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104 Cards in this Set
- Front
- Back
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2 kinds of torts
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1. unintentional tort
2. intentional tort |
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What is the rational used by the courts for imposing strict liability in certain instances?
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to place a greater responsibility for losses, which are likely to occur, on those who are in the best position to control them.
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2 examples of activities for which a person might be deemed at Law to be strictly liable
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1. The lighting of fire
2. injury or damage arising out of the keeping of dangerous things (wild animals) |
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What factor is the key in determining whether one is an occupier of property?
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Any person who exercises control over the premises is deemed to be an occupier
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State the common duty owed by occupiers to provide persons entering into the premises
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Should take such care in all circumstances to ensure the visitor will be reasonably safe in using the premises
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to what extent is the liability of a landlord of a building having multiple occupancy limits
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injury or damage arising out of the conditions of the common areas
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identify the 2 categories of compensatory damages that may be awarded by the courts and provide 1 example of each
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1. General damages e.g. future earnings
2. Special damages e.g. Doctor charges |
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in some cases a court award may be sought if for no other reason than to establish the validity of the plaintiffs claim. What is the name given to the damages awarded in such instances
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nominal damages
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What is the coverage territory insured under the commercial general liability policy
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canada & usa including its territories and possessions
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identify the 2 conditions that apply before payment will be made for bodily injury or property damage which results from the use of the insured's products outside the coverage territory
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1. product was madeour sold in the coverage territory
2. suit for damages must be brought in the coverage territory |
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indicate what factors must be proven before the insurer will agree to provide coverage for any injuries caused to your clients customers as a result of the use of force to eject then from the premises
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1. reasonable force was used
2. Such force was used to protect persons or property |
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provide a brief explanation of any 2 features of claims made liability policies
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1. It is not necessary to determine when the injury or damage occurred. It is designed to have 1 and only 1 policy respond to any claim. That being the policy which is in effect at the time the claim is made
2. responds only to those claims which take place on or after the retroactive date shown on the policy |
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What additional coverage form or endorsement would you recommend be purchased by an insured who is changing from a claims made to an occurrence policy
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The extended reporting period endorsement
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Your client owns & operates a mobile welding business. The welder is permanently attached to the chassis of the 3/4 ton truck used by the business. indicate the extent of the coverage provided under the commercial general liability policy for this exposure
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Will insure only those claims for bodily injury & property damage which arise out of the operation or use of attached equipment while at the site of use or operation of such equipment
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indicate the method of payment for goods being described under each of the following:
1. Payment is made either on presentation of the invoice or at some specified future date 2. arrangements for payment are made between the buyers and alerts bank |
1. draft
2. letter of credit |
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excluding buyers and sellers identify 2 other parties which might have an insurable interest in a policy of ocean Marine cargo insurance
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1. carriers
2. financial institutions |
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3 conditions necessary to establish negligence
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1. The defendant owed a duty of care to the plaintiff
2. The defendant breached the duty 3. The plaintiff suffered damages because of the negligence of the defendant |
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3 remedies available to the court when there have been a beach of contract
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1. enforce specific performance of the contract
2. provide payment of damages to the injured party 3. Grant injunction stopping the party to the contact from performing certain acts |
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a judgement against the insured is made in a US court and damages are awarded in US funds. is the insurers obligation for payment affected in any way in this instance
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funds are to be paid in Canadian currency
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The insurer has decided to terminate the policy because of the insureds poor claim record. When the policy is issued in more than 1 name who is the notice and refund sent
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1st named insured on the policy
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The insured may be sued by a claimant when it fails to pay the amount of the award. how long after such a right of action does the claimant have to file an action against the insurer
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1 year from the time the action arose
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Your clients are tenants in a small commercial mall. The value of the building is 1.5 million. How much tenants legal liability coverage would you recommend they purchase
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Should purchase only such amounts as would be necessary to replace that portion of the building occupied by them
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The policy provides for payment of medical payments without regard to Fault. List 2 advantages which insurers hope to gain by providing such payments under the policy. Give 2 persons excluded.
