Assignment 8 - Managing Property and Liability Risk Flashcards
- other prop. and liability policies
- policy that covers breach of duty, neglect, error, misstmt, misleading stmt or omission
- used for persons serving on various kinds of BoDs
directors and officers liability policy
only source of flood and mudslide ins. cov’g for indiv.
Nat’l Flood Ins. Program
special endorsement on homeowner policies that automatically increases the cov’g limits periodically by small %age amts.
inflation guard
variation of homeowner’s ins. policy that provides open perils cov’g on all cov’d prop.
Homeowners 5
variation of homeowner’s ins. policy that covers personal prop. for tenants
homeowners 4 (HO-4)
new replacement cost less the amt the prop has physically depreciated since it was built or was new
actual cash value
- ins. protection that covers damages b/c of bodily injury and property damage
- pays on behalf of the insured all sums up to the policy limit that the insured is legally obligated to pay
- limit is placed for each insurable occurrence regardless of # of persons injured or amt of separate property damage
- ins. comp. agrees to defend insured in any court suits - no matter if it is groundless - up to liability limit on policy
- certain exclusions to policy due apply
comprehensive personal liability coverage
auto ins. personal injury protection
plan that allows insured persons to voluntarily relinquish a part of their right to sue in return for reduced prem.
Choice Type No-Fault Plan
HO-3
Property Coverages
- A: Dwelling ($500,000)
- B: Other Structures ($50,000; 10% of dwelling amt, but may be incr’d)
- C: Personal Prop. anywhere in the world ($250,000; 50% of dwelling or incr’d or decr’d to 40%) or on residence of insured other that residence described in the policy ($25,000; 10% of Cov’g C limit, but no less than $1,000)
- D: Loss of use (100,000 or 20% of dwelling amt)
HO-3
Liability Coverages
- E: Personal ($300,000 each occurrence)
- F: Medical pmts to others $1,000 each person
the loss of assets or earnings through the judicial process as a result of one’s negligence or other legal liability
personal liability
Comprehensive Personal Liability Ins. does NOT apply to:
- bus/prof. pursuits
- ownership/maint. or use of automobiles
- injury/damage caused intentionally by the insured
- benef. payable under WC Laws
- liability assumed by insured under contract/agreement
- anything linked to crime
**any situations in which other ins. is applicable - CPL doesn’t not cover
when basic property cov’g and CPL are added to some other cov’gs or written on an open risk basis, it is the resulting, more comprehensive policy
Types 2-6 and 8
Homeowner’s Insurance (HO)
- type of HO insurance
- provides broad specified perils prop cov’g
HO-2
- type of HO insurance
- open/specified perils on builidngs and broad form on personal prop
HO-3
- type of HO insurance
- personal prop. cov’g only (broad form) for tenants (renters insurance)
HO-4
- type of HO insurance
- comprehensive form providing open perils cov’g on all cov’d prop.
HO-5
- type of HO insurance
- specified perils
- personal prop. and loss-of-use cov’g (broad form), and cerain dwelling cov’g w/in the unit and for which the unit owner may have ins. respons. under an assoc. agreement
- for condos and cooperative unit owners
HO-6
- type of HO insurance
- specified perils
- cov’g on bulidings and personal prop. that is more limited than HO-2
- used to provide cov’g on homes that my not meet the insurer’s UW guidelines for other homeowner’s forms
HO-8
stmt that applies to the insured’s dwelling and other structures
states that prop. damaged or lost will be replaced subj. to terms of policy
replacement cost provision
replacement cost provision statement
- If insured carries ins. on a building = at least 80% of its replacement cost new, any covered loss to the building will be paid to the extent of the full cost to repair or replace the damage w/o deducting for appreciation, up to policy limit*
- OTHERWISE:*
- depreciation will be taken in account and subtracted from formula*
Replacement Provision Options
- RC w/o any depreciation deduction.
- ACV = RC - depreciation
- obtain a RC protection endorsement, which allows insurer to incr. limit and prem. based on prop. eval.
no-fault regulations for auto ins.
benefits provided are payable to injured, cov’d persons by their own ins. comp. w/o the cov’d persons needing to show that anyone was negligent in causing the injuries
personal injury protection (PIP)
auto insurance
single limit of liability that applies to all cov’d liability arising out of an accident
Personal Auto Policy
Parts of Automobile Insurance Coverage
- A: Liability cov’g (bodily injury and prop. damage liability
- B: Medical pmts cov’g
- C: uninsured motorists cov’g (underinsured)
- D: damage to cov’d autos (comprehensive, collision, towing and labor, and transportation exp.)
key components of auto ins. policies
- uninsured motorist cov’g
- underinsured motorist cov’g
- phys. damage
- comprehensive
- collision
UW guidelines in determining cost of auto ins.
- age/gender
- use of auto
- territory where the auto is garaged
- operators’ driving records
- other prop. and liability policy
- designed to pay and defend liability claims after limits of underlying liability policies are exhausted
- usually min of $1 million
- worldwide in scope
Personal Excess Liability or Umbrella Policies
- other prop. and liability policy
- covers professionals against claims and suits arising out of possible or alleged negligence or errors/ommissions in practice of business
Prof. Liability Ins. Cov’g
Types of Prof. Liability Ins. Cov’g
- claims-made basis
- occurrence forms
- Type of Prof. Liability Ins. Cov’g
- the event or incident occurs after the effective date of the policy and is reported to the ins. company prior to the end of the policy period
claims-made basis
- Type of Prof. Liability Ins. Cov’g
- claim must occur during the policy period, but a claim can be made during OR after period
*
occurrence forms
- also known as “open risk”
- protects against all risks or perils that may cause a loss to a prop., except for those specifically excluded in the policy
any-risk cov’g
the cause of a possible loss
peril
ONLY protects against specific causes of loss named in policy
specified perils cov’g
2 basic approaches for insuring property
- specified perils cov’g
- “any risk of loss” cov’g
common personal liability exposures faced by most indiv.
- ownership, rental and/or use of automobiles
- ownership and/or rental of premises
- prof. or business activities
- directorships or officerships in corp., cred. unions, school boards, and other orgs
- employment of others (WC)
- ownership, rental, or use of watercraft or aircraft
- other personal activities
