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

Estoppel prevents an insurer from asserting a right or defense that it has previously abandoned through words or conduct that the insured reasonably relied upon.

Question 2

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

Accepted Answer

The earliest date an occurrence can trigger coverage

Answer

The retroactive date is the earliest point from which an occurrence or wrongful act can originate and still be covered under a claims-made policy.

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

An occurrence-based policy covers bodily injury or property damage that takes place during the policy period, regardless of when the claim is made.

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

The coinsurance clause penalizes an insured who underinsures property by requiring them to share in any loss proportionally.

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

A separation of insureds clause means the policy applies separately to each insured, so one insured's wrongdoing does not automatically exclude coverage for another insured.

(CU) Certified Underwriter Practice Test

(CU) Certified Underwriter Practice Test

CU Insurance Policies and Contracts 2