chapter three - casualty (liability) basics

Question 1

A wrongful act, other than a breach of contract, that violates a duty or the rights of another for which compensation may be sought from the responsible party.

Answer 1

Tort

Question 2

The liability assigned to one party for the conduct of another, based solely on a relationship between the two.

Answer 2

Vicarious liability

Question 3

Failure to use ordinary care.

Answer 3

Negligence.

Question 4

Failure to exhibit any sort of care through recklessness or deliberate indifference to the well-being of others.

Answer 4

Gross negligence.

Question 5

An artificial condition on land that attracts children.

Answer 5

Attractive Nuisance.

Question 6

Compensation to a husband or wife for the loss of companionship of a spouse.

Answer 6

Loss of Consortium.

Question 7

What is a civil wrong committed by one person against another?

Answer 7

Tort.

Question 8

An award to an injured party, in addition to compensatory damages, to punish and discourage a wrongdoer from repeating negligent acts or omissions.

Answer 8

Punitive Damages.

Question 9

Legal liability arising from physical injury, including sickness, disease, and death caused by the acts or omissions of an insured.

Answer 9

Bodily Injury.

Question 10

Coverage for bodily injury of third-party sustained on an insured location or as a result of the insured’s activities.

Answer 10

Medical Payments Coverage.

Question 11

The term for an award to an injured party to compensate for a loss.

Answer 11

Damages.

Question 12

Awarded to return an injured party to his or her pre-loss condition and to make reparation for the actual loss that occurred.

Answer 12

Compensatory damages

Question 13

Awarded for tangible losses that can be calculated and proven.

Answer 13

Special damages

Question 14

Awarded for losses that are not tangible and cannot be objectively calculated.

Answer 14

General damages.

Question 15

What type of damages is awarded to the injured party for the actual medical expenses incurred?

Answer 15

Special.

Question 16

An accident includes continuous or repeated exposure to the same general harmful conditions.

Answer 16

Occurrence.

Question 17

Payment of necessary medical expenses without regard to negligence is covered by which of the following insurance coverages?

Answer 17

Medical Payments.

Question 18

What document informs an insurer that a loss has occurred?

Answer 18

Notice of loss.

Question 19

4 elements of negligence:

Answer 19

Duty is owed.
Violation of duty
Violation of duty is the proximate cause
Foreseeable Consequence.

Question 20

What is a common-law defense used by the insured when the injured party is partially responsible for his own injuries?

Answer 20

Contributory negligence.

Question 21

A party injured in an auto accident is not allowed to sue the negligent party who caused the accident under which law?

Answer 21

No -fault.

Question 22

What is designed to prevent the insured from collecting more than the actual extent of a loss?

Answer 22

Pro rata liability

Question 23

A clause that in the event more than one insurance policy covers a loss, each will pay its share of loss in proportion to the total insurance on the risk.

Answer 23

Pro rata liability.

Question 24

The most the policy will pay for all losses submitted during the policy period, regardless of all other policy limits.

Answer 24

Aggregate limits

Question 25

The most the policy will pay for loss of different types that occur as a result of any one loss, regardless of other limits.

Answer 25

Split limit

Question 26

In split limit, what is the order of the numbers. num 1/num 2/num 3

Answer 26

Per person limit bodily injury / Per occurence limit bodily injury / Per occurrence property damage liability

Question 27

The most the policy will pay for all losses of all types resulting from any one occurrence, regardless of other limits.

Answer 27

Combined single limit.

Question 28

The ___ is the most the policy will pay for the sum of all the losses occurring within a single policy period.

Answer 28

Aggregate.

Question 29

The ____ Limit of liability applies to bodily injury. property damages, or both.

Answer 29

Combined Single.

Question 30

When coverage under a particular form of insurance issued by an insurer is broadened without an additional premium charge, it automatically applies to all policies currently in effect.

Answer 30

Liberalization.

Question 31

Insured cannot transfer policy ownership without the written consent of the insurer.

Answer 31

Assignment.

Question 32

What is the name for a type of policy that doesn't pay benefits until the limits of the primary policy have been exhausted?

Answer 32

Excess policy.

Question 33

Which of the following terms includes pain and suffering, disfigurement, and mental anguish?

Answer 33

General Damages.

Question 34

An insurer decides to increase the first aid benefits for one of its insureds for no extra premium. What is the name of the provision which automatically applies this broader coverage without additional premium to all policies currently in effect by the same insurer?

Answer 34

Liberalization.

Question 35

Duty of care Violation of Duty of care Proximate Cause Damages are foreseeable

Answer 35

Elements of Negligence

Question 36

An unintended and unforeseen event from which a loss results is called what?

Answer 36

Accident.

Question 37

The most that will be paid for any one occurrence.

Answer 37

Occurrence limit.

Question 38

The most that will be paid within the policy period.

Answer 38

Aggregate limit.

Question 39

What prevents all recovery for injuries if the claimant was also considered partially negligent?

Answer 39

Contributory Negligence.

Question 40

The equal sharing of a loss by two or more insurers until the loss is paid, or until each insurer has exhausted its limits of insurance, whichever comes first, is the description of which of the following?

