P&C

An insured has a $60,000 DP-3 policy. $10,00 in damages to the attached garage. How much of that amount is paid under the coverage B-other structures?

$0. An attached garage is part of the dwelling. It would be covered under part A

An insurance company requires an insured to attend and testify during a 5-day trial. As a result, the insured is not paid their full weekly salary ($4,000). What amount will the supplementary payments section of the commercial general liability coverage form reimburse the insured?

$1,250- $250 per day

Jewelry stolen from home is covered at:

$1,500

Bob has a liability policy in the amount of 300/500/100. How much coverage does he have per occurrence for property damage liability?

$100,000

How much is allowed for bail bonds?

$2000

The replacement cost of Arjun's home is $200,000. He carries $100,000 of insurance on the home with a $1,000 deductable. The policy has an 80% coinsurance requirment. If a $40,000 covered loss occurs, how much would Arjun's insurance company pay for the loss?

$24,000

What is the maximum daily amount paid under the CGL's supplementary payments provision for the insured's loss of earnings?

$250

Credit card fraud is covered under a homeowners policy to a maximum of what amount?

$500

Dwelling policies provide up to how much $$ for fire department service charge?

$500

Bill and Marge have a HO-2 policy insuring their main residence for $150,000. How much coverage do they have for personal property kept at their summer cottage? A) $15,000.00 B) $30,000.00 C) $75,000.00 D) $7,500.00

$7,500- only 10% for personal property when not primary residence

An insured lives in a house covered by an $80,000 special form (DP-3) policy. While the insured is on vacation, someone breaks into the house and steals $5,000 in electronic equipment. The damage to the door is estimated at $800. What coverage is provided by the DP-3 policy? A) $800.00 B) $0.00 C) $5,000.00 D) $5,800.00

$800

Coverage B - Personal and Advertising Injury

- Offenses: libel and slander - Individual or entire business -Provides protection for liability arising from personal and advertising injury offense committed in the coverage territory and during the policy period

types of auto

- Owned - Nonowned - Hired - Temporary substitute

Notice of Claim

- The policyowner's obligation to the insurer to provide notification of loss within 20 days after the occurrence (or as soon as is reasonably possible). - 20 days

Duties of the insured after a loss

- give immediate written notice -protect property from further damage -Provide proof of loss

Fair Credit Reporting Act

-A federal law that established procedures that consumer-reporting agencies must follow in order to ensure that records are confidential, accurate, relevant and properly used. -Act that protects privacy of background information and ensures that information supplied is accurate.

Law of Large Numbers

-A principle stating that the larger the number of similar exposure units considered, the more closely the losses reported will equal the underlying probability of loss. -the larger the number of individuals that are randomly drawn from a population, the more representative the resulting group will be of the entire population

Loss Valuation

-A property policy pays for losses to property based on the valuation method contained in the policy or chosen by the insured in an endorsement added to the policy. -A factor in determining the premium charged and the amount of insurance required.

Directors and Officers

-Liability coverage and legal defense for actions or decisions taken while action capacity of officer of a company -A type of Professional Liability Insurance sold to individual board members who may be sued by the shareholders.

Who is an insured?

-Named insured and resident spouse -Resident family members -Any person who borrows a covered auto with the permission of any insured

Supplemental Payments

-Payments made for additional expenses related to damages or defense, usually paid in addition to the limits of liability. -Things specified in auto policies that the insurance company will pay for in addition to the auto policy limits of liability

Medical Payments

-Policyholders and family members are covered if they are injured while riding in their car or another car -Auto insurance coverage can help to provide medical payment for treatment of bodily injury

Watercraft Coverage

-Sailboats less than 26 feet in length -Boats with inboard motors of 50 horsepower or less -Boats with outboard motors of 25 horsepower or less

Retroactive Date

-Under the claims-made CGL form, a date stipulated in the declarations as the first date on which an event may occur and be covered by the policy if a claim is filed. -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.

Newly Acquired Auto

-automatically has same coverage as current covered autos for 14 days -must be specifically added to policy within those 14 days

Duties of the Insured

-pay premiums -notify the insurer of insured events within a reasonable time -cooperate with insurer's investigation

In order to nonrenew a personal auto policy, an insurer must provide how many days' advance notice to the policyholder?

