AU62- Liability

complete or partial defenses in a products liability lawsuit

- Misuse -Alteration -State-of-the-art

Reasons to adopt risk control

- Products and activities may cause harm - financial consequence from exposures -Reputational damages

elements needed to prove strict liability

- The product was defective when it left the manufacturers or suppliers custody or control -The defect condition made the product unreasonably dangerous - The defect product was the proximate cause of the plaintiff injury

Elements needed to prove strict liability:

- The product was defective when it left the manufactures or supplier's -The defect condition made the product unreasonably dangerous -The defect product was the proximate cause of the plaintiffs injury

general considerations need to be evaluated when selecting and implementing risk control techniques:

-Cost-effectiveness -Legal requirements -Insurer requirements and recommendations -Public perception -Management's aversion to risk

Post- Accident Techniques

-Reducing the motivation to sue for damages -Detecting fraud

Other Employer Factors to Consider

-Temporary and seasonal employees -Leased employees -Subcontractors -Maritime occupations -Relative premium size -Employee concentration

Financial and legal professional liability

-insuring agreement -exclusions -standard exclusion of bodily injury or damage to tangible property.

Architects and Engineers professional liability insurance

-insuring agreement -persons and organization insured -coverage territory -exclusions -limits

Healthcare Professional liability insurance provisions

-insuring agreement -persons and organizations insured -coverage territory -exclusions -limits

Hospital Professional liability

-ownership and control -licensing and accreditation -type of hospital, patient population, services -staffing -premises and operations exposures -loss history -risk control

Physicians Professional Liability

-personal and background information -current medical practice or specialty -loss history -adverse selection -risk controls

Common Allegations against Architects and Engineers:

-practicing beyond the scope of a license -breach of contract -conflict of interest -negligent preparation of plans or design -negligent selection of materials or equipment -negligent supervision of construction -liability of other parties

Rating workers compensation coverage involves three primary factors:

-the classification of the insured -the basis for the premium (payroll) -any premium adjustments that can be applied.

Basic Manual consist of 4 parts:

1- Rules-Starts with an introduction that explains the application of the rules. 2- Classification-Contains an alphabetical list of classification descriptions with notes or guides within those descriptions indicating the proper classification an insurer should use. These pages also show the unique four-digit number for each classification. 3- Loss costs, rates, and state expectations-Includes the applicable rates (or loss costs) by classification for the state as well as any special classifications, special rules, rating plans, or other exceptions that apply in a particular state. 4- Classifications Pending-Lists previous national classification treatments that remain in effect in some states until the states' effective dates of elimination. The Basic Manual is part of the workers compensation and employers liability contract.

When analyzing an insured's loss history, approximately how many years of data should excess and umbrella liability insurance underwriters use in order to fully understand the insured's loss exposures?

10+ Years

JG Tires sold 4 new tires to William. The tires were $150 each, but he was given a 15% discount for buying all 4. There was also a charge of $100 for installing the tires, and $20 in sales taxes. William's total bill for the tires was $630. For purposes of determining JG Tires' general liability premium, what amount should be included in the gross sales amount for this transaction?

= 700 The gross sales should include the cost of the tires before the discount ($600) and the $100 charge for the installation. The sales taxes should not be included in the gross sales.

Begley Company insured its auto liability exposure through a retrospectively rated plan for a calendar year. Auto liability losses for the calendar year were: $120,000, $20,000, $50,000, $180,000, and $70,000. The retrospectively rated plan had a policy limit of $500,000 per-loss, a loss limit of $50,000 per loss, and a maximum aggregate retention of $250,000. What are Begley's retained losses for the calendar year under this plan?

=220,000 Losses are limited at $50,000, so the loss amounts are 50,000 + 20,000 + 50,000 + 50,000 + 50,000 = 220,000; Begley's retained losses for the calendar year are $220,000.

Special Industry Classification

A CLM subclassification that applies to trucks, tractors, and trailers for listed categories of use that have unusual hazards.

Civil Law

A classification of law that applies to legal matters not governed by criminal law and that protects rights and provides remedies for breaches of duties owed to others.

age group

A classification of vehicles based on the vehicle's model year.

Comparative Negligence

A common-law principle that requires both parties to a loss to share the financial burden of the bodily injury or property damage according to their respective degrees of fault.

hazard

A condition that increases the frequency or severity of a loss.

Hold-harmless agreement (or indemnity agreement)

A contractual provision that obligates one of the parties to assume the legal liability of another party.

