Question 1

All the following are legal duties of a product manufacturer except:

Accepted Answer

A) police vendor's activities when the product is in the vendor's hands 
B) manufacture safe products 
C) provide safe packaging 
D) provide adequate instructions 
A) police vendor's activities when the product is in the vendor's hands 
B) manufacture safe products 
C) provide safe packaging 
D) provide adequate instructions

Question 2

The liability insurance policy currently used by many business firms is known as the Commercial General Liability Policy.

Accepted Answer

A) True 
 B)False

Question 3

A "state of the art" defense would mean a product manufactured using current technology could not be judged against the performance of a product using improved technology unavailable at the time the product was made.

Accepted Answer

A) True 
 B)False

Question 4

Insurance companies argue that the term "sudden and accidental" means unintentional and over a short duration of time.

Accepted Answer

A) True 
 B)False

Question 5

Professional liability insurance policies usually:

Accepted Answer

A) are not available in todays marketplace 
B) do not provide a defense for the insured 
C) do not give the insurer the right to settle suits without the insured's consent 
D) are not available for insurance agents 
A) are not available in todays marketplace 
B) do not provide a defense for the insured 
C) do not give the insurer the right to settle suits without the insured's consent 
D) are not available for insurance agents

Question 6

All the following are suggestions for reducing the cost of commercial liability coverage except:

Accepted Answer

A) statute of limitations on filing suits 
B) reduce non economic injuries 
C) end contingency fees for lawyers 
D) eliminate state of the art evidence rules 
A) statute of limitations on filing suits 
B) reduce non economic injuries 
C) end contingency fees for lawyers 
D) eliminate state of the art evidence rules

Question 7

One of the suggested solutions for the product liability problem is a statute of limitations to bar defendants from having any allowed defense after seven years.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following factors is primarily responsible for the increase in medical malpractice insurance premiums?

Accepted Answer

A) Losses on medical malpractice claims 
B) The number of attorneys per capita 
C) The number of doctors working in managed care systems 
D) A decline in physician intelligence 
A) Losses on medical malpractice claims 
B) The number of attorneys per capita 
C) The number of doctors working in managed care systems 
D) A decline in physician intelligence

Question 9

The Price-Anderson Act provides for the federal government to compensate victims of nuclear reactor accidents for all their financial injuries.

Accepted Answer

A) True 
 B)False

Question 10

Indhar suffers minor injuries when Monica negligently crashes her car into his. Monica is also slightly injured in the accident. Both of them have automobile liability policies in force. Under the no-fault liability system:

Accepted Answer

A) Indhar will be compensated by Monica's automobile liability insurer 
B) Indhar will be compensated by his liability insurer, which will also compensate Monica 
C) Indhar and Monica will each collect from the Federal Emergency Management Agency. 
D) Each will collect from their own auto insurance policy 
A) Indhar will be compensated by Monica's automobile liability insurer 
B) Indhar will be compensated by his liability insurer, which will also compensate Monica 
C) Indhar and Monica will each collect from the Federal Emergency Management Agency. 
D) Each will collect from their own auto insurance policy

Question 11

Which of the following theories provides that the "injury" occurs when the disease is first diagnosed?

Accepted Answer

A) exposure theory 
B) double trigger theory 
C) manifestation theory 
D) retroactive theory 
A) exposure theory 
B) double trigger theory 
C) manifestation theory 
D) retroactive theory

Question 12

The long tail problem is present in several types of legal liability coverage because:

Accepted Answer

A) sudden and accidental events causing injury must be paid for by existing contracts 
B) the time between the injury and payment of the claim is long 
C) the time between the discovery of the injury and the time the lawsuit is filed is usually long 
D) insurance companies generally do not cover events discovered after the policy has expired 
A) sudden and accidental events causing injury must be paid for by existing contracts 
B) the time between the injury and payment of the claim is long 
C) the time between the discovery of the injury and the time the lawsuit is filed is usually long 
D) insurance companies generally do not cover events discovered after the policy has expired

Question 13

Which of the following theories says an "injury" occurred when the injured person first experienced the disease-causing substance?

