Part Three, Other States Insurance
provides coverage for incidental injuries incurred by employees in listed states outside of those where the employer has facilities
Part Two, Employers Liability
provides coverage for the employer for liability claims by employees or their dependents that fall outside the protection of the workers compensation law
Part One, Workers Compensation Insurance
provides coverage for statutory benefits payable under the laws of the covered states specified in the policy
the permitted incidental occupancies resident premises endorsement
eliminates the 2,500$ liability for business property on the residence premises the
the employment-related practices exclusion endorsement excludes
coverage for bodily injury arising out of the termination of an employee
inland marine policies
provide property coverage
a commercial umbrella policy provides excess limits of liability coverage over a firm's
general liability, auto liability, and employers liability insurance.
controlled business is permissible provided that in any calendar year,
at least 25% of the total volume of the agents premiums is derived from from persons other than the agent and from property other than that on which the agent controls the placing of insurance
a typical assignment provision states that any assignment of the policy will be
invalid unless the insurer provides its written consent, which is rarely if ever given
because direct writers and exclusive agents are permitted to represent only one insurance company or group,
they are sometimes referred to as captive agents
an exclusive remedy provision in every states workers compensation law stipulates that
benefits prescribed in the act are the sole remedy against he employer for covered job-related injuries . (preclude employee's filing a lawsuit against employers for work related injury's)
definitions of terms used in each coverage section of the policy appear at the
end of their respective section
where do the definitions appear in an ISO business-owners policy?
at the end of the property section and at the end of the liability section
DP 2 & DP 3 covers
ordinance of law among its "other coverages
DP 1 provides
named perils coverage
What is the minimum weekly income benefit that an employee can receive under workers compensation?
15% of the state average weekly wage
to be eligible for insurance through the Texas Automobile Insurance Plan Association, an applicant must certify
they they have been rejected for insurance as least TWO insurers
Equipment breakdown protection coverage form covers
utility interruption, brands and labels, and spoilage damage
Crime policy including a guests' property endorsement does NOT cover
loss to property in or on vehicles
The Consumer Information Privacy regulation provides consumers with the right to
opt out" of the disclosure of nonpublic personal financial information to non-affiliated third parties
the creation of a contract must include
offer, acceptance, and consideration
Farm property-Barns, outbuildings and other Farm Structures coverage Form (FP 00 14) does NOT
land,water,field or pasture fences, below ground foundations of buildings or structures, pilings, piers, wharves, or docks, costs of excavations, grading, or filling
An invitee, such as the driver for a parcel delivery service,
is invited onto the premises for the owner's benefit
which of the following correctly explains why insurance policies are contracts of adhesion?
the insurance company determines the wording of the policy, and the insurance buyers who wants the policy has to "adhere" to the policy's write provisions . if courts find that a contract is ambiguous, the will interpret it in favor of the party that did
who usually determines which party is legally responsible for an auto accident?
insurers
Which of the following protects policyholders and claimants of impaired or insolvent insurers that cannot pay their claims or benefits?
Texas Property and Casualty Insurance Guaranty Association
Almost all states permit an employer to self-insure workers compensation provided that, among other requirements,
the employer proves it is able to directly pay required benefits to injured workers
under the weather conditions exclusion, when weather conditions (such as rain) contribute to the cause of an excluded peril (such as a mudslide)
coverage is denied
none of the dwelling policies includes
personal liability coverage. This coverage can be added through an endorsement or written as a separate policy
Which of the following perils is NOT covered under any causes of loss form(basic/broad)?
transport of farm personal property
the broad theft coverage endorsement adds coverage to a dwelling policy for the
theft of personal property. Provides up to $200 in coverage for money, bank notes, and coins, but does NOT cover cars, business property, or credit cards.
