Liability

Four types of Claim Expenses the insurer pays

"Expenses we incur", Premiums on bonds, reasonable expenses (up to $250), and postjudgement interest.

Loss Assessment will pay up to

$1,000

Damage to property of others will pay up to

$1,000 to replace property that has been damaged by insured, regardless of fault or liablility.

Basic liability limits are

$100,000 per occurrence

The ISO commercial property program offers three causes of loss forms-basic, broad, and special. Most insurers' businessowners policies (BOPs) provide

A named perils form, similar to the broad form, and a special form.

Class actions provide access to the courts for a large group of persons who are interested in:

A single issue or action.

A toxic tort claim encompassed a specific question regarding coverage for the parties involved. Negotiations are stalled due to this issue. What ADR method may assist the parties in reaching resolution?

A summary jury trial where mock jurors reach a verdict may assist in the settlement process and save legal expenses.

When a file is transmitted to legal counseling it should include:

A transmittal letter outlining the facts and providing direction to legal counsel, a complete copy of the claim file (not just segments), and an initial attorney evaluation request.

The Inflation Guard endorsement gradually and automatically increases limits throughout the policy period in homeowners policies for Coverage(s)

A, B, C, and D. The endorsement provides an automatic increase in the amount of each of the Section I—Property coverages

Twelve exclusions to Section II E and F (some have numerous

Aircraft, Business, Communicable Disease, Controlled Substance, Expected or intended injury, Hovercraft, Insured's premises not an insured location, Motor Vehicles, Professional services, Sexual molestation, War, and Watercraft

An occurrence as defined in the HO-3—Special Form (HO-3) is a(n)

An accident

***Normally, automobile, homeowners, and general liability policies are written on which one of the following bases?

An occurrence basis.

When a claim representative and legal counsel discuss the amount of time and effort needed for each of the listed elements they are establishing:

An outline of a case budget.

What type of evidence may be presented at mediation?

Any admissible evidence may be presented at mediation.

The Section II Limit of Liability provision of the HO-3 stipulates that the limit of Coverage E—Personal Liability appearing on the declarations page is the total limit of coverage for

Any one occurrence

The major concerns that are associated with a third-party billing audit include:

Arbitrary judgements, form over substance, and many others.

Most common type of liability claim:

Automobile liability (when ops fail to exercise reasonable degree of care).

An exculpatory agreement or clause allows a party to a contract to:

Avoid liability for negligence. These contract agreements will be upheld in courts if the clause is not adverse to public interest or public policy, the party excused from liability is not under duty to perform and the parties had equal bargaining power and the contract was conscionable.

Most businessowners policies automatically include

Business income and extra expense coverage.

Four types of additional coverage under Section II

Claim Expenses, First Aid Expenses, Damage to Property of Others, and Loss Assessment

Four steps of liablity claim process:

Claim assignment, determine coverage, assess liability, and evaluate damage.

*Policies that require that the loss occur and be reported within a specified time period are called:

Claims-made policies.

The standard of unreasonable conduct for a tort is established by

Common law or statutory law.

The type of evidence that relates to the reliability of the source of the evidence and whether it is adequate to justify admission into court is known as

Competent evidence.

Section II includes

Coverage E Personal Liability, Coverage F Medical Payments to others, and additional coverages

Credit Card, EBT, Forgery, etc endorsement to HO3 increases

Coverage from a limit of $500 to a higher amount up to $10,000

The Dietz and Jones Memory Curve illustrates that 86 percent of learning is retained for a:

Day

the following are policy conditions that apply to both Sections I and II of the HO-3

Death, Liberilization, and Non-renewal

Diagrams of accident scenes are:

Demonstrative Evidence

After a claim is assigned, the liability claim process begins with the

Determination of coverage.

The primary objective of a liability investigation is to

Determine who is at fault.

The coverage that an umbrella liability policy provides for claims not covered at all by the underlying policies is called

Drop down coverage

Regarding to the coverage limits in the liability section of the businessowners policy (BOP)

Few insurers offer per occurrence limits that exceed $2 million in their BOPs.

A formula method for valuing claims might lead to early settlements because the formula method allows:

For a simple approach, assuming that the special damages have a certain ratio to pain and suffering.

