P&C
An insured has a $60,000 DP-3 policy. $10,00 in damages to the attached garage. How much of that amount is paid under the coverage B-other structures?
$0. An attached garage is part of the dwelling. It would be covered under part A
An insurance company requires an insured to attend and testify during a 5-day trial. As a result, the insured is not paid their full weekly salary ($4,000). What amount will the supplementary payments section of the commercial general liability coverage form reimburse the insured?
$1,250- $250 per day
Jewelry stolen from home is covered at:
$1,500
Bob has a liability policy in the amount of 300/500/100. How much coverage does he have per occurrence for property damage liability?
$100,000
How much is allowed for bail bonds?
$2000
The replacement cost of Arjun's home is $200,000. He carries $100,000 of insurance on the home with a $1,000 deductable. The policy has an 80% coinsurance requirment. If a $40,000 covered loss occurs, how much would Arjun's insurance company pay for the loss?
$24,000
What is the maximum daily amount paid under the CGL's supplementary payments provision for the insured's loss of earnings?
$250
Credit card fraud is covered under a homeowners policy to a maximum of what amount?
$500
Dwelling policies provide up to how much $$ for fire department service charge?
$500
Bill and Marge have a HO-2 policy insuring their main residence for $150,000. How much coverage do they have for personal property kept at their summer cottage? A) $15,000.00 B) $30,000.00 C) $75,000.00 D) $7,500.00
$7,500- only 10% for personal property when not primary residence
An insured lives in a house covered by an $80,000 special form (DP-3) policy. While the insured is on vacation, someone breaks into the house and steals $5,000 in electronic equipment. The damage to the door is estimated at $800. What coverage is provided by the DP-3 policy? A) $800.00 B) $0.00 C) $5,000.00 D) $5,800.00
$800
Coverage B - Personal and Advertising Injury
- Offenses: libel and slander - Individual or entire business -Provides protection for liability arising from personal and advertising injury offense committed in the coverage territory and during the policy period
types of auto
- Owned - Nonowned - Hired - Temporary substitute
Notice of Claim
- The policyowner's obligation to the insurer to provide notification of loss within 20 days after the occurrence (or as soon as is reasonably possible). - 20 days
Duties of the insured after a loss
- give immediate written notice -protect property from further damage -Provide proof of loss
Fair Credit Reporting Act
-A federal law that established procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant and properly used. -Act that protects privacy of background information and ensures that information supplied is accurate.
Law of Large Numbers
-A principle stating that the larger the number of similar exposure units considered, the more closely the losses reported will equal the underlying probability of loss. -the larger the number of individuals that are randomly drawn from a population, the more representative the resulting group will be of the entire population
Loss Valuation
-A property policy pays for losses to property based on the valuation method contained in the policy or chosen by the insured in an endorsement added to the policy. -A factor in determining the premium charged and the amount of insurance required.
Directors and Officers
-Liability coverage and legal defense for actions or decisions taken while action capacity of officer of a company -A type of Professional Liability Insurance sold to individual board members who may be sued by the shareholders.
Who is an insured?
-Named insured and resident spouse -Resident family members -Any person who borrows a covered auto with the permission of any insured
Supplemental Payments
-Payments made for additional expenses related to damages or defense, usually paid in addition to the limits of liability. -Things specified in auto policies that the insurance company will pay for in addition to the auto policy limits of liability
Medical Payments
-Policyholders and family members are covered if they are injured while riding in their car or another car -Auto insurance coverage can help to provide medical payment for treatment of bodily injury
Watercraft Coverage
-Sailboats less than 26 feet in length -Boats with inboard motors of 50 horsepower or less -Boats with outboard motors of 25 horsepower or less
Retroactive Date
-Under the claims-made CGL form, a date stipulated in the declarations as the first date on which an event may occur and be covered by the policy if a claim is filed. -The date on or after which bodily injury or property damage must occur (or a personal and advertising injury offense must be committed) in order to be covered.
Newly Acquired Auto
-automatically has same coverage as current covered autos for 14 days -must be specifically added to policy within those 14 days
Duties of the Insured
-pay premiums -notify the insurer of insured events within a reasonable time -cooperate with insurer's investigation
In order to nonrenew a personal auto policy, an insurer must provide how many days' advance notice to the policyholder?
