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CAIB 3 > Chapter 2 > Flashcards

Chapter 2 Flashcards

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1
Q

List four coverages provided under section 1 of a CGL policy

A

Coverage A: bodily injury and property damage
Coverage B: personal injury
Coverage C: medical payments
Coverage D: Tenants Legal Liability

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2
Q

Define defamation

A

A statement that causes unjustified injury to the reputation of another person and which results in the loss to that person of the esteem, confidence, respect and goodwill of a considerable part of the community. Include libel and slander

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3
Q

Define easement

A

A right of persons to use land belonging to others

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4
Q

Define false arrest

A

Includes false imprisonment with the additional feature of detaining a person with the intention of turning them over to the police for prosecution

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5
Q

Define false imprisonment

A

Holding someone without lawful justification in a place against their will

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6
Q

Define libel

A

Written defamation

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7
Q

Define malicious prosecution

A

A suit begun in malice without probably cause to believe the charges can be sustained

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8
Q

Define slander

A

Spoken defamation

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9
Q

What is listed on the declaration on a commercial insurance policy

A
  1. Name and address
  2. Policy period
  3. Limits of insurance
  4. Description of the business
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10
Q

Explain key feature “coverage is provided for bodily injury and property damage only”

A

Those sums that the insured becomes legally obligated to pay as compensatory damages, because of bodily injury or property damage, to which this insurance applies

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11
Q

Explain key feature “payment made only for sums insured becomes legally obligated to pay”

A

The policy will respond when the insured is deemed legally responsible to pay damages. The courts alone will determine the legal obligation and assess damages. In most cases, the matter of damages will be settled out of court.

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12
Q

Explain key feature “insurer liable for compensatory damages only”

A

The policy will only provide compensatory damages, damages are intended to match the dollar value associated with the injury or damages caused. Punitive damages, fines, and other penalties are NOT covered and are the responsibility of the insured.

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13
Q

Explain key feature “coverage is provided only for losses which occur during the policy period”

A

If bodily injury is claimed from products that occurred 10 years ago, the policy in effect at the time would pay the claim.

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14
Q

Explain key feature “injury or damage must be caused by an occurrence”

A

Occurrence covered as a result of sudden, unusual, unexpected event, or one that occurs gradually

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15
Q

Explain key feature “loss or damage must take place in coverage territory”

A

-in Canada and US and international waters or airspace
- limited world-wide coverage for products liability
- limited worldwide coverage for other business activities

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16
Q

Explain key feature “insurers right and duty to defend”

A

The insurer has a right and duty to defend the insured in any action that coverage is provided, this ends when coverage limits have been exhausted.

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17
Q

Explain key feature “insurer reserves right to investigate and settle any claim or action at its discretion”

A

-investigate:provides insurer with first hand information that otherwise might be withheld. This information can often affect the determination of liability.
-settle: can result in substantial monetary savings to insurer, saves courts time and defence costs by agreeing to settle

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18
Q

Is bodily injury or property damage that is expected or intended covered?

A

No, this is excluded unless it is a result from the use of reasonable force to protect a persons property

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19
Q

In using reasonable force, if a claim is made against the insured, it is covered as long as…

A
  1. The force was reasonable
  2. The force was used to protect persons or property from injury or damage must take
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20
Q

Although there is generally no coverage under the policy for damages assumed by the insured under contract or agreement, there are certain types of day to day business contracts that are incidental to the affairs of an insurer. Name 5

A

1.A lease of premises
2. Side track agreement
3. Any other easement agreement
4. An elevator maintenance agreement
5. A license agreement in connection with vehicle or pedestrian private railroad crossings at grade.

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21
Q

Explain lease of premises

A

-condition of lease or rental agreement
-the property owner is held harmless for bodily injury or property damage arising out of the use and occupancy of the premises
-tenant assumes liability of the owner

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22
Q

What is a sidetrack agreement

A

Railroads are held harmless for all bodily injury or property damage arising out of the use of the sidetrack

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23
Q

What is an easement agreement

A

A right of persons to use land belonging to others for special purposes, not general use or occupation.
The party requesting the right of use agrees to hold owner of property harmless for liability that may arise from negligence

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24
Q

What is municipal ordinance?

A

Indemnification of a municipality as required by ordinance is automatically insured except in connection with work for a municipality

