Exam 50: Insurance

A business organization cannot obtain insurance on the life of a person, even on the life of an individual who is important to that organization.

Federal law determines the status of all parties writing insurance.

An insurance agent ordinarily works for the insurance company.

An applicant for an insurance policy is called an underwriter.

Alain and Bette are partners who own and operate Cakes n' Pies, a chain of dessert restaurants. Their partnership obtains insurance on Alain and Bette's lives. This is

Anna obtains a business liability insurance policy for her Bagels & Coffee Shop from ChoiceFirst Insurance Company. When an event occurs that gives rise to a claim, each party has a duty to

Hernando obtains an insurance policy that protects him against some risks of loss to the contents of his residence. This is

Commerce Insurance, Inc., has a valid reason to cancel a policy issued to DIY Auto Parts Company. In most states, Commerce could cancel the policy on

Global Reach, Inc., insures its real and personal property, as well as the lives of its key employees, to protect its financial interest should some event undermine its security. This is

Bret obtains a fire insurance policy on his rental house with Continental Insurance Company. Like all insurance, this policy is an arrangement for

Cooks Delight LLC makes and sells kitchen appliances. To cover injuries to consumers if the appliances prove defective, Cooks should obtain

Risk management is the transfer of certain risks from an individual to an insurance company.

Ruth obtains a fire insurance policy on her house from Safety Insurance Company. Later, after she moves out and the house is empty, a fire destroys the structure. Most fire insurance policies require that at the time of a loss, the insured premises be

An insurer has a duty to avoid paying a claim even if it means acting in bad faith.

Energy Industries, Inc., obtains insurance policies with Fidelity Insurance, Inc., and Goodworth Insurance Company against the risk of loss of Energy's property. Each policy includes a multiple insurance clause. A fire partially destroys one of Energy's buildings. Energy can collect from Fidelity

Ricky obtains an insurance policy from Security Insurance, Inc. The policy provides that on Ricky's death Security will pay $500,000 to Tori, Ricky's spouse and beneficiary. This is

Roy, an accountant, injures Sally. She files a claim to recover for the injury under Roy's homeowners' insurance policy. Liability coverage under a homeowners' policy normally applies to liability that arises from

A binder provides temporary insurance coverage.

Under an antilapse clause, an insurance policy will not lapse under any circumstances.

Under a multiple insurance clause, a homeowner who insures a home for 80 percent of its value can recover only 80 percent of the cost for damage to it.