30 days
Under the commercial articles coverage form additional acquired property is automatically covered for up to:
30 days if it is a type of property already covered by the form
The minimum financial responsibility for automobile liability limits in Texas are:
30/60/25 30,000-due to bodily injury or death of any one person 60,000-due to bodily injury or death of two or more persons in any one accident 25,000-due to damage to all property of others in any one incident
The basic reporting period on a CGL policy is:
5 years after the end of the policy
If the shrubs in front of a house burn when the house catches fire, how much is the insured entitled to recover for the shrubs under his HO-3?
5% of the limit on coverage A with a maximum of $500 for any 1 shrub
Shrubs burning under HO3
5% of the limit on coverage A with a maximum of $500 for any one shrub
Vandalism or malicious losses to property are not covered if the dwelling has been vacant for:
60 or more consecutive days
When a workers comp injury results in death, the employees beneficiaries are entitled to:
75% of the employee's average weekly wage
An emergency insurance license is valid for:
90 days and may be renewed for an additional 90 days
What is one of the major differences between the application of commercial blanket bond policy limit versus a blanket position bond's policy limit?
A commercial blanket bond's policy limit applies separately to each loss. A blanket position bond's policy limit applies separately to each employee involved in a loss.
Commercial Property floater
A commercial inland marine policy designed for commercial and business property
Buisness Owners Policy (BOP)
A commercial package policy designed for certain types of small businesses, combining Property and Liability coverages. Very similar to a Commercial Package Policy (CPP).
Morale Hazard
A condition of carelessness or indifference that increases the frequency or severity of loss.
Deposit Premium Audit
A condition that allows the insurer to audit the insured's books or records at the end of the policy term to make sure adequate premium has been collected for the exposure.
Direct Loss vs. Indirect Loss
A direct loss is a financial loss that results from the physical damage, destruction, or theft of the property, such as fire damage to a home An indirect or consequential loss is a financial loss that results indirectly from the occurrence of a direct physical damage or theft loss, e.g., the additional living expenses after a fire
Mysterious Disappearance
A disappearance of property that cannot be explained as to the location, time or the manner of property loss.
Products and Completed Operations
A form of General Liability insurance that covers a company against liability arising out of its products (a manufacturer) or its completed operations (a contractor or architect).
Special Damages
A form of compensatory damages that awards a sum of money for specific, identifiable expenses associated with the injured person's loss, such as medical expenses or lost wages.
Surety Bond
A guarantee that protects a business when another person or business fails to fulfill the terms of a contract between them
Certificate of Insurance
A legal document that indicates that an insurance policy has been issued, and that states both the amounts and types of insurance provided.
Indirect Loss
A loss that arises as a result of damage to property, other than the direct loss to the property.
All of the following properties can be insured under an unendorsed homeowners policy except
A mobile home
General Damages
A monetary award to compensate a victim for losses, such as pain and suffering, that do not involve specific measurable expenses.
Compensatory Damages
A money award equivalent to the actual value of injuries or damages sustained by the aggrieved party.
For personal property coverage, who is NOT insured by a homeowners policy? A) A live-in housekeeper requested by the named insured. B) A nonresident uncle. C) The named insured. D) A 20 year-old resident.
A non resident uncle
Insuring Agreement
A statement in an insurance policy that the insurer will, under described circumstances, make a loss payment or provide a service.
Which of the following statements regarding bond agreements is correct?
A surety bond serves as a guarantee of performance.
binder
A temporary written or oral agreement to provide insurance coverage until a formal written policy is issued.
Absolute Liability
A type of liability that occurs due to extremely dangerous operations, such as the use of explosives or working at extreme heights.
Dwelling Policies Coverage
A- Dwelling B- Other structures C- Personal property D- Fair rental value E- Additional living expense
Section 1 property coverage covers:
A- Dwelling B-Other structures C-Personal property D-Loss of use
A therapist owns office space in a commercial office building that is legally organized as a condominium. Which of the following best protects the therapist's business personal property? A) Condominium commercial unit owners form. B) Condominium association coverage form. C) Commercial package policy (CPP). D) Unit owners form (HO-6).
A.
Owned Auto
An auto defined by the ISO Business Auto Coverage Form as owned by the insured, including trailers that are not owned while attached to owned vehicles.
Hired Auto
An auto that the insured leases, hires, rents, or borrows, excluding autos leased, hired, rented, or borrowed from employees, partners, LLC members, or members of their households.
