Lesson 4 - Liability Insurance

Question 1

Liability Loss Exposure

Answer 1

Where negligent acts may occur for which entity may be held responsible

Question 2

Legal Liability

Answer 2

Third party insurance promises to pay on behalf of insured

Question 3

Negligence

Answer 3

Failure to exercise proper degree of care

Question 4

4 basic requirements that must exist before negligence is present

Answer 4

1) Legal duty
2) Actual injury/damage to property
3) Wrong committed
4) Proximate cause

Question 5

Individual ruled negligent & in any degree contributes to own damage

Answer 5

Contributory Negligence

Question 6

If plaintiff had knowledge of defendant’s negligence & not entitled to recovery

Answer 6

Assumptions of Risk

Question 7

Where damages are set in proportion by a court of law to degree of negligence

Answer 7

Comparative Negligence

Question 8

Composed law enacted by legislative body and formal document

Answer 8

Statutory Law

Question 9

Three liability damage classes

Answer 9

1) Special Damages
2) General Damages
3) Punitive Damages

Question 10

Private wrong and names of people who commit it

Answer 10

Tortes

Tortfeasor

Question 11

Compensates individual for measurable loss such as medical expenses

Answer 11

Special Damages

Question 12

Compensates injured person for noneconomic loss such as pain and suffering

Answer 12

General Damages

Question 13

Damages exceeding simple compensation and awarded to punish the defendant.

Answer 13

Punitive Damages

Question 14

Participates in activities considered to be hazardous

Answer 14

Absolute/Strict Liability

Question 15

Vicarious/Imputed Liability

Answer 15

When person who is liable for occurrence is under control of individual/organization

Question 16

Gross Negligence

Answer 16

When person fails to show even minimum degree of care

Question 17

Two versions of Commercial General Liability forms

Answer 17

1) Occurrence Form

2) Claims Made Form

Question 18

Occurrence Form

Answer 18

CG-00-01 provides coverage for injury/damage to others that occur during policy period, regardless when claim is reported/filed

Question 19

Claims Made Form

Answer 19

CG-00-02 provides coverage for injury/damage that occurs after retroactive date AND when claim is reported/filed

Question 20

3 coverage sections in a CGL policy

Answer 20

Coverage A/ Bodily Injury & Property Damage
Coverage B/ Personal & Advertising Injury Liability
Coverage C/ Medical Payments Coverage

Question 21

Consists of summarized annual paid claim & reserve amounts (record of claim information)

Answer 21

Quantitative Information

Question 22

NonQuantitative Information

Answer 22

Record of occurrence information

Question 23

Coverages that extend claim reporting period

Answer 23

Tails

Extended Reporting Periods (ERP’s)

Question 24

Contingent insurance known as automatic mini tail

Answer 24

60 Day Tail

Question 25

Covers claims reported to insurer no later than 60 days after end of policy period

Answer 25

5 Year Tail

Question 26

The two main ERP tails are called _________

Answer 26

Basic Extended Reporting Periods

Question 27

Tail considered excess insurance, with no time limit, functions as occurrence form, extends claim reporting pd. & not an automatically provided premium

Answer 27

Supplemental/Unlimited Tail

Question 28

6 Limits that apply to Commercial General Liability

Answer 28

1) General Aggregate Limit
2) Products-Completed Operations Aggregate Limit
3) Personal & Advertising Injury Limit
4) Each-Occurrence Limit
5) Fire Damage Limit
6) Medical Expenses Limit

Question 29

CG-27-02

Answer 29

Exclusion of specific products, accidents, work, or locations

Question 30

CG-27-04

Answer 30

Supplemental extended reporting period for specific accidents, products, work, or locations

Question 31

CG-27-03

Answer 31

Extended reporting periods for specific products, accidents, work, or locations