Insurance and Commercial Casualty II: Terms, Definitions, and Coverage, Exams of Business Fundamentals

Download Insurance and Commercial Casualty II: Terms, Definitions, and Coverage and more Exams Business Fundamentals in PDF only on Docsity! Commercial Casualty II Questions and answers Accident CORRECT ANSWERS✅ An event or continuous or repeated exposure to the same conditions resulting in bodily injury or property damage. Auto CORRECT ANSWERS✅ A land motor vehicle; trailer or semi-trailer designed for travel on public roads; or any other land vehicle that is subject to a compulsory or financial responsibility law or other motor vehicle insurance law where it is licensed or principally garaged. An auto does not include "mobile equipment". Bodily injury CORRECT ANSWERS✅ Injury, sickness, or death sustained by a person. Concurrency CORRECT ANSWERS✅ When the dates of an Excess/umbrella policy and an underlying policy or policies are the same. Conditions CORRECT ANSWERS✅ The rules of a contract for an insured and insurance company. Coverage territory CORRECT ANSWERS✅ The geographic area where insurance applies Commercial Casualty II Questions and answers Declarations Page CORRECT ANSWERS✅ The part of a policy that shows the who, what, when, and where Deductible CORRECT ANSWERS✅ The amount the insurance company reduces its payment for a loss, and it is shown in the declarations for each coverage Depreciation CORRECT ANSWERS✅ the amount of value an auto has lost due to its age, mileage, or wear and tear Diminution CORRECT ANSWERS✅ Perceived loss in market or resale value resulting from a direct and accidental loss Duty to defend CORRECT ANSWERS✅ an insurance companies assumed obligation to defend an insured for any covered claim Employee CORRECT ANSWERS✅ includes a "leased worker"; does not include a temporary worker Endorsements CORRECT ANSWERS✅ additions to a policy that amend the coverage provided in the coverage form Commercial Casualty II Questions and answers mobile equipment CORRECT ANSWERS✅ equipment that is designed for travel off public roads, including specific types of equipment and vehicles as described in the policy. -Bulldozers farm machinery and forklifts -used solely on or next to premises owned or rented by insured -travel on crawler treads -provide mobility to assorted permanentley mounted equipment -not self propelled and are maintained to provide mobility to permanently attached equipment -designed for purposes other than transportation of persons or cargo monopolistic state fund CORRECT ANSWERS✅ a state created, state owned, and state operated workers compensation insurance facility; it writes all workers compensation insurance for the state named insured CORRECT ANSWERS✅ the person or organization shown on the declarations page Commercial Casualty II Questions and answers Negligence (4 elements) CORRECT ANSWERS✅ used to determine whether the operator of an auto is responsible for an accident. Negligence has four elements 1. a duty is owed to others 2. that duty is breached 3. injury or damage results 4. the breach of the duty is the proximate cause of the injury or damage. Non owned auto CORRECT ANSWERS✅ autos that a business organization or sole proprietor doesn't own, hire, rent, or borrow in connection to the business; includes autos belonging to employees or partners or any of their family members Owned autos CORRECT ANSWERS✅ autos that are owned titled/leased in the name of a business or organization, or owned by a sole proprietor, and being used for business purposes pollutant CORRECT ANSWERS✅ any solid, liquid, gaseous, or thermal irritant or contaminant property damage CORRECT ANSWERS✅ damage to or loss of use of tangible property SIR CORRECT ANSWERS✅ the amount an insured must pay before an insurance policy will respond to a loss. Commercial Casualty II Questions and answers Temporary worker CORRECT ANSWERS✅ on furnished to the insured as a substitute for a permanent employee who is on leave or someone who works for the insured to meet seasonal or short term workload conditions Tort CORRECT ANSWERS✅ a legal wrong done to others underlying insurance condition CORRECT ANSWERS✅ a requirement in excess and umbrella policies where the insured must maintain underlying insurance as described in the declarations during the policy period of the excess or umbrella policy ultimate net loss CORRECT ANSWERS✅ the total of amounts paid or payable in the settlement of claims or suits vicarious liability CORRECT ANSWERS✅ when one party is held