Study 3

Question 1

What is Manuscript policies

Answer 1

Policies composed of unique wordings drafted to accommodate the needs of a particular risk

Question 2

What are the standardized wording
forms

Answer 2

Named perils,
Broad form (all-risks coverage for building and named-perils coverage for contents)
Comprehensive form (with all-risks coverage for building and contents)

Question 3

What are the Main elements of policy wording and structure

Answer 3

plain language,
the declarations or coverage summary page,
the insuring agreement,
the exclusions,
Conditions,
additional coverages and limitations.

Question 4

What are the essential elements of a contract under common law?

Answer 4

Agreement,
Capacity to contract,
Consideration,
Genuine intention,
Legality of object.

Question 5

What are the essential elements of a contract under Civil Code of Quebec?

Answer 5

Consent
Capacity to Contract
Cause of Contract
Object of Contract

Question 6

Describe the steps of Policy analysis

Answer 6

Analysis :
1st / Once a preliminary review of the policy establishes that it is in effect,
2nd/ Determine whether any of those essential elements affect the policy.
3rd/ Consider the specific rules governing insurance contracts –
the principle of indemnity, insurable interest, and utmost good faith.

Question 7

What question to be applied to a property loss to determine whether insurable interest exists?

Answer 7

What property was damaged by an insured peril?
Is the property the subject matter of the insurance?
What is the insured’s relationship to the property in law?

Question 8

What is a Declarations Page or Coverage Summary Page

Answer 8

They are statements included in a policy that are agreed to by the insured and form the basis of the contract of insurance.

Question 9

what is Insuring Agreement?

Answer 9

It describes the intent of the policy, what insurance coverage is provided by the policy, and in what limits including the limitations, exclusions, conditions, and additional coverages

Question 10

Types of Exclusion

Answer 10

Property excluded
Loss excluded

Question 11

What is Contra proferentem

Answer 11

The common law doctrine “against the offeror”
A legal term that provides that any ambiguity in a contract must be interpreted against the person who drew the contract because that person had the opportunity to make it clear.

Question 12

Coverage Provisions Construed Broadly

Answer 12

The law of precedent has established that coverage provisions must be construed broadly in the insured’s favour.

Question 13

Exclusion Clauses Construed Narrowly

Answer 13

Exclusions in insurance policies are to be interpreted narrowly and generally against the insurer.

Question 14

What are the four principles to interpret insurance contracts in common law provinces?

Answer 14

1) Contra proferentem
2) Coverage provisions construed broadly
3) Exclusion clauses construed narrowly
4) Reasonable expectations and intent of the contracting parties

Question 15

What has the declarations page been replaced by in many policies?

Answer 15

Coverage summary

Question 16

What happened in Whiten v. Pilot Insurance?

Answer 16

Bad conduct by the insurer led to punitive damages

Insurer alleged arson, although evidence did not support it

Question 17

What are the general rules of contract interpretation in Quebec?

Answer 17

Common intention of the parties is given precedence over the literal meaning of the language (1425)

Nature, formation, usage and prior interpretation must all be considered (1426)

Treat the contract as a whole to determine the meaning (1427)

If an interpretation defeats the intentions of a party and one interpretation suggests the claim should be paid (1428-1431)

If there is any doubt, it is interpreted against those that made it (1432)

If anything is illegible or incomprehensible, it is null (1436)

An abusive clause (1437)

Question 18

What are the 8 questions you could ask to analyze the coverage of a property claim?

Answer 18

1) Does the loss fall within the policy period?
2) Has insurable interest in the property been confirmed?
3) What is the proximate cause of the loss?
4) Does the loss fall within the insuring agreement?
5) Do any exclusions or limiting clauses/sub-limits apply? If so, how is coverage affected?
6) Have all policy conditions been met?
7) Does the policy offer any extensions of coverage or do any endorsements apply?
8) Is there a deductible to be applied?

Question 19

What are the 6 questions you could ask to analyze the coverage of a liability claim?

Answer 19

1) Does the occurrence fall within the policy period? (occurrence vs claims made)
2) Does the loss fall within the insuring agreement?
3) Are there any exclusions under the policy which apply?
4) Are there limitations or conditions that affect the claim?
5) Does the insurer have a duty to defend? Indemnify? If not, why not?
6) Is there a deductible to apply?

Question 20

What is the best description of concurrent causation and when it is referred to?

Answer 20

Generally, concurrent causation refers to a situation where at least one peril is covered and one is not. It is then up to the adjuster to review the policy and consider if damages caused by each peril can be separated. Having two perils not covered or two perils covered would not be relevant as the outcomes would be clear.

Question 21

What are the 2 basis a liability forms are written on?

Answer 21

occurrence basis
claims-made basis

Question 22

What are the 2 main forms of coverage that a liability policy offers?

Answer 22

1st - applies to the costs of the insured to defend a claim brought against the insured.
2nd - indemnifies the insured if the insured should owe money to a third party as a result of the insured’s negligence.

Question 23

What is a defence clause?

Answer 23

1) It is included in liability policy
2) It describes whether the insurer will defend an action or whether the insurer will indemnify the insured once the claim has been resolved.