The greatest value of the best alternative negotiated agreement (BATNA) calculation is that it:

Forces insurers to consider the financial consequences of not reaching a settlement.

Duties of an injured person under Coverage F

Give insurer written proof of claim ASAP, authorize insurer to obtain copies of medical reports, and submit to physical exam.

Liberalization clause condition of Section II

If a policy form is broadened at no additional premium, the broadened coverage automatically applies to all existing policies of the same type.

The homeowners 2000 wording appears to eliminate coverage for the statutory vicarious liability of parents for the intentional damage caused by teenage family members, because the exclusion applies:

If any insured intended to cause bodily injury or property damage.

Business exceptions to the exclusion

If insured received $2,000 or less during the year, volunteer activities, home daycare not involving compensation or to a relative

The so-called "cooperation clause" of most liability policies is found:

In the "Duties After an Accident or Loss" section.

Farm Insurance Coverage G is used to insure:

Insure all types of farm buildings and structures other than the dwelling and private garages.

Some umbrella policies combine an excess policy and an umbrella policy in one policy, using the letters "A" and "B." A and B refer to the

Insuring Agreements

The HO-3—Special Form (HO-3) policy

Is assignable only with the insurer's written consent.

Sonya is survived by her husband and four minor children who initiated a wrongful death and survival claims. Who can sign the settlement and release agreement?

Legal counsel must be consulted as lawful signatories vary by jurisdiction.

Relationship between insured and claimant is based on:

Legal duties under tort law.

***Witnesses are classified according to their attitude and

Liability position.

An individual who uses a portion of a premises that the landowner knows is frequented by people is a

Limited Trespasser* (got this wrong twice)

Six exclusions for Coverage E only

Loss Assessment and Contractual liability, damage to the insured's property (is not a 3rd party claim), damage to property in insureds care (exception for fire, smoke, or explosion), bodily injury to persons eligible for workers comp, nuclear liability, and bodily injury to the insured.

Courts determining that only the policy in force at the time that the injury or property damage is discovered must cover the claim is a description of the

Manifestation rule.

Complex claims that will require extensive discovery are usually suitable for:

Mediation

Why do claim representatives need to have an understanding of tort law?

Most liability claims are based on tort law.

Pollution liability arises out of :

Negligence, nuisance, trespass, and statutory enactments.

One cause of action in products liability occurs when the seller represents that the product is free from defects; the seller cannot be sure that the product is free from defects; the seller knows that a significant danger exists if there is a defect; the purchaser relies on the seller's representation; and the product contains a defect that harms the user. This cause of action is called:

Negligent misrepresentation.

The medical payments coverage in a homeowners policy covers certain medical expenses incurred by

Nonresidents of the insured's household. Coverage F—Medical Payments to Others covers medical payments incurred by others (not insureds or regular household residents) within three years of an injury.

Drop-down coverage pays claims:

Not covered at all by the underlying policies and claims not covered by an underlying policy because the underlying policy's aggregate limits have been depleted.

Rather than using the number of resulting claims approach to determine whether there was more than one occurrence, most courts use the

Number of causes approach.

*Normally, automobile, homeowners, and general liability policies are written on what?

Occurrence basis.

The homeowners 2000 policy wording seems to clarify that unintended consequences of intentional acts are excluded even if the injury or damage is :

Of a different kind, quality, or degree than expected or intended.

Final eval. of the amount to offer to settle occurs:

Only after liability and coverage have been determined.

An example of a proprietary function is:

Operating gas and water utilities.

Minimum requirements for a HOMEBIZ endorsement to HO3

Ownership by an insured, operation from the residence, and maximum of three employees

Pollution liability claims were intensively litigated based on the term, "sudden and accidental". This term was alleged to be ambiguous. Additional evidence was presented in court to clarify the term. This type of evidence is called :

Parole evidence.

A declaratory action can resolve the issue of whether the :

Particular exclusion applies.

An insured under a homeowners policy inadvertently used the same logo that a national business uses when she volunteered to print flyers to advertise a charitable auction. The national business sues the homeowners insured for copyright infringement. Which definition in the homeowners policy would be most likely to raise questions of coverage for this loss?

Property damage.

A paper plant that emits noxious odors in a residential area is an example of a:

Public nuisance.

