Liability Claims Management Flashcards
7 cards from real CCP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Liability Claims Management flashcards as text
Which coverage part of a Commercial General Liability (CGL) policy responds to claims that the insured's advertising injured another party's reputation?
Answer: Coverage B – Personal and Advertising Injury
Coverage B of the CGL policy covers personal and advertising injury offenses including libel, slander, copyright infringement in advertising, and malicious prosecution.
When a claimant's attorney sends a policy limits demand with a strict acceptance deadline, what risk does the insurer face if it fails to respond timely?
Answer: The insurer may face a bad faith claim and excess judgment exposure
Failure to accept a reasonable policy limits demand within the specified time can expose the insurer to bad faith liability for any verdict exceeding policy limits.
What is 'structured settlement' in the context of liability claims resolution?
Answer: A series of periodic payments funded by an annuity purchased by the insurer
A structured settlement uses an annuity to deliver tax-free periodic payments to the claimant over time, often preferred in large bodily injury cases involving minors or permanent injury.
Under the 'products liability' theory of strict liability, a manufacturer can be held liable when:
Answer: A product was defective when it left the manufacturer's control and the defect caused injury
Strict products liability requires proof that the product contained a defect at the time it left the defendant's control and that the defect was the proximate cause of the plaintiff's injuries.
A property manager fails to repair a broken handrail that was reported three months ago. A tenant falls and is injured. What type of negligence is demonstrated?
Answer: Premises liability based on failure to remedy a known dangerous condition
Actual or constructive notice of a dangerous condition combined with failure to correct it within a reasonable time is the classic basis for premises liability negligence.
Which best describes the 'duty to defend' in a liability insurance policy versus the 'duty to indemnify'?
Answer: The duty to defend is broader and triggered by allegations that could potentially fall within coverage, while the duty to indemnify is triggered by actual covered liability
Courts consistently hold that the duty to defend is broader — it is triggered if the complaint's allegations potentially implicate coverage — whereas indemnity arises only upon a finding of actual covered liability.
In a multi-vehicle accident involving commercial trucks, which entity is most likely required to file proof of financial responsibility on file with a federal regulatory authority?
Answer: Interstate motor carriers operating under FMCSA authority
The FMCSA requires interstate motor carriers to maintain proof of minimum financial responsibility (MCS-90 endorsement or surety bond) as a condition of operating authority.