P and C 10 Other Coverages

Question 1

Subrogation

Answer 1

The transfer to the insurance company of the insured’s right to collect for damages. After paying a claim, the company stands in the place of the sinned in suing the negligent party, thus preventing the insured from collecting twice.

Question 2

Deductible

Answer 2

The portion of a loss considered the responsibility of the insured.

Question 3

Retention Limit

Answer 3

In an Umbrella Liability policy, the amount the insured must pay for a loss NOT covered by an underlying policy before the Umbrella will begin to cover losses.

Question 4

Surety Bond

Answer 4

Guarantees the performance of a duty. It obligates the surety to hold itself responsible for the performance of a duty by the principal. Includes contract, judicial, public office, license, and permit bonds.

Question 5

Umbrella Policy

Answer 5

This coverage is a popular form of Excess Liability insurance. It provides additional limits, with a combined blanket single limit, over other existing (underlying) liability coverages, such as Commercial General Liability for commercial risks and for personal insurance risks, and the liability sections of the Homeowners and Auto policies.

Question 6

Errors and Omissions

Answer 6

A Professional Liability coverage that protects the insured against liability for committing an error or omission in performance of professional duties.

Question 7

Malpractice

Answer 7

A form of Professional Liability insurance used to insure professionals including physicians, dentists, and druggists against their liability for professional misconduct or lack or ordinary skill.

Question 8

Professional Liability Insurance

Answer 8

Liability arising out of the rendering, or failure to render, services of a professional nature.