MA Casualty Insurance

In any action to recover on an insurance policy, a court may award punitive damages if the court finds that the party seeking to recover on the insurance policy has been damaged by any violation of a producer. Punitive damages may not exceed

25% of the claim

A policy form is deemed to be approved by the Commissioner if it has been on file for at least how many days?

30 days

Per occurrence

A sublimit in a liability policy that puts a ceiling on the payment for all claims that arise from a single accident/occurrence

Rebating

Any inducement offered to the insured in the sale of insurance products that is not specified in the policy

Loss Ratio

Compares premium income to losses

The Commissioner has suspended a rating plan because he feels it is unlawful. Within how many days must the Commissioner hold a hearing regarding this suspension?

15 days

Interline Endorsements

Endorsements that apply or could apply to more than one coverage part. They are designed to eliminate redundancy and minimize the number of endorsements in the policy

Business Auto Physical Damage Coverage Form

Provides physical damage protection only for the insured's owned or hired business autos

Burglary

The crime of forced entry into or out of the premises of another by a person or persons with felonious intent

Obligee or insured

The person to whom the promise has been made and to whom the bond is payable in the event the principal defaults on its obligation

Vicarious Liability

This doctrine comes from the Old English Law "respondent superior" in which the master was liable for the acts of their servants. The purpose of this doctrine is to transfer the liability from one person to another person who would probably have a greater ability to pay

Release of attachment bond

When a court order requires the attachment of assets of another party (the defendant), the defendant uses this type of bond to have the property returned by posting ( ) to serve in lieu of the property as security for the plaintiff's claim

Attachment bond

When a court order requires the attachment of assets of another party, this bond may be used to guarantee that if the action to the attach property was wrong, any damages suffered will be paid for

How is a professional liability policy written?

Claims-made

Each insurer that sells, solicits, or negotiates any form of limited line credit insurance must provide to each individual whose duties will include selling, soliciting, or negotiating limited line credit insurance

A program of instruction that may be approved by the Commissioner

Sublimit

A reduced or limited amount of coverage's, other than the combined single limit, that is available to pay claims resulting from passenger bodily injury

Mass Insurers Insolvency Fund

An unincorporated, nonprofit legal entity established to cover claims of insolvent insurers

Non-owned autos

Any private passenger auto, pickup, van, or trailer which is operated by or in the custody of, but is not owned or furnished for the regular use of the named insured or family member

Components

Factors that determine rates

Attractive Nuisance

An exception to the rule that an individual owes no duty of care to someone trespassing on his/her property

Per person

The maximum amount available for payment of bodily injury to a single person in an accident, regardless of the policy limit stated in the policy for bodily injury claims

Principal or obligor

The person who promises to fulfill the obligation and who purchases the bond. This is the person or entity that will go through the underwriting process

Robbery

The taking of property from the care and custody of a person by one who has caused or threatened to cause that person bodily harm, or committed an obviously unlawful act witnessed by that person

If an insurance policy has additional coverage provision, how does it affect the policy premium?

There is no additional premium

Bail bond

This bond is issued to secure the release of a person from jail pending a courtroom appearance. It guarantees that the person will appear when specified

Surety

Someone who guarantees the performance of someone else

Two Classes of Compensatory Damages

Special and General

Damage to the property of others

The policy will pay up to $1,000 per occurrence on a replacement cost basis for damage the insured causes to property of others

Supply bonds

These bonds guarantee that a supplier will furnish supplies, materials, products, and equipment as specified in the written contract

First aid to others

The policy will pay expenses the insured incurs to render first aid for bodily injury to third parties

Coercion

To require, as a condition to a loan, that the applicant purchase insurance from a specific insurer

Owned autos

Eligible vehicles owned by the insured or acquired during the policy period

Absolute Liability

Imposed on defendants engaged in hazardous activities, such as harboring wild animals, using explosives. The injured party does not need to prove negligence

Negligence

The failure to use the care that a reasonable, prudent person would under the same or similar circumstances

Comparative Negligence

The fault is shared between the parties involved, and the awards for damages are reduced by the percentage of negligence of each party

The Business Auto Coverage Form

The form that provides coverage on all covered autos while used by the insured or employees of the insured, or others using the covered auto with permission but does not cover the exposure of other autos not owned, hired or leased by the named insured

Surety bonds

They guarantee specific duties or obligations will be fulfilled

Massachusetts Assigned Risk Plan

This plan is designed to provide motor vehicle insurance to applicants who are entitled, but unable to obtain coverage in the voluntary market

What was the purpose of the Motor Carrier Act of 1980?