Temporary Substitute
Any auto or trailer that is non-owned while being used in place of an insured vehicle which not available because of breakdown, repair, servicing, loss, or destruction
Theft Coverage
As theft is a rather broad (and oftentimes high risk) peril, not all property policies cover theft. Dwelling policies without a Limited Theft or Broad Theft endorsement do not cover theft at all and neither do Commercial Property policies written with a Basic or Broad Cause of Loss form. All Homeowners policies cover theft.
Dennis purchased a small manufacturing firm and wants to purchase coverage for the premises-operations and products-completed operations exposures. Which of the following types of insurance should he purchase? A) Comprehensive general liability. B) Commercial general liability. C) Employment practices liability. D) Boiler and machinery.
B. Commercial general liability
Adding the personal injury endorsement to the homeowners policy protects the insured against all of the following EXCEPT: A) invasion of privacy. B) contractual liability. C) libel. D) slander.
B. Contractual liability
BLANKET VS SPECIFIC
BLANKET COVERAGE-provides coverage for different classes of property under one policy. SPECIFIC INSURANCE-is when you insure a specific item or specific kind of property.
BIG AFFECT
BURGLARY ICE, SLEET AND SNOW WEIGHT GLASS BREAKAGE ACCIDENTAL DISCHARGE OF WATER FALLING FREEZING ELECTRICAL COLLAPSE TEARING APART
Which of the following is not and exclusion in the commercial auto policy liability section?
Bail bonds
The bailee (the business) policy pays
Bailor (customer)
DP1 (Basic Form)
Basic perils: Fire, lightning, internal explosion All values: ACV Optional: Extended coverage (WCSHAVVER) Optional: Vandalism, Malicious mischief
HO8 Modified coverage form
Basic- A- ACV Basic-B-ACV Basic-C-ACV
premises and operations
Business liability exposure arising out of the business location or the activities of the business. Covered under the CGL.
Windstorm Coverage
COVERAGE FOR COASTAL AND MIDWESTERN STATES THAT DO NOT QUALIFY FOR WIND COVERAGE UNDER TRADITIONAL HO POLICIES
Section 2 of homeowner policy:
Casualty
In describing the concept of subrogation, the insurer claims the right to:
Collect from a negligent third party
While backing her car into a parking space on a neighborhood street, Melanie struck a fire hydrant with her bumper. Which coverage under Melanie's personal auto policy (PAP) will cover the damage to the bumper? A) Collision. B) Medical payments. C) Comprehensive. D) Liability.
Collision
Automobile comprehensive coverage insures all of the following except:
Collision (aka other than collision coverage)
Dennis purchased a small manufacturing firm and wants to purchase coverage for the premises-operations and products-completed operations exposures. Which of the following types of insurance should he purchase? A) Comprehensive general liability. B) Commercial general liability. C) Employment practices liability. D) Boiler and machinery.
Commercial general liability
HO6
Condo owner. Broad-C-ACV Also covers inside walls (A)
Extra Expense Coverage Form
Covers additional expenses incurred by the insured business to continue operations following a direct loss by a peril insured a separate form that can be used to cover the extra expenses incurred by the firm in continuing operations during a period of restoration
Inland Marine Insurance
Covers goods that are moved by land carriers such as trains, trucks, and airplanes. Insurance that covers many different classes of property that typically involve an element of transportation.
Forgery and Alteration Coverage
Covers loss due to dishonesty in writing, signing or altering checks, bank drafts, and other financial instruments through Coverage Form B. CR 00 03.
Of the dwelling forms, which one of the following provides the broadest coverage?
DP-3 Special Form
DICEE
Declaration, Insuring Agreement, Conditions, Exclusions, Endorsements.
Peril A
Dwelling
Section 2 casualty coverage covers:
E-Liability F-Medical
vicarious liability example
Employee delivering for employer causes an auto accident in which people were injured.
Drive Other Car Coverage (doc)
Endorsement to the Business Auto Policy that covers named persons for use of nonbusiness autos they don't own. Used when the named insured furnishes an auto to another, such as an employee, who does not own his/her own car
Which policy provides coverage for professional liability?
Errors and omissions
temporary substitute vehicle
Ex: loaner vehicle by repair shop
Which of the following is NOT a basic way in which underwriters assign rates?
