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Insurance Illinois Exam > Casualty Insurance > Flashcards

Casualty Insurance Flashcards

1
Q

A claimant is …

A

A person or organization who has sustained injuries

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2
Q

A first person claimant is who?

A

Is an insured making a claim under his/her own policy for damage to his/her insured property

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3
Q

A third-party claimant is who?

A

Is a person or organization, other than the insured making a claim against an insured for the insured to submit to his/her insurance company for insurance coverage.

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4
Q

Legal liability occurs when?

A

It occurs when an insured is involved in an accident in which a third-party claimant is injured or incurs property damage. The third-party claimant may make a legal liability claim against the insured for injuries and or property damage.

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5
Q

What are the things specified in auto policies that the insurance company will pay for in addition to the auto policy limits of liability?

A

Supplemental payments

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6
Q

What are the things specified in auto policies that the insurance company will pay for in addition to the auto policy limits of liability?

A

Supplemental payments

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7
Q

What two things does an adjuster do?

A

And adjuster determines if there was coverage in effect at the time of loss and investigates and settles the loss

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8
Q

On an application, what are representations?

A

Basic regular statements that the insured believes to be correct

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9
Q

What are warrantees on an application?

A

Special statements which the insured guarantees to be correct

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10
Q

What is on the declaration page name 2 things

A

It is the information page. It has the effective date and expiration date.

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11
Q

On the exclusion part of a policy, what three types of hazards are excluded?

A

Morale hazards, moral hazards, and physical hazards.

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12
Q

What is a morale hazard?

A

It is a risk of loss is caused by the insured acting in an indifferent, careless or irresponsible manner

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13
Q

What is a moral hazard?

A

It is one there is a risk of loss due to legal action

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14
Q

Sometimes the underwriter will hire a firm to do an investigation or inspection of the property. The purpose of the inspection is the determine 4 things.

A

To verify the value of the property.
To verify the use of the property.
To verify the use of surrounding properties.
To verify that the property being proposed for insurance is reasonably well maintain

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15
Q

Definition of commission

A

Doing something that he/she should not have done

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16
Q

What are punitive damages and are these covered by liability insurance?

A

Punitive damages are extra amounts a court orders the insured to pay to the claimant as punishment for doing something particularly reckless. Usually punitive damages are not covered by liability insurance.

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17
Q

What is law of torts?
It is also sometimes called?

A

Tort law is a type of civil liability, which is a legal liability that can arise from a contract or a tort. Tort law is the largest area of civil law, which is the law that governs disputes between private individuals. The purpose of tort law is to determine if someone should be legally responsible for harming another person, and if so, how much compensation they should receive.

Civil liability

Civil liability is a legal obligation that requires a party to pay for damages or follow other court-ordered enforcement in a lawsuit. It’s usually brought by a private party to sue for damages, injunctions, or other remedies. For example, in a car crash, the injured party can sue the driver and ask for monetary damages.

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18
Q

What is an occurrence?

A

It’s an accident or some other repetitive exposure, which result in bodily entry or property damage

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19
Q

Some commercial and or professional liability policies are written as what type of policies?

A

Claims made policy

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20
Q

Omnibus clause

A

Anyone legally responsible for the use of the auto at the time of the accident

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21
Q

What is it called? One an employee takes the employer car and has an accident and the employer is legally responsible.

A

Vicarious liability

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22
Q

State mandatory insurance law minimum liability limits required to be carried on all automatic deals by state laws are

A

25/50/20

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23
Q

Explain 25/50/20

A

25,000 for bodily injuries per person
$50,000 for total/aggregate bodily injuries per occurrence
$20,000 per property damage per occurrence

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24
Q

An alternative to 25/50/20 split limits is minimum single liability limit of

A

$70,000

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25
Q

Transportation rental reimbursement coverage pays up to how much per day for transportation cost not to exceed how much?

A

It pays up to $20 per day not to exceed $600

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26
Q

What coverage can be purchased by a business to protect a key employee such as an executive who is not cover under a personal auto policy?

A

Drive other car coverage

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27
Q

Uninsured motorist coverage covers only what?

A

It does not cover damage to the insured vehicle. It only covers bodily injuries.

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28
Q

If the insured and the insurance company disagreed to the amount of loss and the vehicle cannot be repaired or replaced each may select an appraiser. What is this called?

A

. Arbitration clause

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29
Q

If the insured and the insurance company disagreed to the amount of loss and the vehicle cannot be repaired or replaced each may select an appraiser. What is this called?

