Comm Chp 11 Flashcards
Excess Liability Policy
a policy that covers liability claims in excess of the limits of an underlying policy or stated retention amount
Umbrella Liability Policy
a liability policy that provides excess coverage above underlying policies and may also provide coverage not available in the underlying polices, subject to a self insured retention
Self Insured Retention (SIR)
an amount that is deductable from claims that are payable under an umbrella liability policy and that are not covered at all by any primary policy
Professional Liability INsurance
insurance that covers persons engaged in various occupations against liability resulting from their rendering or failing to render professional services
Management Liability Insurance
insurance that covers organizations and in some cases their directors, officers and other employees against claims for damages resulting from various wrongful acts that are not covered under other commercial liability polices common examples are directors and officers liability, employment practices liabilty insurance, employee benefit liability insurance, and fiduciary liability insurance
Retroactive Date
the date on or after which the injury, damage, or other insured event must occur in order to be covered in a claims made liability policy
Extended Reporting Period (ERP)
an additional period also called a tail, following the expiration of a claims made policy, during which the expired policy will cover claims first made for injury or damage that occurred on or after the polices retroactive date and before policy expiration
Directors and Officers (D&O) liability Insurance
insurance that covers a corporations directors and officers against liability for their wrongful acts covered by the policy and also covers the sums that the insured corporation is required or permitted by law to pay to the directors and officers and indemnification
Entity Coverage
coverage extenstion of D&O liability policies for claims made directly against a corporation ( the entity) for wrongful acts covered by the policy
Employment practices liability (EPL) insurance
insurance that covers an organizations, its directors and officers and its employees against claims alleging damages because of wrongful employment practices such as sexual harassment, wrongful termination, and unlawful discrimination
Fiduciary liability insurance
insurance that covers the fiduciaries of an employee benefit plan against liability claims alleging breach of their fiduciary duties involving discretionary judgement
Employee benefits liability insurance
insurance that covers an employer against liability claims alleging improper advice or other error or omissions committed while administering the employers employee benefit plan
Site-specific environmental impairment liability (EIL) policy
an insurance policy that covers third party claims arising from either sudden or gradual releases of pollutants from specified locations
Underground storage tank (UST) compliance policy
an insurance policy that provides proof of financial responsibility under governmental regulations that apply to the owners and operations of underground storage tanks containing fuel or other hazardous materials
Remediation stop-loss policy (cost cap policy
a insurance policy purchased to insure remediation cost that exceed the projected or anticipated cost of preforming an environmental cleanup of a specific location that is being sold
Contractors pollution liability (CPL) policy
an insurance policy that covers the pollution related loss exposures of a contractor
Aircraft insurance
insurance that covers liability due to the insureds ownership, maintenance, or use of aircraft, physical damage to aircraft owned or used by the insured, and other aircraft loss exposures
Intangible property
property that has no physical form
Denial-of-service attack
an attempt to overwhelm a computer system or network with excessive communication in order to deny users access
Malware
malicious software such as a virus that is transmitted from one computer to another to exploit system vulnerabilities in the targeted computer
Infringement
the unauthorized use of an individuals intellectual property
Obligee
the party to surety bond that receives the surety guarantee that the principal will fulfill an obligation or preform as promised
Principal
the party to a surety bond whose obligation or performance the surety guarantees
Suretyship
the obligation of one entity to answer for the debt default, or miscarriage of performance of duties by another entity
Contract Bond
a surety bond guaranteeing the fulfillment of obligations under construction contracts or other types of contracts
Surety
the party usually the insurer to a surety bond that guarantees to the obligee that the principal will fulfill an obligation or perform as required by the underlying contract, permit, or law
Bid Bond
a contract bond guaranteeing that a contractors bidding on a construction or supply contract will enter into the contract and will provide a performance bond if the bid is accepted
Performance Bond
a contract bond guaranteeing that a contractors work will be completed according to plans and specifications
Payment Bond
a contract bond guaranteeing that the project will be free of liens
Maintenance Bond
a contract bond guaranteeing that the work will be free from defects in material and workmanship for a specified period after the project is completed
Public Official Bond
a commercial surety bond guaranteeing that a public official will preform his or her duties faithfully and honestly
Court Bond
a classification of surety bonds guaranteeing that a person or organization will faithfully perform certain duties prescribed by law or by a court or will demonstrate financial responsibility for the benefit of another until the final outcome of a courts decisions
Which one of the following statements concerning site-specific environmental impairment liability insurance policies is most accurate?