responsible for the actions of another party due to the nature of their relationship Employee - Advantages of WC CORRECT ANSWERS✅ Defined benefits if injured on the job Commercial Casualty II Questions and answers Four different types of employee benefits provided by most WC laws CORRECT ANSWERS✅ Medical, Disability, Rehabilitation, Death Part 1 WC Insurance policy Paragraph A. CORRECT ANSWERS✅ applies to bodily injury by accident or bodily injury by disease. Bodily injury includes resulting in death. - Must occur during policy period -Must be caused by aggravated by the conditions of your employment Part 1 WC Insurance policy Paragraph B CORRECT ANSWERS✅ We will pay - promptly when due the benefits required of you by the WC law Categories of WC benefits CORRECT ANSWERS✅ Medical - Cover any reasonable and necessary med treatment related to injury. usually have no dollar or time limit. Disability - Compensate for temporarily lost wages. Usually a waiting period. Rehabilitation - include costs to restore an injured employees physical capacity Death - Include an amount for burial expenses and on going support paid to qualifying beneficiaries. Typically conditional. Commercial Casualty II Questions and answers Part 1 WC Insurance policy Paragraph C CORRECT ANSWERS✅ We will defend - insurer has the right and duty to defend against any claim proceeding or suit brought against the insured for benefits payable by the insurance. Part 1 WC Insurance policy Paragraph D CORRECT ANSWERS✅ We will also pay - costs associated with any claim proceeding, or suit the company defends Part 1 WC Insurance policy Paragraph E CORRECT ANSWERS✅ Other Insurance - insurance carrier will not pay more than its share of benefits and costs covered by the insurance policy and other insurance or self insurance. Part 1 WC Insurance policy Paragraph F. CORRECT ANSWERS✅ Payments you make - employer is responsible for any payments in excess of benefits prescribed by the law. Part 2 Employers Liability Insurance and its 4 types of claims CORRECT ANSWERS✅ 1. Third Party Action over 2. Care and loss of services 3. consequential BI Commercial Casualty II Questions and answers 4. Dual capacity Third Party Action over claim CORRECT ANSWERS✅ an employee is injured by a piece of equipment. The employee sues the manufacturer who then files a claim against the employer when it discovers the employer removed safety guards to speed up production or use. Care and loss of services claim CORRECT ANSWERS✅ Dependents need care and services an injured parent can no longer provide. Also, a spouse may sue for loss of consortium or harm to the marriage or relationship due to injury Consequential BI Claim CORRECT ANSWERS✅ A spouse suffers a heart attack upon hearing of an injured employee Dual Capacity Claim CORRECT ANSWERS✅ An employer acts as the manufacturer of a product that injures an employee while in the course of employment. In this case the employer serves in two capacities- as employer and manufacturer. Employers Liability Insurance Limits CORRECT ANSWERS✅ Bodily Injury by accident each accident Commercial Casualty II Questions and answers Sole proprietors, partners, officers, and other coverage - Covering those who are excluded by law but elect to be covered. Sole Proprietors partners and others exclusion Voluntary Compensation Endorsement and employers liability coverage endorsement - extend coverage to those who may not be subject to a states WC law. Domestic employees. Name the parts of a BA policy CORRECT ANSWERS✅ 1. Declarations Page 2. Business Auto Coverage Form 3. Endorsements BA Declarations Page CORRECT ANSWERS✅ 1. Company, producer, named insured, mailing address, policy period, form of business 2. Schedule of coverages and covered autos 3. Schedule of covered autos you own 4. Schedule of hired or borrowed covered autos and premium 5. Schedule non ownership covered autos liability 6. Schedule for gross receipts or mileage basis Commercial Casualty II Questions and answers BA Coverage Form Sections CORRECT ANSWERS✅ Section 1 - Covered autos Section 2 - Covered autos liability Section 3 - Physical Damage coverage Section 4 - Business auto conditions Section 5- Definitions BA Section 1 Covered autos CORRECT ANSWERS✅ Paragraph A - lists and explains the numerical symbols that describe the autos . Paragraph B - explains the conditions associated with owned autos the insured acquires after the policies eff date. Paragraph C- focuses on coverage for certain trailers, mobile equipment, and temporary substitute