A

. Arbitration clause

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30
Q

CGL stands for what?
An audit is done at the end of the policy term if it determines that the risks have increased and an additional premium can be charged. This additional premium is called?

A

Commercial general liability
Audit premium

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31
Q

CGL’s are usually issued as what kind of policy?

A

Occurrence policy

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32
Q

Under CGL policy conditions, also known as what? The insured is required to give the insurance company. What six things?

A

Required.
Prompt notice of an occurrence.
Prompt written notice of all claims.
Immediate copies of claim notices and legal papers.
Authorization to obtain records.
Cooperation in investigation, settlement, defense claims.
Cooperation in enforcement of rights against others to attempt to recover the loss. The insurance company has paid also called Subrogation

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33
Q

In CGL what is coverage A?

A

Bodily injury and property damage liability coverage

34
Q

Products and completed operations liability coverage is also called?

A

Products liability coverage

35
Q

With products liability coverage there is a high standard of responsibility/liability to assure the products do not kill anyone and this high level of liability is called?

A

Strict liability

36
Q

With CGL’s coverage a one of the exclusions is liquor liability what is this also called?

A

Dram shop liability

37
Q

With CGL’s, coverage B involves what?

A

personal injury, like slander, etc.

38
Q

In regards to CGL’s, what is coverage C cover?

A

Medical payments coverage

39
Q

What are the three optional coverages with garage coverage and explain them

A

Garage liability coverage covers liability arising as a result of garage operations.
Garage keepers coverage covers legal liability for damage to customers cars.
Garage physical damage coverage covers autos owned by the insured business

40
Q

What is the coverage that covers only liability arising out of defects of products and completed services manufactured handled distributed, or sold by the insure?

A

Products and completed operations liability coverage also called products liability coverage

41
Q

What coverage covers only liability assumed by the insured by contract, found in business contracts such as purchase agreements, construction, contracts, maintenance agreements, etc.

A

Contractual liability coverage

42
Q

Contractual liability coverage also called

A

Hold harmless clause

43
Q

When one person or organization becomes legally liable accidents, injuries, or property damage caused by another it is called. What type of liability?

A

Vicarious liability

44
Q

Terrorism risk insurance act also called what? For it to apply total losses must succeed how much?

A

TRIA
100 million

45
Q

CGLs
Generally to be successful in making a liability claim against an insured the claimant must be able to prove that the insured was negligent. There are a few exceptions such as what three?

A

Absolute liability.- high level of risk company poisoning water of a neighborhood
Strict liability. When there is a high duty to take care . If they sold something that they knew would break down and hurt someone
Could buy products and completed liability insurance. Vicarious liability

46
Q

Example of absolute liability, which again is an exception in this case in regards to employees with a claimant does not need to prove that the insured was negligent

A

Workmen’s Comp.

47
Q

Give an example of strict liability

A

If the insured had reason to know that in certain situations their product could break down they could be held to a standard strict liability that would not require the claimant to prove negligence

48
Q

In the case of strict liability, what type of insurance should be purchased?

A

Products and completed operations liability

49
Q

Explain vicarious liability
If this happened to a parent, they would be protected under what?
If it’s an employer, they would be protected under what? Which might also include what type of coverage.
In the person organization entering into the contract with the hold harmless clause can be protected by what type of coverage?

A

When an insured person organization has not committed an act of negligence, but becomes legally liable for actions or failures to act of another
Home owners personal liability coverage
Commercial general liability coverage, which might also include employers non-ownership liability coverage.
Contractual liability coverage

50
Q

What is a bond?

A

The contract that guarantees a promise

51
Q

Define Fidelity bonds

A

They are contracts issued by an insurance companies that guaranteed a promise of honesty of one person to either another person or to an organization

52
Q

Describe employee dishonesty coverage

A

This is a Fidelity bond issued by insurance companies to guarantee the honesty of an employee to an employer

53
Q

A bond is a three party contract list the three

A

Principal/obligor employee , obligee - employer, surety - insurance company

54
Q

What is seven major crime and surety policies

A

Premises, burglary coverage.
Premises, and outside theft and robbery coverage.
Robbery and safe burglary coverage.
The disappearance and destruction coverage.
Forgery and alteration coverage next line employee dishonesty coverage
Surety bonds

55
Q

Employee dishonesty coverage is also called a?

A

Fidelity bond

56
Q

Most employee dishonesty policies also called Fidelity bonds have how long of a discovery window?

