FOI - Chapter 10

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Questions and Answers

Which of the following types of injuries are not covered under the personal liability policy?

Injuries to residence employees on the job

Injuries to roomers and boarders (correct)

Injuries to family members residing in the household (correct)

Injuries caused by negligence of a third party

In terms of claims, which statement is true about residence employees?

They can only sue if they live in a nursing home.

They must be insured under provincial workers' compensation plans.

They are entitled to sue for injuries caused by negligence. (correct)

They are always excluded from coverage.

What is the primary role of the insurer regarding claims against the insured?

To deny all claims regardless of their nature

To cover only the claims deemed valid by the insured

To investigate claims but not settle them

To defend claims, even if they are groundless (correct)

Which of the following expenses is the insurer obligated to pay?

Emergency medical or surgical treatment expenses incurred for others Signup and view all the answers

Which of the following does not influence the coverage of personal liability for employers?

The type of residence the employee is working in Signup and view all the answers

What happens regarding interest on judgments related to coverage E?

Insurer will pay any accruing interest after judgment within coverage limits. Signup and view all the answers

Which of the following is excluded in Coverage E personal liability?

Claims made by boarders Signup and view all the answers

Which rule applies to the personal actions of a named insured who does not reside on the premises?

They are excluded from coverage unless in a care facility. Signup and view all the answers

Under what condition does the personal liability coverage apply to business pursuits of an insured person under the age of 21?

It provides coverage for babysitting and delivering newspapers. Signup and view all the answers

Which of the following claims would NOT be covered under personal liability coverage?

Injury caused by a person insured under the policy during a business pursuit. Signup and view all the answers

What must an insured person do to assure coverage for additional business activities?

Include the type of business on the Coverage Summary Page. Signup and view all the answers

Which of the following situations is explicitly excluded from personal liability coverage?

Failure to render professional services. Signup and view all the answers

What type of abuse or harassment triggers an exclusion in personal liability coverage?

Physical abuse directed at someone by an insured person. Signup and view all the answers

What type of expenses are covered under Coverage F for voluntary medical payments?

Surgical, dental, hospital, and ambulance expenses Signup and view all the answers

Under what condition will medical payments not be provided by Coverage F?

Injured party has private health insurance Signup and view all the answers

What is the typical limit for voluntary payment for damage to property under Coverage G?

$1,000 Signup and view all the answers

Which of the following is NOT covered under Coverage G?

Damage to property rented by the insured Signup and view all the answers

What does Coverage H provide for residence employees?

Limited benefits for accidental injury or death Signup and view all the answers

What is the primary purpose of Coverage F?

To pay for medical expenses incurred by unintentional injuries Signup and view all the answers

Under Coverage H, what must an employee do to accept benefits?

Sign a release relinquishing the right to sue the insured Signup and view all the answers

For which of the following would Coverage G provide voluntary payment?

Property the insured unintentionally damaged that is owned by a friend Signup and view all the answers

What is one condition under which the insurer might withdraw the offer of benefits to a residence employee?

If the employee does not accept the benefits or sues the insured Signup and view all the answers

Which of the following does not require separate coverage under the special limitations for watercraft and motorized vehicles?

Watercraft with an outboard motor not exceeding 12 kW Signup and view all the answers

Who is excluded from receiving medical payments under Coverage F?

Individuals covered by their own health insurance Signup and view all the answers

What is the maximum time frame for incurring medical expenses to be eligible for Coverage F?

One year from the accident date Signup and view all the answers

For how long are newly acquired watercraft automatically covered if they exceed the special limitations?

30 days after purchase Signup and view all the answers

What is included in the benefits under Coverage H for residence employees?

Funeral expenses in the event of loss of life Signup and view all the answers

What happens if the benefits offered under Coverage H are accepted by the residence employee?

They must waive their right to sue the insured Signup and view all the answers

What type of watercraft requires separate coverage if it exceeds the limitations mentioned?

Non-motorized watercraft over 8 meters in length Signup and view all the answers

What is covered under Section A of the Standard Garage Automobile Policy?

Injury or damage to others from owned and non-owned automobiles Signup and view all the answers

What must insureds provide to qualify for an Umbrella Liability Policy?

Evidence of existing liability policies Signup and view all the answers

When does an Umbrella Policy pay out on a claim?

Only when the primary policy has insufficient coverage Signup and view all the answers

What does the term Self-Insured Retention (SIR) refer to in a commercial Umbrella Liability Policy?

A fixed amount paid before the policy provides coverage Signup and view all the answers

What typical range is suggested for Self-Insured Retention on Personal Umbrella Liability Policies?

$500 - $1,000 Signup and view all the answers

Study Notes

Coverage Exclusions

Family members living in the same household can sue each other for negligence, but judgments against the responsible party are not insured.
Exclusions also apply to roomers and boarders; liability coverage is intended for third parties only.
Residence employees injured on the job due to insured’s negligence can sue; homeowners coverage provides this.

Legal Liability Coverage

Homeowner forms cover legal liability for residence employees. Some provinces require residence employees to be included in workers’ compensation plans.
Named insureds who do not reside on the premises have exclusions unless they live in a nursing home or care facility.

Defense and Payments

Insurer defends claims even if groundless, choosing legal counsel and determining if settlement is appropriate.
Insurer covers all related expenses, costs from lawsuits, and any interest accruing after judgment within the coverage limit.

Voluntary Medical Payments

Medical expenses for accidents occurring on premises, incurred within one year, are covered, regardless of liability.
Payments are voluntary; common limit is up to $5,000, covering surgical, dental, hospital, and other related costs.
No payment if injuries are covered by other insurance plans.

Voluntary Damage Payments

Insurer makes voluntary payments for unintentional property damage caused by the insured, typically up to $1,000.
Claims for damage to property owned or rented by the insured are excluded.

Compensation for Residence Employees

Limited benefits are provided to residence employees injured or killed while working, regardless of liability.
Payments include loss of life, temporary and permanent disabilities, medical expenses, and are subject to specific conditions.

Special Limitations on Coverage

Automatic coverage exists for specific watercraft and motorized vehicles, with limitations on size and power.
Newly acquired boats exceeding limitations have temporary coverage for 30 days.
Coverage excludes business-related claims unless specified on the coverage summary.

Business and Property Exclusions

Claims arising from business pursuits or professional services are not covered unless explicitly included.
Policy excludes coverage for injuries due to intentional acts, sexual abuse, and physical damage to client's vehicles under care.

Umbrella Liability Policies

Umbrella policies extend coverage for existing primary policies, necessary to provide proof of prior coverage.
They activate when claims exceed primary policy limits or when claims are not covered by primary insurance.
High deductibles often apply, also known as Self-Insured Retention (SIR), particularly for commercial exposures.

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Description

This quiz explores the nuances of liability coverage as it pertains to bodily injury for household members and the exclusions involved. It delves into legal aspects regarding negligence and the implications for insured parties. Test your understanding of how insurance policies respond to these scenarios.