Types of Policies, Bonds and Related Terms

Exclusions

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Rental Reimbursement Expense

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Other related issues

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Owned Auto

A vehicle that someone owns and is under thier auto policy is what kind of vehicle?

Newly Acqired Auto

Any automobile purchased after the effective date but before the end of the term of an automobile policy. Must report vehicle within 14 days of purchase.

Bonds

Are contracts between three parties: the principal, the surety, the obligee.

Underinsured Motorist Coverage

Auto coverage that pays the difference between the insured's actual damages for bodily injury and the amount of liablilty insurance carried by the at-fault driver; may be added to personal or commercial auto policy by endorsement.

Uninsured Motorist Coverage

Automobile coverage designed to provide protection for the insured if she is involved in an accident in which an uninsured motorist is at fault; it includes those who do not carry insurance, motorist whose insureance does not meet the state's minimum financial responsibility laws, drivers whose insurance companies are inslovent, and hit-and-run drivers who cannot be identified.

Surety Bond

Bond that guarantees the someone will perform faithfully whatever she agrees to do or that someone will make an agreed-upon payment ot another party

Products and Completed Operations Exposure

Business liabitily exposure arising out of defects in the company's product or completed operations. Ex: injury rsulting form the sale of spoiled cream puffs or for injury that rsults when a customer steps on a carpet tack left behind.

Fidelity Bond

Class of bonds that garantee an employee's honest discharge of duty: written to protect and insured from dishonest acts by employer

Garage Coverage Form

Comercial auto coverage form that provides liability, garagekeepers, and physical damage coveragews for vehicle dealers, including dealers that have repair operations on the business premises.

Individual Insured and Drive Other Car (DOC)

Comercial auto endorsment that extends the definition of a covered auto to include autos the named insured does not own, hire, or borrow while being used by the person named in the endorsement.

Employers Liability Insurance

Coverage included int he Workers' Compensation and Employers Liability policy that covers the employer's liability at common law arising out of employees' work-related injuries and occupational diseases

Garagekeepers Insurance

Coverage that is part of the garage coverage form; covers a garage risk's legal liability for customers' auto in the care, custody, or control of the garage; at the insured's option and for an additional premium, can aslo appply without regard to fault.

CGL Coverage C- Medical Payments

Covers medical expenses incured for bodily injury caused by an accident on the premises the insured owns or rents, on ways next to premises the insured owns or rents, or arising from the insured's operations.

Property Damage

Damage to or destruction of property, including loss of use of property.

Bodily Injury

Defined in most policies to include injury, sicknes, disease, and death resulting from an accident

Personal Auto- auto policy that provides property and liability coverage for both owned and nonowned autos used, maintained, or operated by the insured and her family members. Business Auto- one of the comercial auto coverage forms that covers a business's owned, nonowned, and hired autos against liability and physical damage losses

Describe the difference between personal auto and business auto?

Basic: of either 60 days or five years is available automatically and free of chage under specific conditions such as: -When a claims-made policy is terminated Supplemental: provides an unlimited extension of the reporting period, although the even causing the claim must still occur between the retroactive date and the policy expiration date. The ERP takes affect

Explain the difference between Basic ERP and Supplemental ERP?

Comprehensive, Specified causes of Loss, Collision

In Business Auto, what does physical damage coverage cover?

Coverage C

In a personal auto policy, what coverage is uninsured and underinsured motorist under?

They have to be added as an endorsment.

In busiess auto, what coverage is uninsured and underinsured motorist under?

Workers Compensatrion Insurance

Insurance that covers an employer's obligations under workers' compensation laws, which make the employer responsible for stated damages in the event of a work-related injury or illness; also covers the insured's liability for work-related injuries under common law

Professional Liability

Liability arising out of rendering or failing to services of a professional nature

1. Basic ERP 2. Supplemental ERP

On the claims-made form there are two different extended reporting periods, what are they?

Combined Single Limit

One policy limit that applies to both BI and PD losses

CGL Coverage A- Bodily Injury and Property Damage Liability

Pays those sums the insured becomes legally obligated to pay as damages because of bodily injury or property damage to which the insurance applies.

Split Limits

Policy limit that provides separate limit for BI and PD

Medical Malpractice

Professioanl liability insurance issued to medical professionals or institutions

Errors and Omission insurance

Professional liability converage that protects the insured against liability for committing an error or omission in the performance of professional duties.

Hired Auto

Rental car for traveling would be what kind of auto?

Obligee

The party to whom the principal makes the promise and for whose protection the bond is being written.

