Unit 18: Miscellaneous Commercial Insurance

Question 1

Medical Malpractice Policy

Answer 1

written for medical professionals or institutions, including physicians, nurses, dentists, surgeons, opticians, optometrists, chiropractors, and veterinarians

Question 2

Errors and Omissions Policy (E&O)

Answer 2

written for other professionals, such as insurance agents, accountants, architects, stockbrokers, engineers, consultants, and attorneys

Question 3

Directors and Officers Liability

Answer 3

• exposure for directors and officers is properly insured under this type of E&O insurance as they may be sued as individuals by stockholders
• no coverage under CGL for personal liability and no coverage under homeowners contract for liability arising out of business pursuits

Question 4

Fiduciary Liability Policy

Answer 4

protects those who manage private pension and employee benefit plans against liability for violation of the Employee Retirement Income Security Act of 1974 (ERISA), which governs employer-sponsored retirement plans

Question 5

Consent to Settle Losses

Answer 5

In the past, professional liability policies contained a provision that the insurer could not settle a claim without the insured’s consent. Currently, most policies do not require the insured’s consent to settle a loss

Question 6

Liquor Liability Insurance

Answer 6

• not covered by CGL
• businesses that sell or serve
• bodily injury or property damage as result of contributing to a person’s intoxication
• also called dram shop

Question 7

Employment Practices Liability

Answer 7

• not covered by CGL
• only policy that covers discrimination

Question 8

Aviation Insurance

Answer 8

• legal liability to third parties (other than passengers)
• bodily injury to passengers
• property damage to passengers luggage
• medical payments

Question 9

Aviation Physical Damage

Answer 9

• similar to auto collision and comprehensive
• also called hull coverage
• may be covered: in the air or on the ground, on the ground only, or not in motion under its own power

Question 10

Commercial Umbrella

Answer 10

• businesses that need high limits
• requires underlying policies
• primarily excess coverage

Question 11

Difference in Conditions

Answer 11

• unique property coverage written for catastrophic exposures
• high deductibles

Question 12

Surplus Lines

Answer 12

• provides coverage for high-risk insureds
• written by nonadmitted insurers (no certificate of authority
• risks admitted and licensed insurers don’t want to insure
• usually requires a special agent, producer, or broker’s license to sell
• cannot be sold only for the purpose of getting a lower rate

Question 13

Website Publishing Liability

Answer 13

covers the insured’s liability due to an unintentional error or misstatement posted on the insured’s website

examples: copyright infringement, defamation, or privacy violations

Question 14

Network Security Liability

Answer 14

covers the insured’s liability if a person gains access to the insured’s computer system, and this unauthorized access results in the publication of clients’ personal information

also covers the insured’s unintentional transmission of a computer virus to another party

Question 15

Replacement Or Restoration of Electronic Data

Answer 15

covers the cost to replace or restore electronic data destroyed due to a virus, or malicious computer instructions designed to disrupt or destroy an insured’s computer system

Question 16

Cyber Extortion

Answer 16

covers extortion expenses and ransom payments due to an extortion threat to infect the insured’s computer system with a virus, or to publish clients’ personal information

Question 17

Business Income and Extra Expense

Answer 17

covers loss of business income or extra expenses due to an interruption in the insured’s business due to a virus, malicious computer instruction, or extortion threat