Chapter 2 Flashcards
Identify five losses of liability insurance of the 1980s
- high court awards in the USA.
- Environmental disasters.
- Aviation disasters
- Inadequate assessment of dangerous risks.
- Dormant bodily injury claims.
5 sections of the IBC 2100
- Coverages.
- Who is insured?
- Limits of insurance.
- Commercial general liability conditions.
- Definitions.
Section 1 - coverages
A. bodily injury and property damage liability
B. Personal injury and advertising injury liability
C. Medical payments.
D. Tenants legal liability.
Each coverage section has two parts
The insuring agreement
Definitions
Bodily injury
Bodily injury, sickness or disease, sustained by a person, including death, resulting from any of these at any time
Does not include mental anguish, such as pain, nausea, tears, or hysteria, or other emotional stress
Death
Deaths resulting from bodily injury, sickness or disease at any time is insured under the agreement
Sickness or disease
Refers to conditions that originate within the body
Two key coverages included under definition of property damage
- Physical injury to tangible property, including resulting loss of use.
- Loss of use of tangible property not physically insured.
3 types of liability that may be faced by business owners
1.torts liability
2.statutory liability
3.certain contractual liabilities
Occurrence
An accident, including continuous, or repeated exposure to the same general harmful conditions
What is limited worldwide coverage for products liability
The plaintiff must show that the products causing the injury or damage were made, or sold within the United States or Canada
Where must a suit for any product liability claims be brought
Within Canada or the USA
Define automobile
Land motor vehicle, trailer or semi trailer that is required by law to be insured
True or false
The insurer must defend in action for which coverage is provided by the policy, even if the allegations are groundless falls or fraudulent
True
True or false
The insurance, right and duty to defend ends when the coverage limits have been expended to pay the claim
True
True or false
The insurer can settle any claim or action at its discretion
True
Yes, or no
Does personal and advertising injury respond to claims alleging bodily injury
No
Identify two instances when there would be coverage for watercraft
1.While the shore on premises
2.You do not own that is less than 8 m long and not used to carry people for compensation
False imprisonment
Holding someone without lawful justification, in a place against their will
False arrest
False imprisonment, but contains the additional feature of detaining the victims with the intention that they be turned over to the police for prosecution
Malicious prosecution
A suit begun in malice without probable cause to believe that the charges can be sustained
Defamation
A statement that causes unjustified injury to the reputation of another person.
Slander
Spoken defamation
Libel
Written defamation
Identify 4 activities that constitute an advertising liability exposure
- Advertising
- Publishing.
- Broadcasting
- Telecasting.
On what basis or medical payments made
Voluntary
No fault
Five types of medical expenses
1.first aide
2.ambulance
3.x-ray
4.medical
5.surgical
Insured liable for payment of…
Compensatory damages only
Exemplary or punitive damages are..
Not covered under this policy and are the full liability of the insured
Tangible Property
Property that can be felt or touched, including real and personal property
Right to Defend
The insurer has invested interest in ensuring all the facts are placed before the courts as they may be called upon to render a judgement made against them
Right to investigate
It provides the insurer with firsthand information that might otherwise be withheld from it
Right to settle a claim or action
Once underway, it can result in substantial savings to the insurer
Right and duty to Defend ends when
The coverage limits have been expended to pay the claim
Duty to defend
The insurer has a duty to defend the insured in any action for which coverage is provided by the policy
Tenants Legal Liability
Is limited to the payment of only those losses for which the tenant is liable in tort
Exclusions - coverages A, C and D
Asbestos
Fungi or spores
Nuclear energy liability
Pollution liability
Terrorism
War risks
Aggregate limit
The most the policy will pay during the policy period for all claims for which insurance is provided.
3 examples of short term, rental exposures, that may be faced by a business
- Rental of hotel rooms.
- Seminars
- Trade shows.
Two kinds of court costs
- Court costs
2.interest of amount of judgement
Who’s name a commercial general liability policy can be issued
- individual to
- Partnerships, joint ventures, limited liability corporation
- Organizations other than partnerships or joint ventures
Identify when a newly formed or acquired business would be automatically covered under the existing IBC 2100
When insured purchases all or majority of an existing corporation or forms a new one during the policy.
Identify for those newly formed businesses that are covered the length of time for automatic coverage
90 days
Or
Policy expiry date
Occurrence limit
The maximum to be paid by the insurer in anyone occurrence
Identify three duties of the insured in the event of an occurrence claim or action
- Notify insurer promptly.
- Provide written notice to insurer when claim or action filed.
- Insurer not liable for cost or obligation, assumed by insured except first aid.
Exposure theory
Assumes that the injury occurred when the person was in physical contact with the harmful substance
Exposure in residence theory
The assumption is made that the disease or other bodily injury continues after the exposure to the hazardous substance.
Manifestation theory
Injury is assumed to have occurred only one recognized or diagnosed
Three features of the claims made policy
- Coverage triggered when claim made.
- Coverage limited by retroactive date.
- Reporting period can be extended for an additional premium.
Three instances when the extended reporting period endorsement could be added to the IBC 2200 form
- Going out of business.
- Changing from claims made to a current policy.
- Replacing claims made policy with another Insurer.
A professional
Someone who possesses or claims to possess the special knowledge and skills necessary to render a professional service
Two categories of professionals
- Those who administer health or other professional care
- Those who give advice and counseling.
Other than the company, identify three others that are also owed a duty, established by federal and provincial governments
- Shareholders.
- Creditors.
- Employees, and the public.
Umbrella policy
Designed to respond only after the underlying or primary policy has responded
A breach of contract will be successful when the plaintiff can show that the professional failed to perform at the required level
- Complete or unsatisfactory performance
- Level of performance meets accepted standards - Substantial performance.
- Performance fall short of complete performance only in minor respects - Material breach
- Professional performance is grossly inadequate or defective in some major respect
Easement
Right of person to use to land belonging to others