30 days

Under the commercial articles coverage form additional acquired property is automatically covered for up to:

30 days if it is a type of property already covered by the form

The minimum financial responsibility for automobile liability limits in Texas are:

30/60/25 30,000-due to bodily injury or death of any one person 60,000-due to bodily injury or death of two or more persons in any one accident 25,000-due to damage to all property of others in any one incident

The basic reporting period on a CGL policy is:

5 years after the end of the policy

If the shrubs in front of a house burn when the house catches fire, how much is the insured entitled to recover for the shrubs under his HO-3?

5% of the limit on coverage A with a maximum of $500 for any 1 shrub

Shrubs burning under HO3

5% of the limit on coverage A with a maximum of $500 for any one shrub

Vandalism or malicious losses to property are not covered if the dwelling has been vacant for:

60 or more consecutive days

When a workers comp injury results in death, the employees beneficiaries are entitled to:

75% of the employee's average weekly wage

An emergency insurance license is valid for:

90 days and may be renewed for an additional 90 days

What is one of the major differences between the application of commercial blanket bond policy limit versus a blanket position bond's policy limit?

A commercial blanket bond's policy limit applies separately to each loss. A blanket position bond's policy limit applies separately to each employee involved in a loss.

Commercial Property floater

A commercial inland marine policy designed for commercial and business property

Buisness Owners Policy (BOP)

A commercial package policy designed for certain types of small businesses, combining Property and Liability coverages. Very similar to a Commercial Package Policy (CPP).

Morale Hazard

A condition of carelessness or indifference that increases the frequency or severity of loss.

Deposit Premium Audit

A condition that allows the insurer to audit the insured's books or records at the end of the policy term to make sure adequate premium has been collected for the exposure.

Direct Loss vs. Indirect Loss

A direct loss is a financial loss that results from the physical damage, destruction, or theft of the property, such as fire damage to a home An indirect or consequential loss is a financial loss that results indirectly from the occurrence of a direct physical damage or theft loss, e.g., the additional living expenses after a fire

Mysterious Disappearance

A disappearance of property that cannot be explained as to the location, time or the manner of property loss.

Products and Completed Operations

A form of General Liability insurance that covers a company against liability arising out of its products (a manufacturer) or its completed operations (a contractor or architect).

Special Damages

A form of compensatory damages that awards a sum of money for specific, identifiable expenses associated with the injured person's loss, such as medical expenses or lost wages.

Surety Bond

A guarantee that protects a business when another person or business fails to fulfill the terms of a contract between them

Certificate of Insurance

A legal document that indicates that an insurance policy has been issued, and that states both the amounts and types of insurance provided.

Indirect Loss

A loss that arises as a result of damage to property, other than the direct loss to the property.

All of the following properties can be insured under an unendorsed homeowners policy except

A mobile home

General Damages

A monetary award to compensate a victim for losses, such as pain and suffering, that do not involve specific measurable expenses.

Compensatory Damages

A money award equivalent to the actual value of injuries or damages sustained by the aggrieved party.

For personal property coverage, who is NOT insured by a homeowners policy? A) A live-in housekeeper requested by the named insured. B) A nonresident uncle. C) The named insured. D) A 20 year-old resident.

A non resident uncle

Insuring Agreement

A statement in an insurance policy that the insurer will, under described circumstances, make a loss payment or provide a service.

Which of the following statements regarding bond agreements is correct?

A surety bond serves as a guarantee of performance.

binder

A temporary written or oral agreement to provide insurance coverage until a formal written policy is issued.

Absolute Liability

A type of liability that occurs due to extremely dangerous operations, such as the use of explosives or working at extreme heights.

Dwelling Policies Coverage

A- Dwelling B- Other structures C- Personal property D- Fair rental value E- Additional living expense

Section 1 property coverage covers:

A- Dwelling B-Other structures C-Personal property D-Loss of use

A therapist owns office space in a commercial office building that is legally organized as a condominium. Which of the following best protects the therapist's business personal property? A) Condominium commercial unit owners form. B) Condominium association coverage form. C) Commercial package policy (CPP). D) Unit owners form (HO-6).

A.

Owned Auto

An auto defined by the ISO Business Auto Coverage Form as owned by the insured, including trailers that are not owned while attached to owned vehicles.

Hired Auto

An auto that the insured leases, hires, rents, or borrows, excluding autos leased, hired, rented, or borrowed from employees, partners, LLC members, or members of their households.

