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320 Cards in this Set
- Front
- Back
4 elements of a legal contract
|
Legal Purpose, Consideration,
Offer and Acceptance Competent Parties |
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Contracts -
Adhesion |
Prepapred with 1 party, little or no opportunity for bargaining by the other party. Insurance contract
|
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Contracts -
Utmost Good Faith |
Insurer relies on Insured's statements and insured relies on insurer's ability to fulfill its promises
|
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Contracts -
Aleatory |
Dependent on an uncertain event
|
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Contracts -
Personal |
Insures a Person
|
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Contracts -
Indemnity |
After a loss occurs, an individual is restored to the approximate financial condition she was in before the loss
|
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Contracts -
Unilateral |
One sided contract; only the insurance company is legally bound to perform under the contract
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Contracts -
Conditional |
Includes conditions that boith the insured and the insurer must comply with
|
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Insurance Policy -
Declaration |
The insured, What property or risk is covered, When and where coverage is effective, how much coverage applies
|
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Insurance Policy -
Insuring Agreements |
Describe what is covered and the preils the policy insures against
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Insurance Policy -
Conditions |
Rightsd and duties of the insured and the insurer under the policy
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Insurance Policy -
Exclusions |
Propert, perils, persons, or situations that are not covered by the policy
|
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Insurance Policy -
Definitions |
Clarify the meaning of certain terms used in the policy
|
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Insurance Policy -
Endorsements |
Documents attached to the policy that change the policy in some way
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Risk
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Chance of Loss
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Insurance
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Transferring the risk of loss
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Peril
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The cause of the loss
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Hazard
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Increases the chance of loss
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Pure Risk
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Involves only the possibility of loss
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The Law of Large Numbers
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The more examples used to develop a statistic, the more reliable the statistic will be
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Insurable Interest
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Exists when there is an actual economic interest in the safety or preservation of the subject from loss, impairment or destruction
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Criteria a Risk must meet to be insurable
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Any of the following; Insurable interest, Pure Risk, Loss is definite, loss is calcuable, insurance is affordable, large number with similar potential for loss, Loss can not happen to large number at the same time,
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Reduction
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Cabn reduce the severity but cannot prevent or reduce the number that occur
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Avoidance
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Avoids all risk by avoiding the risky circumstance
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Retention
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Insured (Non) retains the risk of loss
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Peril
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Cause of loss
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Hazard
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Increases the chance of loss
|
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Mutual Insurance Company
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Owned by the insured
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Multi Line Company
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Writes more than one line insurance
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Personal
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P&C that cover an individual or family
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Casualty Insurance - Important Risk Covered
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You will become liable for damage to others
|
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Non Exclusive Agent
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Represents more than one company
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Solicitor
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Limited authority, sells insurance and collects premiums. Cannot sign issue or countersign policies
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Direct Writer System
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Agents are employees - draw salary, commission, or both
|
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Law of Agency
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Agent represents the company
Broker reperesents the insured |
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Actuarial Department
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Determines rate to be charged for insurance
|
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Loss Control Department
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Performs Inspections and Certifications
|
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Audit Department
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Examines financial and bookkeeping of insureds to detemine after the fact premiums
|
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Marketing Department
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Comapny's overall marketing startegy
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Underwriting
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Accepts or Rejects based on company standards
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Claims
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pays insureds covered losses
|
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State Insurance Department
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Responsible for licensing agents
|
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Rebating
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Offering a reduction of gift - illegal in most states
|
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State Regulation Department -
Prior Approval |
Offical approval before using new forms and rates
|
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State Regulation Department -
File and Use |
Use forms anbd rates as soon as they have been filed
|
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State Regulation Department -
Use and File |
Must file rates and forms within a time period after using them
|
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State Regulation Department -
Open Competition |
Compete openly with forms and rates selected by the company. Subject to adequacy and non-discrimination
|
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Federal Government Insurance
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Flood and Crop Insurance as examples
|
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State Government Insurance
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Unemployment or Workman's Comp Insurance as examples
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Who Regulates Insurance?
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State
|
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Why Does State Regulate Insurance?
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Preserve Solvency, detect financial problems, if insolvency occurs protect insured
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Who Issues the Binder?
|
Agent or Insurance Company
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Judgment Rating
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Oldest form of rating, premium determined by considering individual risk.
|
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Merit Rating
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Experience Rating, Retrospective Rating, Schedule Rating
|
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Misrepresentation
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written or verbal
misstatement of a material fact. It may be either intentional or unintentional. |
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Warranty
|
part of the policy. If it is breached, the insurer can void the policy.
|
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Representations
|
statements that the
applicant believes are true o a policy cannot be voided on the basis of a representation |
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Estoppel
|
This means the insurer can keep an allowance for expenses
|
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How does an Underwriter evaluate a risk?
|
nspection services,
government bureaus, insurance industry bureaus, financial information services, previous insurers, and the company's own claim files. |
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FAIR Credit Report
|
Prenotification is required for investigative reports but not regular reports.
|
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What is Adverse Selection?
|
High Risk. The tendency for people with a greaterthan-average exposure to loss to purchase
insurance |
|
Retrospective Rating
|
Retrospective rating is a type
of merit rating that bases the insured's premium on losses incurred during the policy period. |
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Certificate of Insurance
|
general summary of the policy's coverage.
|
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Fraud
|
always intentional and involves an all-out effect by one party to deceive and cheat the other.
|
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Estoppel
|
egal principle that states that
if one intentionally or unintentionally creates the impression that a certain fact exists, and an innocent party relies on that impression and is injured as a result, the guilty party may be legally prohibited from asserting that the fact does not exist. |
|
Nonrenewal
|
occurs when the insured
or the insurer decides to not continue coverage for another policy period after the current policy period expires. |
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Open Peril Policy
|
An open peril policy covers any
loss that is not specifically excluded by the policy. |
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Named Peril Policy
|
A named peril policy insures 8.
property against the perils specifically listed in the policy. |
|
Named Insured
|
named insured is the person,
business, or other entity named in the declarations to whom the policy is issued. |
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First Named Insured
|
When there is more than one named insured listed on a policy, the policy may assign a higher level of duties or rights to the first named insured, the person listed first on the declarations page.
