Chapter 10

Strict liability refers to damage caused by

A defective product

what type of liability would be associated with owning a swimming pool?

Absolute

In a casualty policy, which of the following policy provisions states that the interest in a policy may be transferred?

Assignment

Which of the following would use a commercial policy?

Business owners

Most professional liability policies are written on a

Claims-made basis

In surety bonding, whose performance is being guaranteed?

Obligor

The legal process that gives the insurer, after a payment of a loss, the right to seek recovery from a third-party that was responsible for the loss is known as

Subrogation

Which of the following is true about commercial lines policies?

They are used by corporations and businesses

A child commits an act that results in legal liability for the parent. This is because of what type of liability?

Vicarious

Liability insurance would pay for losses caused by

the insured

For which of the following entities should an agent recommend a Personal Lines liability policy?

An individual

Which of the following would be considered an advertising injury?

Damage to a business' reputation

In a commercial general liability form, which of the following forms provides coverage that occurs after a retroactive date and when a claim is made during the policy period?

Claims-made

Casualty or liability insurance is known as a third-party coverage because it is designed to cover injuries to or probably damage of

Other people

In commercial general liability policy, which of the following forms covers losses that occur, start or or discovered during the policy, Regardless of when the date is actually reported by the insured

occurrence

In personal auto policies, which of the following types of coverage gives a total amount per claim to be use whenever needed, instead of sitting maximums for bodily injury and property damage?

Combined single limit

Physical damage coverage includes

Other than collision, transportation expenses, collision. EXCEPT medical costs

Commercial lines policies could be written with some form of both property and liability insurance, which makes them what type of policies?

Package

Which of the following terms means the acquisition buy an insurer of an insured's Rights against any third-party for indemnification, to the extent that the insurer pays the loss?

Subrogation

What is the purpose of the claims made form?

To allow insurers to determine adequate rates foe unknown losses claimed in the future

the portion of a loss that is considered the responsibility of the insured is called

Deductible

What insurance term best describes perils that are not insured against?

Exclusions

an insured's home is damaged in an earthquake. He finds out that his home owners policy will not cover the loss, because earth movement is listed in his policy's

Exclusions

Under the professional liability loss settlement provision, what must an insurer do before offering to pay a claimant to settle a claim?

Get the insured's consent

Which of the following coverages and a personal auto policy with a dress losses such as hail, deer, or falling objects?

Other-than-collision

An insured has two liability policies in force covering the same risk. When a loss occurs, which of the following policy provisions states that each policy will pay the same proportion of its limits to the overall coverage?

Pro rata

types of perils covered by a casualty/liability policy

Property damage, bodily injury, advertising injury. EXCEPT chronic illness

Which of the following terms means the acquisition by an insurer of an insured's rights against any third party for indemnification, to the extent that the insurer pays the loss?

Subrogation

If a claims settlement is in arbitration, what likely happened?

The insurer and the insured were unable to agree on the amount of the settlement