Question 1

Plumbers who serve as subcontractors are often held liable for:

Accepted Answer

A) professional liability 
B) completed operations liability 
C) toilet clog liability 
D) this is a trick question; subcontracted plumbers cannot be held liable for anything once they complete a job 
A) professional liability 
B) completed operations liability 
C) toilet clog liability 
D) this is a trick question; subcontracted plumbers cannot be held liable for anything once they complete a job

Question 2

Under a claims-made liability insurance policy,the insurer will pay if the injury sustained by the claimant:

Accepted Answer

A) occurs during the policy period 
B) occurs after the policy period 
C) is first reported during the policy period, regardless of when the actual accident may have happened 
D) is first reported during the policy period, and if the accident causing the injury occurred after the policy's retroactive date 
A) occurs during the policy period 
B) occurs after the policy period 
C) is first reported during the policy period, regardless of when the actual accident may have happened 
D) is first reported during the policy period, and if the accident causing the injury occurred after the policy's retroactive date

Question 3

Explain the idea behind implementing a pure no-fault law that applies to automobile insurance.

Accepted Answer

A pure no fault law would eliminate all

Question 4

A claims-made contract pays for claims made in the policy period that stem from occurrences that took place after the retroactive date.

Accepted Answer

A) True 
 B)False

Question 5

A claims-made liability insurance contract pays for:

Accepted Answer

A) injuries suffered by the insured during the policy period 
B) defense costs if the insured is sued, but not for actual damages awarded to a plaintiff 
C) claims only when an insured is sued, but does not pay for defense costs 
D) claims filed against the insured during the policy period 
A) injuries suffered by the insured during the policy period 
B) defense costs if the insured is sued, but not for actual damages awarded to a plaintiff 
C) claims only when an insured is sued, but does not pay for defense costs 
D) claims filed against the insured during the policy period

Question 6

All of the following acts have been passed to promote a cleaner environment except:

Accepted Answer

A) Clean Environmental Universal Act 
B) Clean Water Act 
C) Clean Air Act 
D) Toxic Substances Control Act 
A) Clean Environmental Universal Act 
B) Clean Water Act 
C) Clean Air Act 
D) Toxic Substances Control Act

Question 7

Long-tail claims are those filed:

Accepted Answer

A) as a result of animal injuries 
B) by shareholders against the board of directors of a corporation 
C) several years after the actual injury takes place 
D) in a no-fault state 
A) as a result of animal injuries 
B) by shareholders against the board of directors of a corporation 
C) several years after the actual injury takes place 
D) in a no-fault state

Question 8

When a nuclear disaster occurs,the Price-Anderson Act provides for private insurance to handle the first level of claims.

Accepted Answer

A) True 
 B)False

Question 9

"Social inflation" means a person can collect additional damages after the original judgment because costs increase (as reflected by the Consumer Price Index).

Accepted Answer

A) True 
 B)False

Question 10

Which of the following is false concerning Environmental Impairment Liability (EIL)coverage?

Accepted Answer

A) is expensive and difficult to place 
B) most small firms do not need it since they are immune from liability 
C) the content of the insurance contract is subject to negotiation between insureds and insurers 
D) Federal laws impose legal responsibility on polluters 
A) is expensive and difficult to place 
B) most small firms do not need it since they are immune from liability 
C) the content of the insurance contract is subject to negotiation between insureds and insurers 
D) Federal laws impose legal responsibility on polluters

Question 11

An "occurrence" based policy is also known as a "claims made" policy in professional liability insurance.

Accepted Answer

A) True 
 B)False

Question 12

No-fault auto insurance is designed to cover only those accidents for which no driver is clearly at fault.

Accepted Answer

A) True 
 B)False

Question 13

When a governmental body creates legal rights for a particular group of people,employers may find that they have new exposures to employment practices liability.

Accepted Answer

A) True 
 B)False

Question 14

Which of the following types of legal liability coverage is most likely to have a "long tail" problem,and thus be insured under a claims-made contract?

Accepted Answer

A) water craft liability 
B) auto liability 
C) contractual liability 
D) products liability 
A) water craft liability 
B) auto liability 
C) contractual liability 
D) products liability

Question 15

Which of the following statements about medical liability is false?