|
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Additional Insured
|
In some circumstances, another individual or business may be listed on the declarations as an additional insured. An example is a mortgage company that has
an outstanding loan on the property. |
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Direct Loss
|
direct loss is financial loss resulting directly from a loss to property
|
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Indirect Loss
|
comes as a result, or
consequence, of the original loss. |
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Subrogation
|
transfers the insured's right to collect from a responsible third party to the insurance company.
|
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Assignment Condition
|
pecifies that a policy may not be transferred to anyone else without the written consent of the insurer, except in the event of the death of the named insured
|
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Inurance Policy Conditions
|
conditions that specify what the insured and insurer
must do when a loss occurs. |
|
Specific Coverage
|
property is specifically listed in the declarations and covered for a specific
amount. |
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Blanket Coverage
|
Blanket coverage insures more
than one item of property at a single location or one or more items of property at multiple locations. |
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Policy Period
|
Insurance policies specify the date and time, including where and in what time zone, coverage begins and ends.
|
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Coinsurance Condition
|
requires an insured to carry a certain amount of insurance, which is expressed as a
percentage of the property's value. |
|
Liability Loss
|
A liability loss occurs when a
person is responsible, or liable, for loss to another person or another person's property and is required to make financial restitution. |
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Negligence
|
lack of reasonable care
that is required to protect others from the unreasonable chance of harm |
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Proximate Cause
|
Proximate cause is one of the elements required to establish a charge of negligence. It is an action that, in a natural
and continuous sequence, produces a loss. |
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Absolute Liability
|
Absolute liability is imposed by law on those participating in certain activities that
are considered to be especially hazardous. Individuals involved in such activities may be held liable for the damages of another, even though the individual was not negligent. |
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Vicarious Liability
|
liability that a person or business incurs because of the actions of others, such as family members or employees.
|
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Third Party Losses
|
The insured is the first party. The insurance company representing the insured is the second party. The person
who sustained the injury or damage is the third party. |
|
Liability Policies
|
agree to pay on behalf of the insured all sums for which the insured becomes legally liable to pay as damages because of bodily injury or property damage
|
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Liability Policies - Supplementary Payments
|
Defense costs, postjudgrnent
interest, and premiums for certain types of bonds are examples of coverages that are usually included as supplementary payments. |
|
Aggregate Limit
|
limit that applies to all losses occurring within any one policy
period. An aggregate limit is not restored after payment of a loss. |
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Assumption of Risk
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Person knowingly exposes himself to danger or injury.
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Comparitive Negligence Law
|
A finding of liability may be made even when both parties have contributed to the loss,
with an award based on the extent of each party's negligence. |
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Special Damages
|
all direct and specific expenses involved in a particular loss, such as medical expenses, lost wages, funeral expenses, and the cost to repair or replace damaged property.
|
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Dwelling Policy
|
The dwelling policy provides
more limited property coverage than the homeowners policy. The unendorsed dwelling policy provides property coverage only, |
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Dwelling Policy Eligibility
|
To be eligible, a mobile
home must be permanently located. An apartment building may not contain more than four units. |
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Dwelling Policy Inclusions
|
A dwelling policy automatically includes coverage for the dwelling, other structures, personal
property, and fair rental value. Liability and medical payments coverage may be added by endorsement. |
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Coverage C Exclusions
|
Animals, motor vehicles, and most types of boats are excluded under Coverage C.
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DP-1 Automatic Coverage
|
The only perils that are
automatically covered under the DP-1 are fire, lightning, and internal explosion. |
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DP-1 Extended Coverage
|
Coverage for the extended
coverage perils and vandalism and malicious mischief is optional. |
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DP - 2
|
Automatically covers all of the
standard and optional perils available on the basic form: fire, lightning, the extended coverage perils, and vandalism and malicious mischief. |
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DP - 3
|
Called the special form. It
provides named peril coverage for personal property and open peril coverage for the dwelling and other structures. |
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How are Losses paid on DP1, DP2, DP3?
|
The DP-2 and DP-3 pay losses to the dwelling and other structures on a
replacement cost basis. Under the DP-1, losses are paid on an actual cash value basis. |
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Qualify for Replacement Cost Coverage
|
To qualify for replacement cost coverage, the insured must carry insurance equal
to 80% of the replacement cost of the building. |
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DP - 2, DP - 3, Coverage E
|
dditional living expense.
The DP-2 and DP-3 include Coverage E— additional living expense. It pays for additional living expenses the insured incurs after a covered loss, including reasonable motel, dining, laundry, and transportation expenses. T |
|
Dwelling Insurance - Glass Breakage
|
he glass or safety glazing material other coverage pays for breakage of glass or safety
glazing material and damage to covered property caused by glass breakage. It is included in the DP-2 and DP-3 but not the DP-1. |
|
Dwelling Policy with Broad Theft
|
redit cards, motor vehicles and their equipment, and property in the custody of
a cleaner are all excluded under the broad theft coverage endorsement. |
|
HO-5
|
The HO-5, the comprehensive form, provides open peril coverage for dwellings,
other structures, and personal property. |
|
HO-4
|
The HO-4 is designed for tenants. It provides broad coverage for personal
property and no coverage for the dwelling. |
|
HO-3
|
The HO.3 provides open peril coverage for the dwelling and named peril coverage for personal property. The HO-8 provides basic coverage for the dwelling and personal property. The HO-6 offers limited coverage for the dwelling and broad
coverage on personal property. |
|
Unendorsed Homeowners Policy
|
Up to two boarders per family
are allowed if the home is also occupied by the insured. An endorsement is required to insure a mobile home under a homeowners policy. The insured must live in the dwelling to qualify for homeowners coverage. |
|
Homeowners Liability Coverage
|
The liability coverage is
identical in all of the homeowners forms. The property coverage varies with the homeowners form selected. |
|
Perils Covered in All Homeowners forms
|
Fire, Theft, Volcanic Eruption, Smoke
|
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Collapse Additional Coverage
|
HO-8
|
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Special Limits under a Homeowners Policy
|
Animals, birds, fish, and
property of boarders are excluded. The items listed in the other answer choices are covered with no special limits of liability. |
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Which classes have special limits for personal property - theft
|
Firearms, Silverware, Jewelry
|
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Unendorsed Homeowners Policy - how are dwelling & structure losses paid?
