Podcast
Questions and Answers
What is defined as an occurrence in liability policies?
What is defined as an occurrence in liability policies?
- An event that is anticipated and scheduled.
- An event that happens suddenly and unexpectedly. (correct)
- An event that can only be classified as an accident.
- An event that is only defined by its duration over time.
What does an aggregate limit in a policy indicate?
What does an aggregate limit in a policy indicate?
- The total limit for all claims across all occurrences. (correct)
- The combined limit that includes future claims.
- The maximum payout per occurrence only.
- The limit for each individual claim made under the policy.
How do split limits function in liability policies?
How do split limits function in liability policies?
- They provide a single limit for all types of claims.
- They only apply to bodily injury claims regardless of circumstances.
- They specify different limits for various categories of claims. (correct)
- They combine both bodily injury and property damage limits into one.
If a liability policy has a limit of $1,000 per occurrence and an aggregate limit of $10,000, what does this imply?
If a liability policy has a limit of $1,000 per occurrence and an aggregate limit of $10,000, what does this imply?
What does an inclusive limit denote in a liability policy?
What does an inclusive limit denote in a liability policy?
What is the main purpose of liability policies according to the insuring agreement?
What is the main purpose of liability policies according to the insuring agreement?
Which of the following statements about bodily injury is true?
Which of the following statements about bodily injury is true?
What type of coverage does property damage liability typically provide?
What type of coverage does property damage liability typically provide?
Who qualifies as a third party under the liability insurance policies?
Who qualifies as a third party under the liability insurance policies?
What conditions must be met for a liability policy to respond to a claim?
What conditions must be met for a liability policy to respond to a claim?
What is included in the definition of bodily injury?
What is included in the definition of bodily injury?
What does the term 'property damage' encompass in liability policies?
What does the term 'property damage' encompass in liability policies?
Which statement about the coverage territory for liability policies is true?
Which statement about the coverage territory for liability policies is true?
What is the primary purpose of compensatory damages in liability policies?
What is the primary purpose of compensatory damages in liability policies?
Which obligation is NOT required of the insured when there is a claim or action?
Which obligation is NOT required of the insured when there is a claim or action?
What role does the insurer have in the investigation of a claim?
What role does the insurer have in the investigation of a claim?
What happens if the insured refuses to provide testimony during a legal action?
What happens if the insured refuses to provide testimony during a legal action?
Which of the following is included under supplementary payments in a liability policy?
Which of the following is included under supplementary payments in a liability policy?
What financial obligation can the insured incur without prior consent from the insurer?
What financial obligation can the insured incur without prior consent from the insurer?
What is the insurer's responsibility regarding punitive damages?
What is the insurer's responsibility regarding punitive damages?
What must the insured do promptly after an occurrence that may lead to a claim?
What must the insured do promptly after an occurrence that may lead to a claim?
Which statement about liability policies is true?
Which statement about liability policies is true?
What type of expenses are typically covered under supplementary payments?
What type of expenses are typically covered under supplementary payments?
Flashcards
Liability Insurance
Liability Insurance
Insurance that pays for legal obligations to compensate third parties for damage or injury related to a covered event.
Bodily Injury
Bodily Injury
Physical harm to someone from an external cause, including sickness, disease, or death.
Property Damage
Property Damage
Unintentional physical damage to tangible property or loss of use, even if not physically harmed.
Occurrence-based Coverage
Occurrence-based Coverage
Signup and view all the flashcards
Aggregate Limit
Aggregate Limit
Signup and view all the flashcards
Split Limits
Split Limits
Signup and view all the flashcards
Compensatory Damages
Compensatory Damages
Signup and view all the flashcards
Insured Duties (Occurrence/Claim)
Insured Duties (Occurrence/Claim)
Signup and view all the flashcards
Supplementary Payments
Supplementary Payments
Signup and view all the flashcards
Limitations of Liability Policies
Limitations of Liability Policies
Signup and view all the flashcards
Study Notes
Introduction to Liability Insurance
- Liability insurance policies ensure compensation for legal obligations to pay third parties due to covered occurrences during the policy period within a defined coverage territory.
Insuring Agreement Overview
- Insurers cover bodily injury and property damage claims.
- Bodily injury involves physical harm from external causes, encompassing sickness, disease, and related death.
- Property damage refers to unintentional physical injury to tangible property and includes loss of use even if property is not physically harmed.
Coverage Specifics
- Only third-party coverage is provided, excluding named individuals in the policy.
- Claims are paid only when the insured is legally liable, necessitating proof of negligence.
Occurrence Basis of Coverage
- Liability policies cover incidents on an occurrence basis, meaning they respond to sudden events or long-term issues.
- Coverage limits apply per occurrence, allowing for the same limit to be used for multiple claims.
Aggregate and Split Limits
- An aggregate limit caps total payouts during the policy term; for example, a 1,000peroccurrencelimitwitha1,000 per occurrence limit with a 1,000peroccurrencelimitwitha10,000 aggregate limit.
- Split limits define distinct coverage amounts for different claim types, common in auto insurance, e.g., $100,000 for bodily injury per person.
Compensatory Damages
- Liability insurance pays only compensatory damages aimed at reimbursing injured parties, not punitive or exemplary damages, which are the insured’s responsibility.
Insured Duties Upon Occurrence or Claim
- Insureds must promptly notify insurers of any occurrence with potential claims, providing details like time, place, and witnesses.
- Immediate sharing of legal documents is required to aid insurer’s defense actions.
- Insureds must assist with investigations and defenses, but cannot incur expenses without insurer consent, aside from first aid.
Supplementary Payments
- Supplementary payments cover additional costs like legal defense expenses, reasonable costs incurred by the insured upon insurer request, and court costs.
- Interest on judgment amounts within policy limits is the insurer’s responsibility and is not capped under supplementary payments, which are additional to standard coverage limits.
Limitations of Liability Policies
- Liability policies address specific activities rather than all potential risks faced by the insured, ensuring targeted coverage.
Studying That Suits You
Use AI to generate personalized quizzes and flashcards to suit your learning preferences.
Related Documents
Description
This quiz focuses on Chapter 9 of the Liability Insurance course, which covers key concepts such as the insuring agreement and what liability policies insure. Students will have three minutes to recall and write about their understanding from the last class, emphasizing the Forgetting Curve. Examples are encouraged to deepen comprehension.