Expense rating
Which one of the following forms would be most appropriate to protect against a suspension of business operations for an insured that cannot afford to have its operations interrupted?
Extra expense insurance
Which one of the bonds is purchased to protect an employer from the actions of dishonest employees?
Fidelity
Which of the following would NOT be paid as supplementary payments under Part A of the personal auto policy?
Funeral expenses for the insured
Which of the following commercial auto coverages covers automobiles in the insured's care?
Garagekeepers
Which of the following provides open perils coverage? HO- 3 8 4 2
HO-3
Which homeowners policy would be written to cover personal property only?
HO-4 because it is rental
Which homeowner insurance covers mysterious disappearance?
HO5
XYZ insurance company gives its agents authority that was not formally expressed or communicated. The authority given to the agents by XYZ can be called:
Implied authority
In most cases, an injured employee receives payments under workers' comp insurance from whom?
Insurance company
Fidelity Bond
Insurance coverage to protect a business from losses due to employee theft
Commercial Property Insurance
Insurance that covers commercial buildings and their contents against various types of property loss. covers property losses resulting from fire, storms, accidents, theft, and vandalism
Equipment breakdown insurance
Insurance that covers loss due to the accidental breakdown of almost any type of equipment that operates under pressure or that controls, transmits, or uses mechanical or electrical power.
In an insurance transaction, who does a licensed agent legally represent?
Insurer
The list of perils covered under a policy is found in which part of the policy?
Insuring agreement
Commercial Building and Personal Property Form
Is the main form used to cover buildings, business personal property, and property of others on the insureds premises. This Form can be used to cover direct loss or damage to buildings, business personal property, and/or property of others in the insureds care, custody, or control.
Which one of the following statements regarding personal liability is correct?
It is added by endorsement to the dwelling policy, but automatically included in the homeowners policy.
What are the 3 basic way to assign rates?
Judgement, Manuel, and Experience
Endorsement:
L- Liability M- Medical Theft Mobile home
proximate cause
Legal cause; exists when the connection between an act and an injury is strong enough to justify imposing liability.
Vicarious Liability
Legal doctrine under which a party can be held liable for the wrongful actions of another party.
Peril E
Liability
Peril D
Loss of use
An insurance company may measure its underwriting profitability by using which of the following ratios?
Loss ratio (annual claims to premiums received for that year)
Workers' compensation laws vary from state to state. The categories of coverage are elective or compulsory. In compulsory states, the basic methods of providing coverage are monopolistic or competitive. The monopolistic method is when the insurance:
MUST be purchased from the state-run insurer
Which one of the following is NOT an additional coverage found in homeowners policies? A. debris removal B. loss assessment C. market valuation D. fire department service charge
Market valuation
Peril F
Medical
Coverage C of the commercial general liability policy will cover?
Medical payments
Punitive Damages
Monetary damages that may be awarded to a plaintiff to punish the defendant and deter similar conduct in the future.
HO3 Special Form
Most popular HO coverage form. Providing the best coverage for the money. It is all risk on the dwelling and other structures. Contents are still named peril but all risk coverage for contents may be added by endorsement. Includes A, B, and C
Farm policy
Must have at least 10 acres
HO2 policy provides which type of coverage?
Named perils coverage for dwelling and personal property
Steve meets with his agent to apply for an automobile insurance policy on his 2 personal cars. In reviewing the policy, Steve finds he is not willing to accept the duties listed in the conditions section. He signs the application but adds a note deleting the duties to the insurer. Is this acceptable to the company? A) No, the agent has to make this request in writing. B) Yes, the insured has the ability to change the policy at the time of the application. C) No, a written endorsement by the insurer is the only way to change the policy. D) Yes, as long as the request is done in writing.
No- a written endorsement by the insurer is the only way to change the policy.
automobile bodily injury liability
Occurs when a driver or car owner is held legally responsible for bodily injury losses that other people, including pedestrians, suffer.
Builders Risk Coverage Form
One of the commercial property coverage forms; covers commercial, residential, or farm buildings that are under construction
DP3 (Special Form)
Open perils- real property Broad perils- personal property Theft of fixtures is covered
Peril B
Other structures
Doug who is 7 years old, accidentally throws a baseball through the neighbors kitchen window. Which part of the homeowners policy will pay for the damages to the window?
