Chapter 9: Introduction to Liability Insurance Flashcards Preview

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Flashcards in Chapter 9: Introduction to Liability Insurance Deck (14)
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1
Q

Common features of liability policies

A
  1. insure bodily injury and property damage
  2. 3rd party coverage
  3. payment only when legally liable
  4. coverage provided on occurrence basis
  5. pay compensatory damages only
2
Q

Define “bodily injury”

A

physical injury, sickness, death

bodily injury from external source

sickness: manifests internally
death: resulting directly from the above

3
Q

Define “property damage”

A

physical injury to tangible property including loss of use

4
Q

3rd party coverage is…

A

payments only to parties other than insured

5
Q

Who determines the matter of “legal liability”?

A

only the courts have the authority to determine when legally liable

6
Q

Define “occurrence”

A

an event which occurs suddenly or occurs over a long period of time

7
Q

Liability policies pay for compensatory damages only. Explain the purpose of “compensatory damages”

A

amounts intended to compensate the 3rd party (plaintiff) for injury caused by the insured (defendant)

8
Q

State the duties owed by the insured to the insurer in the event of an occurrence, claim or action

A
  1. prompt notice to insurer of any occurrence that may result in claim
  2. legal papers must be immediately forwarded to insurer
  3. authorize insurer to obtain info
  4. assist in investigation, settlement or defense
  5. can’t make voluntary payment other than first aid
9
Q

The insurer agrees to make “Supplementary Payments.” What is the purpose of these payments and identify 4 such payments.

A

a separate insuring agreement for additional expense incurred by insurers and insured in settling a claim

  1. cost of defense = insured may hire independent adjuster to investigate and negotiate any settlement of claim
  2. expense of insured to assist = ie. lost wages from appearing in court
  3. court costs assessed against insured = courts may require insured to pay court costs
  4. interest payable = plaintiff doesn’t get paid until after Right of Appeal has passed so interest accrues in the meantime
10
Q

Means an accident, including continuous or repeated exposure to substantially the same general harmful conditions

A

Occurrence

11
Q

Refers to damage to tangible property including all resulting loss of use

A

Property damage

12
Q

A sudden and unusual event which is fixed in time

A

Accident

13
Q

Includes sickness, disease and even death

A

Bodily Injury

14
Q

Provide additional payments over and above the amount of the actual judgment

A

Supplementary Payments