MA Casualty Insurance
In any action to recover on an insurance policy, a court may award punitive damages if the court finds that the party seeking to recover on the insurance policy has been damaged by any violation of a producer. Punitive damages may not exceed
25% of the claim
A policy form is deemed to be approved by the Commissioner if it has been on file for at least how many days?
30 days
Per occurrence
A sublimit in a liability policy that puts a ceiling on the payment for all claims that arise from a single accident/occurrence
Rebating
Any inducement offered to the insured in the sale of insurance products that is not specified in the policy
Loss Ratio
Compares premium income to losses
The Commissioner has suspended a rating plan because he feels it is unlawful. Within how many days must the Commissioner hold a hearing regarding this suspension?
15 days
Interline Endorsements
Endorsements that apply or could apply to more than one coverage part. They are designed to eliminate redundancy and minimize the number of endorsements in the policy
Business Auto Physical Damage Coverage Form
Provides physical damage protection only for the insured's owned or hired business autos
Burglary
The crime of forced entry into or out of the premises of another by a person or persons with felonious intent
Obligee or insured
The person to whom the promise has been made and to whom the bond is payable in the event the principal defaults on its obligation
Vicarious Liability
This doctrine comes from the Old English Law "respondent superior" in which the master was liable for the acts of their servants. The purpose of this doctrine is to transfer the liability from one person to another person who would probably have a greater ability to pay
Release of attachment bond
When a court order requires the attachment of assets of another party (the defendant), the defendant uses this type of bond to have the property returned by posting ( ) to serve in lieu of the property as security for the plaintiff's claim
Attachment bond
When a court order requires the attachment of assets of another party, this bond may be used to guarantee that if the action to the attach property was wrong, any damages suffered will be paid for
How is a professional liability policy written?
Claims-made
Each insurer that sells, solicits, or negotiates any form of limited line credit insurance must provide to each individual whose duties will include selling, soliciting, or negotiating limited line credit insurance
A program of instruction that may be approved by the Commissioner
Sublimit
A reduced or limited amount of coverage's, other than the combined single limit, that is available to pay claims resulting from passenger bodily injury
Mass Insurers Insolvency Fund
An unincorporated, nonprofit legal entity established to cover claims of insolvent insurers
Non-owned autos
Any private passenger auto, pickup, van, or trailer which is operated by or in the custody of, but is not owned or furnished for the regular use of the named insured or family member
Components
Factors that determine rates
Attractive Nuisance
An exception to the rule that an individual owes no duty of care to someone trespassing on his/her property
Per person
The maximum amount available for payment of bodily injury to a single person in an accident, regardless of the policy limit stated in the policy for bodily injury claims
Principal or obligor
The person who promises to fulfill the obligation and who purchases the bond. This is the person or entity that will go through the underwriting process
Robbery
The taking of property from the care and custody of a person by one who has caused or threatened to cause that person bodily harm, or committed an obviously unlawful act witnessed by that person
If an insurance policy has additional coverage provision, how does it affect the policy premium?
There is no additional premium
Bail bond
This bond is issued to secure the release of a person from jail pending a courtroom appearance. It guarantees that the person will appear when specified
Surety
Someone who guarantees the performance of someone else
Two Classes of Compensatory Damages
Special and General
Damage to the property of others
The policy will pay up to $1,000 per occurrence on a replacement cost basis for damage the insured causes to property of others
Supply bonds
These bonds guarantee that a supplier will furnish supplies, materials, products, and equipment as specified in the written contract
First aid to others
The policy will pay expenses the insured incurs to render first aid for bodily injury to third parties
Coercion
To require, as a condition to a loan, that the applicant purchase insurance from a specific insurer
Owned autos
Eligible vehicles owned by the insured or acquired during the policy period
Absolute Liability
Imposed on defendants engaged in hazardous activities, such as harboring wild animals, using explosives. The injured party does not need to prove negligence
Negligence
The failure to use the care that a reasonable, prudent person would under the same or similar circumstances
Comparative Negligence
The fault is shared between the parties involved, and the awards for damages are reduced by the percentage of negligence of each party
The Business Auto Coverage Form
The form that provides coverage on all covered autos while used by the insured or employees of the insured, or others using the covered auto with permission but does not cover the exposure of other autos not owned, hired or leased by the named insured
Surety bonds
They guarantee specific duties or obligations will be fulfilled
Massachusetts Assigned Risk Plan
This plan is designed to provide motor vehicle insurance to applicants who are entitled, but unable to obtain coverage in the voluntary market
What was the purpose of the Motor Carrier Act of 1980?