Homeowners Policy Special Form 3(HO 3)
Dwelling and other structures(covered at replacement cost) on an open perils basis; personal property on a named perils basis (16 specified perils); loss of use, personal liability, and medical payments.
a workers compensation insurance policy with an Outer Continental Shelf Lands Act Coverage endorsement excluded coverage for workers subject to all the following legislation EXCEPT
the Outer Continental Shelf Lands Act
an insuring agreement, also called an insuring clause, is a
very broad statement that sets forth the insurer's basic promises under the policy
Buildings are values on an actual cash value basis under
the DP 1
the insurer's consideration is its
promise to pay for losses as stipulated in the contract
The Amendment of Policy Provisions Texas Endorsement requires insurers to give an insured
10 days' notice if they receive an offer to compromise or settle a claim against the insured and 30 days' notice of a claim settlement
The Texas changes endorsement modifies the commercial general liability policy to
exclude criminals acts from coverage
The joint ownership coverage endorsement provides coverage for a vehicle that is
owned by two or more resident relatives
Why is an MCS-90 endorsement attached to a motor carrier policy insuring a fleet of commercial trucks?
it amends the policy to comply with the Motor Carrier Act of 1980
accounts receivable floater contains
a dishonesty exclusion
Homeowners Policy Contents Broad Form 4 (HO 4) is designed for
tenants of houses or apartments
the common-law defenses available to employers were
assumption of risk, contributory negligence, and negligence of a fellow employee
What is the purpose of the mobile agricultural machinery and equipment coverage form?
it insures farm machinery and equipment separately from other property when it is the only exposure
The auto medical payments coverage covers the reasonable expenses of medical and funeral services suffered by
Persons(other than the insured) in an eligible loss. It also covers expenses from related sickness, disease, and/or death that are incurred within three years from the date of the accident.
medical payments to others coverage applies to
persons injured on the insured location who are there within the insured's permission, but not to the named insured, regular residents of the household or pets
a captive insurance company is designed to cover the
risks of the parent organizations that own it
symbol 2 covers all autos
owned at the beginning of the policy period and any autos acquired during the policy period
Contractual Liability results from the
voluntary assumption of obligations that otherwise not exist under common law
the common policy conditions form conditions that apply to any
ISO commercial lines policy. that is why it is an interline (IL) endorsement
The Texas Mutual Insurance Company guarantees the
availability of workers compensation coverage in the state and acts as an insurer of last resort employers unable to obtain coverage elsewhere.
For purpose of insurance, the 4 basic types of construction are
frame, masonry veneer, masonry, and superior (noncombustible or fire-restrictive)
with property and casualty insurance, an insurable interest
must exist at the time of the loss
the "direct loss" insuring agreement pays for the loss of money
surrendered as a ransom payment as the result of an actual kidnapping of an insured person.
the "expenses incurred" form provides coverage for
certain expenses incurred by the insured in connection with an actual or alleged kidnapping.
the price the insurer determines is necessary to insure a single unit of exposure is the called
rate
the amount the the insured pays to the insurance company in exchange for receiving the insurance coverage is the
premium
the premium is
equal to the insured's assigned rate times the number of exposure units
the federal employers liability act provides employees of
interstate railroads with a negligence remedy for on-the-job injury without having to overcome some employer defenses.
the conditions requiring notice endorsement is mandatory for all
commercial general liability policies
unlike standard farm insurance coverage's, which are very location-specific types of forms,
the inland marine forms often provide broader off-premises coverage
an emergency license is valid for
90 days in a 12-month period
both the basic and broad forms cover losses from
windstorm and hail
general damages involve a money award designed to compensate an injured person for his or her
pain and suffering
DP-2 and DP-3 other coverages
trees, shrubs, and other plants
commercial general liability policy to cover
against liability claims for damage to the property of others
offering inducement to purchase or renew a policy
is rebating and it is illegal
which dwelling policy form(s) value personal property on an actual cash value basis?
DP 1,2,3
the loss settlement provisions of all DP forms value
personal property on an actual cash value basis
unlike the medical payments to others coverage, liability coverage applies only when an insured is
legally responsible to pay damages because someone has been injured
regarding the death of livestock, communicable disease is not a covered peril under
the basic and broad causes of loss forms
the ISO BOP's medical expenses coverage does not apply to the bodily injury of an
insured, a tenant, or persons hired to do work for the insured
Authority to do something that is explicitly stated (expressed) in the insurer's agency agreement is
express authority
in general, what do fidelity bonds guarantee?
the honesty of a person in a trusted position
the two major classes of claimants under insurance agents errors and omission policies are
clients and insurers
apartments buildings are eligible for BOP coverage. Along with
construction contractors doing work at heights up to 3 stories, mercantile risks, motels up to 3 stories tall, and office buildings up to 6 stories tall
utility services - time element endorsement
an endorsement that covers loss of business income or extra expense at the insured premises caused by the interruption of utility services to or from the insured premises
property and casualty policies are
personal contracts between the insurer and the policy owner.
