Ch.9- Intro To Liability Insurance

Question 1

What liability policies insure:

1.insure bodily injury + property damage

Answer 1

1. Bodily injury: physical unjury sustained + associated w/external causes
2. Property damage: unintentional damage to property of others

Question 2

What liability policies insure:

2. 3rd party coverage

Answer 2

anyone/any entity not names in policy

Question 3

What liability policies insure:

3. Payment only when insured legally liable

Answer 3

• policy responds only when insured legally liable for injury/damage caused
• must establish negligence

Question 4

What liability policies insure:

4. Coverage provided on occurrence basis

Answer 4

• occurrence:
  
  • occurs suddenly + unexpectedly

OR

• occurs over long period of time
• limit stated is for each occurrence ( amount resets for future claims
• Also:
  
  • aggregate limits
  • split limits

Question 5

Aggregate limits

Answer 5

• aggregate limits : max amt paid for all valid claims during policy term

Question 6

Split limits

Answer 6

• Inclusive limit|:
• split milits: 3 limits
  
  • 1st- limit for bodily injury per person
  • 2nd- limit in total for all claimants, still subject to limit per person
  • 3rd- limit for property damage per occurence

Insert pic

Question 7

What liability policies insure:

5. Coverage for compensatory damages

Answer 7

• pays for compensatory damages only
• compensatory damages: compensate 3rd party for injury/damage caused by insured

Question 8

Duties in event of occurrence ,claim, action (5)

Answer 8

*should be in package*

• provide insured w/ prompt notification of any occurrence which may lead to claim/action
• immediately provide insurer w/ copies of any legal docs rec’d (notice of claim)
• Authorize insurer to obtain record + other info -assist in the investigation, settlement, defence of claim/action
• do not voluntarily make payment, assume obligation,incur expense, other than for first aid, w/o consent of insurer

Question 9

Supplementary payments

Answer 9

• Additional expenses incurred are under separate agreement: supplementary payments
  
  • 1. Cost of defence
  • 2.reasonable expenses incurred by insured at insurers request to assist in investigation + defence of claim
  • 3. Court costs assessed against insured
  • 4. Interest from date judgement rendered but only on amt within limit of insurance in policy