Unit 18

The most common form of DIC policies are considered

"all risk", however, the perils that would normally be covered on a standard policy are excluded and the customary exclusions are covered.

Aviation Liability insurance for owners of aircraft includes coverage for:

-Legal liability to third parties (other than passengers) -Bodily injury to passengers - Property damage -Medical payments

Three conditions must be met before surplus lines insurance may be obtained from an unauthorized insurer:

-The business must be obtained through a licensed surplus lines producer, agent, or broker -It is determined after a diligent (thorough) search that the full amount of insurance cannot be obtained from authorized insurers who market the insurance in the state -Coverage may not be obtained as a surplus lines coverage solely for the purpose of obtaining a better contract or a lower premium than an authorized insurer can provide -Examples of surplus lines coverage include amusement parks, music or rock concerts, movie filming, and auto or boat racing.

A commercial umbrella policy provides coverage in three situations:

-The policy limits applying to a loss under an underlying policy have been exhausted -A loss is excluded under an underlying contract but not excluded under the umbrella( the insured must first meet the retention-deductible limit) -Previous losses reimbursed under an underlying policy have reduces its aggregate limit so that a subsequent loss is not fully covered

aviation physical damage coverage can be provided while the aircraft is

-in the air or on the ground -on the ground only -not in motion under its own power

Professional Liability includes:

-medical malpractice -Errors and omissions -Directors and officers -Fiduciary liability -Consent to settle clause

'Internet Liability and Network Protection' includes what agreements?

-website publishing liability -Network security liability -Replacement or restoration of electronic data -Cyber extortion -Business income and extra expense

Surplus Lines

-written by no admitted insurers (no certificate of authority) -Unusual risks -insured with poor loss histories -Usually requires a surplus agent, producer, or broker's license to sell -Cannot be sold only for the purpose of getting a lower rate

Which of the following is NOT covered under employment practices liability insurance? A) physical injury B) Failure to promote C) discrimination, harassment, and wrongful termination D) Retaliation

A) physical injury

Aviation physical damage coverage covers all of the following except: A) engines B) airframe C) personal effects D) electronic navigation

C) personal effects

Aviation (flying) liability insurance includes coverage for all of the following EXCEPT: A) medical payments B) bodily injury to passengers C) the aircraft D) Bodily injury liability to persons other than passengers.

C) the aircraft

what is designed to provide coverage for a catastrophic liability coverage for business risks?

Commercial umbrella liability insurance

Catastrophic coverage for risks like floods and earthquakes is usually excluded from policies, but if the insured as an exposure, a ____ policy can be written to provide coverage.

DIC (difference in conditions)

what provides broad coverage to fill the gaps in commercial property coverage?

Difference in conditions insurance (DIC)

Which liability policy protects those who manage private pension and employment benefit plans?

Fiduciary liability

Which internet liability and network protection insuring agreements covers the insured's liability if a person gains unauthorized access to the insured's computer system and this unauthorized access results in the publication of clients' personal information?

Network security liability

Which internet liability and network protection insuring agreements covers the insured's liability due to an unintentional error or misstatement posted on the insured's website?

Website publishing liability

Commercial Insureds who need higher liability limits than those provided by a certain policy or who want coverage for losses that are excluded by a certain policy should purchase

a commercial umbrella policy

Employment Practices Liability insurance covers

a company and its directors, officers, and current former employees against claims or lawsuits regarding inappropriate workplace behavior. covers legal costs, whether the company wins or loses the suit.

the business must be obtained through

a licensed surplus lines producer, agent, or broker

An insurance agent has liability exposure and needs to be properly insured under

an E&O (errors and omissions) policy.

An authorized or admitted insurance company (insurer) has current certificate of authority issued by

an insurance department specifically authorizing the insurer to transact particular lines of business in that state. - the law prohibits anyone from acting as an agent for an unauthorized company and an insurer from transacting any line of business for which it is not authorized.

'surplus lines insurance' is provided by

carriers that do not need to be filed with a stat e insurance department in order to offer coverage. - an agent or broker that works with surplus or excess lines carriers is required to have a surplus lines license.

unlike standard property policies, DIC policies do not generally have a _____________ requirement.

coinsurance. -deductibles in a DIC policy are generally quite high due to the type of risks being insured and the potential for sizeable losses

Cyber extortion

covers extortion expenses and ransom payments due to an extortion threat to infect the insured's computer system with a virus, or to publish clients' personal information.

Business income and extra expense

covers loss of business income or extra expenses due to an interruption in the insured's business due to a virus, malicious computer instruction, or extortion threat.

Replacement or restoration of electronic data

covers the cost to replace or restore electronic data destroyed due to a virus, or malicious computer instructions designed to disrupt or destroy an insured's computer system.

website publishing liability

covers the insured's liability due to an unintentional error or misstatement posted on the insured's website. ex: copyright infringement (breaking the law), defamation (slander), or privacy violations.

Network security liability

covers the insured's liability if a person gains unauthorized access to the insured's computer system, and this unauthorized access results in the publication of clients' personal information. In addition, it covers the insured's unintentional transmission of a computer virus to another party .

A business that wants coverage for its liability for employment-related acts can obtain it by purchasing

employment practices liability insurance

"EPL" stands for

employment practices liability.

Which refers to a professional liability policy written for other professionals, such as insurance agents, accountants, architects, stockbrokers, engineers, consultants, and attorneys?

errors and omissions (E&O) (professional liability policies written for other professionals, such as insurance agents, accountants, architects, stockbrokers, engineers, consultants, and attorneys.)

directors and officers liability

exposure that is properly insured under a E&O (errors and omissions) insurance

Difference in Conditions (DIC) insurance

is property insurance that covers high severity, low frequency perils (the exact opposite of what is normally accepted by insurance companies)

Professional liability-

liability arising out of rendering (give) or falling to render (give) services of a professional nature. -is excluded under CGL policies

Medical malpractice is the term commonly applied to

medical professional liability policies written for medical professionals or institutions, including physicians, nurses, dentists, surgeons, opticians, chiropractors, and veterinarians.

Unauthorized insurers are also known as

nonadmitted insurers

the Fiduciary (trust) Liability policy

protects those who manage private pension and employee benefit plans against liability for violation of the employee retirement income Security Act of 1974, which governs employer-sponsored retirement plans.

high-limit commercial umbrella policies are designed to

provide catastrophic liability coverage for business risks.

Errors and omissions

refers to professional liability policies written for other professionals, such as insurance agents, accountants, architects, stockbrokers, engineers, consultants, and attorneys.

Who represents nonadmitted companies?

surplus lines

Aviation physical damage coverage, called aircraft hull insurance, covers

the complete aircraft, including is airframe, engines, controls, and electronic navigation and communications equipment. -does not cover personal effects

Liquor liability insurance

this form provides coverage for bodily injury and property damage for which the insured may become liable as a result of contributing to a person's intoxication. - may also be called 'dram shop coverage' ---- dram shop literally refers to a bar, tavern, or place where alcoholic beverages are served

Many states have an approved lost of surplus lines carriers and requires surplus lines to be placed with

those carriers

which policy would these actions be covered on?: -discrimination -Harassment -Failure to promote -Retaliation -Wrongful termination

under the EPL (employment practices liability) policy

Because the umbrella policy is not designed to handle usual or everyday exposures, the insured must have

underlying liability coverage, such as commercial auto liability or commercial general liability coverage, before an umbrella policy will be issued.

Surplus lines insurers must become authorized to

write insurance in their states.