P&C Casualty Insurance and Liability 3

Question 1

What is the primary purpose of an umbrella liability policy?

Accepted Answer

To provide additional limits above the underlying policies and fill certain coverage gaps

Answer

To replace the underlying primary liability policies

Answer

To cover only personal injury claims

Answer

To satisfy state minimum auto liability requirements

Question 2

Which of the following is covered under the personal and advertising injury portion (Coverage B) of a CGL policy?

Accepted Answer

Libel or slander published by the insured

Answer

Bodily injury caused by a slip-and-fall on the premises

Answer

Property damage caused by an employee

Answer

Workers compensation claims

Question 3

In casualty insurance, 'aggregate limit' refers to:

Accepted Answer

The maximum the insurer will pay for all covered losses during the policy period

Answer

The maximum paid per occurrence

Answer

The deductible amount the insured must pay

Answer

The total premium charged for the policy

Question 4

An employer's liability policy typically provides coverage for:

Accepted Answer

Employee lawsuits against the employer alleging negligence beyond the workers comp system

Answer

Statutory workers compensation benefits

Answer

Job discrimination claims

Answer

Health and disability benefits

Question 5

Which party has the right to defend a claim under a standard liability policy?

Accepted Answer

The insurer, who has the duty and right to select defense counsel and control the defense

Answer

The insured, who hires their own attorney and bills the insurer

Answer

The claimant's attorney, who determines the scope of defense

Answer

The court, which appoints a neutral attorney

Question 6

The 'severability of insureds' clause in a CGL policy means:

Accepted Answer

The policy applies separately to each insured as if they were the only insured, subject to the overall limits

Answer

Each named insured must purchase a separate policy

Answer

Coverage is severed once the aggregate limit is reached

Answer

The deductible applies separately to each covered location