To establish financial responsibility requirements for interstate motor carriers
Contract bonds
Used to guarantee performance of a written contract. They are primarily used in construction contracts
The Commissioner has the power to examine and investigate the affairs of every person engaged in the business of insurance in order to determine
Whether the person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or prohibited practice
Claims expense
The policy will pay expenses incurred and costs taxed against the insured in any suit the insurer defends, premiums on bonds required in a suit, reasonable expenses incurred by the insured including up to $250 per day for loss of income, and interest on the entire judgment that accrues after judgment has been entered and before the insurer pays it
Hired autos
Autos that are leased, hired, rented, or borrowed from someone other than an employee or partner
Performance bond
These bonds guarantee that the principal will complete the contract as agreed upon
Coverage E - Homeowners Policy
Personal Liability
Labor and materials bond
These bonds guarantee that work and materials will be delivered free and clear of any liens or other burdens. These are sometimes called payment bonds
Bid bonds
When construction projects are awarded based on the lowest bid, the oblige usually also requires a ( ). The ( ) promises that if the contractor is awarded the contract, the contractor will actually accept the contract
Portable electronics insurance
Protects the owner of a mobile phone, laptop, tablet, or other similar device against the device's theft or malfunction
Smooth Limit
A limit of liability offered as a combined single limit of coverage for all bodily injury to passengers and non-passengers, and property damage
Motor Carrier Coverage Form
An alternative to the truckers coverage form. It covers businesses that transport either owned or non-owned property
An insurance adviser's license may be issued to a corporation if the majority of the officers of the corporation
Are found by the Commissioner to be in all respects qualified for licenses as advisers
Occupying
In, upon, getting in, on, out of or off a vehicle
Which of the following endorsements is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle?
Individual named insured
With respect to the commercial package policy, an interline endorsement is one that
May apply to more than one line of insurance that is included in the package
Coverage F - Homeowners Policy
Medical Payments to Others
Reciprocity
Occurs when the state in which the person resides accords the same privilege to residents of Massachusetts
Any person who violates a cease and desist order of the Commissioner after it has become final must
Pay a fine to the state not to exceed ten thousand dollars for each violation, which may be recovered in a civil action
Contributory Negligence
The injured party must be completely free of fault in order to collect
Aggregate Limit
The maximum limit of coverage available under a liability policy during a policy year, regardless of the number of claims made or the number of accidents that occur
Cost bond
This bond guarantees that the person (plaintiff) who brings legal action against another (defendant) will be able to pay court costs and any resulting damages in the event the plaintiff loses the case
Injunction bond
This bond is required by courts whenever someone seeks an injunction against another. It guarantees that if the injunction should not have been issued, damages will be paid to the injured party
Garage Coverage Form
Used for businesses that regularly have autos of others in their care, custody or control. These types of businesses would include auto dealerships, auto repair and service garages, and businesses that park vehicles for others
Personal Injury Protection (PIP)
A mandatory coverage in Massachusetts, that must be provided with an aggregate limit of up to $8,000. However, if the injured insured has health insurance that will pay for some of the insured's medical expenses, ( ) will only pay $2,000 in benefits
Combined Single
A single dollar limit of liability applying to the total of damages for bodily injury and property damage combined, resulting from one occident or occurrence
Strict Liability
Commonly applied to product liability cases. A person or business that manufactures or sells a product makes an implied warranty that the product is safe. The business is then liable for defective products regardless of fault of negligence
Compulsory Insurance
Coverage's required by Massachusetts law that must be purchased before an auto can be registered
Completion bonds
If a contractor is required to borrow money to complete a construction project, the lender usually will require a ( ). This bond guarantees that the money borrowed will be used to fund the construction project and that the project will be completed free of any other obligations
Appeal bond
If a person appeals to a higher court after judgment already has been entered, this bond may be required to guarantee that the judgment will be paid, as well as the cost of the appeal
Loss assessment coverage
The policy will pay up to $1,000 per occurrence for the insured's share of loss assessment charged against them as owner or tenant of the residence premises, during the policy period, by a corporation or association of property owners