|
eplacement cost. Losses to the
dwelling and other structures are paid on a replacement cost basis. |
|
All forms but HO-5
|
n all homeowners
forms except the HO-5, personal property losses are paid at actual cash value. The HO-5 provides replacement cost coverage for personal property. |
|
Medical Payments to Others
|
Injuries to the named insured
or regular residents other than resident employees are not covered. |
|
Personal Liability Coverage
|
The insurance company will
provide a defense for the insured at the insurer's expense, even when the charges are groundless. |
|
Homeowners Endorsement -
Business Pursuits |
This endorsement provides liability coverage for a business
conducted away from the residence premises. |
|
Homeowners Endorsement -
Personal Injury |
This endorsement modifies
the definition of bodily injury to include personal injury. |
|
Homeowners Endorsement -
Personal Property Replacement Cost |
This endorsement adds replacement cost coverage for personal property.
|
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Homeowners Endorsement -
Scheduled Personal Property |
This endorsement provides open peril scheduled
coverage for nine optional classes of property. |
|
HO-6 Coverage
|
In the HO-6, the accidental discharge or overflow of water or steam peril includes
coverage for the costs to tear out and replace any part of the building necessary to repair the system or appliance from which the water or steam escaped. |
|
HO-8 Coverage
|
Accidental and sudden
discharge of water from a plumbing system is covered in all forms except the HO-8. |
|
Coverage E of Homeowners Policy
|
The definition of bodily injury includes required care, loss of services, and death.
|
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Coverage E Standard Liability Limit
|
$100,000
|
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Coverage E of Homeowners Policy - Property Damage
|
The definition of property damage includes loss of use.
|
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Section 2, Homeowners Policy Exclusion
|
Excluded because the damage
was expected or intended by the insured. Excluded because the loss arose from the rendering of professional services. Excluded because the injury arose out of the ownership of aircraft. |
|
Insurance Company Cancellation
|
The insurance company may cancel a policy for any reason with 10 days' written notice to the insured during the first 60 days of a policy term.
|
|
Personal Auto Policy -
Name 4 Coverages |
Part A—liability coverage,
Part B—medical payments coverage, Part C—uninsured motorists coverage, and Part D—coverage for damage to your auto. |
|
Parked Car Damage
|
Part D coverage for damage to your auto covers physical damage losses to the
insured's car. |
|
Hit an Embankment
|
Part B—medical payments coverage provides protection for the named insured,
family members, and passengers in the named insured's auto for injuries received in an accident, regardless of who was at fault. |
|
Hit and Run Driver
|
A car operated by a hit-and-run driver
who cannot be identified is considered an uninsured motor vehicle. |
|
Damage to the car from falling object/tree
|
Damage caused by a falling object and breakage of glass are considered other than collision losses under Part D of the personal auto policy.
|
|
Damage to the car from other driver running stop sign
|
This would be considered a collision loss 12. under Part D of the personal auto policy
because it involves the impact of an auto covered by the policy with another vehicle. Part A—liability coverage would not cover damage to the insured's own car. |
|
Personal Auto Policy
What does Part A & B Cover? |
Part A—liability coverage covers damages for bodily injury or property damage that
an insured becomes legally responsible for because of an auto accident. Injuries to the named insured or the insured's family members would be covered under Part B—medical payments coverage. |
|
Personal Auto Policy
Medical Payments Coverage |
Medical payments coverage provides protection for the named insured, family
members, and passengers in the named insured's auto for injuries received in an accident, regardless of who was at fault. It is not a form of liability coverage for injuries sustained by passengers in another auto involved in an accident with the insured |
|
No Fault Insurance
|
Under a no-fault law, an insured driver is reimbursed by his own insurance company
for medical expenses and loss of wages arising out of an auto accident, regardless of who was at fault for the accident. |
|
Assigned Risk
|
Assigned risk plans insure motorists with poor driving records who are unacceptable
risks for most insurance companies. |
|
Personal Auto Policy -
Family Member |
The personal auto policy defines a family member as any person related to the named insured who is a resident of the insured's household
|
|
Part A -
Financial Responsibility |
The financial responsibility
provision under Part A—liability coverage states that the insurance company can certify the policy as proof of future financial responsibility. |
|
Out of State Coverage
|
The out-of-state coverage provision would amend the policy to reflect the state's higher financial responsibility limit.
|
|
Part C limit of liability provision
|
states
that the insurer will not pay any part of a loss that could be covered under a workers' compensation law. |
|
Nonowned Auto
|
Under physical damage
coverage, a temporary substitute auto is considered to be a nonowned auto instead of a covered auto. |
|
Loss Excluded under Part D
|
Damage due to freezing is
normally excluded under Part D. However, an exception is made when the damage results from the total theft of the auto. |
|
National Flood Deductible
|
The standard deductible is $500 under 8.the regular program and $1,000 under the
emergency program. Higher deductibles are available. |
|
Which Flood Insurance has a Deductible?
|
Both coverages do.
|
|
Who administers the NFIP?
|
It is managed by the Federal
Insurance Administration. |
|
Maximum Coverage under the Emergency Flood Insurance Program
|
additional coverage may be purchased: up to $250,000 for building coverage and up
to $100,000 for contents. |
|
Earthquake Coverage
|
The dwelling and homeowners
policies do not cover the earthquake peril. This coverage is provided by adding an endorsement to the dwelling or homeowners policy or buying a separate policy. |
|
Mobile Home Polcies
|
Mobile home policies include
coverage for contents and additional living expenses. |
|
Personal Inland Marine Policy
Personla Articles Form |
The personal articles form provides scheduled coverage for nine optional classes of personal property: jewelry,
furs, cameras, musical instruments, silverware, golf equipment, fine arts, stamp collections, and coin collections |
|
Personal Inland Marine Policy
Personal Property Form |
provides open peril coverage for personal property.
|
|
Personal Inland Marine Policy
Personal Effects Form |
covers an insured's
personal belongings, such as baggage, while traveling. |
|
Large Boat Coverage
|
This
coverage can be provided through inland marine forms, ocean marine policies, or specialized policies. |
|
Typical Outboard Motor Boat Policy Coverage
|
This insurance is written to cover the
physical damage exposure of boats. It is commonly provided under open peril inland marine floaters. |
|
Under NFIP Policy what pays replacement cost?