Temporary Substitute

Any auto or trailer that is non-owned while being used in place of an insured vehicle which not available because of breakdown, repair, servicing, loss, or destruction

Theft Coverage

As theft is a rather broad (and oftentimes high risk) peril, not all property policies cover theft. Dwelling policies without a Limited Theft or Broad Theft endorsement do not cover theft at all and neither do Commercial Property policies written with a Basic or Broad Cause of Loss form. All Homeowners policies cover theft.

Dennis purchased a small manufacturing firm and wants to purchase coverage for the premises-operations and products-completed operations exposures. Which of the following types of insurance should he purchase? A) Comprehensive general liability. B) Commercial general liability. C) Employment practices liability. D) Boiler and machinery.

B. Commercial general liability

Adding the personal injury endorsement to the homeowners policy protects the insured against all of the following EXCEPT: A) invasion of privacy. B) contractual liability. C) libel. D) slander.

B. Contractual liability

BLANKET VS SPECIFIC

BLANKET COVERAGE-provides coverage for different classes of property under one policy. SPECIFIC INSURANCE-is when you insure a specific item or specific kind of property.

BIG AFFECT

BURGLARY ICE, SLEET AND SNOW WEIGHT GLASS BREAKAGE ACCIDENTAL DISCHARGE OF WATER FALLING FREEZING ELECTRICAL COLLAPSE TEARING APART

Which of the following is not and exclusion in the commercial auto policy liability section?

Bail bonds

The bailee (the business) policy pays

Bailor (customer)

DP1 (Basic Form)

Basic perils: Fire, lightning, internal explosion All values: ACV Optional: Extended coverage (WCSHAVVER) Optional: Vandalism, Malicious mischief

HO8 Modified coverage form

Basic- A- ACV Basic-B-ACV Basic-C-ACV

premises and operations

Business liability exposure arising out of the business location or the activities of the business. Covered under the CGL.

Windstorm Coverage

COVERAGE FOR COASTAL AND MIDWESTERN STATES THAT DO NOT QUALIFY FOR WIND COVERAGE UNDER TRADITIONAL HO POLICIES

Section 2 of homeowner policy:

Casualty

In describing the concept of subrogation, the insurer claims the right to:

Collect from a negligent third party

While backing her car into a parking space on a neighborhood street, Melanie struck a fire hydrant with her bumper. Which coverage under Melanie's personal auto policy (PAP) will cover the damage to the bumper? A) Collision. B) Medical payments. C) Comprehensive. D) Liability.

Collision

Automobile comprehensive coverage insures all of the following except:

Collision (aka other than collision coverage)

Dennis purchased a small manufacturing firm and wants to purchase coverage for the premises-operations and products-completed operations exposures. Which of the following types of insurance should he purchase? A) Comprehensive general liability. B) Commercial general liability. C) Employment practices liability. D) Boiler and machinery.

Commercial general liability

HO6

Condo owner. Broad-C-ACV Also covers inside walls (A)

Extra Expense Coverage Form

Covers additional expenses incurred by the insured business to continue operations following a direct loss by a peril insured a separate form that can be used to cover the extra expenses incurred by the firm in continuing operations during a period of restoration

Inland Marine Insurance

Covers goods that are moved by land carriers such as trains, trucks, and airplanes. Insurance that covers many different classes of property that typically involve an element of transportation.

Forgery and Alteration Coverage

Covers loss due to dishonesty in writing, signing or altering checks, bank drafts, and other financial instruments through Coverage Form B. CR 00 03.

Of the dwelling forms, which one of the following provides the broadest coverage?

DP-3 Special Form

DICEE

Declaration, Insuring Agreement, Conditions, Exclusions, Endorsements.

Peril A

Dwelling

Section 2 casualty coverage covers:

E-Liability F-Medical

vicarious liability example

Employee delivering for employer causes an auto accident in which people were injured.

Drive Other Car Coverage (doc)

Endorsement to the Business Auto Policy that covers named persons for use of nonbusiness autos they don't own. Used when the named insured furnishes an auto to another, such as an employee, who does not own his/her own car

Which policy provides coverage for professional liability?

Errors and omissions

temporary substitute vehicle

Ex: loaner vehicle by repair shop

Which of the following is NOT a basic way in which underwriters assign rates?

