Adbanker P&C Ch. 3
Negligence is: A. An intentional tort B. A deliberate act C. An unintentional tort D. An aleatory tort
An unintentional tort
Policy A provides liability coverage to F's Grocery up to $500,000. Policy B provides coverage for the same risks up to $1.5 million. Both policies pay on a pro rata basis. If F's Grocery is determined to have a legal liability of $400,000 to a claimant who was injured on the property, how much will Policy A pay? A. $100,000 B. $500,000 C. $50,000 D. $400,000
$100,000
Q's liability policy has the following limits: $25,000 per person, $100,000 per occurrence, and $2,000,000 aggregate. This year, five separate claimants each file $25,000 for injuries suffered in a single accident. How much will the policy pay? A. $50,000 B. $125,000 C. $100,000 D. $25,000
$100,000
Driver D slid into another car, causing an accident in which three people in the other car were injured. Two injured parties claimed $15,000 in medical expenses, and the third person claimed $25,000. How much will D's insurance company pay if D's policy has 25/50 limits for bodily injury? A. $55,000 B. $75,000 C. $50,000 D. $45,000
$50,000
H's liability policy has the following limits: $35,000 per person, $350,000 per occurrence, and $2,000,000 aggregate. This year, three claimants file in the amounts of $15,000, $30,000, and $45,000. How much will the policy pay? A. $90,000 B. $35,000 C. $80,000 D. $350,000
$80,000
Which of the following would be considered an attractive nuisance? A. A toy store B. A candy store C. A trampoline D. A back lawn
A trampoline
Which of the following is a legal liability imposed without demonstrated negligence? A. Absolute liability B. Direct liability C. Proximate liability D. Contingent liability
Absolute liability
K gets a horrible rash after using wrinkle-prevention cream for 2 months. This is considered: A. Punitive damages B. An accident C. Negligence D. An occurrence
An occurrence
Proximate cause refers to: A. The fact that a wrongdoer could not foresee the consequences of their actions B. An unbroken chain of events initiated by a negligent act that leads to a loss C. A second negligent act that interferes with the chain of events leading to a loss D. The fact that a policy restricts the territory to which coverage applies
An unbroken chain of events initiated by a negligent act that leads to a loss
W plays hockey on the weekends and was injured while defending the goal. Which of the following defenses could the owner of the ice rink use to avoid liability for W's injuries? A. Comparative negligence B. Contributory negligence C. Statute of limitations D. Assumption of risk
Assumption of risk
Which of the following is not an element of negligence? A. Assumption of risk B. Proximate cause C. Duty owed D. Foreseeable consequence
Assumption of risk
A death caused by an insured either by negligence or purposefully would be covered by which of the following? A. Bodily Injury B. Property Damage C. Medical Payments D. Contributory Negligence
Bodily Injury
Personal Injury includes all of the following, EXCEPT: A. Slander B. Bodily injury C. Libel D. False arrest
Bodily injury
Which of the following is a third party contract? A. Both answers B. Property C. Casualty D. Neither answer
Casualty
Which of the following types of liability limits represents the maximum amount payable for a single occurrence, without regard for the number of claimants? A. Combined single limit B. Comprehensive limits C. Split limits D. Per person limit
Combined single limit
When a claimant brings a negligence claim against the insured, the court determines that the claimant is partially responsible for the loss, and the damages they are owed is reduced by the amount of their responsibility. This describes which defense against negligence? A. Contributory negligence B. Comparative negligence C. Contributory risk D. Comparative risk
Comparative negligence
Which of the following defenses against negligence reduces damages in proportion to the degree of negligence? A. Statute of limitations B. Assumption of risk C. Contributory negligence D. Comparative negligence
Comparative negligence
Which of the following is an example of special damages? A. Damages assessed by the court as a penalty for gross negligence B. Compensation to a party for the loss of companionship of a spouse C. Compensation to an injured party for actual medical expenses and loss of earnings D. Compensation for pain, suffering, and disfigurement
Compensation to an injured party for actual medical expenses and loss of earnings
The equal sharing of a loss by two or more insurers until the loss is paid, or until each insurer has exhausted its limits of insurance, whichever comes first, is the description of which of the following? A. Excess insurance B. Contribution by equal shares C. Pro rata liability D. Assumed liability
Contribution by equal shares
What is the name for a type of policy that does not pay benefits until the limits of the primary policy has been exhausted? A. Common law policy B. Surplus lines policy C. Excess policy D. Liberalization policy
Excess policy
What is the name for a type of policy that does not pay benefits until the limits of the primary policy has been exhausted? A. Liberalization policy B. Common law policy C. Excess policy D. Surplus lines policy
Excess policy
Losses that cannot be calculated objectively, such as pain and suffering or mental anguish, are considered: A. General damages B. Physical damages C. Special damages D. Punitive damages
General damages
Payments for mental anguish or loss of consortium are known as: A. Punitive damages B. General damages C. Strict liability D. Specific damages
General damages
Driving while under the influence of alcohol is an example of: A. Contributory negligence B. Vicarious Liability C. Gross negligence D.Assumption of risk
Gross negligence
All of the following are areas of law under which a person can be found liable for injury or damage to another, EXCEPT: A. Absolute liability B. Vicarious liability C. Intervening cause D. Negligence
Intervening cause