|
Single-family dwellings (other than mobile homes) are the only buildings that may be insured on a replacement cost basis under a flood policy
|
|
NFIP Coverage Begins
|
nless an exception applies, coverage does
not take effect until after a waiting period of 30 days following the date of application. |
|
Commercial Package Policy
|
Other types of coverage
besides property and liability may be included in a CPP. Ocean marine and aviation insurance are not eligible for the CPR |
|
CPP Eligble Policies
|
Most commercial coverages are eligible for the CPP, with the exception of ocean marine, aviation, workers'
compensation, and businessowners coverages. |
|
Common Policy Declarations
|
The common policy conditions are included in every CPP and every monoline policy issued using CPP forms.
|
|
Who may cancel a Commercial Package Policy?
|
First Named or Insurance Company
|
|
When can a transfer occur without written permission of the company
|
When the named insured dies, rights are transferred to the deceased's legal
representative while acting within this scope. |
|
Largest Office Building eligible for a Businessowners policy?
|
Office buildings that are no more than 6 stories high and contain no more than
100,000 square feet are eligible for the businessowners policy. |
|
2 Major Property Coverages provided by Businessowners policy
|
The two primary coverages in the businessowners property section are buildings and business personal property.
|
|
Presertvation of Property Additional Coverage
|
Preservation of property additional coverage covers loss from any cause of loss to property that was removed from the insured location to protect it from damage by a covered peril. Coverage applies for up to 30 days after the property is first moved.
|
|
Standard Deductible for a Businessowners policy
|
The standard deductible is $500.
|
|
Optional Coverages for BOP
|
Optional coverages are usually preprinted
in the policy but apply only if they are designated in the declarations. |
|
Coverage included in BOP
|
The businessowners liability coverage
includes the following coverages: BI liability, PD liability, personal and advertising injury liability, and medical expense. |
|
Personal Property covered in BOP, Building Coverage
|
Property owned and used by the
insured in the business, such as photocopy machines and furnishings in the insured's private office, would be covered under business personal property coverage. |
|
Personal Property covered in BOP
|
Property owned and used by
the insured in the business and tenants' improvements and betterments made at the tenant's expense that cannot be legally removed are covered under business personal property coverage. Materials that are on or within 100 feet of the premises being used for alterations, such as the cans of paint, are covered under building coverage. Personal property used to maintain or service the building, such as the fire extinguishers in, are also covered under building coverage. |
|
Property Covered under BOP policy
|
The pollutant cleanup and
removal additional coverage pays the costs to extract pollutants from the insured's premises, not property belonging to others. |
|
2 Conditions to be met for a loss to be covered under the utility services, direct damage endorsement
|
Two conditions must be met for a loss to be
covered under the utility services—direct damage endorsement: the damaged property must be scheduled for coverage on the endorsement, and the service interruption must be caused by a covered cause of loss. |
|
Components of a Commercial Property Coverage part
|
A commercial property coverage part
must include the following components: common policy declarations, common policy conditions, commercial property declarations, commercial property conditions, one or more commercial property coverage forms, causes of loss form, and any mandatory endorsements. |
|
Commercial Property Coverage Form -
Builders Risk |
The builders
risk coverage form covers buildings under construction. |
|
Commercial Property Coverage Form -
Legal Liability |
covers the insured for liability arising
out of negligent damage to the property of others in the care, custody, or control of the insured. |
|
Commercial Property Coverage Form -
Extra Expense |
reimburses the insured
for extra expenses required to avoid a suspension of business and continue operations. |
|
Commercial Property Coverage Form -
Building anad Personal Property |
covers buildings, the
insured's business personal property, and the personal property of others located at the business premises. |
|
Commercial Property Coverage Form -
Condominium Association |
insures a
condominium association against direct physical loss or damage to buildings, business personal property, and personal property of others in the care, custody, or control of the association while it is located at the premises. |
|
Commercial Property Coverage
Perils Covered in the Cause of Loss - Basic Form |
Explosion and Smoke
|
|
Earthquake and Volcanic Eruption - Hours per Incident?
|
Under this endorsement, all earthquake
shocks or volcanic eruptions that occur within any 168-hour period constitute a single earthquake or volcanic eruption. |
|
Which causes of loss form provides open peril coverage?
|
e basic and broad causes of loss forms
are named peril forms. |
|
Loss caused by sprinkler leakage covered under which commercial property causes of loss form
|
Basic, Broad, Special
|
|
Loss caused by collapse covered under which commercial property causes of loss form
|
Broad and Special
|
|
Commercial Property Endorsement -
Value Reporting Endorsement |
This
endorsement provides coverage based on the actual values of property at certain locations at specific times. |
|
Commercial Property Endorsement -
Spoilage Endorsement |
This endorsement
is used with the building and personal property and condominium commercial unit-owners coverage forms. It adds coverage for the insured's perishable stock—personal property that must be maintained under controlled conditions to protect it from loss or damage. |
|
Commercial Property Endorsement -
Ordinance/Law Endorsement |
coverage
for demolition costs and increased construction costs required or regulated by law or ordinance. |
|
3 types of coverages provided by the Building and Personal Property Coverage
|
Under the building and personal property
coverage form, the insured may select one or more of the following coverages: building, business personal property, and personal property of others. |
|
Building and Personal Property Coverage -
Inventory |
Inventory would be covered
under business personal property coverage. |
|
Building and Personal Property Coverage -
New Building |
The newly acquired or constructed property
coverage extension covers new buildings that are being built on the described premises and buildings the insured acquires. The most that will be paid under this coverage extension is $250,000 per building. |
|
Building and Personal Property Coverage -
Personal Effects Prop of Others |
The personal effects and property of others
coverage extension is available even if the insured has not purchased personal property of others coverage, as long as the coinsurance requirement is met. |
|
Building and Personal Property Coverage -
Special Loss Valuation |
Stock, glass, valuable papers
and records, and tenants' improvements and betterments all have special valuation requirements. |
|
Building and Personal Property Coverage -
Vacant Building |
Damage in a vacant building
due to sprinkler leakage is covered if the system was protected against freezing. |
|
Builder's Risk Coverage Form
|
The builders risk coverage form covers
the building under construction and its foundation. Fixtures, machinery, equipment used to service the building, and the insured's building materials and supplies can be covered if they will become a permanent part of the building and are within 100 feet of the building |
|
Builders Risk Coverage Form -
Vacant Building |
The builders risk coverage form does
not have a vacancy condition because buildings under construction are not considered vacant. |
|
Definition of Business Income
|
definition of business income includes
net income that would have been earned if the loss had not occurred and the cost of continuing normal operations. |
|
Business Income -
Extra Expense Coverage |
