Commercial & Business Insurance Flashcards
6 cards from real Insurance practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 Commercial & Business Insurance flashcards as text
What is 'directors and officers' (D&O) liability insurance designed to protect?
Answer: Corporate directors and officers against personal liability for management decisions made on behalf of the organization
D&O insurance protects the personal assets of corporate directors and officers when they are sued by shareholders, employees, or regulators for alleged wrongful acts in their management roles.
In commercial insurance, what is 'product liability' coverage?
Answer: Coverage for third-party claims that a product manufactured or sold by the business caused bodily injury or property damage
Product liability coverage protects manufacturers, distributors, and retailers from claims alleging that their product caused injury or damage to a consumer or their property.
What is 'commercial auto' insurance and why do businesses need it separately from personal auto coverage?
Answer: Commercial auto covers vehicles owned or used by a business, providing higher limits and coverage that personal auto policies exclude for business use
Personal auto policies typically exclude or limit coverage for vehicles used for business purposes, making a separate commercial auto policy essential for business-owned or regularly business-used vehicles.
What is 'fidelity bond' insurance used for in a business context?
Answer: Protecting a business against financial losses caused by employee theft or dishonesty
A fidelity bond (employee dishonesty bond) protects businesses from losses due to fraudulent or dishonest acts committed by employees, such as theft, embezzlement, or forgery.
What is 'employment practices liability' (EPL) insurance?
Answer: Coverage protecting an employer from claims by employees alleging discrimination, harassment, wrongful termination, or other employment-related violations
EPL insurance covers the costs of defending and settling claims made by current, former, or prospective employees alleging wrongful employment acts such as discrimination or harassment.
What does 'commercial umbrella' insurance do for a business?
Answer: Provides additional liability coverage above the limits of the underlying GL, auto, and employers liability policies
A commercial umbrella policy provides a high, additional layer of liability protection that activates once the underlying policy limits are exhausted by a large claim.