autos BA Section 1 Covered Autos Symbol 7 CORRECT ANSWERS✅ If symbol 7 appears next to a coverage in item 2 of the declarations then an auto the insured acquires will be covered for coverage outlined in the policy only if the insurer already covers all autos the the insured owns for that coverage or the newly acquired auto replaces a previously owned auto that had that coverage. Plus, insured must alert insurer 30 days after acquisition of the auto. Commercial Casualty II Questions and answers BA Section 2 Covered Autos liability coverage CORRECT ANSWERS✅ provides protection from claims for bodily injury and property damage for which an insured is legally responsible. (Owned, Non Owned, Hired or Borrowed) BA Section 3 Physical Damage Coverage CORRECT ANSWERS✅ Provides coverage for damage to or loss of an insureds covered auto. BA Section 4 Business Auto Conditions CORRECT ANSWERS✅ Explains the rules for the insured and the insurance company under the terms of the contract. Address loss situations, premium payment, behaivors of the parties, locations where the policy applies and other issues BA Section 5 Definitions CORRECT ANSWERS✅ An insurance professional requires a thorough understanding of the terms defined in an insurance policy. To help develop that understanding the terms are examined in detail later in this section. BA Policy Endorsements CORRECT ANSWERS✅ Additions to a policy that amend the coverage provided in the coverage form. Commercial Casualty II Questions and answers business. Also includes autos owned by the insureds employees, partners, and members of LLC's and their family members BA Coverage Symbol 19 CORRECT ANSWERS✅ Mobile equipment subject to compulsory or financial responsibility or other motor vehicle insurance law only Mobile equipment is NOT CORRECT ANSWERS✅ self propelled equipment with the following types of permanently attached equipment snow removal road maintenance street cleaning cherry picker on an auto or truck chassis vehicles providing mobility to equipment used for spraying welding building cleaning geophysical explortion land vehicles subject to financial responsibility laws in the states where licensed or garaged BA Symbol 10 CORRECT ANSWERS✅ Covered Auto Designation - can create or restrict coverage for types of autos described in the Endt CA9954. Can provide diff coverages or deductibles based upon the types or ages of owned autos Commercial Casualty II Questions and answers If BAP has liability it automatically extends to CORRECT ANSWERS✅ -Trailers with GVW 3,000 lbs or less that are designed primarily for travel on public roads -mobile equipment being towed or carried by a covered auto -a non owned auto being used as a temporary substitute for an owned auto that is out of service Who is an insured under BAP? CORRECT ANSWERS✅ - The named insured for a covered auto - A permissive user of a covered auto - Anyone held vicariously liable for a named insured Permissive user of covered auto exceptions CORRECT ANSWERS✅ - the owner or anyone else from whom an insured borrows a covered auto -an employee, if the covered auto is owned by the employee or a member of the employees household - anyone using a covered auto while working in the auto business unless it is the named insureds business -non employees loading and unloading covered autos Commercial Casualty II Questions and answers -a partner/member if the covered auto isowned by the partner/member of her/his household *This coverage may be changed by endorsement Types of liability losses not covered by BAP CORRECT ANSWERS✅ 1. Expected or intended injury 2. Contractual liability 3. Workers Compensation 4. Employee indemnification and employers liability 5. Fellow Employee 6. Care, Custody, and Control 7. Handling of Property 8. Movement of property by mechanical device 9. Operations 10. Completed operations 11. Pollution 12. War 13. Racing Commercial Casualty II Questions and answers -authorization of insurer to obtain info -submitting to examination by physicians of the companys choice Legal action against us CORRECT ANSWERS✅ Conditions in which the insured can start legal proceedings against the company: -Must be full compliance with all terms of the coverage form -insurance company must agree in writing that the insured has an obligation to pay Loss Payment - Physical Damage Coverages CORRECT ANSWERS✅ Rules regarding the payment of physical damage losses: -pay for, repair, or replace damage property -Return stolen property at our expense and pay for any damage that results