The business income with extra expense
coverage form covers money spent to avoid or minimize a business shutdown. |
|
Perils Included in Cause of Loss - Broad Form
|
Collapse,
Weight of Ice, Snow, Sleet Falling Objects Water Damage |
|
Ocean Marine Insurance -
Hull Insurance |
ocean marine hull
insurance provides coverage for physical damage to the ship. |
|
Ocean Marine Insurance -
Protection and Indemnity Insurance |
Ocean marine protection and indemnity
insurance covers a variety of types of liability, such as damage to cargo through negligence and damage to other property or another boat resulting from collision. |
|
Ocean Marine Insurance -
Cargo Insurance |
Ocean marine cargo
insurance covers goods while they are in transit over water. |
|
Ocean Marine Insurance -
Freight Insurance |
Ocean marine freight
insurance protects the insured against the loss of shipping costs. |
|
Ocean Marine Insurance -
Jettison |
voluntary action to rid the ship
of cargo to prevent further peril. Jettison is permitted if the action is taken to save the remaining property. The loss incurred by sacrificing a portion of the cargo will be reimbursed. |
|
Ocean Marine Insurance -
General Average Losses |
A general
average loss is one in which a partial loss resulting from a sacrifice of cargo to save remaining property is shared by all other property owners, including the owner of the ship. |
|
Ocean Marine Insurance -
Nationwide Definition |
The nationwide definition was developed
to identify the kinds of risks that are eligible for either ocean or inland marine insurance. |
|
Commercial Inland Marine Insurance -
Categories of Risk |
Imports and
exports are covered under ocean marine insurance. Personal property floater risks are covered by personal inland marine insurance. |
|
Commercial Inland Marine Insurance -
Commercial Package Policy |
Filed
classes of inland marine insurance can be written under the commercial inland marine coverage part of the commercial package policy. They include the following coverage forms: mail, physicians and surgeons equipment, theatrical property, film, commercial articles, accounts receivable, valuable papers and records, signs, jewelers block, floor plan, equipment dealers, and camera and musical instrument dealers. |
|
Motor Truck Cargo Policy
|
This form protects the carrier, instead of
the shipper, for liability for loss to domestic shipments in transit. |
|
Bailee's Customer Policy Covers
|
A bailee's customer policy reimburses the
insured for damage to a customer's property that is in his care, regardless of whether the insured is liable for the damage, as long as the damage resulted from a covered peril. |
|
Breach of an Implied Warranty
|
Implied warranties
are an important concept in ocean marine insurance. They are not written into the policy but carry the same weight as those that are written. Breach of an implied warranty can void the contract. These warranties include seaworthiness (i.e., the vessel must be fit for the voyage, must not be overloaded, and must have a competent crew), conditions of cargo (i.e., the cargo must be warranted to be sound and packed properly), legality (i.e., the trip must involve a lawful enterprise), and no deviation in voyage (i.e., the ship must follow an agreed route, with no changes in destination and no untoward delays). |
|
Forms included in Commercial Inland Marine Coverage Part
|
1. One or more of the 12 filed coverage forms,
2. Commercial Marine Conditions form 3. Commercial Marine Declarations form 4. Common Policy conditions and declarations |
|
Commercial Inland Marine Insurance -
Proof of Loss |
he commercial inland marine conditions
form states that the insured must send a signed, sworn statement of loss within 60 days after the insurer requests it. |
|
Commercial Inland Marine Insurance -
Pays with 2 insurances |
he other insurance condition in the
commercial inland marine conditions form states that if the insured has other insurance that is written on the same basis as the commercial inland marine form, the commercial inland marine form pays on a pro rata basis. If the other coverage is not written on the same basis, commercial inland marine coverage is excess over any other insurance that applies to the loss, regardless of whether the insured can collect under the other insurance. |
|
Commercial Inland Marine Insurance -
Mail Coverage |
he mail coverage
form provides open-peril coverage against loss to property in transit by registered mail, first class mail, certified mail, or express mail. Food stamps and money may be covered when sent by registered mail. |
|
Physicians and Surgeons Coverage Form
|
This form covers
medical and dental instruments on and off the premises, furniture and fixtures at the office and the insured's interest in improvements and betterments. Radium is not covered. |
|
Physicians and Surgeons Coverage Form -
Coverage |
he physicians and surgeons equipment
coverage form covers collapse of a building or structure when it is caused by one of the perils specified in the form and damage caused by theft or attempted theft to the building. |
|
Theatrical Property Coverage Form
|
ehicles are covered if they are actually
used on the stage in the covered production. Admission tickets are not covered property. Loss by theft from an 23. unlocked, unattended vehicle is excluded. |
|
Film Coverage Form
|
The film coverage
form covers exposed motion picture film, soundtracks, video tapes, and magnetic tapes used in the production scheduled in the declarations and that the insured owns or has in his custody or control. It does not cover cut-outs, unused footage, positive prints or films, or library stock. |
|
Account Receivable Coverage Form
|
he accounts receivable coverage form
covers loss of records when removed from the premises to protect them from imminent loss. Removal coverage applies only if the insured gives written notice of the removal within 10 days. |
|
Sign Coverage Form
|
Loss caused by
artificially generated current that creates a short circuit or other electrical disturbance within a covered item is not covered. |
|
Jewelers Block Coverage -
Stock in Trade |
A jeweler's stock in trade is not covered
while it is in transit by mail unless it is sent by registered mail. Such property is also not covered while being worn by a family member or at an exhibition promoted or financially assisted by a trade association. |
|
Jewelers Block Coverage -
Coverage for Loss |
he show windows
optional coverage covers theft of stock from a show window when the window is cut or smashed. Money coverage covers theft of money from locked safes or vaults on the insured's premises. Theft from any vehicle is excluded unless the insured, an employee, or other person whose only duty is to attend the vehicle is actually in or on the vehicle when the theft occurs. |
|
Jewelers Block Coverage -
Insured's Requirements |
e jewelers block coverage form requires
the insured to take a physical inventory at least once every 12 months and maintain detailed records of inventory, purchases, sales, property of others, and property off premises. These records must be retained for three years after the policy ends. |
|
Jewelers Block Coverage -
Floor Plan Coverage Form |
Coverage under the floor plan form is
written on a reporting basis. The insured must file reports of values within 30 days after the end of each month. |
|
Equipmenet Dealers Coverage Form -
Businesses Insured |
The equipment dealers
coverage form covers mobile equipment and construction equipment dealers. It covers the insured's stock in trade as well as customer property in the insured's care, custody, or control. Watercraft is not covered under the form. |
|
Camera and Musical Instrruments Coverage Form
Covered Losses |
This form excludes loss arising out of
artificially generated current that creates a short circuit or other electrical disturbance within an item covered under the policy. |
|
Electronic Data Processing Equipment Floater
|
The electronic data
processing equipment floater provides open-peril coverage for computer hardware, software, and data that is owned by the insured or in the insured's care, custody, or control. Property in transit is covered. Optional breakdown coverage insures against damage to the equipment caused by mechanical breakdown, electrical disturbances, and temperature changes. |