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1. potential for claims alleging negligence is reduced
2. a legal confrontation with the injured party for payment of such expenses is avoided. Excludes insured & insured's employee's |
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identify 2 coverages provided by SPF #1 owners form which extends to automobiles rented for short periods (while vacationing)
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3rd party liability
section B - accident benefits |
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When automobiles owned by the insured's employee's are used in the business the employer has a non owned automobile liability exposure. identify the policy which can be purchased by the employer to insure this exposure
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SPF #6 standard non owned vehicle
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While the SPF #6 can be provided on a standalone basis it is not normally done in this way. explain the usual manner in which this coverage is provided to business owners
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coverage is usually provided as an endorsement to the commercial general liability policy
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The insured purchased the following physical damages coverage under the SPF #4. How would the deductible be applied by the insurer in the event of a loss.
1. collision or upset 2. comprehensive |
1. deducible is applied to each and every loss
2. Only 1 deductible is applied regardless of the number of vehicles |
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When your client purchased comprehensive excluding collision or upset and open lot pilferage coverages under the SPF #4 they choose to insure on a 80% Co insurance basis as opposed to the monthly average basis. a $12,000 car was stolen. When the values is all cars insured were added together your client insured only 60% off value. What effect would this have on the amount of the payment under the policy
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The insurer agrees to waive the application of any penalty
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2 implied warranties relating to ocean Marine cargo insurance policies and provide a brief explanation of each
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1. legality - venture must be legal
2. No delay - the voyage well start within a reasonable time 3. No deviation - no deviation from most direct route |
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indicate when the coverage commences and ends under the transit clause contained in the Institute cargo clauses
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It commences from the time the goods leave the shipping warehouse and arrives at the destination indicated in the policy
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briefly state how insurer measures the extent of the damages caused to insured cargo
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percentage of the insured value lost
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Your clients overvalued the shipment when they submitted their report to the insurer. amount reported was $116,000 but the actual value was $112,000. How much will your clients receive in the event if a total loss to the shipment
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$116,000
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After cargo has been unloaded from the ship it may sit at dockside or be warehoused for a Period of time before it is delivered to the consignee. How long will the policy continue to provide coverage for such shipments under the transit clause
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60 days
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retention can be used as a risk financing technique. identify 3 sources of funding when retention is used as a risk financing technique
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1. Current expensing of losses
2. unfunded reserves 3. funded reserves 4. borrowed funds 5. affiliated captive insurer |
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retention as a risk financing technique may be forced upon the organization. provide 2 examples of forced retention.
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1. losses resulting from certain uninsurable perils
2. amounts required as deductibles |
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optional retention can also be used as a risk financing technique. What single factor would cause an organization to choose to finance certain losses in this way.
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The cost
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an organizations exposure to Loss can be categorized according to the peril causing the loss. identify 3 groupings of perils which can cause a financial loss. which group are largely beyond the control of the insured.
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1. Natural - earthquake
2. human - pollution 3. economic - inflation natural perils are largely beyond human control |
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identify 2 factors considered by the risk manager in categorizing an organizations exposure to a liability loss
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1. entity to whom duty is owed
2. source of legal duty |
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a legal action can impose significant costs upon the organization. identify 2 such costs
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1. costs to investigate and defend
2. Payment of an award for damages or costs of corrective action |
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Another route of value exposed to Loss is that for property value. identify 2 categories of property values owned by the organization which expose it to coaxial loss
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1. tangible property
2. intangible property |
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identify 1 weakness in each of the following methods used to identify and analyze a business' loss exposure
1. standardized surveys/questionnaires 2. Balance sheet 3. flow chart |
1. They generally do not lead the respondent to provide relevant information which goes beyond the scope of the questions asked
2. is little use in valuing of assets of the organization 3. While each step in the productivity process is identified, is vulnerability to loss is not |
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There are a number of reasons why contractors might default under a bid bond. identify 2 such reasons
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1. error in judgement
2. mistakes in arithmetic |
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While labor & material payment bonds have often been described as a public relation bonds they also serve as useful business purposes. What are 2 such business functions served by these bonds
