CSR Flashcards: Employee Benefits Liability

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Questions and Answers

What is the purpose of the Employee Benefits Liability Endorsement?

To increase coverage limits

To exclude all employee benefits

To cover errors in employee benefits administration (correct)

To add coverage for automobile damages

What does the Designated Construction Project(s) General Aggregate Limit Endorsement change?

It changes the aggregate limits to be applied on a 'per project' basis.

What should you do if you encounter an unfamiliar endorsement in a CGL policy?

Investigate to understand its true meaning and intent.

Standard Coverage A Exclusions include _____ Liability.

Employer's Signup and view all the answers

Standard Coverage B Exclusions include Knowing Violation of _____ of Another.

Rights Signup and view all the answers

Which of the following is NOT a Standard Coverage C Exclusion?

Vehicles with special modifications Signup and view all the answers

What are the eight major steps in the CSR Support Cycle?

Obtain Required Submission Information, Complete ACORD Forms, Send the Submission, Receive and Review Quotes, Create and Present the Proposal, Bind Coverage with the Insurance Company, Check the Policy, Support the Insured. Signup and view all the answers

What is a class code?

A 5 digit number used to classify a business's operations. Signup and view all the answers

What is meant by premium basis?

The basis to which rates are applied to determine premium. Signup and view all the answers

What does exposure refer to in insurance terms?

The insured's level of risk to a loss or claim represented as actual/estimated figures. Signup and view all the answers

What are the three steps required to determine the correct premium basis?

Understand the insured's business operations, discover the class code assigned to the insured's business operations, ascertain the class code's appropriate premium basis. Signup and view all the answers

How can you understand business operations?

By collecting the insured's supplemental applications and discussing directly with the insured. Signup and view all the answers

Who determines the Class Code?

Insurance Services Office, Inc. (ISO). Signup and view all the answers

What does the first digit in a class code number indicate?

It determines the distinctive premium basis. Signup and view all the answers

What should be collected once the premium basis is determined?

Estimated annual exposure figures. Signup and view all the answers

What are completed supplemental applications?

Applications sent to the insured for completion, required by an insurance carrier. Signup and view all the answers

Study Notes

Employee Benefits Liability Endorsement

Provides coverage for damages incurred by errors or omissions in administering employee benefits.
Covers activities such as describing benefit plans, maintaining records, and managing enrollments.
Offers 'claims-made' coverage, unlike 'occurrence-based' coverage in standard general liability policies.

Designated Construction Project(s) General Aggregate Limit Endorsement

Adjusts aggregate limits to apply on a 'per project' basis.
The aggregate limit resets with each new project during the policy term.
Requires that each project be listed by name in the policy.

Standard Endorsements in CGL Policies

Many standard endorsements exist in Commercial General Liability (CGL) policies.
Unique endorsements may be created by individual insurance carriers.
Endorsements not understood should be investigated for their meanings and implications.

Standard Coverage A Exclusions

Expected or Intended Injury
Contractual Liability
Liquor Liability
Workers' Compensation and similar laws
Employer's Liability
Pollution
Exclusions for aircraft, auto, watercraft, mobile equipment, war, and damage to property and products.

Standard Coverage B Exclusions

Knowing violation of the rights of another
Material published with knowledge of falsity
Criminal acts and breach of contract
Quality or performance failures of goods.

Standard Coverage C Exclusions

Excludes miscellaneous type vehicles, livery, and residence premises.
Does not cover workers' compensation, autos for personal use, business-related claims, war, nuclear, and racing incidents.

CSR Support Cycle

Involves eight major steps from obtaining submission information to supporting the insured.
Includes completing ACORD forms, sending submissions, reviewing quotes, binding coverage, checking policy, and ongoing support.

Class Code

A 5-digit number used to classify a business's operations.
Helps identify different workplace exposures.

Premium Basis

The basis upon which rates are applied to determine insurance premiums.

Exposure

Represents the insured's level of risk for a loss or claim.
Expressed in actual or estimated figures.

Steps to Determine Premium Basis

Understand the insured's business operations.
Discover the assigned class code for the operations.
Ascertain the appropriate premium basis associated with the class code.

Understanding Business Operations

Gather supplemental applications and engage in discussions with the insured for clarity.
Review past policy details for a comprehensive understanding.

Discovering Class Code

Class codes are determined by the Insurance Services Office, Inc. (ISO).
ISO provides a listing of codes along with descriptions to help identify the correct classifications.

Ascertain the Premium Basis

Dependent on the first digit of the class code:
- 10000-19999: Gross sales
- 40000-49000: Various Figures
- 50000-59999: Gross sales
- 60000-6999: Various Figures
- 90000-9999: Payroll or gross sales.

Collecting Estimated Annual Exposure Figures

After determining the premium basis, collect estimated annual exposure figures from the insured.
For payroll-based premiums, straight-time wages of employees are used in calculations.

Completed Supplemental Applications

Required by some insurance carriers for thoroughness.
Applications may be sent via email, mail, or fax to be completed by the insured.

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Description

This quiz focuses on the concept of employee benefits liability endorsement, detailing coverage for damages incurred due to errors in the administration of employee benefits. Review key terms and definitions related to this crucial area in corporate social responsibility.