Expense rating

Which one of the following forms would be most appropriate to protect against a suspension of business operations for an insured that cannot afford to have its operations interrupted?

Extra expense insurance

Which one of the bonds is purchased to protect an employer from the actions of dishonest employees?

Fidelity

Which of the following would NOT be paid as supplementary payments under Part A of the personal auto policy?

Funeral expenses for the insured

Which of the following commercial auto coverages covers automobiles in the insured's care?

Garagekeepers

Which of the following provides open perils coverage? HO- 3 8 4 2

HO-3

Which homeowners policy would be written to cover personal property only?

HO-4 because it is rental

Which homeowner insurance covers mysterious disappearance?

HO5

XYZ insurance company gives its agents authority that was not formally expressed or communicated. The authority given to the agents by XYZ can be called:

Implied authority

In most cases, an injured employee receives payments under workers' comp insurance from whom?

Insurance company

Fidelity Bond

Insurance coverage to protect a business from losses due to employee theft

Commercial Property Insurance

Insurance that covers commercial buildings and their contents against various types of property loss. covers property losses resulting from fire, storms, accidents, theft, and vandalism

Equipment breakdown insurance

Insurance that covers loss due to the accidental breakdown of almost any type of equipment that operates under pressure or that controls, transmits, or uses mechanical or electrical power.

In an insurance transaction, who does a licensed agent legally represent?

Insurer

The list of perils covered under a policy is found in which part of the policy?

Insuring agreement

Commercial Building and Personal Property Form

Is the main form used to cover buildings, business personal property, and property of others on the insureds premises. This Form can be used to cover direct loss or damage to buildings, business personal property, and/or property of others in the insureds care, custody, or control.

Which one of the following statements regarding personal liability is correct?

It is added by endorsement to the dwelling policy, but automatically included in the homeowners policy.

What are the 3 basic way to assign rates?

Judgement, Manuel, and Experience

Endorsement:

L- Liability M- Medical Theft Mobile home

proximate cause

Legal cause; exists when the connection between an act and an injury is strong enough to justify imposing liability.

Vicarious Liability

Legal doctrine under which a party can be held liable for the wrongful actions of another party.

Peril E

Liability

Peril D

Loss of use

An insurance company may measure its underwriting profitability by using which of the following ratios?

Loss ratio (annual claims to premiums received for that year)

Workers' compensation laws vary from state to state. The categories of coverage are elective or compulsory. In compulsory states, the basic methods of providing coverage are monopolistic or competitive. The monopolistic method is when the insurance:

MUST be purchased from the state-run insurer

Which one of the following is NOT an additional coverage found in homeowners policies? A. debris removal B. loss assessment C. market valuation D. fire department service charge

Market valuation

Peril F

Medical

Coverage C of the commercial general liability policy will cover?

Medical payments

Punitive Damages

Monetary damages that may be awarded to a plaintiff to punish the defendant and deter similar conduct in the future.

HO3 Special Form

Most popular HO coverage form. Providing the best coverage for the money. It is all risk on the dwelling and other structures. Contents are still named peril but all risk coverage for contents may be added by endorsement. Includes A, B, and C

Farm policy

Must have at least 10 acres

HO2 policy provides which type of coverage?

Named perils coverage for dwelling and personal property

Steve meets with his agent to apply for an automobile insurance policy on his 2 personal cars. In reviewing the policy, Steve finds he is not willing to accept the duties listed in the conditions section. He signs the application but adds a note deleting the duties to the insurer. Is this acceptable to the company? A) No, the agent has to make this request in writing. B) Yes, the insured has the ability to change the policy at the time of the application. C) No, a written endorsement by the insurer is the only way to change the policy. D) Yes, as long as the request is done in writing.

No- a written endorsement by the insurer is the only way to change the policy.

automobile bodily injury liability

Occurs when a driver or car owner is held legally responsible for bodily injury losses that other people, including pedestrians, suffer.

Builders Risk Coverage Form

One of the commercial property coverage forms; covers commercial, residential, or farm buildings that are under construction

DP3 (Special Form)

Open perils- real property Broad perils- personal property Theft of fixtures is covered

Peril B

Other structures

Doug who is 7 years old, accidentally throws a baseball through the neighbors kitchen window. Which part of the homeowners policy will pay for the damages to the window?

