in a capacity "other than as an employer" at the time the injury occurred.
This is not a covered peril for collapse under the commercial property additional coverage - ANSWER-A building that is in danger of collapsing is NOT covered under the additional coverage for "collapse" under a Commercial Property policy.
World-wide liability coverage is provided for a period of 30 days for.. - ANSWER-autos the insured hires, leases, rents or borrows without a driver. The insured's liability is determined in a settlement agreed to by the insurer, or in a suit filed in the United States or its territories, possessions, Puerto Rico or Canada.
The "principal" for an independent adjuster is the - ANSWER-insurer
The "control of property" condition of the Commercial Property policy: - ANSWER-states that a negligent act of someone beyond the insured's direction or control will not affect the coverage.
All loss or damage to property other than money and securities under a Crime policy is settled on - ANSWER-replacement cost basis
Which of the following businesses can cover their private passenger and commercial automobile exposures with a Business Auto policy? - ANSWER-a grocery store
An insured has purchased BAP physical damage coverage against specified causes of loss. Protection applies to all of the following perils, EXCEPT: - ANSWER-falling objects
period of restoration begins - ANSWER-72 hours a [Show Less]