To establish financial responsibility requirements for interstate motor carriers

Contract bonds

Used to guarantee performance of a written contract. They are primarily used in construction contracts

The Commissioner has the power to examine and investigate the affairs of every person engaged in the business of insurance in order to determine

Whether the person has been or is engaged in any unfair method of competition or in any unfair or deceptive act or prohibited practice

Claims expense

The policy will pay expenses incurred and costs taxed against the insured in any suit the insurer defends, premiums on bonds required in a suit, reasonable expenses incurred by the insured including up to $250 per day for loss of income, and interest on the entire judgment that accrues after judgment has been entered and before the insurer pays it

Hired autos

Autos that are leased, hired, rented, or borrowed from someone other than an employee or partner

Performance bond

These bonds guarantee that the principal will complete the contract as agreed upon

Coverage E - Homeowners Policy

Personal Liability

Labor and materials bond

These bonds guarantee that work and materials will be delivered free and clear of any liens or other burdens. These are sometimes called payment bonds

Bid bonds

When construction projects are awarded based on the lowest bid, the oblige usually also requires a ( ). The ( ) promises that if the contractor is awarded the contract, the contractor will actually accept the contract

Portable electronics insurance

Protects the owner of a mobile phone, laptop, tablet, or other similar device against the device's theft or malfunction

Smooth Limit

A limit of liability offered as a combined single limit of coverage for all bodily injury to passengers and non-passengers, and property damage

Motor Carrier Coverage Form

An alternative to the truckers coverage form. It covers businesses that transport either owned or non-owned property

An insurance adviser's license may be issued to a corporation if the majority of the officers of the corporation

Are found by the Commissioner to be in all respects qualified for licenses as advisers

Occupying

In, upon, getting in, on, out of or off a vehicle

Which of the following endorsements is used by individual business owners who use company vehicles for personal use rather than purchasing a personal vehicle?

Individual named insured

With respect to the commercial package policy, an interline endorsement is one that

May apply to more than one line of insurance that is included in the package

Coverage F - Homeowners Policy

Medical Payments to Others

Reciprocity

Occurs when the state in which the person resides accords the same privilege to residents of Massachusetts

Any person who violates a cease and desist order of the Commissioner after it has become final must

Pay a fine to the state not to exceed ten thousand dollars for each violation, which may be recovered in a civil action

Contributory Negligence

The injured party must be completely free of fault in order to collect

Aggregate Limit

The maximum limit of coverage available under a liability policy during a policy year, regardless of the number of claims made or the number of accidents that occur

Cost bond

This bond guarantees that the person (plaintiff) who brings legal action against another (defendant) will be able to pay court costs and any resulting damages in the event the plaintiff loses the case

Injunction bond

This bond is required by courts whenever someone seeks an injunction against another. It guarantees that if the injunction should not have been issued, damages will be paid to the injured party

Garage Coverage Form

Used for businesses that regularly have autos of others in their care, custody or control. These types of businesses would include auto dealerships, auto repair and service garages, and businesses that park vehicles for others

Personal Injury Protection (PIP)

A mandatory coverage in Massachusetts, that must be provided with an aggregate limit of up to $8,000. However, if the injured insured has health insurance that will pay for some of the insured's medical expenses, ( ) will only pay $2,000 in benefits

Combined Single

A single dollar limit of liability applying to the total of damages for bodily injury and property damage combined, resulting from one occident or occurrence

Strict Liability

Commonly applied to product liability cases. A person or business that manufactures or sells a product makes an implied warranty that the product is safe. The business is then liable for defective products regardless of fault of negligence

Compulsory Insurance

Coverage's required by Massachusetts law that must be purchased before an auto can be registered

Completion bonds

If a contractor is required to borrow money to complete a construction project, the lender usually will require a ( ). This bond guarantees that the money borrowed will be used to fund the construction project and that the project will be completed free of any other obligations

Appeal bond

If a person appeals to a higher court after judgment already has been entered, this bond may be required to guarantee that the judgment will be paid, as well as the cost of the appeal

Loss assessment coverage

The policy will pay up to $1,000 per occurrence for the insured's share of loss assessment charged against them as owner or tenant of the residence premises, during the policy period, by a corporation or association of property owners