Section 3C Flashcards

0
Q

Personal Umbrella Liability

A

Pays after the primary policy pays and the retention requirement is paid.

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1
Q

Retention Requirement

A

Acts like a deductible

On a Personal Umbrella Liability, it may be as high as $1,000

It only covers personal liability.

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2
Q

Commercial Umbrella Liability

A

Limit up to $50,000,000 or more

Is written over and above a business’ underlying CGL, auto liability, and employers liability coverages

Retention Requirement (Deductible) can be as high as $25,000

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3
Q

Coverage is usually very broad on a

A

Commercial umbrella and it is worldwide and written on an occurrence basis.

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4
Q

Professional Liability for doctors, lawyers, real estate agents, and insurance agents is needed

A

To cover their professional activities

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5
Q

Professional Liability

A

Does not cover fraud or dishonest or criminal acts

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6
Q

Malpractice

A

Sold to medical professionals, covers BI

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7
Q

Errors and Omissions (E&O)

A

Sold to lawyers, agents, and accountants

Covers financial damages, but generally excludes BI and PD with the exception of architects and engineers

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8
Q

Directors and Officers Liability (D&O)

A

Sold to board members/officers of corporations, covers errors and omissions and lawsuits brought by stockholders

Doesn’t cover fraud, embezzlement, or illegal activities

It covers liability resulting from actions of a director or officer (such as mismanagement of corporate assets) , inactions, and errors and omissions.

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9
Q

Professional Liability is issued on a claims made basis.

It requires the

A

consent of the insured to settle a claim

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10
Q

Fiduciary Liability

A

Personal holding the funds or property of another in a position of trust and who is obligated to act in a prudent and ethical manner.

Examples: attorney’s, bank trustees, custodians, and executors

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11
Q

Liquor Liability

A

Purchased by tavern/nightclub owners who can be sued under dram shop laws, which state a person serving someone who is intoxicated or contributing to the intoxication of another person may be liable for injury or damage

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12
Q

Employment Practice Liability

A

Provides protection for an employer against claims made by employees,or potential employees.

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13
Q

Aviation

A

Provides coverage for both liability and hull damages

Excluded if airworthiness certificate is no longer valid

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14
Q

Surplus Lines

A

Unauthorized surplus line carriers are free from state regulation in the areas of policy forms and rates.

Surplus lines business may be transacted through a licensed surplus lines broker.

Brokers must obtain a contract to represent a surplus lines insurer

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15
Q

Surety Bonds

The bond is a three-party contract, while insurance is a

A

Two-party contract

16
Q

Surety or Guarantor

A

Provides the bond in consideration for the premium paid and agrees to pay if the principal defaults

17
Q

Principal

A

Has agreed to PERFORM the obligation, who purchases the bond at the request of the obligee.

18
Q

Obligee

A

Party for whose benefit the bond is written

19
Q

A performance bond

A

Guarantees that a job will be completed per contract specifications

20
Q

Fidelity Bond aka Employee Dishonesty Insurance

A

Covers a policyholder (the business) for losses that they incur as a result of fraudulent acts by specified individuals (employees)