Questions and Answers
What is the purpose of the Employee Benefits Liability Endorsement?
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.
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Standard Coverage B Exclusions include Knowing Violation of _____ of Another.
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Which of the following is NOT a Standard Coverage C Exclusion?
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What are the eight major steps in the CSR Support Cycle?
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What is a class code?
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What is meant by premium basis?
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What does exposure refer to in insurance terms?
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What are the three steps required to determine the correct premium basis?
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How can you understand business operations?
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Who determines the Class Code?
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What does the first digit in a class code number indicate?
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What should be collected once the premium basis is determined?
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What are completed supplemental applications?
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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.