Part E
Employee Dishonesty Coverage Form
Part of the Commercial Crime Coverage part of the Commercial Package Policy, it covers loss resulting from dishonest acts of employees. This coverage is excluded under other Crime insurance forms. Formerly this coverage was provided under Fidelity bonds or combination policies that included Fidelity bonds.
Sue, an employee of Paul's Bicycle Shop, was on a service call repairing some bicycles at Bill's home. On her way back to the shop she was involved in an automobile accident and injured. Where would Sue find coverage? A) Paul's auto policy. B) Both Paul's auto policy and workers' compensation policy. C) Paul's workers' compensation policy. D) Her own auto policy.
Paul's workers' comp policy
Paul purchased utility services- time element coverage for his bicycle shop. Of the following, which statement best describes the type of coverage Paul purchased with this endorsement?
Payment for loss of business income due to a covered loss involving certain utility services
Business Income Coverage
Pays for losses of income that the insured sustains due to a direct physical loss from a covered peril that forces the insured to suspend operations.
Contract bond=
Performance bond
Named Insured
Person, business, or other entity named in the declarations to whom the policy is issued.
Personal Articles Floater
Personal Inland Marine insurance which provides all-risk coverage on nine optional classes of personal property: jewelry, furs, cameras, musical instruments, silverware, golf equipment, fine arts, stamp collections and coin collections.
Peril C
Personal Property
Commercial Package Policy (CPP)
Policy that covers two or more lines of business by combining ISO's commercial lines coverage parts.
3 Sources for Workers' Compensation
Private Insurance, State Funds, and Self-Insurance
Errors and Omissions Insurance
Professional liability policy that provides coverage for insurance agents, as wells as certain other types of professionals.
Section 1 of homeowners policy
Property
Which of the following is covered by the jewelers block coverage form?
Property that is sold but not delivered
Employment practices liability insurance (EPLI)
Protects an employer against claims by workers that their legal rights as employees of the company have been violated.
Garage Coverage Form
Provides liability, garagekeepers, and physical damage coverages for vehicle dealers including dealers that have repair operations on the business premises
Damage to property of others
Provision in Section II of a homeowners policy that pays up to $1000 per occurrence on behalf of an insured who damages someone's property. Payment is made without regard to legal liability
other-insurance provisions
Provisions whose purpose is to prevent profiting from insurance and violation of the principle of indemnity when more than one policy covers a loss.
Transferring is a method of:
Purchasing insurance
Pure risk vs. Speculative risk
Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling, stock investment).
DP2 (Broad Form)
Real property- replacement Personal property- ACV Includes everything from DP1 Plus: The "BIG AFFECT"
Which department within an insurance company organization is typically responsible for helping cover the insurers exposure to loss?
Reinsurance department
Section II of the homeowners policy provides liability coverage for all of the following EXCEPT: action of a resident employee renting the garage to a jewelry maker actions of a domestic animal use of a 17-foot sailboat
Renting the garage to a jewelry maker -does not cover liability for any rental on the premises
Mortgagee Rights
Rights granted to a mortgagee (lender), under a property contract issued to a mortgagor, by virtue of the mortgagee's financial interest in the property.
George just returned from Europe with a beautiful Swiss watch valued at $10,000. He is concerned that his homeowners policy will not provide enough coverage. His insurance agent suggests that he add which endorsement to adequately cover his watch?
Scheduled personal property endorsement
Commercial General Liability
Section I - Coverages Coverage A - BI and PD liability Coverage B - Personal and Advertising Injury Coverage C - Medical Expense Section II - Who is an Insured Section III - Limits of Insurance Section IV - Conditions Section V - Definitions
Causes of Loss Form
Separate form used with the Commercial Property coverage part of the Commercial Package policy that lists covered perils and exclusions. Several different versions provide increasingly broader coverage from basic to broad to special. a required component of the commercial property coverage part that specifies perils covered
Which type of return premium computation is used when the policyholder cancels a policy? A) Short rate. B) Aggregate. C) Flat. D) Pro rata.
Short-rate
Which one of the following dwellings would a HO-3-- homeowners form cover?
Single-family home
Endorsements to the Homeowners Policy
Some property owners have special needs or desire broader coverage than that provided by a standard homeowners' policy - Inflation guard endorsement - Earthquake endorsement - Personal property replacement cost loss settlement endorsement - Scheduled personal property endorsement - Personal injury endorsement - Watercraft endorsement - Home business insurance coverage endorsement - Identity theft endorsement
A bailee is:
Someone who has taken temporary custody of another person's property for a special purpose.