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1. reducing the costs of construction
2. eliminating or reducing delays in construction 3. freeing up credit |
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identify 2 guarantees provided to the owners of projects when a performance bond is issued on behalf of a contractor
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1. guarantees the actual performance of the contact in accordance with us specified terms and conditions
2. guarantees that faulty work will be corrected and defective materials repaired for a period of 1 year after completion of performance |
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identify 2 options available to the surety company should the contractor default under the performance bond
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1. completion of the contact
2. obtain a bid(s) for submission to the oblige for completion of the contact |
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What is the standard time period of the guarantee provided under maintenance bond
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1 year after completion of performance
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provide 2 reasons why surety companies are reluctant to provide such a guarantee for longer periods of time
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1. The longer the guarantee the greater the chance for defects to become apparent
2. determining the cause of any defects becomes more difficult add time passes |
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corporate suretyship had been established in Canada since the mid 1850's. identify the parties to a surety bond and state the function/role of each
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principal - is the party primarily liable. The one who undertakes the obligation to perform the promise started in the contact
obligee - the party to whom someone else is obligated under a contact. The party to whom the bond is given surety - one who undertakes to pay money or do any other act in event that his principal fails therein |
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When goods are being shipped overseas the method of payment for such goods is addressed in the terms of sale identify the method of payment
1. The buyer establishes what is essentially a charge account with the seller 2. Payment is required to be made before the seller will agree to ship the goods |
1. Open account
2. Cash in advance |
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identify 3 risks faced by owners when a contract is awarded without the request for bonding
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1. refusal or inability of the successful bidder to enter into a contract
2. failure of the contractor to complete the project at the contacted price 3. inability of the contractor to pay subcontractors and supplies |
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surety companies can be compared to banks of other financial institutions in one key way. explain
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like financial institutions surety companies extend credit to others
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under a surety bond the principal is liable to the surety. indicate whether the following statements are true or false
1. obligee must sue surety before payment will be made 2. principal must repay surety for any amounts paid by surety |
1. false
2. True |
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The decision made in the donoghue vs. stevenson case (snail in the bottle) changed consumer law. What was the result of that decision
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made manufacturers responsible for their negligence to the ultimate users of their product
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sellers may often seek a wide variety of goods some of which they may know little about. What level of knowledge does the law expect sellers to have concerning the goods sold by them
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sellers are viewed at Law to be experts when it comes to the ingredients and properties of the products they sell
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manufacturers owe a responsibility to consumers who might use their products. identify 1 of the general rules respecting the duty of manufacturers to consumers
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1. to ensure safe design
2. to ensure age manufacturing, construction, assembly, & packaging 3. to give proper warning of dangers which can occur in using the product 4. provide instructions if needed |
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The commercial general liability policy contains an exclusion for liability of others assumed under contract by the insured. The insurer agrees that there are certain liabilities assumed in contact or agreement that are so standard that they should automatically be insured by the policy. identify 4 such contacts
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1. Lease of premises agreement
2. sidetrack agreement 3. an easement or license agreement in connection with vehicle or pedestrian private railway crossings at grade 4. Any other easement agreement 5. an indemnification of a municipality as required by ordinance except in connection with work for a municipality 6. an elevator maintenance agreement 7. Any other tort liability aimed under a prior agreement or contact |
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The value of the supplementary payments provided by the commercial general liability policy becomes apparent at the time of a serious claim. In terms of potential costs to insured's what is the major coverage provided to them under supplementary payments
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The major coverage provided by the supplementary payments section of the policy are those related to insured's costs e.g. costs to establish the insured's defense
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businesses which operate out of rented or leased premises should purchase the tenants legal liability coverage provided under coverage D of the commercial general liability policy. identify 2 perils insured under this insuring agreement
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1. Fire
2. Smoke 3. explosion 4. leakage from fire protective equipment |
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How should the amount of insurance under coverage D of the commercial general liability policy be established
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The coverage limit purchased usually is equivalent to the value of the building or the portion of the building occupied by the insured
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identify 2 things insured might do to avoid responsibility for future suits arising out of defective products or work supplied by them
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1. withdraw products or work