the homeowers modified form 8 (HO 8) is used to insure
an older dwelling based on the amount required to repair or replace the property using common construction materials and methods
Real property includes
land, buildings, and other structures attached to the land (trees, shrubs, and patios)
all other tangible items, including automobiles, are considered
personal property
The Texas Department of Insurance will examine the business affairs and financial condition of every insurer authorized to transact business in the state as often as necessary but
must do so at least once every five years
condominium commercial unit owners coverage form is designed for businesses that
own units in the condominium
under the split limits approach to stating a policy's liability limits, the first limit is the
maximum per person amount that will be paid to any one injured person
under the split limits approach to stating a policy's liability limits, the second limit is the
maximum per occurrence amount that will be paid to all injured persons
under the split limits approach to stating a policy's liability limits, the third limit is the
maximum property damage amount that the insurer will pay for damage to other cars or property resulting from the accident
a warranty, which is stronger than a representation,
guarantees that something is true and will remain true
a situation in which it would cost more to salvage the cargo than what the salvaged cargo would be worth is
constructive total loss
the residual market most often provides a source of coverage for
workers compensation, personal auto liability, and property insurance,
the BAP's fellow employee exclusion precluded coverage for
for bodily injury to an employee arising out of and in the course of a fellow employee's employment
symbol 4 designates coverage on
owned autos other than private passenger autos
typically, if the estimated cost of repairs is 75 to 80% or more of the vehicle's actual cash value, the auto is considered to be a
constructive total loss
the PAP territory includes the US, its territories or possessions,
and Canada, but not mexico
This is not granted by the principal directly to the agent but arises out of the impression the principal gives that the agent is authorized to act a certain way is
apparent authority
more than 20% of flood losses occur in
moderate to low risk flood zones
the Voluntary Compensation and Employers Liability Coverage Endorsement is attached when
an insured wishes to offer statutory benefits to exempt employees
the declarations include information to a particular policy such as
the name and address of the insured policyholder
the motor carrier act of 1980 requires some motor carriers to:
carry liability insurance with minimum coverage limits that depend on their cargo
vandalism and malicious mischief are covers perils if a
premium is listed in the declarations for these perils (DP 1)
Attractive Nuisance Doctrine
An owner has a duty to reasonably protect children from injury when the premises are likely to attract children.
If a written complaint is filed the Texas Department of Insurance, the department will notify
each complaining party of the status of the complaint at least once per quarter unless giving the notification would jeopardize an undercover investigation. The department will keep records of every complaint it receives.
direct response marketing does not involve the sale of insurance through
local agents; rather, employees of the insurer deal with applicants by mail, telephone, or internet
What should business partners who want to be covered under a workers compensation policy covering their employees do if they want to also be protected for job-related injuries?
add the sole proprietors, partners, officers, and other coverage endorsement to their workers compensation policy
The Outer Continental Shelf Lands Act applies to workers
who are not masters or crew members of a vessel working on a continental shelf
in the typical insurance transaction, the applicant (offeror) makes the offer to the
insurance company (offeree) through a signed application plus a premium deposit
an aggregate limit is the maxim amount the insurer will pay
for all applicable claims during the policy period
common-law rules of agency involve 2 parties
a principal and an agents. An agent acts on behalf of a principal. An insurance agent acts on behalf of an insurance company.
the insurer can repair or replace any part of a pair or set to restore it to its value before the loss or pay the difference between
the ACV of the entire pair or set before and after the loss.
The Terrorism Risk Insurance Act (TRIA) does NOT compel insurance companies to offer coverage for certified acts of terrorism in which of the following lines of insurance?
Homeowners
Expenses paid to third-party "salvors"(including other ships) who render assistance in saving property that was exposed to loss is
salvage charges
Coverage under the ISO pollution liability forms is written subject to which 2 policy limits?