Answer 40

Contribution by Equal Shares

Question 41

Unintentionally renting a leaky boat to vacationers might be considered what?

Answer 41

A negligent act.

Question 42

An employer's liability for the acts of an employee is an example of what?

Answer 42

Vicarious liability.

Question 43

The most a policy will pay for a loss arising out of any one accident regardless of overall policy limits, is known as what?

Answer 43

Per occurrence limit.

Question 44

The maximum amount payable for all losses within a policy period is known as what?

Answer 44

Aggregate limit.

Question 45

Medical payments are made with or without regard to negligence or fault?

Answer 45

Without.

Question 46

K gets a horrible rash after using a wrinkle-prevention cream for 2 months. This is considered what?

Answer 46

An occurence.

Question 47

A continuous or repeated exposure to the same general harmful conditions.

Answer 47

An occurence.

Question 48

Negligence is a type of what?

Answer 48

Tort.

Question 49

The time period in which a lawsuit may be filed after the occurrence of a claim is referred to as: Statutory law Limit of liability Common law defenses Statute of limitations

Answer 49

Statute of limitations

Question 50

Plaintiff K was injured after losing control of their skis on a slope with well-marked signs indicating the degree of difficulty. What legal defense is available to the ski resort to avoid liability for the injury? Comparative negligence Statute of limitations Contributory negligence Assumption of risk

Answer 50

Assumption of Risk.

Question 51

When a person participates in an activity where a certain type of injury is known to be probable, that person's rights of recovery are barred or diminished under the doctrine of ____

Answer 51

Assumption of risk.

Question 52

A manufacturer is held liable if a product caused an injury whether the product was or was not defective. This describes what type of liability? Strict Absolute Direct Contingent

Answer 52

Strict

Question 53

The doctrine of ___ Liability applies to products and their manufacturers. It holds that the manufacturer can be held responsible for an injury caused by a product, even if the product is not defective.

Answer 53

Strict.

Question 54

Property damage covered by a liability policy includes which of the following? Damage to property of others in the insured's care, custody, or control Damage to tangible property, including loss of use of that property caused by the insured's negligence Damage to the insured's products arising out of the products Damage to property owned by, or leased to, the insured

Answer 54

Damage to tangible property, including loss of use of that property caused by the insured's negligence.

Question 55

When damages are reduced in proportion to the degree of negligence, this is an example of: Comparative Negligence Absolute Negligence Contributory Negligence Proportional Negligence

Answer 55

Comparative Negligence.

Question 56

___ negligence is a defense wherein damages are reduced to the proportion to the degree of the claimant's negligence.

Answer 56

Comparative.

Question 57

B has two policies on a property. Policy A is for $20,000; Policy B is for $40,000. If Policy A has a pro rata provision, how much will it pay for a covered loss of $15,000? $15,000 $5,000 $7,500 $10,000

Answer 57

$5,000. (The total amount of coverage is $60,000. Policy A provides 1/3 of that total, so Policy A's pro rata contribution would be one-third, or $5,000. Policy B provides $40,000 or 2/3 of the total coverage, so Policy B pays two thirds.

Question 58

Bodily Injury may include which of the following? Slander Loss of earnings False arrest Invasion of privacy

Answer 58

Loss of Earnings. | Bodily injury includes such items as medical expenses, lost wages, mental anguish, death, and disfigurement

Question 59

A liability policy contains a per person bodily injury limit of $25,000 and a per occurrence limit of $50,000. If an accident were to occur and three persons have claims of $20,000 each, the total amount paid is: $50,000 $60,000 $25,000 $75,000

Answer 59

$50,000. (The policy pays up to $25,000 for each person injured, but no more than $50,000 per occurrence, regardless of the number of persons injured. Therefore, the limit for this accident is $50,000.)

Question 60

What type of liability policy requires the injured party to collect benefits from his/her own insurance as if it were first-party coverage, eliminating the process of determining negligence? Pro rata Excess No fault Absolute liability

Answer 60

No fault

Question 61

Under a ____ liability policy, the injured party collects insurance benefits from his or her own insurance as if it were first-party coverage, thus eliminating the process of determining negligence or legal liability.

Answer 61

No fault.

Question 62

Medical expenses and loss of earnings awarded to an injured party are considered: Punitive damages Physical damages General damages Special damages

Answer 62

Special Damages.

Question 63

Most liability policies do not provide coverage for: General damages Punitive damages Special damages Compensatory damages

Answer 63

Punitive Damages.

Question 64

Liability coverage is designed to: Protect the insured from bodily injury and property damage they are legally obligated to pay Cover injuries and damages caused by the insured's intentional and unintentional actions Protect an insured from being sued by an injured party Permit the insured to countersue the insurer for losses not covered

Answer 64

Protect the insured from bodily injury and property damage they are legally obligated to pay.

Question 65

Personal injury liability includes which of the following? Libel and slander Theft Sickness and disease Medical payments

Answer 65

Libel and slander

Question 66

_____ is the legal liability for injury other than bodily injury or property damage.

Answer 66

Personal Injury Liability.

Question 67

Negligence is what kind of tort? An unintentional tort An intentional tort A gross tort A criminal tort

Answer 67

An unintentional tort.