Part E

Employee Dishonesty Coverage Form

Part of the Commercial Crime Coverage part of the Commercial Package Policy, it covers loss resulting from dishonest acts of employees. This coverage is excluded under other Crime insurance forms. Formerly this coverage was provided under Fidelity bonds or combination policies that included Fidelity bonds.

Sue, an employee of Paul's Bicycle Shop, was on a service call repairing some bicycles at Bill's home. On her way back to the shop she was involved in an automobile accident and injured. Where would Sue find coverage? A) Paul's auto policy. B) Both Paul's auto policy and workers' compensation policy. C) Paul's workers' compensation policy. D) Her own auto policy.

Paul's workers' comp policy

Paul purchased utility services- time element coverage for his bicycle shop. Of the following, which statement best describes the type of coverage Paul purchased with this endorsement?

Payment for loss of business income due to a covered loss involving certain utility services

Business Income Coverage

Pays for losses of income that the insured sustains due to a direct physical loss from a covered peril that forces the insured to suspend operations.

Contract bond=

Performance bond

Named Insured

Person, business, or other entity named in the declarations to whom the policy is issued.

Personal Articles Floater

Personal Inland Marine insurance which provides all-risk coverage on nine optional classes of personal property: jewelry, furs, cameras, musical instruments, silverware, golf equipment, fine arts, stamp collections and coin collections.

Peril C

Personal Property

Commercial Package Policy (CPP)

Policy that covers two or more lines of business by combining ISO's commercial lines coverage parts.

3 Sources for Workers' Compensation

Private Insurance, State Funds, and Self-Insurance

Errors and Omissions Insurance

Professional liability policy that provides coverage for insurance agents, as wells as certain other types of professionals.

Section 1 of homeowners policy

Property

Which of the following is covered by the jewelers block coverage form?

Property that is sold but not delivered

Employment practices liability insurance (EPLI)

Protects an employer against claims by workers that their legal rights as employees of the company have been violated.

Garage Coverage Form

Provides liability, garagekeepers, and physical damage coverages for vehicle dealers including dealers that have repair operations on the business premises

Damage to property of others

Provision in Section II of a homeowners policy that pays up to $1000 per occurrence on behalf of an insured who damages someone's property. Payment is made without regard to legal liability

other-insurance provisions

Provisions whose purpose is to prevent profiting from insurance and violation of the principle of indemnity when more than one policy covers a loss.

Transferring is a method of:

Purchasing insurance

Pure risk vs. Speculative risk

Pure risk involves chance of loss ONLY (accident or misfortune). Speculative risk involves chance of loss OR gain (gambling, stock investment).

DP2 (Broad Form)

Real property- replacement Personal property- ACV Includes everything from DP1 Plus: The "BIG AFFECT"

Which department within an insurance company organization is typically responsible for helping cover the insurers exposure to loss?

Reinsurance department

Section II of the homeowners policy provides liability coverage for all of the following EXCEPT: action of a resident employee renting the garage to a jewelry maker actions of a domestic animal use of a 17-foot sailboat

Renting the garage to a jewelry maker -does not cover liability for any rental on the premises

Mortgagee Rights

Rights granted to a mortgagee (lender), under a property contract issued to a mortgagor, by virtue of the mortgagee's financial interest in the property.

George just returned from Europe with a beautiful Swiss watch valued at $10,000. He is concerned that his homeowners policy will not provide enough coverage. His insurance agent suggests that he add which endorsement to adequately cover his watch?

Scheduled personal property endorsement

Commercial General Liability

Section I - Coverages Coverage A - BI and PD liability Coverage B - Personal and Advertising Injury Coverage C - Medical Expense Section II - Who is an Insured Section III - Limits of Insurance Section IV - Conditions Section V - Definitions

Causes of Loss Form

Separate form used with the Commercial Property coverage part of the Commercial Package policy that lists covered perils and exclusions. Several different versions provide increasingly broader coverage from basic to broad to special. a required component of the commercial property coverage part that specifies perils covered

Which type of return premium computation is used when the policyholder cancels a policy? A) Short rate. B) Aggregate. C) Flat. D) Pro rata.

Short-rate

Which one of the following dwellings would a HO-3-- homeowners form cover?