aggregate limit an "each pollution incident" limit
a loss incurred for the common goof that is shared by all parties to the venture is
general average
each item or activity that is exposed to loss may be referred to as an
exposure unit
the words defined in an insurance policy are usually identified throughout the policy by the use of
bold print, italics, or quotation marks
under the CGL policy, damage to any one premises that the insured rents is
limited to $100,000 in any occurrence. This is a sublimit to the each-occurrence limit
unless garagekeepers coverage shows that a direct coverage option applies, claims will be
paid only for losses causes by the insured's negligence
strict (absolute ) liability is used to assess liability for injuries caused by activities that are
by their nature dangerous, (wild animals captive) the law holds ppl responsible for injuries even when they have not been careless
Although the PAP does not cover liability for damage to others' property that the insured possesses, it does
cover such property when the insured rents a residence or private garage
the BOP's building coverage includes coverage for owner personal property used to maintain the premises and for
personal property in common areas, but it does not include personal property owned by tenants
a self-propelled land or amphibious vehicle or any trailer connect with it
motor vehicle
used for incidental types of businesses that are conducted on the residence premises is
the permitted incidental occupancies endorsement
this is designed to cover administrative expenses that are common to all workers compensation policies, regardless of the premium is
the expense constant
what does the coverage territory provision is a P&C insurance policy explain?
in which countries coverage applies
permits the agent to act beyond the rights and powers specified in the agreement is
implied authority. necessary to carry out the authority expressly granted. allows agent to have an office with the insurer's name and use the insurer's name on correspondence
Which is NOT one of the 3 major parts of a personal auto policy(PAP)?
definitions
personal and advertising injury includes
torts such as false arrest, detention, or false imprisonment
only coverages A,B, C, and D are printed
in the DP 1 form, but coverage E can be added by an endorsement
The ISO liquor liability policy provides
an aggregate limit and an each common cause limit
parts not manufactured by the original equipment manufacturer are known as
aftermarket parts or non-OEM parts
the arbitration provision permits the insurer and its insured to resolve their disputes
over whether the insured is entitled to payment of damages and the amount of the payment
unless modified by endorsement, the property section of the ISO BOP provides
open perils coverage on the buildings and business personal property
in addition to the duties an agent owes to the insurer, the agent is also required
to act in the best interests of the applicant or insured
individuals are considered employees for 30 days
after their service terminates. does not apply if termination was due to dishonest acts
the public official is expected to
pay losses for which he/she is responsible. A public official bond is not the first recourse to a pay a loss.
the lessees of safe deposit boxes endorsement to a commercial crime policy is most likely to be used to cover:
an insured's property that is kept in a bank safe deposit box or other depository premises
the personal injury endorsement modifies the definition of bodily injury under a homeowners policy to include personal injury arising out of
false arrest, detention, or imprisonment, malicious prosecution, wrongful eviction, slander, and libel
the chief officer of the Texas Department of Insurance is the Commissioner of Insurance, who is appointed by the
governor for a 2 year term in each odd-numbered year and is confirmed by the Texas Senate.
The NFIP's definition of flood does not include inundation resulting from a
broken water main
with an open perils policy, the Burden of Proof lies with the insurer to show that a loss was caused by an
excluded peril. If the insurer cannot prove the cause of a loss was an excluded peril, the loss is covered.
An insurance carrier may contest the comprehensibility of a workers compensation claim within how many days after being notified of the injury?
60
the CGo policy provides premises and products liability coverage, and the liquor liability policy provides coverage
against claims resulting from a customers intoxication
the forgery or alteration coverage in the employer's crime policy:
does not cover this forgery claim because it was committed by an employee
residual market makes insurance available to consumers who cannot obtain it in the
voluntary market. consumers usually pay higher rates in this market and receive somewhat limited benefits.
medical payment limit applies for
each person injured in a single accident
with the excess direct coverage option selected for garage keepers coverage,
the insurer pays the excess over any other collectible insurance, without regard to the insured's legal liability
an agreement of the loss valuation by any two of the three appraisers establishes
the value of loss
all of the following are one of the standard flood insurance policies available from the National Flood Insurance Program except:
businessowners form
BOP's hired auto liability coverage does
not cover damage to the rented vehicle
burglary damage is a
named peril in the DP 2 broad form, but theft, liability, and medical payments are not automatically covered.
special damages
awarded to an injured party for tangible, measurable losses such as medical expenses and loss of income
suitability standard
requires an insurance agents to be sure a product sold to a consumer appears to suit the needs of that consumer
floaters includes coverage for breakage,
which her homeowners policy would not cover
a type of business operation an employer conducts determines the
appropriate classification of covered employees
claims for loss of consortium are
not excluded from employers liability coverage
a reciprocal insurer( reciprocal exchange) is
an unincorporated group of members that exchange indemnity contracts of the purpose of paying the cost of retained losses and purchasing reinsurance
section 1 of homeowners insurance policy provides
property overages
section 2 of homeowners insurance policy provides
the liability coverages
essential elements of a contract:
offer, acceptance of that offer, and an exchange of consideration
the conditions requiring notice endorsement is
mandatory for all commercial general liability policies.