Claims-Made Form

A coverage form that provides coverage for bodily injury or property damage that is claimed during the policy period. developed in response to Exposures with potential latent defects

Assumption of Risk

A defense to negligence. A plaintiff may not recover for injuries or damage suffered from risks he or she knows of and has voluntarily assumed.

Self-insured retention (SIR)

A dollar amount specified in an insurance policy that the insured must pay before the insurer will make any payment for a claim.

Experience modification factor

A factor that tailors manual rates to an insured's experience based on the insured's payroll and loss record of certain prior years.

Jones Act

A federal statute that permits injured members of a vessel's crew (or survivors of a deceased crew member) to sue their employer for damages due to the employer's negligence.

Expense constant

A flat charge designed to cover administrative expenses, such as policy issuance and record keeping, that are common to all policies.

Self-insurance

A form of retention under which an organization records its losses and maintains a formal system to pay for them.

Hazard Group

A grouping of injuries classified according to their relative occupational injury severity, used in workers compensation retrospective rating.

Dual Capacity

A legal doctrine giving the employee the right to sue the employer when the employer acts in a capacity other than that of employer.

contracts

A legal enforceable agreement between two or more parties

Umbrella Liability Policy

A liability policy that provides excess coverage above underlying policies and may also provide coverage not available in the underlying policies, subject to a self-insured retention.

Loss History

A listing of past claims, including the date of occurrence, the line of business, the type or description of the claim, the date of the claim, the amount paid, the amount reserved, and the claim's current status.

Products Liability

A manufacturer's or seller's liability for harm suffered by a buyer, user, or bystander as a result of a product that has a dangerous manufacturing defect or design defect or that is not accompanied by a warning of an inherent hidden danger.

Radius of Operation

A measurement of road exposure used to classify commercial vehicles. It is measured on a straight line from the street address of the vehicle's principal place of garaging to the furthest point the vehicle operates.

Uniform Commercial Code (UCC)

A model code that has been adopted in whole or in part by each state and whose purpose is to provide a consistent legal basis for business transactions throughout the United States and its territories.

Passive negligence

A plaintiff's failure to discover a product defect or to guard against a possible defect.

Active negligence

A plaintiff's voluntary use of a defective product with knowledge of the potential danger resulting from the defect.

Excess Liability Policy

A policy that covers liability claims in excess of the limits of an underlying policy or a stated retention amount.

gross sales

A premium base that reflects the gross amount of money charged by the named insured for all goods or products sold or distributed, operations performed, or rentals made.

Admissions

A premium base that reflects the insured's liability exposure arising from the number of persons, other than employees of the insured, admitted to an insured event or to events conducted on the insured's premises.

Area

A premium base that reflects the insureds liability exposure based on the total number of square feet or to events conducted on the insureds premises.

payroll

A premium base used in general liability insurance that reflects the insured's liability exposure arising from the works of employees.

Retrospective Rating

A ratemaking technique that adjusts the insured's premium for the current policy period based on the insured's loss experience during the current period; paid losses or incurred losses may be used to determine loss experience.

Class Rating

A rating approach that uses rates reflecting the average probability of loss for businesses within large groups of similar risks; the predominant method used for rating commercial properties.

Experience Rating

A rating plan that adjusts the premium for the current policy period to recognize the loss experience of the insured organization during past policy periods. is a workers compensation rating plan that rewards the insured for successfully controlling its losses

Schedule Rating

A rating plan that awards debits and credits based on specific categories, such as the care and condition of the premises or the training and selection of employees, to modify the final premium to reflect factors that the class rate does not include.

Loss Prevention

A risk control technique that reduces the frequency of a particular loss.

Third-party-over action

A separate legal action, brought by a defendant in a lawsuit, against a third party that might be liable to the defendant for all or part of the plaintiff's claim in the original lawsuit.

statue of repose

A statue that requires a plaintiff to file a lawsuit within a specific time period after a wrongful act by a defendant, such as improper construction of a building , regardless of when the injury occurred or was discovered

Channels of distribution

A system whereby customers are provided access to an organization's products or services.

intentional tort

A tort committed by one who intends to do the act that creates the harm.

Exposure base

A variable that approximates the loss potential of a type of insurance, such as gross sales or payroll

civil wrong

A wrong against a person or persons, for which remedies include damages awarded to the victim and court-ordered injunctions to prevent further injury.

tort

A wrongful act or an omission, other than a crime or a breach of contract, that invades a legally protected right.

Loss sensitive plans are often referred to as

Alternative risk financing (ARF) techniques.

