Chapter 4 - Casualty/Liability Insurance Basics

Question 1

Damages awarded to an injured party for actual expenses (i.e., medical bills)

Answer 1

Special Damages

Question 2

Damages awarded to an injured party that cannot be calculated objectively (i.e., Pain and suffering)

Answer 2

General Damages

Question 3

Legal liability arising from physical injury, including sickness, disease, and death.

Answer 3

Bodily Injury

Question 4

Failure to use ordinary care

Answer 4

Negligence

Question 5

Coverage for bodily injury to a third party regardless of negligence.

Answer 5

Medical Payments

Question 6

Legal liability arising from physical damage to tangible property.

Answer 6

Property Damage

Question 7

4 Elements of Negligence

Answer 7

Legal Duty of Care
Breach of Duty
Proximate Cause
Loss or Damage

Question 8

Maximum amount the policy will pay for all losses submitted during the policy period, regardless of other policy limits

Answer 8

Aggregate Limit

Question 9

A Statutory Law defense that reduces the damages in proportion to the degree of negligence.

Answer 9

Comparative Negligence

Question 10

A Common Law defense that prevents recovery for damages caused by a negligent party if the claimant was negligent in any extent.

Answer 10

Contributory Negligence

Question 11

A system or law in which the injured party collects insurance benefits from his/her own policy.

Answer 11

No Fault Liability

Question 12

25/50/15 is an example of what type of limit?

Answer 12

Split Limit

Question 13

A type of limit in which is the most the policy will pay for all losses in any one occurrence.

Answer 13

Combined Single Limit

Question 14

Legal principle that imposes legal liability for products from a business.

Answer 14

Strict Liability

Question 15

Legal principle that imposes legal liability for animal ownership.

Answer 15

Absolute Liability

Question 16

The failure to exhibit any sort of care through recklessness or deliberate indifference to the well- being of others

Answer 16

Gross Negligence

Question 17

A wrongful civil act- not including a criminal act or breach of contract- that violates a duty or the rights of another, and for which the harmed party may seek compensation

Answer 17

Tort

Question 18

Not caused by a deliberate act, but are the result of the failure to act as a reasonable or prudent person would under the same circumstances

Answer 18

Unintentional torts

Question 19

Deliberate acts that are premeditated or planned and that harm another.
Liability policies do not provide coverage for this

Answer 19

Intentional torts

Question 20

Defenses that are based on judicial or court decisions

Answer 20

Common Law Defenses

Question 21

Prevents recovery if the claimant knowingly assumed a risk, thus weakening or eliminating the defendant’s duty of care.

Answer 21

Assumption of Risk

Question 22

Prevents or limits recovery from the wrongdoer when a distinctly
separate negligent act occurs after the original negligent act, but before damage occurs. This interferes with the chain of events that brings about the loss, meaning the original act may not be the proximate cause of injury.

Answer 22

Intervening Cause

Question 23

Defenses that are based on legislation

Answer 23

Statutory Defenses

Question 24

The length of time during which legal proceedings may be initiated, set either by state or federal law, usually beginning the day an event occurs

Answer 24

Statute of limitation

Question 25

Money paid by order of a court as compensation to an injured claimant

Answer 25

Damages

Question 26

In some cases, the law will allow damages to be awarded in addition to compensatory damages in order to punish and discourage a wrongdoer from repeating negligent acts or omissions.

Answer 26

Punitive Damages

Question 27

An artificial condition on land that attracts children, such as a swimming pool. Even if they are trespassing onto someone’s property, children are legally considered invitees if the premises contains an attractive nuisance, and the property owner may be held absolutely liable for any resulting injuries.

Answer 27

Attractive Nuisance

Question 28

While most liability cannot be transferred to another party, some relationships permit a person
to have _______ _______ for the actions of another (parent/child)

Answer 28

Vicarious Liability

Question 29

Refers to certain types of harm that affect a person’s reputation or emotional well-being, such as libel, slander, false arrest, and invasion of privacy

Answer 29

Personal Injury Liability

Question 30

_______ _______ refers to similar injuries while the insured is advertising their goods and services, such as misappropriation of advertising ideas, copyright infringement, and defamation.

Answer 30

Advertising Injury