2. recall defective products or work 3. inspect products or work 4. repair or replace the defective product or work 5. Remove or dispose of the defective product or work |
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When automobiles owned by the insured's employee's are used in the business the employer has a non owned automobile liability exposure. explain the usual manner in which this coverage is provided to business owners
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This coverage is usually provided as an endorsement SPF #6 to the commercial general liability policy or other general liability policy
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automobiles owned by the insured's employee's are used in the business is an example of a non owned automobile liability exposure. provide 2 other examples of automobiles which fall within the definition of non owned automobiles under the policy
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1. a hired automobile
2. operated under contract for the insured |
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State the common law rule which outlines the reason why the owner of the local pizza to go franchise would be a good candidate for the SPF #6 coverage
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employers are responsible for the torts of their employees while in the performance of their duties
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identify the specific coverage endorsement which could be purchased along with the SPF #4 to ensure there is no delay in the settlement of a claim
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purchase the waiver of legal liability endorsement
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identify 3 characteristics of open policies used to insure ocean cargo shipments
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1. sums insured are not stated
2. Can be extended to insure goods of every description shipped anywhere in the world 3. coverage is automatic 4. Can be insured with no expiry date 5. premium rate stated on the policy |
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identify values insured under cargo policy
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1. value of cargo
2. Shipping costs or freight 3. Other expenses e.g. insurance premium, export packing, inland freight 4. duties and taxes 5. plus 10% |
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When your client made an application for fire aircraft insurance the insurer requests that a pilots record and report be completed. identify 3 items of information required by this report
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1. class of license and endorsements
2. total hours as a pilot in command 3. record of all accidents in previous 5 years |
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identify the endorsement specifically designed to eliminate having to pay for in flight exposure during periods in which it is not needed
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The lay up endorsement
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aircraft (hull) policies can contain as many add 3 different deductibles. identify 2 types of losses for which different deductibles well generally be charged
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1. In Motion deductible
2. moored deductible 3. Not in motion deductible |
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explain the purpose of the forwarding charges Clause
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When cargo is discharged at a port not insured by the policy this clause provides reimbursement of any extra charges properly and reasonably incurred in unloading, storing, and forwarding the subject matter to the destination to which it is insured hereunder
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explain the purpose of the change of voyage clause
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If the destination of the cargo is changed by the insured the insurer agrees to continue coverage so long as prompt notice is provided
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What is the purpose of compensatory damages
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compensate the victim for bodily injury and property damage
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What main duty had been imposed by law upon the sellers of products
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sellers are expected to tell the truth about their products
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client is uncertain to the extent of his liability to the owner of the premises he rents in a mall. What document can be used by the broker to assess the extent of this potential loss exposure
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review rental or lease agreement
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What level of Duty of care is owed at Law by a bailee for the property of others in its possession
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ordinary care
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property damage is specifically defined in the insuring agreement contained in liability policies. identify 2 types of losses normally insured within the definition of property damage
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1. physical injury to tangible property including all resulting Loss of use of such property
2. Loss of use of tangible property that is not physically injured |
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cancer has been directly linked to the continued use of products manufactured by your client. Would bodily injury coverages provided by the policy respond to any claims submitted
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Yes
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What fact must be proven by the insured before the commercial general liability policy will respond to provide coverage for non specified tort liabilities of others assumed under contract by the insured
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coverage is provided only for that tort liability which has been assumed in advance of any claim for bodily injury or property damage
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explain the specific responsibilities of a tenant when the liability of the building owner is assumed by the tenant under an elevator maintenance agreement
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The elevator maintenance agreement between tenant and building owner may require that
1. The tenant make all necessary adjustments 2. apply lubricants as required 3. notify the owner when repair or replacement is needed |
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outline the purpose of the SEF #44 endorsement and identify how it effects the amount of insurance available to the insured
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SEF #44 covers bodily injury when injury or death is caused by a) an under-insured motorist or b) an un-insured motorist.