Commercial Lines Manual (CLM)

An ISO publication that includes rules and rating procedures for several major lines of commercial insurance.

Some state no-fault laws preserve the tort system but require insurers to offer personal injury protection (PIP) insurance that provides specified first-party benefits. This is referred to as

An add-on no-fault law.

Extended Reporting Period (ERP)

An additional period (also called a "tail") following the expiration of a claims-made policy, during which the expired policy will cover claims first made for injury or damage that occurred on or after the policy's retroactive date (if any) and before policy expiration.

Self-contained excess liability policy

An excess liability policy that is subject to its own provisions only and does not depend on the provisions of the underlying policies for determining the scope of its coverage.

express warranty

An explicit statement about a product by the seller that the buyer or other user may rely on and that provides a remedy in the event the product does not perform as claimed.

captive insurer

An insurer formed primarily to cover the loss exposures of its parent or members.

bad faith

An insurer's denial of coverage without cause, which can result in extracontractual damages, punitive damages, or both.

implied warranty

An obligation that the courts impose on a seller to warrant certain facts about a product even though not expressly stated by the seller

recordable case

An occupational incident, illness, or injury that must be entered into a log by the employer to meet Occupational Safety and Health Act requirements.

Maintenance of underlying insurance condition

An umbrella liability policy condition that obligates the insured to maintain all required underlying coverages in full force and effect during the policy period.

Liability loss exposure

Any condition or situation that presents the possibility of a claim alleging legal responsibility of a person or business for injury or damage suffered by another party.

commercial auto coverage forms provides the equivalent of commercial general liability insurance and business auto insurance in a single coverage form?

Auto Dealers Coverage form

The primary loss exposures of professional architects?

Bodily injury, property damage, and financial loss

Business Classification

Contracting or Servicing- Single Classification that describes typical activities of the business. If separate activities the insured performs defy single classification, then each operation should be separately classified and priced. Mercantile- Installing, servicing, and repairing are included in the classification. Installing, servicing, and repairing the merchandise sold are included in the classification unless a footnote specifies otherwise Building or premises- Classified based on ownership and occupancy Miscellaneous- Residual Classification

CGL Coverage Forms

Coverage A- Bodily Injury and Property Damage Coverage B- Personal and Advertising Injury Coverage C- Medical Payments

Transportation expenses

Coverage extension for substitute transportation costs incurred when a private passenger type auto has been stolen.

Garagekeepers Coverage

Coverage for damage to customers' autos left in the named insured's care while the insured is attending, servicing, repairing, parking, or storing them

Specified causes of loss coverage

Coverage for direct and accidental loss caused by fire, lightning, explosion, theft, windstorm, hail, earthquake, flood, mischief, vandalism, or loss resulting from the sinking, burning, collision, or derailment of a conveyance transporting the covered auto.

Drop-down coverage

Coverage provided by many umbrella liability policies for (1) claims not covered at all by the underlying policies and (2) claims that are not covered by an underlying policy only because the underlying policy's aggregate limits have been depleted.

comprehensive coverage

Damage caused by any peril except collision or overturn

Parker Plumbing is insured under a Workers Compensation and Employers Liability Insurance Policy (WC & EL). The company currently has operations in Maryland and Virginia, and has plans to expand operations into Delaware and Ohio (a monopolistic state) in the next 6 to 12 months. Which state/states should appear in Item 3.C of the Information Page of Parker Plumbing's WC & EL policy?

Delaware should appear in Item 3.C of the Information Page because the company plans to expand its operations to the state within the policy period. Maryland and Virginia should be listed in Item 3.A because the company has current operations in those states. Ohio cannot be listed because it is a monopolistic state, and the insurer is not licensed to write WC coverage in that state.

Collison Coverage

Direct and accidental loss or damage caused by collision to object or overturn

OSHA Act of 1970

Ensures every employee a safe place to work by setting safety standards for employers and imposing penalties for violations.

A self-insured plan is usually combined with

Excess insurance to cover severe losses

independently developed source of information to confirm the accuracy of the classifications and payrolls shown on an application. This source of information is the

Experience modification worksheet

When classifying and pricing manufacturing or processing operations, underwriters should follow which one of the following guidelines?

For pricing purposes, exclude the value of any transfers of component parts or interim processes within the operations of the same named insured.