Concealment or Fraud
Specifies that the policy may be voided if there is material concealment, misrepresentation, or fraud on the part of the insured. Hide
Conditions
States policy provisions, rules of conduct, duties, and obligations required for coverage
Ralph is a conductor employed by American Cross-Country Railway System. He routinely travels from Chicago to Los Angeles, and was injured falling from a train platform while helping passengers. Which of the following provides bodily injury coverage for Ralph? A) The U.S. Longshoremen's and Harbor Workers' Compensation Act. B) The Federal Employers Liability Act. C) The Jones Act. D) The Federal Employees' Compensation Act.
The Federal Employers' Liability Act
Terrorism Risk Insurance Act (TRIA)
The Secretary of the Treasury oversees the program and has the authority to establish regulations and procedures to implement the program. Commercial policies must cover the peril of terrorism. The Act does not apply to personal lines policies. **Requires insurance companies to offer terrorism insurance to their commercial policyholders.**
Market Value
The amount you could realistically sell an asset for today
Replacement Cost
The cost to repair or replace property using new materials of like kind and quality with no deduction for depreciation. Most expensive option
What happens if a customer notifies a credit reporting agency that info in the consumers credit report is incorrect
The credit reporting agency is required to investigate and if it is justified, correct and delete the info
National Flood Insurance Program
The federal government's program to provide Flood insurance at subsidized rates.
Strict Liability
The legal responsibility for damage or injury even if you are not negligent
Limits of Liability
The maximum amount of money the insurance company will pay for a particular loss, or for loss during a period of time.
Combined Single Limit
The most the policy will pay for all losses of all types resulting from any one occurrence, regardless of other limits.
First Named Insured
The person listed first on the declarations page when there is more than one named insured
Which of the following statements pertaining to insurance companies is correct?
The primary purpose of a stock company is to earn a profit for its stockholders.
Subrogation
The process by which an insurer can, after it has paid a loss under the policy, recover the amount paid from any party (other than the insured) who caused the loss or is otherwise legally liable for the loss.
All of the following statements about the notice to applicant in the Fair Credit Reporting Act are true except:
This notice must be given to the consumer no later than three days after a report is requested.
HO4
This renter's insurance policy is similar to the homeowner's insurance policy carried on primary residences, but doesn't include coverage on real property owned by someone else. Broad-C-ACV
Which of the following endorsements is used to provide coverage based on actual values at certain locations at specific times?
Value reporting endorsement
HO5 (Comprehensive Form)
Very similar to HO3 but it provided open peril coverage for the dwelling, other structures, and the personal property without the need to add an endorsement. Also covers Mysterious Disappearance
After a fire damages a home, how much is the insured entitled to recover for buying materials to board up the windows under the homeowners policy?
Whatever it will reasonably cost
Decloaration
Who, what, when. where is found in this section
Uninsured Motorist
Your auto insurance pays you for your injuries if the other person does not have insurance.
Coinsurance/Insurance to Value
a Requirement that the insured carry insurance equal to a specified percentage of the value, to be fully indemnified under the policy. Provides a proper basis for setting rates
Direct Loss
a financial loss that results from the physical damage, destruction, or theft of the property
indemnity
a payment for damage or loss
Additional Insured
a person or party who is added to the named insured's policy by an endorsement
Physical Hazzard
a physical condition that increases the frequency or severity of loss
Stated/Agreed Value
a pre-negotiated value for loss, regardless of the actual cost of the loss
non-owned auto
a private passenger auto, pickup, van, or trailer not owned by or furnished or made available for regular use of the named insured or family member, while it is in the custody of or being operated by the named insured or family member
Proof of Loss
a sworn statement that must usually be furnished by the insured to an insurer before any loss under a policy can be paid
Proof of loss
a sworn statement that must usually be furnished by the insured to an insurer before any loss under a policy can be paid
All of the following are covered as business personal property EXCEPT:
accounts receivable
Barney's Breads and Bakery store needs workers' compensation coverage for his 7 employees. He could purchase coverage from all of the following sources except:
an assigned risk plan
Captive agent
an insurance agent who represents only one insurance company and who is, in effect, an employee of that company. They are also independent contractors
Obligations of the Insurance Company
an insurance company, in return for premium, must be fair in underwriting and must pay covered losses.
peril In insurance
an occurrence or event, either caused by a person or nature, that triggers a financial loss.
