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

Collateral estoppel bars a party from re-litigating a factual or legal issue that was already fully decided in a prior case between the same parties.

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

Spoliation occurs when evidence is destroyed or materially altered, which can result in adverse jury instructions or sanctions against the responsible party.

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 made whole doctrine prevents the insurer from pursuing subrogation until the insured has been fully compensated for all damages, including uninsured losses.

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

An occurrence policy covers losses that take place during the policy period, even if the claim is not filed until years later.

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

Comparative bad faith is raised as a defense when the insured's own conduct, such as concealing material facts, contributed to the claims dispute and may offset the insurer's bad faith exposure.

AIC - Associate in Claims Practice Test

AIC - Associate in Claims Practice Test

AIC AIC Litigation & Legal Proceedings 3