During the period from 1993 to 1999 when the median settlement award nationwide increased dramatically, jury awards over the same period:

Remained stable

Motor Vehicle exclusion for any vehicle

Required by law to be registered for use on public roads or property, involved in an organized race, rented to others, used to carry persons/cargo for a fee, or is used for business purposes (except golf carts).

Nonrenewal condition of Section II

Requires insurer to give 30 days notice prior to not renewing.

Four exclusions that are applicable only to Section II F Medical Payments of Others

Residence employee off premises, bodily injury eligible for workers comp, nuclear reaction, and injury to residents.

An excess policy that covers a loss that exceeds the limit of the underlying policy only if it is also covered under the terms of the excess policy is known as a:

Self-contained policy

A formula method for valuing claims is commonly used in:

Soft tissue damage cases.

Means rating, underwriting, or loss control that is substantially different from what is normally applied to the policy containing the exclusion:

Special treatment

Business Auto Coverage is for:

Specified causes of loss, only those that are stated in the policy.

A defense used when a product conformed to industry standards at the time it was designed or built is best identified as?

State of art

An advantage to a claimant of a structured settlement is:

Tax-free interest on investments.

Class actions historically involved those in which:

The amount of damages in each claim was so small that it did not warrant individual suits.

A claim representative's coverage decisions are based on:

The application of facts to policy provisions.

An important difference between the BOP's liability coverage and the CGL's is

The availability of optional professional liability coverage endorsements for use with BOP.

What, in addition to the loss occurring in a specified time period, must take place for coverage to be afforded under a claims-made policy?

The claim is reported within a specified time period.

Why is it beneficial for a claims representative to attend a trial?

The claims representative can observe the proceedings and the negotiations.

In order to succeed in making a case for intentional infliction of emotional distress, the plaintiff must show that the misconduct was intentional, the misconduct was extreme, the misconduct lead to emotional distress, and:

The emotional distress was severe.

The Claim Expenses additional coverage under Section II of a homeowners policy covers

The insured's reasonable expenses at the insurer's request.

The BOP has a relatively short list of "property not covered" because:

The insureds eligible for a BOP are generally lower-risk, more homogenous types of businesses.

*Occurence-based policy requires:

The loss occur during the policy period.

For an insured that owns no automobiles, the BOP eliminates:

The need to obtain a separate business auto policy.

A seller is only liable under strict liability if 1) the product has a defect, 2) the defect is unreasonably dangerous, 3) the defect was the proximate cause of the claimant's injuries, and 4)??

The product was used in a manner reasonably anticipated.

***A voluntary act might not preclude coverage if

The results are unintended or unexpected.

Even when a clear independent contractor relationship exists, property owners can be held responsible for the independent contractor's acts when:

The work to be done is inherently dangerous such as blasting.

Coverage E includes coverage for

Third party loss exposures that result in bodily injury or property damage.

First-call settlements are most often used for what types of cases?

Those in which liability is clear or probable

A declaratory judgment action is a request for an official determination from the court regarding coverage issues. How may this type of action be used?

To determine if the insured has met policy conditions

Motor Vehicle exceptions to the exclusion are

Toy vehicles powered by batteries, mv in dead storage, mv used solely to service a residence, mv used to assist the handicapped, mv used for off public roads and not owned by insured, golf carts in private communities (25 and under), and trailers not towed to or hitched to another mv.

True or False: Mechanical breakdown coverage is often included or available as an option in a businessowners policy (BOP).

True

The objective standard used by courts to determine whether an injury involved expected results is

What a reasonable person would expect.

Parol evidence may be allowed to alter a written contract if:

When the meaning of the written terms are ambiguous or to provide essential terms to a written contract that is not complete.

A warranty of fitness for a particular purpose is created when a seller

Who knows what a buyer wants and how the buyer would use the product, makes a recommendation that the buyer relies on.

An inexperienced claimant attorney may be difficult to work with on bodily injury claims because the attorneys:

Will not be able to properly evaluate the claim for settlement.

Coverage F Medical Payments to others

is generally set at $1,000 per person per accident. Covers reasonable medical expenses when insured is not legally liable.

Severability of insurance condition

policy condition that applies insurance separately to each insured, does not increase the insurer's limit of liability for any one occurrence

The Subrogation condition in the HO-3 allows the insured to waive all rights to recover against any person provided the

waiver is in writing and made before the loss