Exam 26: Commercial Liability Insurance

Which of the following statements is (are) true with respect to the treatment of legal defense costs under the ISO Commercial General Liability policy? I.Legal defense costs usually are counted against the policy limit. II.Once the insurer has paid out the applicable limit of liability, the insurer's duty to defend ends.

Executives of a Fortune 500 firm blocked an acquisition attempt by a larger company. When the stockholders learned they could have made large profits had the acquisition not been blocked, they filed a lawsuit against the executives of the firm. What type of liability insurance protects the executives of the organization against such suits?

Which of the following statements regarding employer liability insurance under the workers compensation insurance coverage form is (are) true? I.Employer liability insurance covers an employee injury that occurs on the job but may not be considered work-related. II.If an injured employee sues a negligent third-party, and the third-party sues the employer for contributory negligence, the lawsuit is covered under employer liability insurance.

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

ABC Company purchased an ISO Commercial General Liability Policy. The agent who sold ABC the coverage noted that the coverage trigger in this policy was different from the trigger in the previous policy. The new policy covers only those claims which are first reported during the policy period, provided the event occurred after a retroactive date. This type of policy is known as

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.

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

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 workers compensation and employer liability policy. Such claims are called

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

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.

A-1 Electrical Service is an electrical contractor that employs 14 electricians. A-1 faces many loss exposures. One general liability exposure arises out of faulty work that A-1 electricians may perform for customers at their homes or businesses. This liability exposure is known as

All of the following statements about aviation insurance are true EXCEPT

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

Which of the following is (are) covered under a claims-made policy? I.Claims arising out of occurrences which take place during the policy period, regardless of when the claim is made II.Claims first reported during the policy period, provided the event occurred after a retroactive date stated in the policy

David 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?

One type of liability insurance covers damages arising from the failure of a data holder to protect private information from being accessed by an unauthorized party. This type of liability coverage is called

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 workers compensation insurance is (are) true? I.Under the workers compensation part of the policy, the insurer agrees to pay the benefits required by the workers compensation law of any state listed in the policy declarations. II.The employers liability part of the policy provides workers compensation benefits when employees are working in states other than those listed in the policy declarations.

Bay Gallery owns a building on 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