Chapter 3 questions

Bodily injury coverage may include payments for which of the following? A Loss of earnings B False arrest C Invasion of privacy D Slander

A

What is the principle of liability that imposes legal liability for injury and damage by products? A Strict liability B Absolute liability C Contingent liability D Professional liability

A

Which of the following statements about an aggregate limit is correct? A It applies to losses from all occurrences within a specified policy period B It applies per occurrence C It is a lifetime limit D It replaces the per occurrence limit for each loss

A

An unintended and unforeseen event from which a loss results is called which of the following? A Proximate cause B Peril C Accident D Loss exposure

Accident

A claimant brings suit against the insured for negligence. The insured's defense argues that the claimant participated in causing the loss and was partially negligent, meaning the claimant is not owed any damages for the loss. This is an example of: A Comparative negligence B Contributory negligence C Vicarious negligence D Proximate negligence

B

Which of the following best describes a liability policy that is written on a primary basis? A It provides only basic coverage B It is the policy that pays first with respect to other policies C It shares the loss with other policies covering the same loss D It pays only after other insurance covering the same loss is exhausted

B

Which of the following defines a tort? A An breach of contract B A civil wrong C An unforeseen event from which damage results D Liability assigned to one party for the conduct of another

B

Which of the following describes the policy liability limits that may be applied to either bodily injury or property damage, in any combination? A Subrogation limits B Combined single limits C Split limits D Per occurrence limits

B

Liability coverage is designed to: A Cover injuries and damages caused by the insured's intentional and unintentional actions B Protect an insured from being sued by an injured party C Protect the insured from the cost of damages for bodily injury and property damage that the insured is legally obligated to pay D Permit the insured to countersue the insurer for losses not covered

C

The equal sharing of a loss by two or more insurers until the loss is paid, or until each insurer has exhausted its limits of insurance, whichever comes first, is the description of which of the following? A Assumed liability B Pro rata liability C Contribution by equal shares D Excess insurance

C

When a claimant brings a negligence claim against the insured, the court determines that the claimant is partially responsible for the loss, and the damages they are owed is reduced by the amount of their responsibility. This describes which defense against negligence? A Comparative negligence B Comparative risk C Contributory negligence D Contributory risk

Comparative Negligence

Payments for mental anguish or loss of consortium are known as: A Punitive damages B Strict liability C Specific damages D General damages

D

Property damage covered by a liability policy includes which of the following? A Damage to property owned by, or leased to, the insured B Damage to tangible property belonging to a third party, including loss of use of that property, caused by the insured's negligence C Damage to the insured's products arising out of the products D Damage to property of others in the insured's care, custody, or control that results from a criminal wrong Sorry!

Damage to tangible property belonging to a third party, including loss of use of that property, caused by the insured's negligence

Losses that cannot be calculated objectively, such as pain and suffering or mental anguish, are considered: A General damages B Punitive damages C Physical damages D Special damages

General damages

A second negligent act that interferes with the chain of events leading to a loss is known as a(n): A Tort B Loss of consortium C Intervening cause D Foreseeable consequence

Intervening cause