Intro to Liability Insurance Ch. 6

Question 1

What are two types of law?

Answer 1

Criminal Law

Civil Law

Question 2

Define Criminal Law

Answer 2

Committing wrongs against society

Question 3

Define Civil Law

Answer 3

Deals with settling disputes between individuals, corporations and governments on matters not involving a criminal act.

Question 4

What are the two branches of civil law?

Answer 4

Contract Law- deals wit the enforcement of agreements entered into between tow or more parties.

Tort Law-a private or civil wrong or injury (other than breach of contract) for which the court will provide a remedy in the form of an action for damages

Question 5

Define Intentional Tort

Answer 5

A wrong that has been deliberately done to another and which caused harm to that individual that was reasonably foreseeable.

Question 6

Define Unintentional Tort

Answer 6

A wrong that has been caused accidentally or as the result of a person’s negligence.

Question 7

There are three levels of civil courts in Canada including:

Answer 7

Small Claims Court
County or District Court
Supreme Court (Appeals Court)

Question 8

What is the difference between Common Law and Statute Law?

Answer 8

Common Law is set by precedents and can be changed by statutes, which are federally and provincially amended written laws that overwrite common law.

Question 9

Under Common Law, what duty is owed dot a trespasser by an occupier?

Answer 9

No duty owed, other than not to intentionally harm or set traps.

Question 10

Under Common Law, what duty is owed to a licensee by an occupier?

Answer 10

No duty owed, other than to warn them of any hazard that has been introduced to the premises that the licensee would not normally expect to find and which the occupier knows is dangerous.

Question 11

Under Common Law, what duty is owed to and invitee by an occupier?

Answer 11

A higher standard of duty to an invitee to protect them not only against dangers of which they know, but which with reasonable care they might discover.

Question 12

What duty is owed by occupiers to all visitors under the new state law ‘Occupier’s Liability Acts’?

Answer 12

Occupiers of property have a duty to exercise reasonable care to ensure that all visitors are protected from harm while on the premises.

Question 13

Define General Damages

Answer 13

Reflect the amount that the court believes to have accrued directly as a result of the wrong. Cannot be precisely quantified. Generally payable as a lump sum.

Question 14

Define Special Damages

Answer 14

The amounts which follow as a natural and direct consequence of the wrong. Limited to actual out-of-pocket expenses and other quantifiable amounts. i.e. extra costs for hospital care, specialized medical or dental services, medication etc.

Question 15

Third Party defined

Answer 15

Coverage is provided only for bodily injury and property damage caused to a person or other legal entity that is not a party to the contract.

Question 16

Property Damage defined

Answer 16

Includes actual damage to property belonging to a third party, including the loss of use to that person of that property.

Question 17

Bodily Injury defined

Answer 17

Includes actual bodily injury, sickness, disease and death arising out of ay of these at any time.

Question 18

Accident defined

Answer 18

A fortuitous circumstance, event or happening. To happen by chance or accident.

Question 19

What is the territory of coverage Homeowners Forms provide insureds for liability coverage?

Answer 19

Anywhere in the world.

Question 20

What are the three elements that need to be present in a tort of negligence?

Answer 20

• legal duty owed
• that this duty was breached by the defendants negligence
• the plaintiff sustained actual damages as a proximate result

Question 21

Describe the purpose of the Umbrella Liability Policy

Answer 21

The main purpose of this policy is to provide additional insurance limits and or coverage for losses not insured by the primary liability policy. The insured will pay a deductible called a Self-Insured Retention (SIR) when using this insurance to pay a claim.

Question 22

What are the duties owed of the insured in the event of an accident or occurrence? (4)

Answer 22

• promptly notify the insurer in writing
• send the insurer any legal documents they receive
• cooperate with the insurer in all matters relating to the claim
• not voluntarily assume any financial obligations on behalf of the insurer, except those for first aid at the time of the accident.

Question 23

What does the Defense, Settlement, Supplementary Payments Included cover?

Answer 23

All liability insurance policies include additional insurance for costs incurred defending and settling the claim, including: the cost of defense, cost of obtaining expert witnesses, courts costs and interest on the amount of the judgment.

Question 24

What liability coverage for motorized vehicles and their equipment is provided under the Homeowners Forms?

Answer 24

Owned Motorized Vehicles- self-propelled lawn mowers, snow blowers, garden-type tractors of not more than 25 HP, golf carts when on golf course, motorized wheelchairs, scooters for disabled persons.

Non-Owned Motorized Vehicles- any vehicle designed primarily for use off public roads, provided that the vehicle is not subject to motor vehicle registration.

Question 25

What are the liability coverages available in Homeowners Forms for Owned and Non-Owned watercraft?

Answer 25

Liability insurance available for:
Owned Watercraft- watercraft with outboard motor no more than 16HP
-watercraft with inboard motor no more than 50HP
-non-motorized watercraft no longer than 8m (26’)

Non-owned Watercraft- watercraft of any length or motor HP size operated by the insured

Question 26

Why would an insured purchase a Umbrella Liability Policy?

Answer 26

It provides insureds with an increase in the limits of liability insurance beyond what they have been provided under their other existing liability policies. It also, most importantly, provides insurance for situations that arise and for which there is no coverage under their primary policy.