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AIC 303 Successfully Evaluating Liability Claims practice questions and answers
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An occurrence as defined in the HO-3 policy may include A. Property damage caused intentionally by an insured who is 13 years old or older. B. More than one accident with more than one injury. C. One accident involving injury to more than one person. D. A non-accidental event. - C. One accident involving injury to more than one person. An occurrence is one accident, even if it involves injury to more than one person or damage to more than one piece of property. An unendorsed securities brokers professional liability policy will insure the firm and registered representatives for claims alleging negligence committed on the firm's behalf in which one of the following capacities? A. Selling life insurance products B. Brokering mortgages C. Selling property-casualty insurance products D. Brokering real estate - A. Selling life insurance products.An unendorsed securities brokers professional liability policy will insure the firm and registered representatives for claims alleging negligence committed on the firm's behalf while selling life insurance products. Which one of the following statements about excess and umbrella liability insurance is the most accurate? Select one: A. Umbrella liability policies may cover claims in excess of either an aggregate limit or a per occurrence limit, but excess liability policies will be either excess aggregate or excess occurrence, but not both. B. The coverage under an excess liability policy includes defense costs but the coverage under an umbrella liability policy treats defense costs as a self-insured retention.
C. Excess liability insurance must be purchased from the same insurer that provided the primary layer, but umbrella insurance can be purchased from any insurance company. D. An umbrella liability policy will typically require the insured to pay a self-insured retention when claims arise that are not covered under any other primary insurance policy. - D. An umbrella liability policy will typically require the insured to pay a self-insured retention when claims arise that are not covered under any other primary insurance policy. Lucy's property was damaged by an accident caused by Valteri and Sara. Lucy lives in a state that uses a system of pure several liability. This means that Valteri and Sara Select one: A. Are each liable up to the total amount of Lucy's damages. B. Can be held separately responsible for the entire amount of Lucy's damages. C. Will split the amount of Lucy's damages evenly among themselves. D. Are liable only for their respective share of Lucy's damages. - D. Are liable only for their respective share of Lucy's damages.Under pure several liability, defendants are liable only for their respective share of the damages. Javiera leases a space in Osakri's parking garage to park her car. Which one of the following best identifies the party liable for vandalism to the inside of Javiera's car? Select one: A. Osakri would be liable if it is determined he did not take great care of the car. B. Javiera is liable because she did not take normal care of the car. C. Osakri is liable because bailees are strictly for property in their care. D. Javiera would be liable if she neglected to lock the car. - D. Javiera would be liable if she neglected to lock the car. Bailees are not strictly liable for everything that happens to bailed property in their care.
C. Myelogram D. X-ray - C. Myelogram is used to detect spinal problems. Miu is assessing liability in an auto claim. She has reviewed and applied the relevant law, determined the legal defenses that apply to the facts, determined the choices the claimant may have, and determined the degree of liability. In which of Miu's steps did she consider comparative and contributory negligence? Select one: A. Review and apply the relevant law B. Determine the degree of liability C. Determine the choices the claimant may have D. Determine the legal defenses that apply - D. Determine the legal defenses that apply, such as comparative and contributory negligence. Miguel is estimating settlement values in an auto liability claim. The reasonable verdict range for the claim is $10,000 to $20,000. He estimates the insured's liability to be questionable, which should result in a defendant's verdict 6 out of 10 times. He further estimates that the insured is 50 percent at fault for the accident. Miguel's final award calculation is Select one: A. $1,000 to $2,000. B. $3,000 to $6,000. C. $2,000 to $4,000. D. $30,000 to $60,000. - C. $2,000 to $4,000.The calculation for low and high award are first reduced by 0.60 and then again by 0.50. Another way to consider it: what is the plaintiff likely to take home? If defendant is likely to win 60% of the time, plaintiff is likely to win 40% of the time. $10.00 x 40% = $4,000. Reduce by 50% for comparative negligence. Same calculation for the high award.