|
Installation Floater
|
An installation
policy covers loss to machinery, equipment, building materials, and supplies in transit to or being used with or during the course of installation, testing, building, renovating, or repair. |
|
3 Business Liabilities that are covered under the Commercial General Liability Policy
|
The three major business liability
exposures that can be covered under a commercial general liability policy are premises and operations, productscompleted operations, and indirect/ contingent. |
|
Cover under an occurence is triggered on a CGL when -
|
With an occurrence policy, the policy that
was in effect at the time the loss occurred will apply to the loss, even if the injured party makes the claim years after the policy expired. |
|
True statements about 60 day basic extensded reporting period
|
When a claimsmade
policy is terminated, a 60-day basic ERP automatically becomes available. The insured does not have to apply for it, and no premium is charged. It provides automatic coverage for any valid claim made during the 60 days after the policy expires, as long as the incident occurred between the expiring policy's retroactive date and its expiration date. |
|
Purpose of the retroactive date in a claims made form
|
The retroactive date provides some
protection against losses that occurred before the claims-made form was written. |
|
Cover under a claims-made is triggered on a CGL when -
|
Under the claims-made form, the policy
that was in effect when the claim is first filed will apply to the loss, even if the loss occurred before the policy was in effect. |
|
CGL Coverage applies -
Coverage A |
This coverage pays sums the
insured becomes legally obligated to pay as damages because of bodily injury or property damage to which the insurance applies. |
|
CGL Coverage applies -
Coverage B |
This coverage applies to
offenses such as libel or slander. |
|
CGL Coverage applies -
Coverage C |
This coverage pays for
medical expenses incurred for bodily injury caused by an accident on premises the insured owns or rents. |
|
CGL Coverage Exclusions -
Coverage A |
Coverage A excludes
property damage to property owned by the insured and property damage to property in the care, custody or control of the insured. |
|
Define cardiac output?
What does venous return mean? |
Cardiac output (CO) - volume of blood ejected from one ventricle per minute
Venous return (VR) is the volume of blood returning to the RA from vena cava or to LA from pulmonary vein per minute |
|
In the CGl, who is considered an insured?
|
In the CGL, who is considered an insured
under the policy depends on how the named insured is designated in the CGL declarations: as an individual, partnership or joint venture, limited liability company, or organization other than a partnership, joint venture, or limited liability company. 2. B. With an occurrence policy, the policy that was in effect at the time the loss occurred will apply to the loss, even if the injured party makes the claim years after the policy expired. |
|
2 Methods used to pay a loss when 2 insurance apply to the claim
|
Contribution by equal shares and
contribution by limits. Under contribution by equal shares, all insurers contribute equally up to the policy with the lowest limit. At that point, the insurer with the lowest limit stops paying since it has already paid its policy's limit, and the other insurers share the remainder of the loss. This continues either until the loss is paid in full or each company has paid its limit. Contribution by equal shares applies when all policies involved specify this method of handling other insurance. If they don't, contribution by limits applies. Under this method, each company pays a proportion of the loss equal to the proportion its policy limits bear to the total amount of insurance available. |
|
Difference between pollution liabilty full and limited coverage?
|
The difference between the two pollution
liability coverage forms is that the pollution liability coverage form covers clean-up costs and the limited form does not. |
|
Products Completed Operations Exposure
|
The products-completed operations hazard
includes all BI and PD occurring away from the premises owned or rented by the insured, and arising out of the insured's product or work, other than products that are still in the insured's physical possession and work that has not yet been completed or abandoned. |
|
CGL Business Exclusions
|
usinesses face
a number of liability exposures, including work-related injuries to employees, pollution, contractual agreements in which the insured assumes liability, and ownership, maintenance, or use of autos, watercraft, and aircraft. However, because of the unique nature of these liability exposures, they are either excluded outright from the CGL policy or may be covered only in certain circumstances or for limited amounts. More complete protection for these liability exposures is available under contracts specifically designed to cover them |
|
60 Day Basic ERP
|
The 60-day basic ERP automatically
becomes available when a claims-made policy is terminated. It provides automatic coverage for any valid claim made during the 60 days after the policy expires, as long as the incident occurred between the expiring policy's retroactive date and its expiration date. |
|
Mobile Equipment defined in a CGL
|
Bulldozer, Road Construction Grader. Both of these items
are specifically listed in the policy's definition of mobile equipment. An auto is a land motor vehicle, trailer, or semitrailer designed for travel on public roads, including any attached machinery or equipment. |
|
CGL Coverage for Breach of Contract
|
Losses arising out of breach of contract 30.
are not covered. |
|
CGL Business Exclusions -
Coverage C |
Coverage C
excludes injuries to the insured's employees and injuries that occur while participating in athletics. |
|
Automatic Coverage under CGL
|
CGL forms
automatically cover newly formed or acquired organizations as a named insured under certain circumstances. However, coverage is not automatically provided for newly acquired or formed partnerships, joint ventures or limited liability companies. |
|
CGL Policy Non Renewal
|
The nonrenewal condition
states that if the insurer decides to not renew the CGL policy, it must mail or deliver written notice of nonrenewal to the first named insured at least 30 days before the expiration date of the policy. |
|
Commercial Auto Insurance -
Business Auto |
The business
auto coverage form covers a business's owned, nonowned and hired autos against liability and physical damage losses |
|
Commercial Auto Insurance -
Business Auto Physical Damage |
covers a business's owned or hired
business autos for physical damage only. |
|
Commercial Auto Insurance -
Garage |
The garage coverage form is designed for
various types of vehicle dealers. It includes coverage for liability arising out of auto and garage operations, physical damage, and garagekeepers' losses arising out of owned, nonowned, and hired autos. |
|
Commercial Auto Insurance -
Truckers |
The truckers
coverage form is written specifically for the trucking industry. |
|
Commercial Auto Insurance -
Motor Carrier |
The motor carrier
coverage form is an alternative to the truckers coverage form. It can be used to cover anyone who transports property by auto in a commercial enterprise. |
|
Commercial Endorsement to extend coverage to immediate family members
|
The individual named insured
endorsement provides coverage similar to that provided under the personal auto policy to family members of the named insured while using any auto. |
|
Medical Payments, Uninsured Motorists, Underinsured Motorists - CAI
|
These coverages are not included in any
of the commercial auto coverage forms. They must be added to the policy by endorsement. |
|
Mobile Equipment Exception -
CAI |
Mobile equipment is usually excluded
under the business auto coverage form. However, an exception applies under liability coverage when the mobile equipment is being towed or carried by a covered auto. |
|
Buisness Auto Liability Coverage
|
his coverage
pays all sums an insured legally must pay as a covered pollution cost or expense to which the policy applies as long as certain conditions are met. |
|
Who is insured under BALC?