A

Six month discovery window this window is a period after the policy has been terminated, but the loss has been discovered

57
Q

How long do I have to tell my insurance about a new car

A

The Illinois new-car insurance grace period is 7 to 30 days in most cases. The new-car grace period is how long insured drivers are allowed to drive a newly purchased vehicle before adding it to an existing car insurance policy.

58
Q

Coverage A exclusions with CGL 4

A

Intended acts
Liquor liability also called dram shop liability
Liability to injured employees also called workers comp
Liability from auto, watercraft, aircraft

59
Q

Coverage A - CGL covers 6 things

A

Premise and off premise liability
Operations liability
Products liability
Fire
Incidental insured contracts liability

60
Q

Incidental insured contracts liability explain

A

Covers liability for someone else by contract in a hold harmless clause

61
Q

Robbery and safe burglary coverage. Has 3 optional coverages

A

Inside the premises of a custodian
Outside the premises of a messenger
Safe burglary

A custodian or messenger includes partners of the insured or an employee

62
Q

Amount paid in loss is call the … or ….

A

Loss settlement
Adjustment

63
Q

Conditions of the policy 2 parts
What must be met at time of the claim. 2

A

Application and premium
Notice of Loss - immediate
Proof of loss in 60 days

64
Q

To persuade a court that the insured is legally liable which means responsible the claimant must prove a concept called … containing 4 points 2-8

A

Necessary elements also called requirements.
Negligence, damages, proximate cause, comparative negligence

65
Q

Negligence consists of two parts

A

Omission
Commission

66
Q

Covered damages in terms if proving to court necessary elements. 2. 2-8

A

Special - damages that are easy to determine. Medical bills acts. Jury duty case

General damages - not easy to calculate pain and suffering.

67
Q

In terms of the court process the claimants prove damages. Bodily injuries include 4
Things
2-8

A

Reimbursed for medical bills
For lost wages
Comp For pain and suffering
Comp for permanent disability
Comp for permanent scaring and disfigurement

68
Q

Am insurance contract is also called

A

Contract of indemnity

69
Q

Parties to whom the coverages applies 4
2-12

A

Named insured and spouse (no driver license needed, don’t have to be named)
Anyone driving with permission (will not cover bodily injury to employee )
Vicarious responsibility- sometimes employer is responsible for the actions caused by an employee

70
Q

Omnibus clause

A

Anyone responsible at time of accident

71
Q

What is an alternative to state law of 25/50/20
Is called

A

Single liability limit of 70,000

72
Q

Difference in deductibles in property coverages vs liability coverages

A

Property coverage usually has a deductible
Liability usually does not

73
Q

Auto medical payments 4 things
2-17

A
  1. Covers medical bills incurred by insured and household members if injured by any auto anywhere. Also covers passenger’s entering, sitting or leaving car.
  2. Within 3 years
  3. Injured is paid whether insured or not.
  4. Limit off person usually 5k or aggregate 25k
74
Q

Uninsured motorist and underinsured covers whom
Covers only ….
Usually the number of min coverage is

A

Insured and all members of house if they were injured anywhere. And passengers entering sitting or leaving.
Bodily injuries
25/50

75
Q

CPL has separate limits for 6

A
  1. Bodily injuries and property liability cov
  2. Products liability coverage
  3. Fire liability coverage
  4. Personal and advertising injury liability coverage
  5. Medical payments coverage
  6. A total max aggregate annual limit for all covered claims
76
Q

CGL coverage B exclusions 7

A

Intentional false writing
Willful law violation
Liability assumed by contract
Liability resulting from publication that first occurred before policy effective date
Advertising liability from breach of contract
Liability caused by advertising of wrong quality or price
Advertising liability when insured business is advertising, broadcasting, publishing or telecasting

77
Q

CGL coverage A and B supplementary payments. Other costs incurred at the request of the insurance company including loss of income of up to how much?

A

100 a day

78
Q

For a prominent business to qualify for commercial excess/umbrekka liability coverage the insured must carry

A

Primary liability coverage with at least required minimum limits

79
Q

Professional errors and omissions coverage also called

A

Malpractice insurance or directors and officers insurance

80
Q

What insurance protects businesses against claims made by employees against an employer alleging they have violated the employee’s rights

A

Employment practice liability insurance

81
Q

The settlement of a professional liability claim can sometimes have an effect on reputation it can sometimes require the insurance company

A

To obtain the insureds written consent to settle a claim without defending against the claim in court

Insurance Illinois Exam (5 decks)

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