This endorsement increases the 3rd party liability limits available to them insured to the same as we're purchased under their own policy |
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identify 2 coverages provided under the policy which extends to rented vehicles so coverage not need from agency
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1. 3rd party liability
2. accident benefits |
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The determination of insurable interest in a shipment oversea cargo is generally stated in the terms of sale. identify the 3 specific areas of responsibilities addressed by INCOTERMS used in sales contacts
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1. point of transit at which the seller has fulfilled obligation
2. which buyer/seller is responsible for Carriage from one point to another 3. which of the buyer or seller is responsible for insurance |
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ocean Marine insurance policies contain both expressed and implied warranties. identify 2 exclusions common to ocean Marine cargo insurance policies
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1. War
2. strikes 3. un-seaworthiness |
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client had purchased an ocean Marine insurance policy on cargo being shipped from Belgium. Once goods arrive they will be transported on clients trucks to warehouse. Client has asked if she needs seperate policy for cargo after voyage
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Not needed. coverage is from the time the cargo leaves the warehouse until it arrives at address stayed in the contact
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identify 3 factors which will be considered by General contractor in deciding whether to require the binding of subcontractors used on project
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1. terms of contract
2. value of subcontract 3. subcontract price in relation to other bidders 4. relationship between general and subcontractor |
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State the guarantee contained in a labor and material payment bond
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It guarantees that the sub-trades and suppliers will be paid for the work and material that enter into the project
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State the guarantee contained in a maintenance bond
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guarantees that the principal will fulfill the warranty obligations stated in the contact
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explain why project owners will Sometimes require principals to provide a seperate maintenance bond even though the same guarantee may have already been provided by another bond
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When the contact signed by the contactor has a warranty period in excess of 1 year
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identify 2 costs incurred by the obligee when there is a default under a bid bond
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1. costs to compensate the owner for delay, the additional costs should the project need to be re-tendered
2. costs to pay the difference between the defaulting contractors bid and the amount for which the work is contacted |
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identify 2 options available to the surety to reduce the amount of the payment when a contractor defaults under a performance bond
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1. completion of contract using existing contractor or replacement contractor
2. to obtain a bid for submission to the obligee for completion of the contact |
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explain what is meant by an inverse relationship between loss frequency and loss severity
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The more frequent the loss, the less severe it tends to be. The more severe a loss, the less frequent is occurrence
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name 2 ways in which exposure avoidance can be achieved
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1. completely avoiding the exposure
2. eliminating the exposure |
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name 2 ways risk can be financed by way of non-insurance transfer
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1. indemnity Contact
2. hold harmless agreement |
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State the goal or purpose of the following risk control techniques
1. exposure avoidance 2. Loss prevention 3. Loss reduction |
1. exposure avoidance - eliminates any possibility of loss
2. Loss prevention - focuses on reducing the frequency of particular kinds of losses 3. Loss reduction - focuses on reducing the severity of those losses that do occur |
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What is 1 key weakness when the below risk control techniques are selected by the organization
1. exposure avoidance 2. Loss prevention 3. duplication |
1. exposure avoidance - by avoiding or eliminating one exposure, they generally create another
2. Loss prevention - not totally effective in eliminating losses, they can still occur 3. duplication - trends to be expensive and impractical Sometimes |
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SPF # 1
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Owners form
* automobiles of the private passenger type * commercial vehicles (trucks & delivery automobiles) * public automobiles (busses & taxicabs) |
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SPF #4
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Standard garage automobile policy
* owned automobiles * non-owned automobiles * e.g. automobile dealers, repair garages, service stations, storage garages, parking lots |
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SPF #6
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Standard non-owned automobile policy
* owned by an employee * a hired automobile * operated under contract for the insured |
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SEF #44
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Family protection endorsement
* provides coverage for injury or death when caused by an under-insured or Un-insured motorist. * increases the 3rd party liability limits available to victims of such accidents to the same limits as purchased under their own policy |
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SEF #5
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Permission to rent or lease endorsement
* provides permission for the lessor to rent or lease automobiles on a long term basis to specified lessees where a SPF#1 firm is issued to each lessee |
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SEF #5C
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Permission to rent or lease endorsement
* extends the policy coverage to lessors when insured automobiles are rented or leased to unspecified lessees for periods not in excess of 30 consecutive days |
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SEF #5D
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conversion coverage endorsement
* covers losses caused by the dishonest acts of the leasee which results in the loss of the automobile to the lessor |
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SEF #27
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legal liability for damage to non-owned automobiles endorsement
* eliminates the need for lessee to purchase physical damage coverage from the lessor |
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SEF #94
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legal liability for damage to hired automobiles endorsement
* must be attached to SPF #6 to cover physical damage coverage |