to the auto from the theft -take all or any part of the damage at an agreed or appraised value Transfer of Rights of Recovery Against Others to Us CORRECT ANSWERS✅ If any person or org to whom we make payment has rights to recover damages from another, those rights are transferred to us. Commercial Casualty II Questions and answers Part B 8 General Conditions CORRECT ANSWERS✅ 1. Bankruptcy 2. Concealment Misrepresentation or Fraud 3. Liberalization 4. No Benefit to Bailee - Physical Damage coverages 5. Other Insurance 6. Premium Audit 7. Policy Period, Coverage Territory 8. Two or more coverage forms or policies issued by us General Conditions Bankruptcy CORRECT ANSWERS✅ The insurance company's obligations under the coverage form do not change should the insured declare bankruptcy or insolvency General Conditions Concealment Misrepresentation or Fraud CORRECT ANSWERS✅ Fraud committed by the insured voids the coverage form General Conditions Liberalization CORRECT ANSWERS✅ The policy will automatically provide additional coverage if the insurance company revises the coverage form to provide more coverage without additional premium charge Commercial Casualty II Questions and answers General Conditions No Benefit to Bailee-Physical damage coverages CORRECT ANSWERS✅ The insurance company will not recognize or grant coverage for the benefit of a person or organization holding, storing, or transporting property for a fee General Conditions Other Insurance CORRECT ANSWERS✅ -If auto is owned by insured BAP coverage is primary -if trailer is attached to a covered owned auto the BAP is primary -For a covered auto not owned by the insured the BAP is excess -If a trailer is attached to a covered non owned auto the BAP is excess -For hired car physical damage any hired auto is considered owned and BAP is primary -Any liability the insured assumed under an insured contract is primary General Conditions premium audit CORRECT ANSWERS✅ insurer with compute final premium due when it determines the insureds actual exposures. The estimated total premium will be credited against the final premium due and the named insured will be billed for balance. Commercial Casualty II Questions and answers Four types of excess coverage forms CORRECT ANSWERS✅ 1.Monoline excess policy 2.Multiline excess policy 3.Buffer layer excess policy 4.Lead umbrella policy Monoline excess policy CORRECT ANSWERS✅ covers one type of underlying insurnace Multiline excess policy CORRECT ANSWERS✅ covers more than one type of insurance Buffer Layer Excess policy CORRECT ANSWERS✅ exists between primary underlying insurance and the excess policy layer Lead umbrella policy CORRECT ANSWERS✅ resides between primary underlying policies and the overlying excess umbrella policy. Excess umbrella policy typically contains follow form provisions meaning it follow the terms and conditions found in the lead policy below it Commercial Casualty II Questions and answers Role of an SIR CORRECT ANSWERS✅ The amount a named insured will pay when the insureds commercial policy provides broader coverage than the underlying policy. Not the same as a deductible. XS Variation Insuring agreement CORRECT ANSWERS✅ Some pay on behalf of an insured others may state they will indemnify an insured XS Variation Defense CORRECT ANSWERS✅ the costs of the defense may be in addition to the limits or they may be from within the limits XS Variation Coverage territory CORRECT ANSWERS✅ Most are far wider than underlying policies. Worldwide, limited worldwide, or no coverage territory statement at all. XS Variation who is an insured CORRECT ANSWERS✅ may follow form, expand the definition, or give automatic coverage when required in contracts for AI's XS Variations Damages CORRECT ANSWERS✅ May follow form, expand coverage in areas of personal injury, property damage or advertising injury. Commercial Casualty II Questions and answers XS Variations Ultimate Net Loss CORRECT ANSWERS✅ Total amounts paid or payable in the settlement of claims or suits. can include the cost of defense if no separate defense costs provisions apply, can also exclude the cost of defense if policy has separate defense cost provisions. XS Exclusions CORRECT ANSWERS✅ Expected or intended injury contractual liability liquor liability injury to a fellow employee employment related pracitces pollution aircraft or watercraft property in the CCC of insured racing activities damage to property damage to impaired property damage to your product or work recall of products professional services