Cpcu 552 Chapter 11

Front 1

underlying insurance

Back 1

insurance that applies below an excess or umbrella liability policy

Front 2

how does liability loss exposure differ from property loss exposure w regard to assessment of maximum possible loss

Back 2

estimating maximum possible loss for liability is harder to estimate than in property loss exposures.

Front 3

why commercial liability ins often in "layers"

Back 3

to obtain limits of liability in it deems desireable

Front 4

aggregate limits of liability affect a commercial entity's need for liability insurance

Back 4

several claims in policy period could exhaust aggregate limits of primary policy in which insd would have no primary cov for additional claims against the policy. insured needs some way of covering possiblities

Front 5

excess liability policy

Back 5

policy that covers liability claims in excess of the limit of an underlying pol or a stated retention amount

Front 6

why are excess liability and umbrella liability policies used

Back 6

to insured liability loss exposures that are too severe to be adequately covered under primary liability pol

Front 7

basic difference between excess liability and umbrella policy

Back 7

excess is not broader than underlying. umbrella provides broader coverage than underlying

Front 8

2 reasons why distinction btwn excess and umbrella liability coverage is often unclear

Back 8

* court and many in the ins profession use the terms interchangeably

* many insurers providing excess and umbrella liability ins do not sue standardized policies

Front 9

self contained excess liability policy

Back 9

excess liability policy that is subject to its own provisions only and does not depend on the provisions of the underlying policies for determining scope of its coverage

Front 10

aggregate or stop loss excess liability insurance policy

Back 10

excess liability policy that requires the insd to retain a specified amount of loss from the first dollar during a specified period of time, usually 1 year; the insurer then pays all loss for that period that exceeds the retention up to the policy limit

Front 11

3 forms that an excess liability ins pol may take

Back 11

* following form policy subject to the same provision as the underlying policy

* self contained policy subject to its on provisions only

* combination of 2 types

Front 12

circumstances a following form excess liability policy cover claim in excess of underlying limits

Back 12

following form will cover claim only if the loss is covered by underlying insurance

Front 13

why coverage gaps may occur btwn excess and underlying layers when a self contained excess liabillity policy is used

Back 13

bc self contained excess liability policy does not depend on the provisions of underlying policies for determining scope of coverage.

Front 14

distinguishing feature of true umbrella policy

Back 14

provision stating that the policy applies over self insd retention if the underlying policy does not cover the loss by the umbrella

Front 15

contrast specific excess liability policy w aggregate excess liability policy

Back 15

specific excess liability policy requires the insd to retain a stipulated amount of loss from 1st dollar for all losses. aggregate policy required the insd to retain a specified amount of loss from the 1st dollar during specified period of time

Front 16

drop down coverage

Back 16

coverage provided by many umbrella policies for 1. claims not covered at all by underlying policies and 2. claims not covered by underlying pol only bc underlying policy aggregate limit is depleted

Front 17

self insured retention (SIR)

Back 17

amount that is deducted from claim that are payable under umbrella liability policy and that are not covered at all by any primary policy

Front 18

maintenance of underlying insurance condition

Back 18

umbrella policy condition that obligates the insured to maintain all required underlying coverages in full force and effect during the policy period

Front 19

when self insured retention applies to claims payable by liability ins

Back 19

only when a claim covered by the umbrella pol is not also covered by primary policy

Front 20

underlying coverages usually required by umbrella liability insurer

Back 20

commercial general liability, business auto liability, and employers liability

Front 21

types of limits that apply to umbrella liability policy

Back 21

each occurrence and aggregate limt

Front 22

basic types of injury or damage usually covered in insuring agreement of umbrella liability policy

Back 22

bodily injury, property damage, advertising injury, and personal injury

Front 23

working layers

Back 23

layers of coverage in an organization's insurance program that are most often called on to pay claims

Front 24

buffer layer

Back 24

level of excess insurance coverage btwn a primary layer and umbrella policy

Front 25

3 problems that occur when liability insurance is layered

Back 25

* application of aggregate limits may vary in each layer

* excess policies may differ as to defense coverage

* excess layers over the first umbrella layer may purport to be following form polices but in fact may contain restrictions not present in the umbrella layer

Front 26

how do risk manager deal w fact that there is no monetary limit amount that a jury may award

Back 26

by buying the highest limit they can obtain and hope the limits are adequate