UNIT 6: Intro To Liability

Question 1

Failure to use the care that is required to protect others from the reasonable chance of harm is…

A) proximate cause
B) legal duty owed and breach of duty
C) A criminal act
D) An intervening cause

Answer 1

Negligence: negligence is the lack of reasonable care that is required to protect others from the unreasonable chance of harm The factors used to establish negligence are legal duty owed, breach of legal duty owed, proximate cause, and damages

Question 2

All of the following must be present to establish negligence except

A) proximate cause
B) legal duty owed and breach of duty
C) damages
D) willful action

Answer 2

Willful Action

Question 3

An action that in a natural and continuous sequence produces a loss is the…

A) hazard
B) proximate cause
C) appraisal point
D) exposure

Answer 3

Proximate cause: proximate cause is one of the elements required to establish a charge of negligence. It is an action that in a natural and continuous sequence produces a loss.

Question 4

Liability that is imposed as a matter of law without regard to negligence is…

A) vicarious liability
B) absolute liability
C) breach liability
D) proximate liability

Answer 4

Absolute liability: absolute liability is imposed by law on those participating in certain activities that are considered to be especially hazardous. Individuals involved in such activities may be held liable for the damages of another, even though the individual was not negligent.

Question 5

Liability that and insured incurs because of the actions of others, such as employees is…

A) vicarious liability
B) absolute liability
C) breach liability
D) proximate liability

Answer 5

Vicarious liability: vicarious liability is liability that person or business incurs because of the actions of others, such as family members or employees

Question 6

Liability losses are known as…_____ party losses

Answer 6

third-party losses. The insured is the first party. The insurance company representing the insured is the second party. The person who sustained the injury or damage is the third-party.

Question 7

Liability policies usually pay damages for the insured’s liability for…

A) bodily injury
B) property damage
C) personal injury
D) intentional torts

Answer 7

A, B, C. Most liability policies agree to pay on behalf of the insured all sums for which the insured become legally liable to pay as damages because of bodily injury or property damage. Some liability policies also cover insurance liability for personal injury, such as slander, libel, fulsome arrest, and invasion of privacy. Liability insurance generally rides no protection for the insured against liability arising out of intentional torts

Question 8

Supplementary payments are…

A) paid in addition to the policies liability limit
B) deducted from the policies liability limit

Answer 8

A) liability policies provide certain supplementary payments that are paid in addition to the policies regular limit of liability. Defense costs, post judgment interest, and premiums for certain types of bonds are examples of coverages that are usually included as supplementary payments.

Question 9

And aggregate limit is the most a company will pay…

A) for any one event
B) over the policy year
C) for any one person or item of property

Answer 9

B) policy year: an aggregate limit is a limit that applies to all losses occurring within anyone policy period. An aggregate limit is not restored after payment of a loss.

Question 10

Teresa is a spectator at a baseball game she is injured when a foul ball hits her head. She sues stadium owners for negligence. Which of the following defenses against negligence will the owner probably use?

Answer 10

Assumption of risk: applies when a person knowingly exposes himself to danger or injury. When a person assumes this risk, he may be prevented from recovering from a negligent party. This doctrine is frequently associated with injuries incurred by spectators at sporting events.

Question 11

Illustrate the concept of contributory negligence?

Answer 11

Driving a car too fast turning the corner and striking a car which is parked illegally in a fire lane

Both parties contributed to the accident one by driving to fast the other by illegally parking their car.

Question 12

Lee sues Pat for injuries sustained in an auto accident. During the trial it is determined that Lee’s negligence contributed to the loss. Under comparative negligence laws…

A) Lee cannot recover any damages from Pat

B) Lee’s damages will be reduced to the extent of her own liability for the loss

C) Lee can recover the full amount of the loss from Pat

Answer 12

B) under a comparative negligence law, a finding of liability may be me even when both parties have contributed to the loss, with an award based on the extent of each parties negligence.

Question 13

What’s type of compensatory damages reimburse the in the injured party for direct, specific expenses involved in the loss?

Specific, General?

Answer 13

Specific: specific damages include all direct answer civic expenses involved in a particular loss, such as medical expenses, lost wages, funeral expenses, and the cost to repair or replace damaged property.

Question 14

Damages that are awarded to punish the defendant and deter others from behaving the same way are called… Punitive Damages/General Damages?

Answer 14

Punitive damages: if a court feels that an individual acted wonton Lee or willfully in causing the injured parties damages, it may award punitive or exemplary, damages. Punitive damages are intended to punish the defendant and make it example out of him to deter others from behaving the same way

Question 15

Which of the following might be included as a supplementary payment in a liability policy?

A) premium for a bail or appeal bond
B) reasonable investigation expenses the insured incurs add the companies request
C) first aide cost
D) judgment against the insured for bodily injury liability

Answer 15

A, B, and C. Judgment against the insured for bodily injury liability and would be covered under the policy’s liability coverage assuming the loss is not excluded.

Question 16

Kyle fails to clean the ice off the driveway after major storm. The mail carrier slide on the ice but does not fall or otherwise injure himself. Could the mail carrier claim negligence against Kyle?

Answer 16

No. Now Carrie did not suffer damages, which is one of the elements required to establish negligence.

Question 17

The insured is sued by a neighbor, who claims she suffered a back injury when she tripped over a skateboard left on the insureds driveway. The insured knows the neighbor has had a bad back for many years; furthermore, our family doesn’t even on his skateboard. Will her insurance company paid to defend this case in court?

Answer 17

Yes; liability policies promise to defend the insured in any seeking EEI or PD damages, even if the charges are groundless or false.

Question 18

An insured is found liable for a $100,000 bodily injury claim as a result of a car accident. Her insurance company incurred $25,000 in expenses defending the insured against the suit. The insured’s auto policy limit is $100,000. How much will the insurance company pay for the bodily injury?

A) $75,000
B) $100,000

Answer 18

$100,000: defense costs are paid in addition to the policy limit and will not reduce the amount paid under the policy for a claim.

Question 19

Brandon’s auto policy has a $50,000 limit and a $25,000 PD limit. This is an example of a split/single blank limit policy.

Answer 19

Split: policy has several events for BI and PD

Question 20

The insureds vase is shattered by a careless neighbor. Could the insured coverage for this loss under her own liability policy?

Answer 20

No: liability policies exclude damage to property owned by the insured.

Question 21

The insured is furious with her neighbor for playing music too loud so she breaks all the windows in their house with a sledgehammer. If the neighbor Sue will the insured be coverage for this loss with her on my belly policy?

Answer 21

No: liability policies exclude damages that are caused intentionally by the insured

Question 22

Which of the following are examples of liability loses?

A) Ronald allows his large dog to run loose. One day the dog bites child while the child is playing in her own yard.

B) during a severe storm a limb from the well in the tree in Sandra’s yard brakes and falls into Shirley’s yard damaging a swingset

C) Thomas his son leaves a toy truck on the front steps. The mail carrier trips over it and breaks her leg.

Answer 22

A and C. A liability loss occurs when a person is responsible, or liable, for a loss to another person or another persons property and is required to make financial restitution.