Factors in calculating payroll:

INCLUDED: wages commissions bonuses overtime holiday/sick pay EXCLUDED: Tips Insurance payments Dismissal pay work uniform allowance employer provided perks

Experience modification factor

If an account has an average claims history compared with others in the same class, its experience modification factor will be 1.0. Anything below that means the account has a better claims history than its peers. Anything above 1.0 indicates a worse claims history than its peers

large deductible plans

In a large deductible plan, the amount the insurer incurs to adjust losses, including legal defense costs, can be inside or outside the deductible. is a form of risk retention accepting more risk and improving risk control to reduce the cost of risk, but she does not want to increase payroll or demands on employees. Malvern does not have significant insurance premiums or losses, but would like any additional insurance costs to be for claim handling expenses not premium adjustments.

Deductible plans

In almost all states that do not have monopolistic state funds, an insured can reduce its premium by selecting a deductible plan. The deductible applies to both medical and disability income claims on a per claim basis. The greater the deductible, the larger the premium credit

4 things when calculating gross sales

Inclusions, Exclusions, Foreign Sales, and Intercompany Sales

Which one of the following is a loss prevention technique

Indicators on glass doors to warn of potential breakage

When theft losses occasionally occur, the losses are paid through current cash flow. This method of dealing with theft losses is called

Informal retention

Other States Insurance

Insurance that automatically extends coverage to the insured's operations in any state listed in Item 3.C. of the WC&EL Information Page.

Professional Liability Insurance

Insurance that covers persons engaged in various occupations against liability resulting from their rendering or failing to render professional services.

Adverse Selection

Insuring individuals with a high probability of loss at a cost lower than the insurer would normally charge for that risk because it wasn't aware of the actual risk involved

A loss limit in the retrospective rating plan formula

Is applied on an individual loss basis to limit losses included in the formula.

distinctive characteristics of large accounts

Large accounts may seek to reduce expenses by handling some services internally or by purchasing from a third party at a reduced cost.

Strict Liability

Liability imposed in certain situations without regard to fault or due care. Example- Workers Comp

The Better Hardware Store recently installed new floors to minimize the chance that customers will slip and injure themselves. This risk management technique is an example of

Loss Prevention

Gross Vehicle Weight (GVW)

Maximum loaded weight for which a SINGLE vehicle is designed, as specified by the manufacturer.

Damages

Money claimed by, or a monetary award to, a party who has suffered bodily injury or property damage for which another party is legally responsible.

3.A other states

ND, OH, WA, WV, WY, and OR. Means these are monopolistic states, and the insurer is not licensed to write WC coverage in that state.

The Basic Manual for Workers Compensation and Employers Liability Insurance (Basic Manual) is developed by which

National Council on Compensation Insurance

In inspecting an employer's facility, workers compensation field underwriter Tony found many lead pipes in the building's plumbing fixtures. He found that workers were unaware of the pipes as well as the asbestos insulation. Because this was a furnace installation business, the owner saw no need for a safety program and vehicles were new so there was as yet, no routine vehicle maintenance schedule. As a workers compensation underwriter, Tony should be most concerned about

Occupational disease

Loss of Use Expenses

Pays for loss of use of a rental when insured is contractually obligated to make payments.

Part 1 of the Workers Compensation and Employers Liability Insurance Policy provides that the insured will reimburse the insurer for

Penalties required under a workers compensation law because of the employer's willful misconduct. Part 1 also shows to handle overtime payroll shown on a workers compensation application Much of the information an underwriter needs to analyze an account's workers compensation loss exposures is included in the workers compensation insurance application. Part 1 also obligates the insurer to pay all compensation and other benefits required by the workers compensation law of any state listed in Item 3.A of the Information Page

Monoline Policy

Policy that covers only one line of business

Commercial Package Policy (CPP)

Policy that covers two or more LOB's

Major categories of commercial liability

Premises and operations, products and completed operations, automobile, workers comp, management, professional, marine, aircraft, cyber, and environmental.

which one of the following represents producers with a reduced professional liability exposure

Producers that take a risk management approach with clients

Facultative Reinsurance

Reinsurance of individual loss exposures in which the primary insurer chooses which loss exposures to submit to the reinsurer, and the reinsurer can accept or reject any loss exposures submitted.

One of the principal differences between the general conditions of primary liability policies and the conditions of umbrella liability policies is that umbrella policies

Require that the insured maintain all required underlying insurance coverages in full force and effect during the policy period.

A large deductible is similar to a self-insured retention (SIR) in that both

Require the insured organization to retain a relatively large amount of loss.

The major difference between a self-insurance plan and informal retention is

Self-insurance involves dedicated recording and payment of losses, and informal retention does not involve formal recording and payment of losses.

