AIC AIC Litigation & Legal Proceedings 3

Question 1

What is 'collateral estoppel' and how does it affect insurance litigation?

Accepted Answer

A legal doctrine that prevents re-litigation of issues already decided in a prior proceeding

Answer

A policy exclusion for intentional acts

Answer

A type of punitive damages cap

Answer

A defense available only in contract disputes

Question 2

What does 'spoliation of evidence' mean in a claims investigation?

Accepted Answer

The destruction or alteration of evidence relevant to pending or anticipated litigation

Answer

Falsifying witness statements

Answer

Failing to report a claim on time

Answer

Denying access to damaged property

Question 3

What is the 'made whole doctrine' in subrogation?

Accepted Answer

The principle that an insured must be fully compensated for all losses before the insurer can recover subrogation proceeds

Answer

The rule requiring the insurer to fully pay the claim before filing subrogation

Answer

The requirement for insurers to file subrogation within one year

Answer

The doctrine requiring joint settlement of all parties

Question 4

In insurance litigation, what is an 'occurrence-based' policy trigger?

Accepted Answer

Coverage triggers when the bodily injury or property damage occurs during the policy period, regardless of when the claim is made

Answer

Coverage triggers when a claim is filed during the policy period

Answer

Coverage triggers on the policy renewal date

Answer

Coverage triggers only when the insured reports the loss

Question 5

What is 'comparative bad faith' in insurance litigation?

Accepted Answer

A defense where the insurer argues the insured also acted in bad faith, reducing the insurer's liability

Answer

Bad faith claims against the reinsurer

Answer

The comparison of two insurers' claims handling practices

Answer

A statutory penalty for late payments

Question 6

What is the significance of 'trigger of coverage' in long-tail liability claims such as asbestos or pollution?

Accepted Answer

It establishes which policy periods are triggered and responsible for paying the loss

Answer

It determines which deductible applies

Answer

It sets the statute of limitations for filing suit

Answer

It identifies the primary vs. excess insurer