Chapter 13: Other types of Property & Casualty Insurance Flashcards
what is an Umbrella/Excess Liability Policy and coverage provided
*provides coverage for non-business liability of individuals
1. higher limits of liability over the limits of the required underlying policies
2. could provide liability coverage that is broader than underlying coverage
what is underlying coverage and SIR in Umbrella
SIR- Self Insured Retention; only applies if the loss is paid by the Umbrella policy when the underlying policy does not provide coverage (the loss is excluded)
Professional Liability & who needs it
provides liability coverage for litigation that claims failure to meet what would be considered professional standard
*medical professions, accountants, layers, architects, consultants, engineers, funeral directors, insurance agents, realtors
Directors and Officers Liability (D&O)
protects corporate officers and members of corporation’s board of directors from allegations of “wrongful acts” which are not in best interest of corporation
*also provides coverage to reimburse the corporation
Employee Benefits
protection to a person or organization who become legally obligated to pay because of an act/error/omission in the administration of employee benefits
Employment Practices Liability (EPLI)
*what is it, why is it important, 3 exposures it protects
covers businesses against claims made by employees that their legal rights as employees of the company have been violated; important b/c employment practice liability coverage is excluded from all other primary personal and commercial insurance policies
1. discrimination acts
2. sexual harassment
3. hostile work environment; abuse
what conditions must be met before coverage can be placed in the surplus lines market
what are the 3 parties to a surety bond
- Principal (obligor)
- Obligee
- Surety (Guarantor)
what 3 criteria do bond underwriters use to determine if they will provide a bond to a principal
Contract bonds
guarantee that contractors will carry out their contractual obligations
3 types of contract bonds
- Bid Bond
- Performance Bond
- Maintence Bond
Bid Bond
contractor bidding on a contract will enter into the contract and furnish all required bonds; surety will pay obligee the difference between the amount of bid and bid that is accepted should contract be unable to actually enter into the contract
Performance Bond
contactor will complete the project in accordance with all plans and specification of the contract
Maintenance Bond
Contractor will correct all defects in workmanship/materials for a specified period of time
Aircraft Hull coverage
what are the Major Coverages under Ocean Marine Insurance
- Hull
- Cargo
- Freight
- Protection & Indemnity (P&I)
- Perils
- Implied Warranties
- Loss Adjustment
what is Protection and Indemnity (P&I)
legal liability of ship-owner from bodily injury & property damage to third parties; liability for bodily injury to passengers, ship visitors, and crew; property damage caused by a collision to other ships/structures, loss of cargo cause by the ship-owners negligence
Who is eligible for Flood Insurance
communities
how is WYO different than Government
What is the purpose of Flood Insurance
- provide individuals and business property owners to purchase coverage from catastrophic effects of flood at reasonable rates
- incentive to communities to reduce future flood losses by proper floodplain management
What is the standard deductible on a flood policy and how does it differ from other property policies
standard deductible of $1,000; applies separately to building and contents ($1,000 for building and $1,000 for contents)
Limits of Flood Insurance and how they differ between the Emergency Program and Regular Program
Emergency- no additional limits
*see chart pg. 11
What is a Risk Retention Group (RRG)
*characteristics, forms
*insurer formed by several organizations to cover liability losses for those organizations
1. members must be involved in a similar or related business
2. owned by its members
3. must have RRG in its name
4. chartered or licensed as insurance company in at least one state
*provides most forms of liability insurance EXCEPT WC
What are Risk Purchasing Groups
group that maintains as one of its purposes the purchase of liability insurance on a group basis; purchases insurance only for its member’s liability exposures
*does not bear any risk
*can offer better rates for same coverage
What is Federal Crop Insurance (FCIC or RMA)
insure wheat yields against loss by drought, flood, hail, frost, insects, diseases and all natural hazards for a premium based on the past loss history of the particular area
What is Boatowners/Personal Watercraft
multiline contract that provides coverage for both property & liability; only applies to losses that occur w/n navigational limits that are defined in the application and the policy
What is Recreational Vehicles
provides automobile coverage on these types of vehicles, tailoring the coverage to meet the needs of the recreational vehicle owner
What is Mobile Home Policy
provide coverage pm the mobile home, other structures, personal property and additional living expenses; personal liability and medical payments to others is also included
What is the FAIR plan? what does FAIR stand for?
Fair Access to Insurance Requirements
*no property owner is denied basic property insurance w/o impartial evaluation of the individual exposure
*basic property coverage; fire, extended coverages, vandalism, malicious mischief
*insures risks that are marginal and normally not acceptable in regular market