Accepted Answer

A) exposure theory 
B) double trigger theory 
C) manifestation theory 
D) retroactive theory 
A) exposure theory 
B) double trigger theory 
C) manifestation theory 
D) retroactive theory

Question 14

Most no-fault automobile insurance laws,as they exist,restrict the right to sue for pain and suffering.

Accepted Answer

A) True 
 B)False

Question 15

Businesses typically insure their primary liability exposures using:

Accepted Answer

A) the commercial general liability policy 
B) the business owners liability package policy 
C) hold harmless agreements 
D) the comprehensive business policy 
A) the commercial general liability policy 
B) the business owners liability package policy 
C) hold harmless agreements 
D) the comprehensive business policy

Question 16

Today more states operate some form of no-fault automobile insurance law than tort liability law.

Accepted Answer

A) True 
 B)False

Question 17

Why are insurance pools used to insure nuclear energy liability,rather than private insurance mechanisms?

Accepted Answer

A) there is unlimited liability when a nuclear event occurs 
B) it is impossible to measure the loss 
C) individual insurers cannot replace lost electricity when a nuclear plant shuts down 
D) the loss could be greater than even the largest insurance company could handle 
A) there is unlimited liability when a nuclear event occurs 
B) it is impossible to measure the loss 
C) individual insurers cannot replace lost electricity when a nuclear plant shuts down 
D) the loss could be greater than even the largest insurance company could handle

Question 18

Proponents of no-fault automobile legislation argue that the tort-liability insurance system:

Accepted Answer

A) pays too much for big claims and too little for small claims 
B) pays claims too quickly and passes the increased cost on to motorists 
C) encourages bad driving and accidents 
D) is not efficient in returning dollars to automobile accident victims 
A) pays too much for big claims and too little for small claims 
B) pays claims too quickly and passes the increased cost on to motorists 
C) encourages bad driving and accidents 
D) is not efficient in returning dollars to automobile accident victims

Question 19

If a policy is written on a claims-made basis,the insurer is liable only if the:

Accepted Answer

A) loss occurred before the policy period 
B) claim is made after the policy period 
C) insured notifies the insurer of an occurrence before the policy period expires 
D) claim occurs during the policy period and arises from an occurrence after the retroactive date 
A) loss occurred before the policy period 
B) claim is made after the policy period 
C) insured notifies the insurer of an occurrence before the policy period expires 
D) claim occurs during the policy period and arises from an occurrence after the retroactive date

Exam 19: Commercial Liability Insurance

All the following are legal duties of a product manufacturer except:

The liability insurance policy currently used by many business firms is known as the Commercial General Liability Policy.

A "state of the art" defense would mean a product manufactured using current technology could not be judged against the performance of a product using improved technology unavailable at the time the product was made.

Insurance companies argue that the term "sudden and accidental" means unintentional and over a short duration of time.

Professional liability insurance policies usually:

All the following are suggestions for reducing the cost of commercial liability coverage except:

One of the suggested solutions for the product liability problem is a statute of limitations to bar defendants from having any allowed defense after seven years.

Which of the following factors is primarily responsible for the increase in medical malpractice insurance premiums?

The Price-Anderson Act provides for the federal government to compensate victims of nuclear reactor accidents for all their financial injuries.

Indhar suffers minor injuries when Monica negligently crashes her car into his. Monica is also slightly injured in the accident. Both of them have automobile liability policies in force. Under the no-fault liability system:

Which of the following theories provides that the "injury" occurs when the disease is first diagnosed?

The long tail problem is present in several types of legal liability coverage because:

Which of the following theories says an "injury" occurred when the injured person first experienced the disease-causing substance?

Most no-fault automobile insurance laws,as they exist,restrict the right to sue for pain and suffering.

Businesses typically insure their primary liability exposures using:

Today more states operate some form of no-fault automobile insurance law than tort liability law.

Why are insurance pools used to insure nuclear energy liability,rather than private insurance mechanisms?

Proponents of no-fault automobile legislation argue that the tort-liability insurance system:

If a policy is written on a claims-made basis,the insurer is liable only if the:

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Risk Management

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the Insurance Market: the Economic Problem

Insurance Regulation

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Basic Property and Liability Insurance Contracts

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the Personal Auto Policy

Professional Financial Planning

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Advanced Topics in Risk Management

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