Mia was walking in a store while texting on her phone. Because she was not watching where she is walking, she slipped on a soft drink that had been spilled in the aisle, but not cleaned up. When she put her arm out to stop her fall, she broke her wrist. Of the following factors in the incident, which one is the proximate cause of Mia's injury for which the store owner could be held liable? Select one: A. Soft drink on the floor B. Stopping fall with arm C. Not inspecting the floor D. Texting while walking - A. Soft drink on the floor. Soft drink on the floor is the proximate cause of the injury for which the owner can be held liable Freja became the victim of identity theft after her credit card company experienced a breach of cyber security. Freja learned that over 100 other customers of the credit card company experienced similar problems as a result of several such breaches. The best way for Freja and the other victims of identity theft to collect damages from the credit card company is to Select one: A. Each file their lawsuits separately. B. File a class-action law suit based on contract law. C. File a professional liability lawsuit. D. File a class-action law suit based on tort law. - D. File a class-action law suit based on tort law. File a class-action law suit based on tort law. In cases with numerous injured parties that have nearly identical injuries and the same cause of action against the wrongdoer, a single lawsuit filed on behalf of all the plaintiffs against the wrongdoer might be a more efficient way of handling claims than having each individual party file a separate lawsuit. Alex buys a chemistry set for his daughter, Beatrice. When Beatrice tries one of the experiments, she accidentally adds the wrong component to the mixture. The resulting reaction causes the experiment to explode and seriously injury Beatrice. Alex's hires an attorney who brings a lawsuit against the chemistry set manufacturer. In the lawsuit, the attorney maintains that the manufacturer
D. Originally, BOP rates were based on square footage. - A. BOP rating is not as complicated as the rating for a commercial package policy Shota is evaluating a bodily injury claim for damages. He is considering whether the claimant has a job, family, or recreation that will be affected by the injury; whether the claimant will be disfigured; and if the claimant's personality has been affected. Shota is evaluating the claimant's Select one: A. Permanence of impairments. B. Loss of consortium. C. Medical expenses. D. Pain and suffering. - A. Permanence of impairments. Such an impairment may affect the person's ability to function in the way he or she functioned before the injury, acting as a detriment to the person's ability to earn a living and enjoy life. One of the three basic forms of excess liability insurance policies is designed so that it incorporates the provisions of the underlying policy and then modifies those provisions with additional conditions or exclusions in the excess liability policy. That type of excess liability policy form is known as Select one: A. An aggregate excess liability policy. B. A self-contained excess liability policy. C. A combination excess liability policy. D. A stop loss excess liability policy. - C. That type of excess liability policy form is known as combination excess liability policy. A typically available cyber risk coverage that includes payment of fines and penalties is Select one:
A. Regulatory action. B. Cyber crime. C. Cyber extortion. D. Crisis management to mitigate damage to reputation. - A. A typically available cyber risk coverage that includes payment of fines and penalties is regulatory action. Miyu is an attorney bringing a professional liability claim against Benjamin, an insured engineer. She alleges Benjamin did not exercise the proper standard of care when he designed her client's roof and oversaw its construction. This lack resulted in the collapse of the roof and injury to the client. Miyu will bring experts to trial to testify that Benjamin Select one: A. Breached a duty of absolute safety. B. Did not perform his services competently. C. Was the proximate cause of injury. D. Demonstrated an intent to cause harm. - B. Did not perform his services competently. Professionals are required to exercise the standard of care accepted in their profession. Jack is handling a bodily injury claim for a knee and is trying to determine if there could be other causes for the injury beside what is being claimed. He has the claimant's family doctor's records, personal financial records, pharmacy records, and employment and school records. Which record would Jack review to verify medical expense payments and identify healthcare providers? Select one: A. Pharmacy records B. Personal financial records C. Employment and school records D. Family doctor's records - B. Personal financial records can be used to verify medical expense payments and identify healthcare providers.