Which of the following best describes a liability policy that is written on a primary basis? A. It provides only basic coverage B. It shares the loss with other policies covering the same loss C. It is the policy that pays first with respect to other policies D. It pays only after other insurance covering the same loss is exhausted
It is the policy that pays first with respect to other policies
Which of the following lists all the required elements for establishing a charge of negligence? A. Legal duty, assumption of risk, statute of limitations, actual damages B. Assumption of risk, intervening cause, standard of care, proximate cause C. Comparative negligence, statute of limitations, damages, legal duty D. Legal duty owed, breach of legal duty owed, proximate cause, damages
Legal duty owed, breach of legal duty owed, proximate cause, damages
Bodily injury coverage may include payments for which of the following? A. False arrest B. Slander C. Loss of earnings D. Invasion of privacy
Loss of earnings
Which of the following statements about medical payments is false? A. General damages compensate the injured party for pain and suffering B. Specific damages compensate the injured party for actual damages C. Medical payments coverage is provided to discourage lawsuits D. Medical payments cover personal injury
Medical payments cover personal injury
Which of the following is defined as the failure to act in a reasonable and prudent manner? A. Legal duty B. Negligence C. Proximate liability D. Tort
Negligence
Special damages would be awarded for all of the following types of loss, except: A. Medical expenses B. Loss of income C. Pain D. Repair costs
Pain
Medical payments coverage includes which of the following? A. Payment of medical expenses incurred by persons who occupy the insured premises B. Payment of necessary medical expenses incurred by an injury on the insured's premises C. Payment of medical expenses caused by illness manifesting itself on the insured's premises D. Payment of medical expenses incurred by an insured while at work on the premises
Payment of necessary medical expenses incurred by an injury on the insured's premises
Which of the following statements about medical payments coverage is true? A. They apply to all expenses incurred within 5 years of the accident B. Payments are made regardless of fault or negligence C. They apply to members of amateur athletic teams sponsored by the insured D. Payments are made to all persons, including the insured on the premises for any reason
Payments are made regardless of fault or negligence
A guest on the insured's premises is injured and incurs medical expenses, which the insured's policy covers up to a certain limit. Which of the following statements about these medical payments is true? A. Medical payments replace bodily injury coverage B. Payments are made without regard to negligence C. Medical payments, when made, are an admission of negligence D. The insured must be legally liable for coverage to apply
Payments are made without regard to negligence
The most a policy will pay for a loss arising out of any one accident, regardless of overall policy limits, is known as the: A. Per person limit B. Split limit C. Aggregate limit D. Per occurrence limit
Per occurrence limit
As used in casualty insurance, bodily injury is best described as: A. Physical injury, sickness, or death arising from the negligent acts of an insured B. All financially measurable injuries directly sustained, including libel and false arrest C. Any injury resulting in bleeding, bruising, bone fractures, or disfigurement D. Any injury causing hospitalization, disability, or loss of income
Physical injury, sickness, or death arising from the negligent acts of an insured
The formal statement an insured provides to an insurer, including all the details an insurer needs to assess its liability following a loss, is known as a: A. Binder B. Proof of loss C. Notice of loss D. Certificate of insurance
Proof of loss
Which type of damages is ordered by the courts to punish a negligent party? A. General B. Specific C. Punitive D. Special
Punitive
All of the following types of damages will indemnify the claimant in the event of a covered loss, EXCEPT: A. Compensatory damages B. Special damages C. Punitive damages D. General damages
Punitive damages
The time period in which a lawsuit may be filed after the occurrence of a claim is referred to as: A. Limit of liability B. Common law defenses C. Statutory law D. Statute of limitations
Statute of limitations
A manufacturer is held liable if a product caused an injury whether the product was or was not defective. This describes what type of liability? A. Contingent liability B. Operations liablity C. Vicarious liability D. Strict liability
Strict liability
What is the principle of liability that imposes legal liability for injury and damage by products? A. Absolute liability B. Contingent liability C. Strict liability D. Professional liability
Strict liability
What is the principle of liability that imposes legal liability for injury and damage by products? A. Contingent liability B. Strict liability C. Absolute liability D. Professional liability
Strict liability
Which statement regarding liability insurance coverage is incorrect? A. Casualty policies must defend the insured against liability claims made against them, but only if the claim is relevant to the policy's coverage B. Pro rata liability is the proportionate distribution of liability among insurers that have policies on the same risk C. The per occurrence limit is the maximum amount recoverable during the policy period D. If the policy is written as primary coverage, it pays first with respect to other policies
The per occurrence limit is the maximum amount recoverable during the policy period
All of the following statements about torts are correct, except: A. Liability insurance excludes intentional torts B. They must be committed intentionally C. They constitute the basis of a claim against the insured by a third party D. Negligence is a type of tort
They must be committed intentionally
Which of the following terms describes what applies when an insureds 13 year old daughter intentionally vandalizes a neighbors house? A. Strict liability B. Vicarious liability C. Absolute liability D. Gross negligence
Vicarious liability