|
Named Insured, Other using auto with permission, others who become liable for the conduct of an insured.
|
|
Exclusins under BALC?
|
Liability assumed under a contract that i considered an insured contract, damage to the insured own auto, liability for property in the insureds custody
|
|
Is Theft paid for under BALC comprehensive coverage?
|
Yes
|
|
BALC Garage Policy
|
There are two covered
auto symbols that are unique to the garage coverage form. Symbol 30 is used for customers' autos left with the insured for service, repair, storage, or safekeeping. Symbol 31 is used for physical damage coverage only for the dealers' autos. |
|
Direct Damage Garagekeepers insurance
|
Direct damage garagekeepers insurance
covers physical damage to customers' property that is in the insured's custody, regardless of whether the insured is liable for the damage. |
|
BALC Truckers Coverage Form
|
The purpose of the truckers coverage form
is to provide coverage for businesses that set themselves out for hire to haul the goods of others. |
|
BALC MCS-90 Endorsement
|
The MCS-90 endorsement adds coverage
for public liability for bodily injury, property damage, and environmental restoration to the commercial auto policy. |
|
BALC Mobile Equipment Endorsement
|
The mobile equipment endorsement
changes the business auto coverage form by allowing mobile equipment to be considered a covered auto under the policy. |
|
Commercial Coverage -
Robbery |
crime forms, robbery is defined as the
unlawful taking of property from the care and custody of another person. The robber must have caused or threatened to cause bodily harm to the person being robbed or must have committed an obviously unlawful act that is witnessed by the person being robbed. |
|
Commercial Coverage -
Definition of a burglary |
Although burglary
is not specifically defined in the crime forms, it still has a specific meaning in the insurance industry. Burglary is the taking of property from inside the premises by a person unlawfully entering or leaving the premises. There must be evidence of forcible entry or exit, such as marks made by tools, explosives, chemicals, or electricity. There is no requirement that the property be taken from a custodian or watchperson. |
|
Commercial Coverage -
Definition of Theft |
Theft means the unlawful taking of money,
securities or other property. This broad term includes burglary, safe burglary and robbery. |
|
Commercial Coverage -
Employee Theft |
Employee Theft coverage pays for loss or
damage to money, securities and other property. |
|
Commercial Coverage -
Defense Costs |
Under forgery or alteration coverage, if the
insured is sued for refusing to pay a forged or altered instrument and obtains the insurer's written permission to defend the suit, the insurer will pay reasonable defense costs incurred by the insured. |
|
Commercial Coverage -
Who is a Custodian? |
A custodian is
someone who has care or custody of property inside the premises. It includes the insured, the insured's partners or members, or any employee. It does not include a watchperson or janitor. |
|
Commercial Coverage -
Crime Insurance Policy |
Securities are instruments or contracts
that represent money or property. Checks, drafts, bonds, certificates of deposit, stock certificates, stamps, and credit card receipts are all considered securities. |
|
Commercial Coverage -
Computer Fraud Coverage |
Computer fraud coverage covers loss of
or damage to money, securities, and other property due to the use of a computer to fraudulently transfer that property from inside the premises or banking premises to a place or person (other than a messenger) outside the premises. |
|
Commercial Coverage -
Proof of Loss |
If a loss occurs, the insured must provide a
sworn proof of loss within 120 days. |
|
Commercial Coverage -
Outside Coverage Territory |
The coverage territory for the crime
policy includes the United States and its territories and possessions, Puerto Rico, and Canada. Under employee theft coverage, losses that occur outside the coverage territory are covered when the employee is temporarily outside the territory for 90 days or less. |
|
Commercial Coverage -
Purpose of Fidelity Bond |
The purpose of a Fidelity bond is to
guarantee an employee's honest discharge of duty and protect the insured against dishonest acts by employees. |
|
Workers Compensation -
Prove Employer Liable? |
No
|
|
Worker's Compensation -
Compensable Injury |
Work-related injuries must arise out of
employment and during the course of employment to be compensable. Time, place, and circumstances are all considered in making this determination. |
|
Worker's Compensation -
Types of Benefits Paid |
Workers'
compensation laws pay benefits in four categories: disability/loss of income benefits, medical benefits, survivor/death benefits, and rehabilitation benefits. They do not pay benefits for pain and suffering. |
|
Worker's Compensation -
Part One |
Workers' Compensation
pays all compensation and other benefits required of the insured by the workers' compensation law in the state or states where the insured's business operates. |
|
Worker's Compensation -
Part Two |
Employers Liability covers
the insured for sums the insured becomes legally obligated to pay under common law because of a work-related injury or occupational disease. |
|
Worker's Compensation -
Part Three |
Other
States may be used to provide coverage for states that are not listed in the information page for part one coverage. |
|
Worker's Compensation -
Part Four |
our Duties if Injury Occurs addresses
the insured's obligations when an injury occurs for which there may be coverage. |
|
Worker's Compensation -
Part Five |
Premium explains how the cost
of the policy is determined |
|
Worker's Compensation -
Part Six |
Conditions sets forth the conditions that
apply to the policy, such as cancellation procedures. |
|
Worker's Compensation -
State Exemption |
Every state has some exempt classifications,
but the majority of the nation's employees are covered under workers' compensation laws. |
|
Commercial Insurance, Misc
Farm Coverage |
armers' businesses and homes are often at
the same location, so they need insurance that will cover both their personal and business exposures to loss. The Farm coverage part includes several Farm Property coverage forms that cover both the personal and business property of the farmer and a Farm Liability coverage form for the personal and business liability exposures of the farmer. |
|
Commercial Insurance, Misc
Farm Coverage, Types |
he Farm coverage part includes both
Property and Liability coverage. |
|
Commercial Insurance, Misc
Farm Coveage, Items |
Buildings-Equipment-Livestock, Liability from farm operations, farm dwelling and personal property
|
|
Commercial Insurance, Misc
Equipment Breakdown Protection |
One breakdown means that if an initial
breakdown causes other breakdowns, all will be considered a single breakdown. All breakdowns at any one premises that manifest themselves at the same time and are the direct result of the same cause will be considered one breakdown. |
|
Commercial Insurance, Misc
Equipment Breakdown Protection, Temp Repairs |
is coverage extension covers the
reasonable cost of temporary repairs and expedition (speeding up) of permanent repairs |
|
Commercial Insurance, Misc
Equipment Breakdown Protection, Not Covered |
nder the Equipment Breakdown
Protection coverage form, breakdown means the following types of direct physical loss that cause damage to covered equipment and necessitates its repair or replacement: failure of pressure or vacuum equipment, mechanical failure, including rupture or bursting caused by centrifugal force, and electrical failure, including arcing. Choice B is specifically excluded under this definition. |
|
Commercial Insurance, Misc
Aviation Policy, Hull Damage |
Hull coverage provides Physical Damage
coverage for the aircraft. |
|
Commercial Insurance, Misc
Aviation Policy, Liability |
viation Liability insurance covers various
liability exposures of owners of aircraft. |
|
A business that wants coverage for its liability for employment-related acts can obtain it by purchasing
|
Commercial General Liability Insurance or Employment Practices Liability Insurance
|
|
Purpose of Difference in Conditions Insurance?