A. Site-specific environmental impairment liability policies typically cover only losses that arise from pollution conditions beyond the policy site listed in the declarations, but may be endorsed to cover on-site cleanup.
A multinational enterprise may purchase coverages and combine them with a difference in conditions (DIC) policy written to wrap around the admitted coverages, thereby accomplishing which one of the following?
Maintaining uniform coverage for all the insured’s location
Insurers that offer professional liability and management liability policies usually have a claims-made trigger. The reason for this is which one of the following?
. Claims are sometimes not settled until long after the policy has expired.
Aircraft insurance differs from auto insurance in which one of the following?
Operators (pilots) are required to provide a strict medical certification
What type of bond guarantees that a construction contractor will enter into a contract?
Bid bond
The two most common aircraft hull coverages are all risks–ground and flight and
All risks–not in motion
Insurance covering an employer against liability claims alleging improper advice in the administration of a group health program is
Employee benefits liability insurance.
Which one of the following elements would you find in the Conditions of an umbrella liability insurance policy?
Maintenance of underlying insurance conditio
Fiduciary bonds are commonly required of a person who does which one of the following?
. Holds property in trust for the benefit of others
Drop-down coverage in an umbrella liability policy is provided for claims that are which one of the following?
Not covered by an underlying policy, including claims not covered due to the depletion of the underlying policy’s aggregate limits
Ace Builders is considering purchasing a large tract of land where a local fuel oil company had its
storage facility for more than 100 years. Ace knows that because of the long-time operation at the site, some environmental clean-up will be necessary. However, the amount of clean-up and its cost are unknown and cannot precisely be estimated.
What is a specific policy that Ace should consider purchasing to address clean-up costs in excess of what it might estimate?
A remediation stop-loss policy
In many cases, the law of a particular nation requires that coverage for properties in that nation be purchased from which one of the following
In many cases, the law of a particular nation requires that coverage for properties in that nation be purchased from which one of the following
nsurers in a particular nation selling insurance in that same nation are known as admitted insurers.
These admitted insurers provide which one of the following?
admitted coverage
Insurance agreements that are commonly found in cyber risk insurance policies include many categories, one of which is coverage for electronic data protection. Which one of the following losses would be covered by an electronic data protection insuring agreement?
computer virus corrupts the insured’s software and database, requiring the insured to purchase replacement software and restore the corrupted data
What is the two-fold purpose of a Terrorism Risk Insurance Act (TRIA) aggregate limit endorsement?
o limit the insurer’s exposure and to provide limited coverage for acts of terrorism at a reduced premium
Like auto liability insurance, aircraft liability coverage is usually not subject to which one of the following?
agrregate limit
Darlene was appointed by a court as conservator of her aunt’s estate. If Darlene is required to post a bond with the court it would most likely be a
fiduciary bond
Which one of the following statements best describes the purpose of a remediation stop-loss policy?
he purpose of remediation stop-loss insurance is to facilitate real estate sales where there is known pollution contamination on the property, but the total cleanup costs are unknow
Professional liability and management liability policies can provide duty-to-defend coverage in the
same manner as the typical commercial general liability policy. However, some professional liability policies provide defense costs reimbursement coverage requiring that the insurer do which one of the following?
Reimburse the insured for defense expense covered by the policy
excess liability coverage
following form, subject to the same terms as the underlying policy
self contained policy, its own terms
combination of two
A number of endorsements have been developed by ISO to implement the provisions of Terrorism Risk Insurance Act (TRIA), including the aggregate limit TRIA endorsement. The ISO aggregate limit
TRIA endorsement is used to
mit the insurer’s exposure and provide limited liability coverage for certified acts of terrorism at a reduced premium when the insured initially rejects certified acts of terrorism coverage.
Which one of the following statements is true regarding aircraft liability insurance?
surers may impose a sublimit on claims by passengers.
hen insurers offer to sell new policies or offer to renew existing policies that are reinsured under the Terrorism Risk Insurance Act (TRIA), the law requires that certain disclosures be made to the policyholder at the time the offer is made. Which one of the following is a required disclosure under TRIA?
The portion of the policy premium that is attributed to certified acts of terrorism
