Exam 26: Commercial Liability Insurance

Which of the following statements is (are)true concerning the self-insured retention (SIR)under a commercial umbrella liability policy? I.The SIR applies to claims covered by the umbrella policy but not by any underlying insurance. II.The SIR only applies to those claims for which the underlying policy has paid first,and the umbrella policy is paying on an excess basis.

The phrase "general liability" is used to refer to the legal liability of a business arising from all of the following EXCEPT

Which of the following is covered under the liability coverage of a businessowners policy?

Which of the following statements about errors and omissions insurance is (are)true? I.It is purchased by professionals to protect against claims arising for negligent acts,errors,and omissions. II.It is designed to meet the needs of stock brokers,attorneys,engineers,architects and other professionals who give advice to clients.

David Florrell started a public accounting firm.David is concerned that accountants on his staff may give incorrect accounting advice,and the accounting firm may be sued.What type of liability insurance should David purchase to protect against such claims?

Which of the following statements about the liability coverage of the Business Auto Coverage Form is (are)true? I.The insurer agrees to defend the insured and pay all legal defense costs arising out of an accident involving a covered auto. II.The insured is covered for property damage and bodily injury arising out of the use of a covered auto.

In addition to the named insured,all of the following are insureds under the Commercial General Liability Policy EXCEPT

One physical damage coverage alternative under the Business Auto Policy provides coverage for losses caused by certain named perils,such as fire,lightning,or explosion; theft; windstorm,hail or earthquake; flood; vandalism or mischief; or the sinking,burning,collision or derailment of any conveyance transporting the covered auto.This physical damage coverage alternative is

All of the following are coverage options under the physical damage coverage in the Business Auto Coverage Form EXCEPT

Which of the following statements about the typical commercial umbrella policy is (are)true? I.The policy is designed to cover only those loss exposures specifically excluded by the underlying insurance contracts. II.The policy is excess over the required underlying coverages.

An employee of Nelson Manufacturing was injured by a defective machine Nelson purchased from Clark Corporation.The employee's tort action against Clark was successful.Clark,in turn,sued Nelson,alleging that Nelson failed to provide proper operating instructions to the employee.This claim (Clark vs.Nelson)is covered under Part Two of Nelson's worker compensation and employer liability policy.Such claims are called

Medical malpractice insurance written on a claims-made basis can leave a surgeon vulnerable to malpractice claims if the surgeon retires,changes insurers,or drops coverage.A provision can be added to the claims-made form that protects the surgeon for future claims arising from incidents that occurred while the claims-made policy was in force.This provision is called a(n)

The employees of an industrial heating and cooling company spent four days installing a large gas furnace in a newly-constructed building.While testing the furnace one week later,an explosion occurred,damaging the building.Damage to the building was covered under the heating and cooling company's general liability insurance.When the heating and cooling company also sought reimbursement for the time its employees spent installing the furnace,the insurer denied coverage and noted a specific applicable exclusion.What exclusion denies coverage for such reimbursement?

A customer was injured when a furnace exploded following its faulty installation by a heating and cooling business.For the heating and cooling business,this is an example of

The purpose of adding garagekeepers legal liability coverage to the Garage Coverage Form is to

A provision included in a claims-made commercial general liability policy provides coverage for claims filed after the policy has expired.This provision is called a(n)

Liability arising out of work performed by independent contractors is referred to as

Ted Thomas is risk manager of XYZ Company.He is concerned his company might be sued by current or former employees alleging wrongful termination,failure to promote,racial or gender discrimination,or sexual harassment.What type of liability insurance can Ted purchase to cover these types of claims?

Bay Gallery owns a building a Wharf Street.Bay Gallery purchased a Commercial General Liability Policy with no endorsements.All of the following claims would be covered under the policy EXCEPT

Which of the following statements concerning directors and officers liability insurance (D&O)is (are)true? I.D&O policies usually cover the personal liability of directors and officers. II.D&O policies exclude coverage for claims brought by employees and by stockholders.