Intro To Liability Insurance

Question 0

What is a term for an unintentional tort?

Answer 0

Negligence

Question 1

What is a tort?

Answer 1

A tort is a civil wrong that violates the rights of another.

Question 2

What is negligence?

Answer 2

The lack of reasonable care required to protect others from the unreasonable chance of harm.

Question 3

What four factors must be involved to establish negligence?

Answer 3

1. Legal duty owed
2. Breach of legal duty owed
3. Proximate cause
4. Damages

Question 4

What is the legal duty owed?

Answer 4

As a general rule, each person owed a duty to another to protect the others rights and property. Each person is expected to behave like a reasonable or prudent person, following those ordinary considerations that guide human affairs. Sometimes known as the REASONABLE PERSON RULE.

Question 5

What is degree/standard of care?

Answer 5

The duty owed by one person to another.

Question 6

What is an invitee?

Answer 6

A person invited onto the premises involving potential benefit to the property owner

Question 7

What is a licensee?

Answer 7

A person on the property with the owners consent but for the sole benefit of the visitor.

Question 8

What is a trespasser?

Answer 8

One who is on the premises without permission, either expressed or implied.

Question 9

What is proximate cause?

Answer 9

An action that, in a natural and continuous sequence, produced the loss. This sequence is unbroken by any other factors or events, and the loss would not have occurred without the proximate cause.

Question 10

What is an intervening cause?

Answer 10

When an independent action breaks the chain of causation and sets in motion a new chain of events.

Question 11

What must another party suffer to prove negligence?

Answer 11

Damages.

Question 12

What is contributory negligence?

Answer 12

If a person contributed to their negligence in any way.

Question 13

What is comparative negligence?

Answer 13

Allow a finding of liability to be made even when both parties have contributed to the loss, with an award based on the extent of each party’s negligence.

Question 14

What is assumption of risk?

Answer 14

When a person knowingly exposes himself to danger of injury. When a person assumes this risk, the person may be prevented from recovering from a negligent party.

Question 15

What is a statute of limitations?

Answer 15

Laws that provide that certain types of lawsuits must be filed within a specific time of the occurrence to be valid under the law.

Question 16

What is absolute liability?

Answer 16

Imposed by law on those participating in certain activities that are considered especially hazardous. Individuals involved in such operations may be held liable for the damages of another, even though the individual was not negligent. Most frequently applied to activities involving dangerous materials, hazardous operations, or dangerous animals

Question 17

What is strict liability?

Answer 17

Usually used in reference to product liability is another term for absolute liability.

Question 18

What is vicarious/imputed liability?

Answer 18

When a person may be held responsible for the negligent acts of another person

Question 19

What is a third party loss?

Answer 19

Liability loss, the person who suffered injury or damage at the fault of the insured.

Question 20

What is a first party loss?

Answer 20

Property loss

Question 21

What are damages when referring to financial consequence of liability?

Answer 21

Monetary compensation

Question 22

What are compensatory damages?

Answer 22

Reimburse the party only for losses that were actually sustained

Question 23

What are special damages?

Answer 23

Include all direct and specific expenses involved in a particular loss, such as medical expenses, lost wages, funeral expenses, and the cost to repair or replace damaged property.

Question 24

What are general damages?

Answer 24

Compensate for things such as pain and suffering, and disfigurement. General damages also include mental anguish and loss of companionship.

Question 25

What are punitive/exemplary damages?

Answer 25

Intended to punish the defendant and make an example of him to discourage others from behaving the same way.

Question 26

What does bodily injury mean?

Answer 26

Injury, sickness, disease, death arising out of injury

Question 27

What is property damage?

Answer 27

Damage to or destruction of property, including loss of use of the property.

Question 28

What is personal injury?

Answer 28

Slander, libel, false arrest, invasion of privacy.

Question 29

What is prejudgment interest?

Answer 29

A court will sometimes award a third party interest on an award for damages to compensation for the interest the third party might have earned if the party had received compensation at the time of injury or damage rather than at the time of judgement

Question 30

What are supplementary payments?

Answer 30

1. Defense costs
2. Expenses incurred in the investigation of a claim
3. Premiums for certain types of bonds, such as bail bonds, appeal bonds, and release of attachment bonds
4. First aid to others at the time of an accident
5. Reasonable expenses incurred by the insured at the company’s request in the investigation of a claim
6. Loss of earnings
7. Prejudgment interest
8. Postjudgement interest

Question 31

What is stated in the policy limits?

Answer 31

The maximum amount the company will pay on behalf of the insured

Question 32

What are split limits?

Answer 32

The policy may stipulate separate limits for bodily injury and property damages

Question 33

What are single/combined limits?

Answer 33

The policy may have one limit that applies to both bodily injury and property damage

Question 34

What does per occurrence mean?

Answer 34

Either a loss that occurs at a specific time and place or a loss that occurs over time

Question 35

What is per accident?

Answer 35

An older more restrictive term than per occurrence that limits covered losses to those that occur at a specific time or place

Question 36

What is per person?

Answer 36

States how much will be paid for injury to any one person in an occurrence or accident

Question 37

What is an aggregate limit?

Answer 37

A limit that applies to all losses occurring within any one policy period

Question 38

General liability coverage exclusions?

Answer 38

1. Damage to property owned by the insured
2. Damage to property in the insureds care custody or control
3. Bodily injury to an insured
4. Losses covered under workers comp laws
5. Losses covered under nuclear energy liability policies
6. Injuries or damages cause intentionally by the insured

Question 39

What is contribution by equal shares?

Answer 39

All insurers pay equal amounts up to the limit of the policy having the smallest limit. Then that company, having paid its policy limit, stops paying, and the other company’s share the remainder of the loss.