tool, she ended up cutting her leg. She hired an attorney, Antonia, in her suit against the landscaping company. Antonia based the suit on the legal theory of Select one: A. Special circumstances. B. Statutory duty to provide security. C. Voluntary assumption of liability. D. Special relationship. - C. Voluntary assumption of liability. This occurs when a business acts in a way that implies a duty to assume protection, even if an insured has no duty or when no special circumstances exist. Charlotte hosts a charity event and allows Cristobal to set up a bar and charge attendees for drinks. Georgia buys a whiskey from Cristobal for her friend, Juhani, who leaves the party intoxicated and injures Mikael in an accident. Mikael would most likely have the strongest case against Select one: A. Cristobal. B. Georgia. C. Charlotte D. The distiller. - A. Cristobal. Generally, courts have assigned more liability to parties who provide liquor to intoxicated parties than to those who manufacture the liquor. As a general rule, social hosts are not held to the same degree of responsibility for acts of their guests as those who provide liquor for a profit. Erin is handling a bodily injury claim and is examining medical records. These include medical/surgical service, pathology service, special care units, and occupational therapy. Which one of the records would Erin go to for physical and speech therapy progress notes? Select one: A. Occupational therapy
B. Medical/surgical service C. Pathology service D. Special care units - A. Occupational therapy physical, respiratory, and speech therapy assessments, treatments, and progress notes. Which one of the following would most likely be covered under a personal umbrella policy? Select one: A. Damage to property an insured owns B. Workers compensation C. Interest on unpaid judgments D. Intentional injury - C. Interest on unpaid judgments would be covered under a personal umbrella policy. Which one of the following statements about defense coverage in the typical professional liability insurance policy is most accurate? Select one: A. Although professional liability policies differ, most policies pay for defense costs as long as they fall within the limits of the policy. B. Although defense costs are usually covered under the standard commercial general liability policy, they are typically excluded in professional liability policies. C. The most common provision for paying defense costs in professional liability policies is to pay them in addition to the policy limits, similar to how they are treated in the standard commercial general liability policy. D. Defense costs of up to $15,000 are payable under the standard professional liability policy as long as it is endorsed and an additional premium is paid for the coverage. - A. Although professional liability policies differ, most policies pay for defense costs as long as they fall within the limits of the policy.
D. Subrogation. - A. For a court to review a settlement, one party must file a friendly suit against the other party to bring the matter before the court and make the settlement binding on all parties. Personal umbrella policies usually cover the insured's liability for personal injury. Under the Personal Umbrella Liability Policy, which one of the following is included under the definition of personal injury? Select one: A. Assault and battery intentionally committed B. Malicious prosecution C. Workers compensation D. Bodily harm - B. Under the Personal Umbrella Liability policy, malicious prosecution is included under the definition of personal injury. Although there is a wide variety of types of liability claims, they always involve how many types of parties? Select one: A. Two B. Three C. Four D. Five - B. Liability claims always involve three types of parties: the insured, the insurer and the third party making a claim against the insured. Larissa is using her snow blower to clear her driveway after a storm. When the snow became clogged in the discharge chute, she reached in to clear the blockage with her hand. In doing so, her finger contacted the spinning blade and she suffered a finger amputation. Larissa retained an attorney in her lawsuit against the equipment manufacturer. The attorney based the complaint on the legal theory of Select one:
A. Negligent manufacture. B. Negligent design. C. Breach of express warranty. D. Implied warranty of merchantability. - B. Negligent design. In a general negligence case involving products liability, the plaintiff must prove that the manufacturer failed to use reasonable care in designing or manufacturing the product that caused the injury. In this case, the design of the chute allowed the hand to contact the spinning blade. Businessowners policy (BOP) rating incorporates which one of the following variables? Select one: A. The number of stories in the insured building B. Whether the coverage is claims-made or occurrence-based C. The amount of the policy deductible D. Whether the policy is new business or a policy renewal - C. Rating variables include the amount of the deductible. A typically available cyber risk coverage that protects an insured when a thief causes the insured's financial institution to transfer funds is called Select one: A. Fund transfer fraud. B. Cyber extortion. C. Network security liability. D. Regulatory action. - A. A typically available cyber risk coverage that protects an insured when a thief causes the insured's financial institution to transfer funds is called fund transfer fraud.