All of the following factors must be involved to establish negligence EXCEPT:
approximate cause
Section II of a homeowners policy covers all of the following except: A. liability for loss of use of another's property B. bodily injury to others C. bodily injury to one of the insured's resident family members C. property damage of another caused by the insured
bodily injury to one of the insured's resident family members
The commissioner of insurance is elected
by the governor for a 2 year term
Negligence
carelessness
umbrella (excess) liability insurance
catastrophic liability policy that covers liability losses in excess of those covered by any underlying homeowner's, automobile, or professional liability policy
Claims-Made Form
commercial general liability coverage form that pays for BI or PD losses for which a claim was first made against the insured during the policy period
All of the following items are covered under coverage A of a business policy EXCEPT:
computers and photocopiers
earthquake coverage endorsement
covers earthquakes, landslides, volcanic eruption, and earth movement
HO2 Broad Form
covers the dwelling (A), other structures (B), and personal property (C) on a named perils basis
Coverage C: Medical Payments
covers the medical expenses of persons who are injured in an accident on the premises or on ways next to the premises, or as a result of the insured's operations -The medical expenses must be incurred within one year of the accident and are paid without regard to legal liability. Ex. a customer is injured on a slippery floor. The medical expenses are covered up to the policy limits
appraisal
evaluation or estimation of worth
Rental Reimbursement
insurance to cover the cost of a rental vehicle if your vehicle is stolen or being repaired; usually involves a per-day limit as well as a limit on the number of days
The coverages offered by an insurance policy are described in the
insuring agreement
Cyber Liability and Data Breach
internet liability and network protection policy covers cyber risks
Per Occurrence
is a sublimit in a liability policy that puts a ceiling on the payment for all claims that arise from a single accident/occurrence
An occurrence is best described as something that
may take place over time
medical malpractice
medical professional misconduct, which differs from negligence because it is performed by a licensed medical professional
Harold owns a sports bar. As a promotion, he offers customers tastings of new German beers. One customer, after several samples, drives off and injures another person. The injured party sues the driver and Harold. Harold's commercial general liability policy will: A) cover the loss under the products/completed operations insuring agreement. B) cover the loss under host liquor liability because Harold did not actually sell the beer. C) not cover the loss because of the liquor liability exclusion. D) cover the loss under the bodily injury and property damage insuring agreement.
not cover the loss because of the liquor liability exclusion
automobile property damage liability
occurs when a driver or car owner is held legally responsible for damage to others' property
Elements of a Contract
offer, acceptance, consideration, legality, capacity, consent, writing
With a few exceptions, most personal lines insurance policies exclude losses arising out of all of the following except:
personal activities conducted away from the insured premises
automobile liability insurance
protects you against financial loss if you injure someone else or damage someone else's property in an automobile accident
Coverage A- Bodily Injury and Property Damage
provides protection for bodily injury and property damage suffered by third parties due to the negligence of the insured and emanating from the insured's premise, operations, product or completed operations that occur within the coverage territory and a time frame described by the policy
conditions
provisions in the policy that qualify or place limitations on the insurer's promise to perform
In states that use the workers' compensation competitive state funds method, all of the following would be viable options available to an employer except:
purchasing coverage from the state fund only
The garage coverage form is designed specifically for all of the following EXCEPT:
rental car companies
ACV (Actual Cash Value)
replacement cost minus depreciation- least expensive
A chance, possibility, or uncertainty of loss is known as:
risk
Arbitration
settling a dispute by agreeing to accept the decision of an impartial outsider
strict liability example
speeding
Workers' Compensation Insurance
state-mandated insurance provided to workers to defray the loss of income and cost of treatment due to work-related injuries or illness
Declarations
statements that provide information about the particular property or activity to be insured
Moral Hazard
the actions people take after they have entered into a transaction that make the other party to the transaction worse off When the act of insuring an event increases the likelihood that the event will happen
salvage value
the estimated value of a fixed asset at the end of its useful life
Utmost good faith contract:
the insured and insurance company have a right to expect honesty from each other and rely on each other when writing a contract
WCSHAVVER
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