Which of the following statements regarding self-insuring healthcare benefits is true?

Self-insured healthcare benefit plans are handled by third-party administrators and usually include purchasing excess insurance.

When a claim covered by an umbrella policy is not covered by the insured's primary policy, the coverage is usually subject to a

Self-insured retention

Information Efficiency

The balance that underwriters must maintain between the hazards presented by the account and the information needed to underwrite it.

Criminal Law

The branch of the law that imposes penalties for wrongs against society.

Kristen was reviewing a workers compensation application for SI Electrical Contractors. She notes that the business has a 1.18 experience modification rate for the current policy period. As an experienced underwriter, Kristen knows that this experience modification rate indicates that which one of the following is true?

The business has a worse claims history than other electrical contractors in its class.

A captive insurance plan often combines use of a captive with a transfer risk financing plan. What is the typical structure of such a plan

The captive insurance plan is used for high frequency and low-to-medium severity losses, with the transfer plan used for higher severity losses

informed consent

The consent to a medical treatment or procedure obtained after adequate disclosure that requires apprising the patient of the nature, potential benefits and risks, and alterative forms of the proposed treatment

Retroactive Date

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.

Claims-made coverage trigger

The event that triggers coverage under a claims-made coverage form; the first making of a claim against any insured during either the policy period or an extended reporting period.

Occurrence coverage trigger

The event that triggers coverage under an occurrence coverage form: injury or damage that occurs during the policy period.

Intercompany sales

The exchange or sale of goods between two or more separate legal entities that are named insureds on the same policy.

Completed Operations Liability

The exposure to liability for bodily injury or property damage arising out of the insured's completed work.

premises liability loss exposures

The exposure to liability for bodily injury or property damage due to the ownership, occupancy, or use of the premises.

Operations liability loss exposures

The exposure to liability for bodily injury or property damage resulting from the insured's business activities conducted away from its own premises.

Negligence

The failure to exercise the standard of care that a reasonable person would exercise in similar circumstances.

breach of contract

The failure, without legal excuse, of a promisor to perform the obligations of a contract.

Umbrella and excess liability underwriters typically determine an insured's eligibility for coverage based on which one of the following?

The insured's operations

Legal Liability

The legally enforceable obligation of a person or an organization to pay a sum of money (called damages) to another person or organization.

Accountants professional liability

The liability arising out of harm to clients and others caused by breach of an accountant's legal duty. A primary underwriting consideration for accountants is the scope of services they provide.

Loss of Consortium

The loss of benefits that one spouse is entitled to receive from the other, including companionship, affection, and sexual relations resulting from the injury or death of a spouse.

Workers compensation and employers liability insurance policy (WC/EL Policy)

The policy used in most states to provide workers compensation and employers liability insurance

Legal Foundations of Liability

The professional seal and signature of a registered design professional are required when filing plans to obtain building permits

Underwriting considerations for accountants professional liability stem directly from

The scope of services provided by the accountant.

OC Roofing is a roofing contractor that employs 12 roofers who work in the field and two clerical employees who work in the office. The total estimated annual payroll is $960,000 for the roofers and $80,000 for the office workers. The workers compensation (WC) rate is $8.00 for the roofing classification and $0.50 for the clerical classification. What is the total estimated WC premium for OC Roofing before any premium discount or other adjustments are applied?

The total estimated premium before premium discount is $77,200. ($960,000/100 x 8.00) + ($80,000/100 x .50) = $77,200

Which one of the following must be examined by underwriters to ensure that umbrella and excess insurers do not face any unexpected loss exposures?

The underlying policy's endorsements

Telematics

The use of technological devices in vehicles with wireless communication and GPS tracking that transmit data to businesses or government agencies; some return information for the driver.

If a captive insurer is established to provide coverage for loss exposures that the parent company has difficulty insuring privately, how does the captive insurer typically deal with such risks?

Through purchasing excess of loss reinsurance

Legal Liability components

Tort- Negligence, Intentional torts, strict liability Contracts- hold-harmless or indemnity agreement, breach of contract Statutes- workers comp, other statutes that define legal duties and standard of care

The United States common-law system requires the amount of damages awarded to a claimant in a liability claim to compensate the claimant for loss incurred as of the

Trial date

Supplementary Payments

Various expenses the insurer agrees to pay under a liability insurance policy (in addition to the liability limits) for items such as premiums on bail bonds and appeal bonds, loss of the insured's earnings because of attendance at trials, and other reasonable expenses incurred by the insured at the insurer's request.