Select one: A. Request a roundtable to obtain consensus from others. B. Calculate a BATNA to motivate the parties toward settlement. C. Calculate the value using the formula method to simplify the process. D. Use an expert system to determine the severity points of the factors. - B. Calculate a BATNA to motivate the parties toward settlement. The greatest value of the BATNA is that it forces insurers to consider the financial consequences of not reaching a settlement. Regarding the use of a parent-guardian release and indemnity agreement (PG release) in a claim involving a minor, the main factor to consider is Select one: A. The estimated cost of the claim. B. The age of the injured minor. C. The potential of the injury for permanency. D. Whether a court-approved settlement has been ruled out. - C. Regarding the use of a parent-guardian release and indemnity agreement (PG release) in a claim involving a minor, the main factor to consider is whether the injury has realistic potential for permanency. Lucy's property was damaged by an accident caused by Valteri and Sara. Lucy lives in a state that uses a system of pure several liability. This means that Valteri and Sara Select one: A. Are liable only for their respective share of Lucy's damages. B. Can be held separately responsible for the entire amount of Lucy's damages. C. Are each liable up to the total amount of Lucy's damages. D. Will split the amount of Lucy's damages evenly among themselves. - A. Are liable only for their respective share of Lucy's damages. Under pure several liability, defendants are liable only for their respective share of the damages.
Most insurers that offer businessowner-type policies for contractors rate the liability coverage for eligible contractors separately from the property coverages by applying a separate liability rate to the insured's Select one: A. Requested per occurrence liability coverage limits. B. Payroll, receipts, or number of full- and part-time employees. C. Total building and personal business property coverage limits. D. Average annual number of construction contracts. - B. Most insurers apply a separate liability rate to the insured's payroll, receipts, or number of full- and part-time employees. One of the three basic forms of excess liability insurance policies is designed so that it incorporates the provisions of the underlying policy and then modifies those provisions with additional conditions or exclusions in the excess liability policy. That type of excess liability policy form is known as Select one: A. A self-contained excess liability policy. B. A combination excess liability policy. C. An aggregate excess liability policy. D. A stop loss excess liability policy. - C. That type of excess liability policy form is known as combination excess liability policy. Which one of the following would most likely be covered under a personal umbrella policy? Select one: A. Intentional injury B. Workers compensation
A. Coverage for the same professional acts and consequences. B. Insurance for the same professional persons and organizations. C. The same coverage territories and policy exclusions. D. Coverage for rendering or failing to render professional services. - D. They all provide coverage for rendering or failing to render professional services. Which one of the following is true with regard to coverage for acts of directors or officers under a personal umbrella policy? Select one: A. They are always covered. B. They are always excluded. C. Directors or officers of a not-for-profit organization are covered. D. Directors or officers of a for-profit organization are covered. - C. Under a personal umbrella policy, directors or officers of a not-for-profit organization are covered. Professional liability policies are designed to cover claims arising from rendering or failing to render professional services. Primary loss exposures differ for different professional groups. Which one of the following best describes the primary loss exposures of professional architects? Select one: A. Property damage and financial loss B. Bodily injury, property damage, and financial loss C. Personal injury, financial loss, and property damage D. Bodily injury and property damage - B. It is bodily injury, property damage, and financial loss. Donnell is a claims rep gathering evidence for automotive claim. In assembling the case file he includes an x-ray of a broken bone suffered by the claimant. This x-ray is
Select one: A. Real evidence. B. Demonstrative evidence. C. Pictorial evidence. D. Documentary evidence. - C. Pictorial evidence includes photographs, x-rays, videos and other images. Hugo is handling a claim for a delivery service in which an experienced driver is accused of assaulting a customer during a delivery. To determine if the service has engaged in negligent behavior, Hugo asks the employer if it Select one: A. Knows of any history of violence from the pre-employment background check. B. Has background check procedures in place and were they followed? C. Retained the employee despite having notice of a propensity for violence. D. Has job application procedures in place and were they followed? - C. Retained the employee despite having notice of a propensity for violence. Negligent retention occurs when employers do not terminate employees who endanger others. Sebastian purchases a fluorescent light and installs it in his workshop. After working on a project in his workshop, he noticed what appeared to be a sunburn on his arms and face. He inspected the new light fixture and discovered that it had been equipped with UV bulbs instead of regular fluorescent bulbs. Sebastian retained attorney Miu to bring a lawsuit against the light fixture manufacturer. Miu based her suit on the legal theory of Select one: A. Misrepresentation. B. Implied warranty. C. Express warranty.
