Chapter 4 - Section 3

Question 1

Identify the limits generally provided under the various covers under Section II of most Habitational forms

Answer 1

Coverage E - Personal Liability - $1 million
Coverage F - Voluntary Medical Payment - $5,000
Coverage G - Voluntary Payment for Damage to Property - $1,000
Coverage H - Voluntary Compensation for Residence Employees - As per schedule

• The limit for Coverage E - Legal Liability can usually be increased for an additional premium *

Question 2

Identify three additional persons insured under Section II that are not insured under Section I of the policy

Answer 2

• “Any person or organization legally liable for damages caused by a watercraft or animal owned by the insured and to which this insurance applies. This does not include anyone using or having custody of the watercraft or animal in the course of any business or without the owner’s permission”;
• “A residence employee while performing duties in connection with the ownership, use or operation of motorized vehicles and trailers for which coverage is provided in this form”;
• “Your legal representative having temporary custody of the insured premises, if you die while insured by this form, for legal liability arising out of the premises”;

Question 3

Identify the five additional “premises insured” insured under Section II in addition to that already covered under Section I

Answer 3

• “Premises where you are residing temporarily or which you are using temporarily, as long as you are not:
  the owner of the premises;
  the lessee or tenant of the premises under any agreement which is longer than 90 consecutive days”
• “Premises in Canada to be occupied by you as your principle residence from the date you acquire ownership or take possession by not beyond the earliest of:
  30 consecutive days
  the date the policy expires or is terminated
  the date upon which specific liability insurance is arranged for such premises”
• “Individual or family cemetery plots”
• “Vacant land in Canada you own or rent other than farm land”
• “Land in Canada where an independent contractor is building a one, two or three family residence to be occupied by you”

Question 4

State whether Coverage E - Personal Liability would respond in the following situations:

A meter reader is injured by the insured’s dog

Answer 4

Covered

Question 5

State whether Coverage E - Personal Liability would respond in the following situations:

A neighbour slips on your icy steps

Answer 5

Covered

Question 6

State whether Coverage E - Personal Liability would respond in the following situations:

Damage you caused to a rented VCR

Answer 6

? Not Covered

Question 7

State whether Coverage E - Personal Liability would respond in the following situations:

Fire damage you caused to a rented hotel room

Answer 7

? Covered

Question 8

State whether Coverage E - Personal Liability would respond in the following situations:

Fire damage you caused to your home

Answer 8

Covered

Question 9

State whether Coverage E - Personal Liability would respond in the following situations:

Water damage you caused to a rented hotel room

Answer 9

? Covered

Question 10

State whether Coverage E - Personal Liability would respond in the following situations:

Damage you caused to your neighbour’s table you are refinishing

Answer 10

Not covered

Question 11

State whether Coverage E - Personal Liability would respond in the following situations:

Injuries to a swimmer you caused while operating an owned watercraft equipped with a 20 hp outboard motor

Answer 11

Covered

Question 12

State whether Coverage E - Personal Liability would respond in the following situations:

Injuries to a swimmer you caused while operating a non-owned watercraft equipped with a 20 hp outboard motor

Answer 12

Covered

Question 13

State whether Coverage E - Personal Liability would respond in the following situations:

Injuries caused to a third party by the insured while operating a ride on 20 hp lawnmower

Answer 13

Covered

Question 14

State whether Coverage E - Personal Liability would respond in the following situations:

Injuries caused to a third party by the insured while operating a motorized golf cart off the gold course

Answer 14

Not covered

Question 15

State whether Coverage E - Personal Liability would respond in the following situations:

Injuries caused to a third party by the insured while operating a motorized wheelchair in a shopping mall

Answer 15

Covered

Question 16

State whether Coverage E - Personal Liability would respond in the following situations:

Injuries caused to a third party from the insured’s beauty parlour in the basement

Answer 16

Covered

Question 17

State whether Coverage E - Personal Liability would respond in the following situations:

Injuries caused to a third party by the insured’s 16 year old daughter operating a lawn care business while on school vacation

Answer 17

Covered

Question 18

Identify six additional costs the insured will pay under “Defense, Settlement, Supplementary Payments”

Answer 18

• All expenses which we incur
• All costs charged against you in any suit insured under Coverage E
• Any interest accruing after judgement on that part of the judgement which is within the amount of insurance of Coverage E
• Premiums for appeal bonds required in any insured lawsuit involving you and bonds to release any property that is being held as security, up to the amount of insurance, but we are not obligated to apply for or provide these bonds
• Expenses which you have incurred for emergency medical or surgical treatment to others following an accident or occurrence insured by this form
• Reasonable expenses including actual loss of income up to $100 per day, which you incur at our request

Question 19

Are these amounts (six additional costs under “Defense, Settlement, Supplementary Payments”) in addition to the limit of the policy?

Answer 19

Yes?

Question 20

Identify four conditions placed upon the insured under “Defense, Settlement, Supplementary Payments”

Answer 20

• Notice of Accident or Occurrence
• Co-operation
• Unauthorized settlements - Coverage E
• Action Against Us - Coverage E

Question 21

Briefly explain the purpose of Coverage F - Voluntary Medical Payments

Answer 21

Provides for the payment of reasonable medical expenses when an insured unintentionally injures another person or if they are accidentally injured while on the insured’s premises

Question 22

Identify four types of claims for which payment will be included

Answer 22

• Surgical
• Dental
• Hospital
• Nursing

Question 23

Under Coverage G - Voluntary Payment for Damage to Property, identify the two situations when coverage will apply

Answer 23

• Which has been unintentionally caused and for which the insured would not be legally liable
• Which has been intentionally caused by an insured 12 years of age or under

Question 24

Identify two exclusions to Coverage G

Answer 24

• Damage to property owned or rented by an insured or an insured’s tenant
• Claims resulting from the loss of use, disappearance of theft of property

Question 25

Identify four types of payment that will be made under Coverage H - Voluntary Compensation for Residence Employee

Answer 25

• Loss of life, including funeral expenses
• Temporary total disability
• Permanent total disability
• Injury benefits (weekly indemnity)

Question 26

Identify two instances when an Umbrella Liability policy will respond

Answer 26

• There is not enough insurance under the primary policy

- There is no coverage provided under the primary policy

Question 27

Briefly explain the operation of the S.I.R.

Answer 27

A Self-Insured Retention (SIR) applies to all losses covered by the Umbrella Liability Policy and which are not insured by the primary policy(ies). The SIR really functions as a deductible, the amount of which often varies from company to company