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25
Explain the exclusions under workers compensation
Policy excludes any obligation of the insured under a workers compensation disability benefit, unemployment compensation law, or any similar law
26
Will the policy pay any charges associated with failure to comply with statutory requirements arising from employment law?
No
27
The policy excludes bodily injury to an employee of the insured arising out of and in the course of employment, what does the exclusion not apply to?
1. Any liability assumed by the insured under contract 2. Employees on whose behalf contributions or payments are or should be made under provisions of any workers compensation law
28
If employees are not insured under the workers compensation plan, what right do they have?
Right of legal action against employer if injured on the job, and the claim is excluded.
29
What should employers do if the do not have coverage under workers compensation plan?
1. Purchase employers liability coverage 2 enroll employees in workers compensation plan
30
There are instances when workers compensation will not respond for injured employees. When will the policy provide Contingent Employers Liability Coverage?
1. When liability is assumed under an insured contract 2.employees on whose behalf contributions are made by or required to be made by the insured under the provisions of any workers compensation law
31
Define automobile
Any self propelled land motor vehicle, trailer, or semitrailer, including machinery, apparatus, or equipment attached thereto, which is designed and used for transportation of persons or property on public roads
32
Exclusion 2e excludes bodily injury or property damage arising out of ownership, use, or operation by or on behalf of any insured when operating:
1. Any automobile 2. Any motorized snow vehicle and its trailer 3. Vehicles used in, or in practice or preparation for speed or demolition contest or stunting activity 4. Vehicles required to be insured under a contract evidenced by a motor vehicle liability policy.
33
What types of vehicles are insured?
Front end loaders, forklifts, road graders, caterpillars, other heavy construction machinery
34
Coverage for bodily injury or property damage arising from the use of boats are excluded, unless:
1. While on shore on premises that the insured owns or rents 2. Watercraft the insured does not own that is less than 8 meters long, and is not being used to carry persons or property for payment.
35
List 6 excluded items of property damage claims
1. Property owned, rented or occupied by insured 2. Premises sold, given away or abandoned by insured 3. Property loaned to insured 4. Property in the care, control, or custody of insured 5. Damage to particular part of real property on which the insured or any contractor working directly or indirectly for insured is performing operations. 6. Damage to property that must be restored, repaired, or replaced because work was incorrectly preformed
36
The exclusion of premises sold, given away, or abandoned is not applicable if
The premises are the insureds work, and were never occupied or rented
37
The exclusion or property being restored, repaired, or replaced is not applicable to;:
Property damage which is covered in the products-completed operations hazard
38
What is the purpose of the “your product” exclusion
Eliminate coverage for defective products sold by the insured to third parties.
39
Define personal injury
Injury, other than bodily injury, resulting from one or more offence -malicious prosecution - false arrest.. etc
40
What is meant by wrongful entry
A landlord wrongfully enters tenants premises, the landlord may be sued for wrongful entry, the policy would respond
41
What is covered under coverage C- medical payments
Insurer agrees to voluntarily pay for certain medical expenses incurred by third parties injured on or near the premises
42
What is a no-fault good will payment?
Acts as a goodwill payment to injured third parties when insured is not at fault
43
Coverage is for ACCIDENTS only, there is no payment for expenses arising out of injuries to:
-the insured -insureds employees -others working on behalf of insured -a tenant of the insured -anyone participating in athletics
44
Tenants legal liability:
-Coverage for short term exposures, including hotel rooms -
45
Commercial general liability policies may be issued in the name of:
1. Individuals 2. Partnerships or joint ventures 3. Organizations
46
All persons who are engaged in the business are insured, this includes:
Owners Partners Spouses Directors and officers Employees
47
When are executive officers and directors insured?
When they are engaged in the performance of related duties
48
Those having temporary custody of property after the death of the insured are also covered. For what?
Only liability associated with the maintenance or use of the property
49
What is the benefit for a business owner to include additional insureds?
The added relief that the policy provides coverage for losses caused by any person directly involved in the business
50
What is the benefit for the insurer for including additional named insureds?
When a claim is made for damages, policy provides control of both the defence and the cost of the defence
51
Unless a separate policy exists, automatic coverage is provided when the insured…
Purchases all, or a majority interest in an existing corporation or, Forms a new corporation during the policy period.
52
Is there automatic coverage for newly formed partnerships and joint ventures? Why?
No, this provides insurers with some control over the kinds of exposures they may unknowingly assume
53
How long are businesses that qualify for automatic coverage insured?
- 90 days or until the expiry of the policy - when the time period has ended, coverage ceases unless the policy has been properly endorsed
54
What is considered the “aggregate limit”
The MAX amount the policy will pay during the policy period for ALL claims
55
What is “each occurrence limit”
The MAX limit to be paid for any one occurrence involving coverage A, C, and D
56
What is meant by “product liability”
In common law, consumers have the right to expect goods purchased will be safe for use. If the use of products result in injury or damage, consumers are entitled to file a suit for damages
57
What does “your product” mean?
Any goods or products, other than real property, manufactured, sold, handled, distributed or disposed of by you, others trading in your name, or an organization whose business assets you acquired.
58
When does a “completed operations exposer” arise?
Arises from work performed by a business. When work is defective and results in injury or damage, person who performed work may be sued.
59
What is meant by “your work”
1. Work or operations performed by you or on your behalf 2. Materials, parts, or equipment furnished in connection with such work
60
What falls under the insureds work?
1. Work done by insured 2. Work performed on behalf of insured by subcontractors 3. Materials, parts, equipment furnished in connection with such work or operation.
61
What two hazards are always insured together
Products and completed operations
62
What are some factors to consider when purchasing liability insurance?
1. The extent of previous awards made my courts for similar businesses 2. Inflation 3. The existence of insurance 4. Territory of operations (exported into countries more likely to sue, must ensure limits meet the exposure) 5. The ability of the business to absorb losses
63
Liability awards are never predictable. What should brokers always do when writing these policies?
-recommend a very high limit of coverage -never suggest a certain limit is adequate - if concerned with the limit chosen, insured should be advised IN WRITING
64
If a defendant has a loss not completed covered by insurance, and have no assets to liquidate, what happens?
Individuals may find their salary garnished, and physical property seized
65
What are two advantages for businesses who have purchased liability insurance when it comes to fraudulent claims?
1. Insured is provided with a professional adjuster, trained to detect fraudulent claims 2. Defence costs are included in the coverage

CAIB 3 (4 decks)

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