Single-family home

Endorsements to the Homeowners Policy

Some property owners have special needs or desire broader coverage than that provided by a standard homeowners' policy - Inflation guard endorsement - Earthquake endorsement - Personal property replacement cost loss settlement endorsement - Scheduled personal property endorsement - Personal injury endorsement - Watercraft endorsement - Home business insurance coverage endorsement - Identity theft endorsement

A bailee is:

Someone who has taken temporary custody of another person's property for a special purpose.

Concealment or Fraud

Specifies that the policy may be voided if there is material concealment, misrepresentation, or fraud on the part of the insured. Hide

Conditions

States policy provisions, rules of conduct, duties, and obligations required for coverage

Ralph is a conductor employed by American Cross-Country Railway System. He routinely travels from Chicago to Los Angeles, and was injured falling from a train platform while helping passengers. Which of the following provides bodily injury coverage for Ralph? A) The U.S. Longshoremen's and Harbor Workers' Compensation Act. B) The Federal Employers Liability Act. C) The Jones Act. D) The Federal Employees' Compensation Act.

The Federal Employers' Liability Act

Terrorism Risk Insurance Act (TRIA)

The Secretary of the Treasury oversees the program and has the authority to establish regulations and procedures to implement the program. Commercial policies must cover the peril of terrorism. The Act does not apply to personal lines policies. **Requires insurance companies to offer terrorism insurance to their commercial policyholders.**

Market Value

The amount you could realistically sell an asset for today

Replacement Cost

The cost to repair or replace property using new materials of like kind and quality with no deduction for depreciation. Most expensive option

What happens if a customer notifies a credit reporting agency that info in the consumers credit report is incorrect

The credit reporting agency is required to investigate and if it is justified, correct and delete the info

National Flood Insurance Program

The federal government's program to provide Flood insurance at subsidized rates.

Strict Liability

The legal responsibility for damage or injury even if you are not negligent

Limits of Liability

The maximum amount of money the insurance company will pay for a particular loss, or for loss during a period of time.

Combined Single Limit

The most the policy will pay for all losses of all types resulting from any one occurrence, regardless of other limits.

First Named Insured

The person listed first on the declarations page when there is more than one named insured

Which of the following statements pertaining to insurance companies is correct?

The primary purpose of a stock company is to earn a profit for its stockholders.

Subrogation

The process by which an insurer can, after it has paid a loss under the policy, recover the amount paid from any party (other than the insured) who caused the loss or is otherwise legally liable for the loss.

All of the following statements about the notice to applicant in the Fair Credit Reporting Act are true except:

This notice must be given to the consumer no later than three days after a report is requested.

HO4

This renter's insurance policy is similar to the homeowner's insurance policy carried on primary residences, but doesn't include coverage on real property owned by someone else. Broad-C-ACV

Which of the following endorsements is used to provide coverage based on actual values at certain locations at specific times?

Value reporting endorsement

HO5 (Comprehensive Form)

Very similar to HO3 but it provided open peril coverage for the dwelling, other structures, and the personal property without the need to add an endorsement. Also covers Mysterious Disappearance

After a fire damages a home, how much is the insured entitled to recover for buying materials to board up the windows under the homeowners policy?

Whatever it will reasonably cost

Decloaration

Who, what, when. where is found in this section

Uninsured Motorist

Your auto insurance pays you for your injuries if the other person does not have insurance.

Coinsurance/Insurance to Value

a Requirement that the insured carry insurance equal to a specified percentage of the value, to be fully indemnified under the policy. Provides a proper basis for setting rates

Direct Loss

a financial loss that results from the physical damage, destruction, or theft of the property

indemnity

a payment for damage or loss

Additional Insured

a person or party who is added to the named insured's policy by an endorsement

Physical Hazzard

a physical condition that increases the frequency or severity of loss

Stated/Agreed Value

a pre-negotiated value for loss, regardless of the actual cost of the loss

non-owned auto

a private passenger auto, pickup, van, or trailer not owned by or furnished or made available for regular use of the named insured or family member, while it is in the custody of or being operated by the named insured or family member

Proof of Loss

a sworn statement that must usually be furnished by the insured to an insurer before any loss under a policy can be paid

Proof of loss

a sworn statement that must usually be furnished by the insured to an insurer before any loss under a policy can be paid

All of the following are covered as business personal property EXCEPT:

accounts receivable

Barney's Breads and Bakery store needs workers' compensation coverage for his 7 employees. He could purchase coverage from all of the following sources except:

an assigned risk plan

Captive agent

an insurance agent who represents only one insurance company and who is, in effect, an employee of that company. They are also independent contractors

Obligations of the Insurance Company

an insurance company, in return for premium, must be fair in underwriting and must pay covered losses.

peril In insurance

an occurrence or event, either caused by a person or nature, that triggers a financial loss.

