Chapter 9 key terms

Question 1

Aggregate Limit

Answer 1

The max dollar amt your insurer will pay in total to settle your claims over the entire period of coverage

Question 2

Claims-made policy

Answer 2

Insurance policy in which coverage is triggered on the date that the insured first becomes aware of the possiblity of a claim and notifies the insurer

Question 3

Declarations page

Answer 3

Portion of a liability insurance policy that provides basic information, including what is insured for how much , under what is insured, for how much, under what circumstances and the length of time that the policy is in effect.

Question 4

Disciplinary Defense Insurance

Answer 4

A type of professional liability insurance that pays legal fees for the defense of the insured during disciplinary proceedings, usually included as a feature in most professional liability policies

Question 5

Exclusions

Answer 5

A provision within an insurance policy that eliminates coverage for certain acts, types of damage or locations

Question 6

Indemnification

Answer 6

To compensate for loss, or damage: to provide a financial reimbursment to an individual in case of a specific loss

Question 7

Independent Contractor

Answer 7

A person, business or corporation that provides goods or services to another under the terms specified in a contract or within a verbal agreement, rather than as an employer

Question 8

Occurrence-basis policy

Answer 8

An insurance policy that covers claims taking place during the policy period, regardless of when claims are made

Question 9

Policy-Jacket

Answer 9

Binder or folder containing an insurance policy; in many instances it lists provisions common to several types of policies

Question 10

Premium

Answer 10

The amount of the money an insurer charges to provide the coverage described in the policy

Question 11

Prior Acts Coverage

Answer 11

Insurance coverage for incidents that occurred before the start of the policy but whose claims are made during the policy period

Question 12

Respondeat superior

Answer 12

legal doctrine stating that in many circumstances an employer is responsible for the actions of employees performed within the course of their employment

Question 13

Rider

Answer 13

An add on provisions to a basic liability insurance policy that provides additional benefits of the policy holder at an additional cost

Question 14

Right of Contribution

Answer 14

Arises when there are others, although not named in the claim who bear some responsibility for an incident that resulted in a claim

Question 15

Self-insure

Answer 15

A system in which a business sets aside an amount of money to provide for any losses that occur- losses that would ordinarily be covered under an insurance program

Question 16

Tail-coverage

Answer 16

A provision of claims-made liability policy that allows the insured to purchase coverage for claims made during a specified time period after the end of the policy

Question 17

Umbrella Policy

Answer 17

Liability insurance policy that provides protection against claims that are not covered or are in excess of the amount covered under a basic liability insurance policy

Question 18

Vicarious Liability

Answer 18

the ability of an employer for the actions of its designated agents