Zone Rating

Vehicle measurement used for regularly operated beyond 200-mile radius of garaging location

commerical use

Vehicles that don't fall into the service or retail classification

Service use

Vehicles used to transport personnel and materials to job sites She owns a pickup truck that she uses primarily to transport workers and materials to clients' homes

predictive modeling

a data-mining technique used to predict future behavior and anticipate the consequences of change

artifical intelligence

a field of study in which computer programs are designed to simulate human cognitive abilites

Statute of Limitations

a law that stipulates the length of time after an event during which legal proceedings (such as a lawsuit or criminal charges) may be initiated.

usage based insurance

a type of auto insurance in which the premium is based on the policyholder's driving behavior

Statutes

a written law passed by a legislative body at either the federal or state level.

The purpose of a retrospective rating plan is to

adjust the premium for guaranteed-cost insurance to reflect the insured organization's current losses. Rather than using industry-wide loss experience to determine premiums, a retrospective rating plan uses the insured organization's own losses from the current policy period to price the current policy period

Loss development factor

an actuarial means for adjusting losses to reflect future growth in claims due to both increases in the incurred amount for reported losses and incurred but not reported (IBNR) losses

Trend Factor

an adjustment to loss and exposure data for a change in general economic conditions, such as inflation. These factors convert the amount of older losses and exposures into today's dollars

Personal loss exposure

any condition or situation that presents the possibility of a financial loss to an individual or a family by such causes as death, sickness, injury, or unemployment

Most professional liability policies provide coverage for acts committed anywhere in the world

as long as the suit is brought in the United States or Canada

crime

certain activities deemed by society to be harmful to public welfare

Insurance Agents and Brokers Professional Liability

considerations include scope of operations, degree of authority, and risk controls.

Internet of Things

describes a system in which everyday objects are connected to the internet and in turn are able to communicate information throughout an interconnected system

U.S. Longshore and Harbor Workers Compensation Act

federal statute that eliminates the right of most maritime workers to sue their employers & in return, requires each such employers to provide injured/ill workers with benefits like those provided by state workers comp statutes; also covers certain govt related employment; more liberal than wc, supplements rather than supplants wc, must satisfy situs (navigable waters/adjoining areas) & status (occupation for maritime employment) tests

The National Council on Compensation Insurance (NCCI) and state workers compensation bureaus have developed

four-digit (4)classification codes

Combination Excess Liability Policy

is designed so that it incorporates the provisions of the underlying policy and then modifies those provisions with additional conditions or exclusions in the excess liability policy

Pre Accident Risk Control techniques

loss prevention, loss reduction, avoidance, and contractual transfer for risk control.

Loss Reduction

measures that reduce the severity of a loss after it occurs

Specific excess liability policy

provides coverage once claims arising out of a single occurrence exceed the retention specified in the policy declarations

Aggregate Excess Insurance

provides coverage once the total claims for an annual period exceed a predetermined retention amount

Person's rights

rights to security, property, reputation, and privacy

Consideration

something of value or bargained for and exchanged by the parties to a contract.

Self-insurance is best suited for losses

that are both high frequency and low severity. First-party auto losses from the fleet of vehicles

Machine Learning

the extraction of knowledge from data based on algorithms created from training data

Under a retrospective rating plan

the insured organization pays a premium to the insurer. The insurer uses the premium to reimburse claimants for losses, pay operational expenses, and provide profit.

Under a guaranteed-cost insurance plan

the premium for the policy period does not vary with the insured's losses that occur during the policy period. Therefore, guaranteed-cost insurance is a risk transfer technique.

soverign immunity

the rule that a citizen cannot sue the government without the government's consent

Premium Base

the unit in which the exposure is measured, such as gross sales or payroll Premium Base for all WC is payroll

Many organizations purchase one or more excess liability insurance policies

to cover claims that exceed their primary insurance limits or the amount they've set aside to pay for liability claims.

Lawyers Professional Liability

underwriters need to know in what areas a law firm actively practices. Lawyers with certifications in their areas of practice tend to be more desirable from an underwriting standpoint. Many professional liability claims brought against lawyers stem from poor lawyer-client relationships and poor business practices.

retail use

vehicles used to make deliveries

A Key difference between Large deductible plans and (SIR) Self Insured Retention plans is

with a SIR, the insured organization is responsible for adjusting and paying its own losses up to the SIR amount. Organizations with SIRs frequently outsource these tasks to an independent claims adjusting organization and pay a fee for that service.