punitive damages
amounts a defendant is required to pay as punishment in cases where the defendant has acted in an especially outrageous manner
the personal auto policy's coverage for collision and other-than-collision risks are collectively called:
physical damage coverage
producers have the implied authority to
make sales appointments and so whatever else is necessary to make insurance sales
bid bond
guarantees that work will be performed at the price quoted in a bid to obtain the contract
performance bond
guarantees that the contractor will perform the work in accordance with the construction contract
payment bond
guarantees that the contractor will pay its workers and suppliers
most information in the business auto declarations reflectsinformation
the applicant provided in the insurance application, The BAP uses this info to tailor coverage to meet the particular needs of the insured
personal and advertising injury included claims for
violation of privacy rights
general average
a loss incurred for the common good that is shared by all parties to the venture
Misrepresentation
a false statement of material fact
an insurer with a combined ratio greater than 100% has an
underwriting loss
the CGL policy does not include electronic data in its
definition of tangible property for which it may provide coverage
on a homeowners policy scheduled personal property endorsement the insurer will pay
the lowest of the ACV, repair cost, replacement cost, or amount scheduled.
the liability section of the ISO businessowners policy has an aggregate limit for:
products and completed operations
Coverage for seamen protected by the Jones Act can be obtained under a standard workers compensation policy by adding what kind of endorsement ?
a maritime coverage endorsement
which of the following protects policyholders and claimants of impaired or insolvent insurers that cannot pay their claims or benefits?
Texas Property and Casualty Insurance Guaranty Association
particular average
partial loss to one party's property in ocean marine insurance
who is primarily responsible for ensuring that applicants receive the appropriate notices about their rights under the Fair Credit Reporting Act?
producer
drive other car endorsement
useful for those whose only vehicle is a company car. it is excess coverage when the individual drives an auto that is borrowed or hired for personal use
adverse selection
the tendency of persons who are more likely to have a claim to buy and maintain insurance
which coverage does a homeowners insurance policy provide that a standard dwelling policy does not?
liability
NFIP or WYO insurer issues the policy, the
coverage and premium are identical
a difference in conditions (D-I-C) policy supplements a commercial property policy by providing coverage for perils,
such as flood and earthquake, that the commercial property policy does not cover.
with class rating, all individuals
with similar characteristics are placed into the same rating class and are charged the same rates
which of the following are the parties to an insurance agency agreement?
insurance company and agent
a mutual insurance company is owned by its policyholders,
through the participating insurance policies they are issued, through which policy dividends may be paid.
homeowners policy coverage does not apply to
sailing vessels that are 26ft or longer
The BAP's exclusion does not apply to liability
for the discharge or escape of fluids necessary for the operation of the covered auto.
the reinstatement of limit after loss provision in the common inland marine conditions form provides that, when there is a total loss to a scheduled item of property,
the insurer will pay the claim and then refund the unearned premium on that item.
DP 3 form covers personal property on a
named perils basis and is valued on an actual value basis
trailer interchange agreement is a contract
under which a motor carrier agrees to exchange trailers with another carrier and to indemnify the other carrier for any losses
coverage A covers
replacement cost of damage to the building
in most states, payroll includes total remuneration,
including wages and salaries, commissions, bonuses, and paid time off
arcing, breakage of pressure relief device, and a steam boiler explosion are
not considered internal explosions
an uninsured motor vehicle has a driver with
no liability insurance, is involved in a hit-&-run accident, or has applicable liability coverage from an insolvent insurer
the most the insurer will pay for the loss to a non-owned trailer
is $1,500
salvage
insured property that has been damaged due to a covered peril
which is not among the list of perils covered by specified causes of loss coverage under the BAP :
glass breakage
a mutual insurance company is owned by its
policyholders. When it pays dividends, the dividend are paid to policyholders.
when a covered loss occurs under a contract of indemnity,
the benefit payable is related to the amount of the loss
a convenience store is eligible for a BOP,
but a manufacturer, a bar, and a bank are not