Liability Insurance Terminology

Question 1

Liability insurance

Answer 1

Insured is 1st party
Insurer is 2nd party
Claimant is 3rd party

Question 2

Tort

Answer 2

A civil wrongdoing, other than breach of contract commited by one person against another.

There are intentional and unintentional torts.

Question 3

Vicarious liability

Answer 3

The liability assigned to one party for The conduct of another, based solely on a relationship between the two.
Ex; employer/employee relationships and parents/child relationships.

Question 4

Negligence

Answer 4

Failure to use ordinary care or act in a reasonable or prudent matter

Question 5

Gross negligence

Answer 5

Failure to exhibit any sort of character recklessness or deliberate indifference to the well-being of others.

For example driving while under the influence of alchohol.

Question 6

Loss of consortium

Answer 6

The loss of companionship of a spouse or family member due to a tort.

Question 7

Compensatory damages

Answer 7

Awarded to the injured party for the actual loss sustained.

Special damages; for tangible losses
General damages: losses that cant be calculated

Question 8

Punitive damages

Answer 8

A reward to an injured party, in addition to compensatory damages, To punish/discourage a wrongdoer from repeating negligent acts or omissions.

Question 9

Bodily injury liability

Answer 9

Legal liability arising from physical injury, including sickness, disease and death by the acts or omissions of an insured.

Question 10

Property damage liability

Answer 10

Legal liability arising from physical damage to tangible property, including loss of use of the property, caused by the acts of an insured.

Question 11

Medical payments coverage

Answer 11

Pays for necessary medical, surgical, hospital and funeral expenses and curd by a third-party on the insureds premises regardless of fault

Question 12

Personal and advertising injury liability

Answer 12

Legal liability arising from specific offense has committed by insured that result in injury other than bodily injury or prop damage. 
Ex: written statement ,slander , oral statement, or undustly damage another reputation.

Question 13

 supplementary payments

Answer 13

Payments by ensure for the cost associated with investigating and resolving claims . Such as premiums on a apeal bonds and the insureds loss of earnings first assisting the insurer in defending a claim

Question 14

Contributory negligence

Answer 14

Prevents recovery for damages caused by anegligent party if the claimant was negligent to any extent.
Ex/ if the claimant is 5% negligent and the wrongdoers 95% negligent, the claimant is not permitted to collect damages

Question 15

Assumption of risk

Answer 15

Prevents recovery is the claimant knowingly assumed the risk

Question 16

Intervening cause

Answer 16

Prevents recovery from the negligent party when a seperate negligent act occurs & interferes w the chain of events that brings about the loss

Question 17

Comparative negligence

Answer 17

Damages are reduced in proportion to the degree of claimants negligence.
Ex: if claiment is 5% negligent and wrongdoer is 95% negligent, Claiment receives 95% of damages.

Question 18

Statue of limitations

Answer 18

The length of time during which a person may file a lawsuit

Question 19

Strict liability

Answer 19

A legal principle that imposes legal liability based on conditions, activities, or products that are highly hazardous.

Ex: owning dangerous animal, storage of firearms

Question 20

Strict product liability

Answer 20

Provides that a manufacturer/seller of a product is liable for all damages caused by defective product without regard to fault or negligence

Question 21

Absolute liability

Answer 21

Is responsible without regard to fault or negligence such as when an employee is injured at work.

Question 22

Named insured

Answer 22

Person specifically named in policy

Question 23

First name insured

Answer 23

The one listed first of all named insured

Question 24

Additional insured

Answer 24

Persons covered by policy in addition to other insureds

Question 25

Per occurrence limit

Answer 25

The most the policy will pay for all losses arising out of any one occurence, regardless of other policy limits.

Question 26

Per person limit

Answer 26

The most the policy will pay for loss to any one person injured in any one loss regardless of other policy limits

Question 27

Aggregate limit

Answer 27

The most the policy will pay for all losses submitted during the policy period, regardless of other policy limits.

Question 28

Split limits

Answer 28

The most the policy will pay for loss of different types that occur as a result of one loss

Question 29

Combines single limit

Answer 29

The most the policy will pay for all losses of all types resulting from any occurrence, regarless of other limits.

Question 30

Subrogation

Answer 30

After paying a loss, the insurer is granted the insureds right to seek recovery from the party responsible for the loss.

Question 31

Assignment

Answer 31

Transfer of policy ownership, which requires insurers consent

Question 32

Liberalization

Answer 32

Coverage that was broadened without an additional premium charge automatically applies to all policies currently in effect