Accepted Answer

A) In the 1970s, medical liability insurance premiums rose rapidly, and some types of insurance were simply not available 
B) The most frequent type of claims brought against physicians today allege failure to diagnose, failed surgery, or improper treatment 
C) Defensive medical costs are not incurred under today's tort liability system 
D) Several solutions for dealing with the medical liability problem have been proposed, but none address the problem of professional incompetence 
A) In the 1970s, medical liability insurance premiums rose rapidly, and some types of insurance were simply not available 
B) The most frequent type of claims brought against physicians today allege failure to diagnose, failed surgery, or improper treatment 
C) Defensive medical costs are not incurred under today's tort liability system 
D) Several solutions for dealing with the medical liability problem have been proposed, but none address the problem of professional incompetence

Question 16

All of the following would be covered by an Environmental Impairment Liability (EIL)policy except:

Accepted Answer

A) chicken processor dumps pollution into a stream and ruins nearby drinking water 
B) chemical plant releases toxic gases and makes nearby residents sick 
C) gas station leaks gasoline from underground storage tanks 
D) chemical firm mislabels a chemical which causes injury to the user 
A) chicken processor dumps pollution into a stream and ruins nearby drinking water 
B) chemical plant releases toxic gases and makes nearby residents sick 
C) gas station leaks gasoline from underground storage tanks 
D) chemical firm mislabels a chemical which causes injury to the user

Question 17

Which of the following is not a defense of the tort liability-system?

Accepted Answer

A) encourages good driving 
B) reduces fraud 
C) places the blame for negligence on those responsible 
D) maximizes the dollars going to the injured due to legal involvement of attorneys 
A) encourages good driving 
B) reduces fraud 
C) places the blame for negligence on those responsible 
D) maximizes the dollars going to the injured due to legal involvement of attorneys

Question 18

Which of these is not a criticism of the current tort system?

Accepted Answer

A) fraud is reduced by using our current tort system 
B) recovery under the tort system is often slow 
C) much of the money that changes hands does not go to the injured party 
D) negligence is difficult to determine in many cases 
A) fraud is reduced by using our current tort system 
B) recovery under the tort system is often slow 
C) much of the money that changes hands does not go to the injured party 
D) negligence is difficult to determine in many cases

Question 19

Which of the following is not a possible solution for alleviating the medical liability problem?

Accepted Answer

A) forcing healthcare workers to provide evidence of competence on a yearly basis 
B) redefining "negligence" to eliminate "minor" mistakes 
C) limiting contingent fees for lawyers 
D) limiting the size of jury awards 
A) forcing healthcare workers to provide evidence of competence on a yearly basis 
B) redefining "negligence" to eliminate "minor" mistakes 
C) limiting contingent fees for lawyers 
D) limiting the size of jury awards

Question 20

One of the suggested solutions to the professional liability problem is a redefinition of the term "negligence."

Accepted Answer

A) True 
 B)False

Exam 19: Commercial Liability Insurance

Plumbers who serve as subcontractors are often held liable for:

Under a claims-made liability insurance policy,the insurer will pay if the injury sustained by the claimant:

Explain the idea behind implementing a pure no-fault law that applies to automobile insurance.

A claims-made contract pays for claims made in the policy period that stem from occurrences that took place after the retroactive date.

A claims-made liability insurance contract pays for:

All of the following acts have been passed to promote a cleaner environment except:

Long-tail claims are those filed:

When a nuclear disaster occurs,the Price-Anderson Act provides for private insurance to handle the first level of claims.

"Social inflation" means a person can collect additional damages after the original judgment because costs increase (as reflected by the Consumer Price Index).

Which of the following is false concerning Environmental Impairment Liability (EIL)coverage?

An "occurrence" based policy is also known as a "claims made" policy in professional liability insurance.

No-fault auto insurance is designed to cover only those accidents for which no driver is clearly at fault.

When a governmental body creates legal rights for a particular group of people,employers may find that they have new exposures to employment practices liability.

Which of the following types of legal liability coverage is most likely to have a "long tail" problem,and thus be insured under a claims-made contract?

Which of the following statements about medical liability is false?

All of the following would be covered by an Environmental Impairment Liability (EIL)policy except:

Which of the following is not a defense of the tort liability-system?

Which of these is not a criticism of the current tort system?

Which of the following is not a possible solution for alleviating the medical liability problem?

One of the suggested solutions to the professional liability problem is a redefinition of the term "negligence."

Fundamentals and Terminology

Defining the Insurable Event

Risk Management

Financial Services Companies

Insurance Occupations

the Insurance Market: the Economic Problem

Insurance Regulation

Insurance Contracts

Basic Property and Liability Insurance Contracts

Homeowners Insurance

the Personal Auto Policy

Professional Financial Planning

Life Insurance Policies

Standard Life Insurance Contract Provisions And Options

Annuities

Medical Expense and Disability Insurance

Advanced Topics in Risk Management

Commercial Property Insurance

Bonding,Crime Insurance and Reinsurance

Employee Benefits

Social Security

Unemployment and Workers Compensation Insurance

Filters