All of the following factors must be involved to establish negligence EXCEPT:

approximate cause

Section II of a homeowners policy covers all of the following except: A. liability for loss of use of another's property B. bodily injury to others C. bodily injury to one of the insured's resident family members C. property damage of another caused by the insured

bodily injury to one of the insured's resident family members

The commissioner of insurance is elected

by the governor for a 2 year term

Negligence

carelessness

umbrella (excess) liability insurance

catastrophic liability policy that covers liability losses in excess of those covered by any underlying homeowner's, automobile, or professional liability policy

Claims-Made Form

commercial general liability coverage form that pays for BI or PD losses for which a claim was first made against the insured during the policy period

All of the following items are covered under coverage A of a business policy EXCEPT:

computers and photocopiers

earthquake coverage endorsement

covers earthquakes, landslides, volcanic eruption, and earth movement

HO2 Broad Form

covers the dwelling (A), other structures (B), and personal property (C) on a named perils basis

Coverage C: Medical Payments

covers the medical expenses of persons who are injured in an accident on the premises or on ways next to the premises, or as a result of the insured's operations -The medical expenses must be incurred within one year of the accident and are paid without regard to legal liability. Ex. a customer is injured on a slippery floor. The medical expenses are covered up to the policy limits

appraisal

evaluation or estimation of worth

Rental Reimbursement

insurance to cover the cost of a rental vehicle if your vehicle is stolen or being repaired; usually involves a per-day limit as well as a limit on the number of days

The coverages offered by an insurance policy are described in the

insuring agreement

Cyber Liability and Data Breach

internet liability and network protection policy covers cyber risks

Per Occurrence

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

An occurrence is best described as something that

may take place over time

medical malpractice

medical professional misconduct, which differs from negligence because it is performed by a licensed medical professional

Harold owns a sports bar. As a promotion, he offers customers tastings of new German beers. One customer, after several samples, drives off and injures another person. The injured party sues the driver and Harold. Harold's commercial general liability policy will: A) cover the loss under the products/completed operations insuring agreement. B) cover the loss under host liquor liability because Harold did not actually sell the beer. C) not cover the loss because of the liquor liability exclusion. D) cover the loss under the bodily injury and property damage insuring agreement.

not cover the loss because of the liquor liability exclusion

automobile property damage liability

occurs when a driver or car owner is held legally responsible for damage to others' property

Elements of a Contract

offer, acceptance, consideration, legality, capacity, consent, writing

With a few exceptions, most personal lines insurance policies exclude losses arising out of all of the following except:

personal activities conducted away from the insured premises

automobile liability insurance

protects you against financial loss if you injure someone else or damage someone else's property in an automobile accident

Coverage A- Bodily Injury and Property Damage

provides protection for bodily injury and property damage suffered by third parties due to the negligence of the insured and emanating from the insured's premise, operations, product or completed operations that occur within the coverage territory and a time frame described by the policy

conditions

provisions in the policy that qualify or place limitations on the insurer's promise to perform

In states that use the workers' compensation competitive state funds method, all of the following would be viable options available to an employer except:

purchasing coverage from the state fund only

The garage coverage form is designed specifically for all of the following EXCEPT:

rental car companies

ACV (Actual Cash Value)

replacement cost minus depreciation- least expensive

A chance, possibility, or uncertainty of loss is known as:

risk

Arbitration

settling a dispute by agreeing to accept the decision of an impartial outsider

strict liability example

speeding

Workers' Compensation Insurance

state-mandated insurance provided to workers to defray the loss of income and cost of treatment due to work-related injuries or illness

Declarations

statements that provide information about the particular property or activity to be insured

Moral Hazard

the actions people take after they have entered into a transaction that make the other party to the transaction worse off When the act of insuring an event increases the likelihood that the event will happen

salvage value

the estimated value of a fixed asset at the end of its useful life

Utmost good faith contract:

the insured and insurance company have a right to expect honesty from each other and rely on each other when writing a contract

WCSHAVVER

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