Assignment #5

Question 1

4 Types of Commercial Liability Loss Exposures

Answer 1

(1) Premises and Operations Liability
(2) Products and Completed Operations Liability
(3) Automobile Liability
(4) Workers Comp and Employers Liability

Question 2

4 Types of Commercial Liability Coverage

Answer 2

(1) Commercial General Liability
(2) Commercial Auto Liability
(3) Workers Compensation Liability
(4) Employers Liability

Question 3

Premises and Operations Liability

Answer 3

Damage arising out of the insureds premises or operations

Usually based on negligence but can also be based on strict liability (negligence not required if activity is inherently dangerous)

Hold harmless agreement – someone assumes liability of another party

Question 4

Products and Completed Operations Liability

Answer 4

Liability arising out of defective products or completed operations

Can be based on negligence, misrepresentation, fraud, deceit, and breach of warranty

Strict liability – product is inherently dangerous, must pass test:
(1) Product was defective when it left the suppliers custody
(2) Defective condition made product unreasonably dangerous
(3) Defective product was proximate cause of damage

Strict liability usually levied against manufacturer but can be against any seller / supplier

Question 5

Commercial General Liability Coverage

Answer 5

Provides coverage for:
(1) Bodily injury and property damage liability
(2) Personal and advertising injury liability (slander, libel, etc.)
(3) Medical payments (for modest BI claims made to avoid larger lawsuit)

Question 6

Employers Liability Insurance

Answer 6

Covers things not covered by WC – claims under dual capacity doctrine, loss of consortium, 3rd party claims)

Question 7

Workers Comp Coverage

Answer 7

Intended to be exclusive remedy for employee injuries on the job

No limit, instead payments are capped by state statute

Includes:
(1) Medical benefits
(2) Disability Income
(3) Rehab benefits
(4) Death benefits

Question 8

WC Underwriters need 5 things to underwrite an account:

Answer 8

(1) Workers Comp Application (most basic info required)
(2) OSHA Records (log of all occupational injuries)
(3) Risk Control Reports (inspection of employer’s background, processes, work place safety policies)
(4) Experience Rating Worksheets (An experience rating worksheet can show trends in an insured’s payroll that may indicate that the estimates on the application are inaccurate)
(5) Stats and Publications

Question 9

Risk Control Techniques (4)

Answer 9

(1) Loss Prevention
(2) Loss Reduction
(3) Avoidance
(4) Transfer

Question 10

Automobile Liability

Answer 10

Corp can be held liable for:
(1) employee negligence driving
(2) negligent maintenance
(3) allowing someone not skilled to drive

Corp and driver can be held jointly liable

Exception if employee deviates materially from work mandates / instructions