CMCA - Certified Manager of Community Associations Risk Management and Insurance Questions and Answers Flashcards

Which type of liability policy covers claims only if the claim is made during the policy period, regardless of when the act occurred (subject to any retroactive date)?

Answer: Claims-made policy

Claims-made policies respond to claims first reported during the policy period, after the retroactive date.

A volunteer committee member uses their own car for an association errand and causes an accident. Which coverage protects the association from vicarious liability?

Answer: Hired and non-owned auto liability

Hired and non-owned auto coverage protects the association when vehicles it doesn't own are used on its business.

An association with employees is sued by a former employee alleging wrongful termination. Which coverage is most likely to respond?

Answer: Employment practices liability

Employment practices liability covers claims such as wrongful termination, discrimination, and harassment.

What is the primary purpose of an umbrella liability policy for a community association?

Answer: To provide additional limits above underlying liability policies

An umbrella adds excess liability limits once underlying policy limits are exhausted.

Hackers access the association's owner database and steal personal and banking information. Which coverage addresses notification costs and liability?

Answer: Cyber liability

Cyber liability covers data breach response costs and related third-party claims.

Immediately after a slip-and-fall on common property, what should the manager do first from a risk management standpoint?

Answer: Document the incident and notify the insurance carrier promptly

Prompt documentation and timely notice to the carrier protect coverage and support the defense.

Who typically decides how a master policy deductible is allocated between the association and a unit owner for a loss originating in a unit?

Answer: The governing documents and applicable state law

Deductible responsibility is set by the governing documents, board policy authorized by them, and state statute.