MISC Flashcards
Sally’s employer obeyed her kidnapper’s instructions to deliver $250,000 to the kidnapper. The kidnapper then released her without harm. Which coverage of the employer’s kidnap/ransom and extortion policy will reimburse the employer for its $250,000 loss?
kidnap/ransom and extortion-direct loss
The “direct loss” insuring agreement pays for the loss of money surrendered as a ransom payment as the result of an actual kidnapping of an insured person. The “expenses incurred” form provides coverage for certain expenses incurred by the insured in connection with an actual or alleged kidnapping.
Which one of the following situations would trigger coverage under a firm’s computer fraud insuring agreement?
Shannon hacks into a merchant’s computer and redirects merchandise ordered by the merchant’s customer to be shipped to her house.
The computer fraud insuring agreement covers the loss of “other property” (but not confidential information) caused by the use of a computer by someone who is not an employee to fraudulently transfer covered property from inside the insured’s premises.
What is the primary consideration provided by the policyholder in an insurance contract?
The premium payment.
When an insured loss occurs, what steps do the insured and the insurer take to process the claim?
When an insured loss occurs, the insured must inform the insurer within 20 days. Once notified of the pending claim, the insurer must give the insured a claim form within 15 days and allow the insured up to 90 days to furnish proof that the loss occurred. After receiving the proof of loss, the insurer must pay the claim within a certain number of days (e.g., 45 or 60 days, depending on the state).
The notice of claim provision of a health insurance policy gives the insured how many days to notify the insurer after a covered loss?
20
The notice of claim provision gives the insured 20 days to notify the insurer of a covered loss.
Ned just bought a homeowner’s policy from Main Street Insurance Company. However, he did not disclose that he operated a lawn mower repair business in his garage and that he employed two mechanics. He also did not disclose that one employee was injured three weeks ago. On what grounds might the insurer deny coverage in the event of a claim?
Concealment
Allied Motor Transport and Brothers Cartage Company. agree to use each other’s trailers while transporting cargo. While using one of Brothers’ trailers, Alliance has an accident that damages the trailer. What coverage does Alliance need to pay for the damage?
Trailer interchange coverage. Trailer interchange coverage is liability coverage that responds when the insured is legally obligated because of a covered loss to a trailer in the insured’s possession. The causes of loss for which coverage may be purchased under this coverage (comprehensive, collision, and specified causes of loss) are the same as those under physical damage coverage.
An intentional injury or damage exclusion is an essential liability exclusion in a personal auto policy (PAP). It excludes coverage for liability in all of the following cases EXCEPT:
Elaine strikes a pedestrian while trying to avoid another pedestrian.No liability coverage is provided if the insured intends to cause injury or damage.
Dos Ojos Optical insures its business on a BOP. What policy limit of liability applies to losses submitted under coverage for liability, medical expenses, and fire legal liability?
General aggregate
.The general aggregate applies, per policy period, for all losses submitted under all coverages except those submitted under the Products-Completed Operations hazard.
In addition to state workers compensation laws, several federal workers compensation laws protect employees injured on the job. Which of the following is not among these federal laws?
Sue and Labor Clause. Exp: The Jones Act, the Outer Continental Shelf Lands Act, and the Federal Employers Liability Act (FELA) are federal workers compensation laws, as is the Longshore and Harbor Workers Compensation Act (LHWCA). The sue and labor clause obligates an insured owner of a boat or ship to preserve damaged property from further loss.
Cindy is a copywriter for Country Gentleman, a men’s fashion magazine. She believes she is a victim of sexual discrimination and has experienced sexual harassment by her supervisor. She files suit against the magazine. What type of liability insurance would Country Gentleman need to cover Cindy’s claims?
Employment practices liability (EPL)
Ace Real Estate is considering a businessowners policy for an office building that has eight stories and is less than 100,000 square feet. Its agent will advise Ace that
Ace is ineligible because the building is taller than six stories Office buildings are eligible for the businessowners policy if they do not exceed six stories in height or 100,000 total square feet.
Since flood is the only peril covered in a flood insurance policy, how a flood is defined is important in determining whether coverage applies. Which of the following is not considered a flood for purposes of the NFIP standard flood insurance policy?
Accidental water damage from a burst plumbing pipe The NFIP standard fire insurance policy defines a flood as a general and temporary condition of partial or complete inundation of two or more acres of normally dry land area, or of two or more properties (at least one of which is the insured property) from these causes, except an accidental leak from a burst plumbing pipe, which is covered under most homeowners and property insurance policies.
Monty, an employee of Happiness Bakery, is sending text messages on his phone while driving the company truck to deliver baked goods. He crashes into the car in front of him, injuring the passenger. The passenger sues Monty and Happiness Bakery. On what grounds could Happiness Bakery be held liable?
Vicarious liability
Vicarious liability arises when a person is legally responsible for the acts of another. A common example is when an employer is held liable for damages resulting from the negligence of an employee who was acting in the course and scope of his or her employment.
Homer’s business owns four vehicles, one of which he uses for business and personal pursuits. Homer does not personally own an auto. What endorsement can Homer add to his business’ BAP to provide him with auto liability when using rented or non-owned cars for his own personal use?
Drive Other Car Coverage The Driver Other Car Coverage endorsement extends coverage to the person named in the endorsement when driving hired or borrowed cars for personal use.
