CU Insurance Policies and Contracts 2

Question 1

Which contract law doctrine prevents an insurer from denying coverage based on a policy provision it previously waived through its own conduct?

Accepted Answer

Estoppel

Answer

Subrogation

Answer

Indemnity

Answer

Adhesion

Question 2

Under a claims-made liability policy, the 'retroactive date' determines:

Accepted Answer

The earliest date an occurrence can trigger coverage

Answer

When the policy expires

Answer

The date the insured first reported a claim

Answer

The policy renewal anniversary

Question 3

An 'occurrence' trigger in a liability policy means coverage applies when:

Accepted Answer

The injury or damage happens during the policy period

Answer

The claim is first reported during the policy period

Answer

The lawsuit is filed during the policy period

Answer

The policy premium is paid

Question 4

Which clause in a property insurance policy requires the insured to maintain coverage equal to a specified percentage of the property's value to receive full loss reimbursement?

Accepted Answer

Coinsurance clause

Answer

Subrogation clause

Answer

Pro rata clause

Answer

Salvage clause

Question 5

What is the primary purpose of a 'separation of insureds' clause in a commercial general liability policy?

Accepted Answer

To allow each insured to be treated separately for coverage purposes

Answer

To limit coverage to a single named insured

Answer

To exclude coverage for employee lawsuits

Answer

To define the policy territory

Question 6

A 'blanket' property insurance policy differs from a 'scheduled' policy in that it:

Accepted Answer

Covers multiple locations or items under a single combined limit

Answer

Covers only one location under a single limit

Answer

Lists each item and its individual coverage amount

Answer

Applies only to inland marine risks

Question 7

Which of the following best describes the 'liberalization clause' found in many insurance policies?

Accepted Answer

It automatically extends broadened coverage to existing policies if the insurer files a broader form

Answer

It allows the insurer to cancel coverage with less notice

Answer

It increases premiums to reflect improved coverage

Answer

It waives the deductible for catastrophic losses