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What Liability Policies Insure
Occurrence is defined by the policy as an event which: (2 things)
1. which occurs suddenly and unexpectedly
or
2. which occurs over a long period of time
BI/PD (bodily injury/property damage) is provided on an occurrence basis.
Aggregate Limits
An aggregate limit is:
the maximum amount paid for all valid claims during the policy term.
Liability policies pay for __________ _________ only.
compensatory damages.
Compensatory damages are: those which are intended to compensate the third party (plaintiff) for the injury of damage caused by the insured (defendant).
In the event of an occurrence, claim, or action, insureds are require to: (5 things)
1. provide the insurer with prompt notification of any occurrence with MAY lead to a claim or action
2. immediately provide the insurer with copies of any legal documents received
3. authorize the insurer to obtain records and other information
4. assist in the investigation, settlement or defence of the claim or action
5. not, except at their own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without the consent of the insurer.
Duties in The Event of an occurrence, Claim or Action
Supplementary Payments.
The additional expenses incurred by insurers and insureds in investigating, settling and defending a claim are provided under a separate Insuring Agreement entitled Supplementary Payment.
The costs insured by the Agreement include: (4 things)
1. costs of defence
(for many insureds, the agreement of the insurer to pay defence costs more than justifies the cost of purchasing liability insurance.)
2. Reasonable expenses incurred by the insured at the insurer's request to assist in the investigation and defence of the claim.
3. Court costs assessed against the insured
4. interest from the date the judgment was rendered but only on the amount which is within the limit of insurance provided by the policy
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