Ch. 4 Casualty (Liability) Insurance Basics

Question 1

Wrongful civil act

Answer 1

Tort

Question 2

Failure to use care that a reasonable person would

Answer 2

Negligence

Question 3

This defense prevents recovery for damages caused by a negligent party if the claimant (plaintiff) was negligent to any extent

Answer 3

Contributory Negligence

Question 4

The defense, a claimant who is partially negligent is still entitled to damages, but damages are reduced in proportion to the claimant’s negligence

Answer 4

Comparative Negligence

Question 5

This defense prevents recovery if the claimant knowingly assumed a risk, thus weakening or eliminating the defendant’s duty of care

Answer 5

Assumption of Risk

Question 6

What are the two types of compensatory damages

Answer 6

General & Special Damages

Question 7

Specific out-of-pocket expenses such as medical bills or property damage

Answer 7

Special Damages

Question 8

Vague or unmeasurable expenses such as pain and suffering

Answer 8

General Damages

Question 9

Punishment to prevent someone from committing an extreme or outrageous act again

Answer 9

Punitive Damages

Question 10

Liability for all damages caused by a defective product, without regard to fault or negligence

Answer 10

Strict Liability

Question 11

Liability associated with dangerous animal ownership, storage of firearms or weapons, and possession of explosive or highly flammable material

Answer 11

Absolute Liability

Question 12

Liability for others you are responsible for

Answer 12

Vicarious Liability

Question 13

An artificial condition on land that attracts children, such as a swimming pool

Answer 13

Attractive Nuisance

Question 14

The limit of insurance is the maximum a liability policy will pay in the event of loss, regardless of the number of insureds, claims made, lawsuits filed, or parties making claims or filing lawsuits

Answer 14

Limits of Liability

Question 15

Maximum a policy will pay for losses per accident or per-repeated exposure

Answer 15

Per Occurrence

Question 16

Maximum a policy will pay to any one person injured in any one loss

Answer 16

Per Person

Question 17

Maximum for a policy period regardless of the number of accidents, claims, etc.

Answer 17

Aggregate

Question 18

Limit to bodily injury per person, bodily injury per occurrence, property damage per occurrence

Answer 18

Split

Question 19

The maximum a policy pays to all losses per occurrence

Answer 19

Combined Single