Principal

The party who promises to do (or not do) a specific thing (this is the person or company bonded)

Directors and Officers

Type of errors and omission policy written for directors and officers of corporations who may be sued as indivuidual stakeholders.

Liability

Type of insureance that protects and insured form financial loss arising out of liability claims by transferring the burden of financial loss from the insured to the insurance company.

Employee Practices Liability

Type of policy that covers buinsess's losses arising out of wrongful termination, discrimination, sexual harassment, and other employment-related practices.

Umbrella Policy

Type of policy that provides broad coverage for and insured's liability over and above liability covered by an underlying contract; may also cover losses that are excluded by the underlying policy; available as personal or commercial insurance.

Insured: -The neame insured, -others have liability coverage while using the covered auto with permission -covers those who become liable for the conduct of the insured. NOT insured include: -the owner of an auto hired or borrowed from an employee or family member -a person who is working in an auto-type business -people besides employees or lessees while moving property to or from a covered auto; and -the owner of a hired or borrowed auto.

Under the business auto coverage, who is insured? who is NOT insured?

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 convered by the policy of a claim is filed.

Coverage A= Bodily injury and property damage liability Coverage B= personal and advertising injury liability Coverage C= medical payments

What are the CGL coverages?

1. Name schedule bonds- cover each employee named on the policy schedule for the amout listed in the schedule. 2. Position schedule bonds- list positioins in the company that are covered, rather than the individual who fill these positions. (new person hired are automatically covered) 3. Commercial blanket bonds- cover losses arising from the dishonesty of one or more employees acting separately or together (in collusion). Neither empoyees nor their positions are specifically named. 4. Blanket position bonds- are similar to comercial blanket bonds in that employees or positions are not specifically listed. However, the bond's limit applies separately to each employee involved in a loss.

What are the types of Fidelity Bonds?

-owned -nonowned -hired -temporary substitute -newly acquired Autos -Transpotations expense and Rental Reimbursement Expense

What are the types of autos that can be insured?

Pays up to $20 per day to maximum of $600 for: -Transportation expenses incurred by the insured becaue of physical damage losses to the insured's coverd auto; and -loss of use expense for which the insured becomes legally responsible becaue of loss to a nonowned auto

What does Transportation Expense Insurance Cover?

-Claims-Made: is triggered when a claim is first made against hte insured during the policy period, even if the actual injury or damage occured at another time. -Occurrence: is triggered by damage or injury that occurs duing the policy period.

What is the difference between a claims-made form and an occurence form?

Business Auto: Has to be added as an endorsement. Personal Auto: Medical payments is coverage B- provides protection for the named insured, faimly members, and passengers in the name insured's auto for injuries received in an accident, regardless of who was at fault.

What is the difference between medical payments in Business Auto and Personal Auto?

-Expenses the insurer incurs -Cost of bail bonds up to $2,000 for violations because of a covered accident -Cost of bonds to release attachments, but only within the limit of insurance -Expenses the insured incurs at the insurer's request, including the insurd's lost earnings up to $250 a day because of time off from work -Costs the insured is required to pay becasue of a suit -Interest that accrues after a judgment and before it is paid *Losses covered under the suplementary payments section do not reduce the policy's limit of liability

What supplementry payments will the business auto coverage cover?

Temporary Substitute

When a car gets in a crash and another vehicle is used until that car gets repaired...what type of auto is the repacement vehicle?

Excess (Liability) Insurance

When two or more policies or coverages apply to the same loss, the one that applies only after the limits of the primary coverage have been exhausted.

Commercial General Liablity Insurance

covers business liability exposures- work-related injuries to employees; pollution; contractual agreements in which the insured assumes liability; and ownership, maintenence or use of auto, watercraft, and aircraft.

CGL Coverage B- Personal and Advertising Injury Liability

covers liability arising out of such offenses as libel or slander. Can be made under occurance or claims-made basis.

Nonowned Auto

is any private passenger auto, pickup truck, trailer, or van not owned by or available for the regular use of the named insured or family member, such as a short-term rental car.

Annual Aggregate Limit (I'm assuming its for one year)

is the most that will be paid for the sum of Coverages A, B, and C, except for damages arising out of the products-completed operations hazard.

Per occurence *This limit is also subject to either the general aggragate limite or the products-completed operations aggregate limit, whichever is applicable.*

is the most that will be paid for the sum of damages under Coverages A and C becasue of all bodily injury, property damage, and medical payments arising out of any one occurrence.

Premises and Operations Exposure

liability arising out of the business location or the activites of the business. This includes liability for BI, PD, and personal and advertising injury. (Coverages A and B)

Surity

the party (often th insurance company) who agrees to be responsible for loss that may result if the prinipal does not keep his promise