Module 5: Liability

Question 1

In the A.Y. McDonald Industries v. Ins. Co. of North America case, the Iowa Supreme Court concludes that “Government mandated response costs under CERCLA are damages within the meaning of the CGL policies.” True or False?

Answer 1

True. The Iowa Supreme Court elects to construe “damages” broadly

Question 2

In the A.Y. McDonald case, the court concludes that the hundreds of thousands of alleged exposures at different times and locations are one occurrence

Answer 2

False. The court says that thousands of exposures at different times and locations are separate and discrete occurrences.

Question 3

True or False? In the Haecker v. Safeco Ins. Co. of America case, the policy in question includes coverage for “mental abuse” and clearly defines it.

Answer 3

False. In this case, the policy excludes coverage for “mental abuse” but does not define it. The issue is “Is alleged behavior mental abuse and therefore excluded?”

Question 4

Suppose that Surgeon operates on a patient in May 2013. In December 2013, the patient begins to experience adverse symptoms and discovers they are attributable to surgical error. Patient has surgery to correct error and sues Surgeon for malpractice. Surgeon immediately notifies carrier. If Surgeon maintained occurrence liability coverage for both 2013 and 2014, which of the following would be true?

a) Neither policy would be triggered
b) Her 2014 policy would be triggered
c) Both policies would be triggered
d) Her 2013 policy would be triggered

Answer 4

d) The 2013 policy would be triggered

Question 5

In the Thoracic Cardiovascular Assoc. v. St. Paul Fire and Marine Ins. Co. case, the court concludes that the reporting of the claimants to the insurer was too late to trigger coverage under the claims-made policy. True or False?

Answer 5

True. The court concludes that the reporting of the claim to the insurer was too late to trigger coverage under the claims-made policy.

Question 6

In the American States Insurance v. Koloms case, the court concludes the policy language applies only to “traditional environmental pollution” not the accidental release of fumes from a broken furnace. True or False?

Answer 6

True. The court concludes the policy language applies only to “traditional environmental pollution” not the accidental release of fumes from a broken furnace.