Chapter 5 Test Questions

Which of these involves negligence? a. A driver goes too fast and hits another vehicle. b. A driver runs a stop light.

A. There must be damage

Personal Injury Liability covers each of these EXCEPT: a. discrimination b. slander c. wrongful eviction d. malicious prosecution

A. Discrimination (Race, Religion)

The limit payable for all losses in a policy year is the:

Aggregate Limit

The maximum amount payable for all losses during a single policy period is known as the:

Aggregate Limit

Which of the following involves the concept of "strict liability?" a. An intentional injury inflicted on another. b. An automobile crash is caused by a defectively manufactured tire.

B

Which of the following is an example of vicarious liability? A store owner is held liable for carelessly dropping a box on a customer's foot. b. A store owner is held liable when a store employee carelessly drops a box on a customer's foot.

B

Supplementary payments cover:

Defense Costs

Negligence is

Failure to act as a reasonable person

A person with an alleged injury notifies a Producer that the Producer's client negligently caused the injury. The producer should first notify the:

Insurer

The liability policy may cover each of the following except: Select one: a. Bodily injury coverage (BI) b. Supplementary Coverage c. Intentional Acts d. Personal Injury Liability (PI)

Intentional Acts. Are never insured BI is covered. Supplementary covers defense Cost PI is sometimes covered

Liability results from: a. Invasion of the rights of others b. Acts of nature

Invasion of the rights of others

A person's duty to society and the degree of care required by the law may be insured by providing coverage for:

Liability Insurance

A carpenter working on a house has a hammer slip from his hands, but no damage occurs. This is not an accident because:

No Damage Occurred

The maximum amount payable for all losses resulting from one event is known as the:

Occurence Limit

A Tenant is Wrongfully Evicted. This is an example of:

Personal Injury

Bodily injury" includes each of the following except: a. personal injury b. death c. pain and suffering d. disease

Personal Injury BI covers Death, Disease, and Pain and Suffering. PI and BI are both a category of Liability Payments

An aggregate limit is the Limit Per:

Policy Year

A liability policy covers: a. crimes b. property damage

Property Damage

Liability for the destruction of property is covered by: a. Physical Damage Coverage b. Property Damage Coverage

Property Damage Physical damage refers to damage to the Insured's Auto

An electrical interruption causes a business to temporarily close. The electrical interruption is known as the?

Proximate Cause Proximate cause is an intentional act

The Insurer won't cover: a. Punitive Damages b. Compensatory Damages

Punitive Punitive damages are intended to punish the Defendent

A car dealer sold a new car. Unfortunately, a shock absorber fell off the car, resulting in an accident. Both the car dealer and the manufacturer will most likely be held liable under the concept of:

Strict Liability (5-13) Absolute Liability applies even if you are not negligent. handling explosives or chemicals

Which adds an unspecified amount (rather than a specific amount) to the policy's limit of liability?

Supplementary

Liability insurance is a: Select one: a. two party contract with payment to a third party. b. three party contract with payment to the insured

Two Party Contract with payment to a third party

Negligence is determined by:

how a reasonable person would have acted under the circumstances.