|
his coverage is provided by Employment
Practices Liability insurance. The purpose of Difference in Conditions insurance is to cover most of the exclusions in the Commercial Property coverage part. |
|
Commercial insurance for more liability insurance
|
ommercial Umbrella policies provide
catastrophic Liability coverage for business risks. |
|
Dirrence in Conditions Insurance
|
Difference in
Conditions insurance is written to exclude the basic fire and extended coverage perils but include most other insurable perils that are not covered under Commercial Property coverage. Consequently, it is written in conjunction with policies providing the basic coverage excluded by the DIC policy. DIC policies are usually written on large risks with a high deductible. |
|
Difference between a Fidelity bond and a Surety bond?
|
Fidelity bond is essentially a guarantee
that certain acts on the part of the employee will not be committed. Surety bonds guarantee that certain things will happen. In broad terms, Surety bonds guarantee that someone will faithfully perform whatever he agrees to do, or someone will make a payment as agreed upon by that person and another party. |
|
What are the parties to a Surety bond
|
here are 3 parties to a Surety bond: the
principal, the obligee, and the surety. |
|
Contract Bonds
Public Officail Bond |
ublic official bonds
guarantee that public officials will handle public money correctly and otherwise perform their duties faithfully and honestly. |
|
Contract Bonds
Court Bond |
Fiduciary bonds and court bonds are
2 types of judicial bonds |
|
Contract Bonds
Bid Bond |
Contract bonds guarantee the fulfillment of
contractual obligations. |
|
Contract Bonds
Supply Bond |
Contract bonds guarantee the fulfillment of
contractual obligations. |
|
Contract Bonds
License and Permit Bond |
License and permit bonds are sometimes
required in connection with the issuance of licenses by government agencies. They guarantee that the person who posts the bond will comply with all applicable laws pertaining to their activities. |
|
Contract Bonds
Completion Bond |
Contract bonds guarantee the fulfillment of
contractual obligations. |
|
Contract Bonds
Fiduciary Bond |
Fiduciary bonds and court bonds are
2 types of judicial bonds. |
|
Contract Bonds
Performance Bond |
Contract bonds guarantee the fulfillment of
contractual obligations. |
|
Contract Bonds
Payment Bond |
Contract bonds guarantee the fulfillment of
contractual obligations. |
|
What Type of items can be insured under the Farm Property Coverage
|
There are 2 types of property that can
be insured under the Farm Property coverage forms or separately under their own specialized coverage forms: mobile agricultural machinery and equipment and livestock. |
|
Equipment Breakdown Coverage - What is Covered
|
Business income and/or extra expense
losses, expediting expenses, and spoilage damage are all coverage options in the Equipment Breakdown Protection coverage form. |
|
Aviation Policy
2 Coverages |
Aviation policies typically include Liability
and Physical Damage coverage. |
|
How do deductibles apply in the Equipment Breakdown Protection?
|
eductibles apply separately for each
applicable coverage unless the deductibles are shown as combined for any two or more coverages. Depending on the coverage, the deductible may be expressed as a dollar amount, a time limit, a percentage of loss, or a multiple of daily value. |
|
Equipment Breakdown Protection - Suspension Provision
|
he insurer may immediately suspend
coverage whenever covered equipment is found to be in or exposed to a dangerous condition. Suspension applies only to that particular equipment and takes effect as soon as written notice is delivered to the insured. |
|
What is covered with Aviation Physical Damage?
|
Aviation
Physical Damage insurance is similar to the Comp and Collision coverages provided by auto insurance. It covers the complete aircraft, including its airframe, engines, controls, and electronic navigation and communications equipment. It does not cover personal effects. |
|
Purpose of Directors and Officers Liability Insurance
|
Directors and Officers Liability insurance
provides Liability coverage for directors and officers of corporations who may be sued as individuals by stockholders. |
|
What general surety bond category guarantees
that the principal will fulfill certain obligations set forth by law? |
Judicial bonds. This category of surety
bonds guarantees that the principal will fulfill certain obligations set forth by law. |
|
Individuals who are entrusted with the care,
control, or management of others' property might require what type of bond? |
A Fiduciary bond. Fiduciary bonds are
commonly used to bond persons appointed by a court of law to manage the property of others. |
|
The newly elected treasurer of a certain state must
post a bond to guarantee that she will handle money correctly and perform her duties honestly. What type of bond would she obtain? |
A Public Official bond. Public Official
bonds guarantee that public officials will handle public money correctly and otherwise perform their duties faithfully and honestly. |