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