PGI Liability Insurance 2

Question 1

What is 'cyber liability' insurance and why is it growing in Singapore?

Accepted Answer

Insurance covering data breaches, cyberattacks, ransomware, and associated costs including legal liability, notification costs, and business interruption

Answer

With Singapore's digital economy growth and strict PDPA requirements, cyber liability insurance covers costs from data breaches, including notification expenses, legal defence, regulatory fines, and business disruption.

Question 2

What is 'fidelity guarantee' insurance in Singapore?

Accepted Answer

Insurance protecting businesses against financial loss caused by dishonest or fraudulent acts of their employees

Answer

Fidelity guarantee insurance compensates businesses for direct financial loss resulting from employee dishonesty — theft, fraud, embezzlement, or misappropriation of funds.

Question 3

What does 'third-party' mean in liability insurance terminology?

Accepted Answer

Any person or entity other than the insured and the insurer who suffers loss or damage due to the insured's actions

Answer

In liability insurance: the first party is the insured (policyholder), the second party is the insurer (insurance company), and the third party is anyone else who may have a claim against the insured.

Question 4

What is 'claims-made' vs 'occurrence-based' liability insurance?

Accepted Answer

Claims-made covers claims reported during the policy period regardless of when the event occurred; occurrence-based covers events during the policy period regardless of when claims are filed

Answer

Occurrence-based policies cover incidents that happen during the policy period, no matter when the claim is filed. Claims-made policies cover claims reported during the policy period, regardless of when the incident occurred (subject to retroactive date).

Question 5

What is the significance of 'aggregate limit' in liability insurance?

Accepted Answer

The maximum total amount the insurer will pay for all claims combined during the policy period

Answer

The aggregate limit caps the total payout for all claims during the policy period. Once this limit is reached, no further claims are covered. This is separate from the per-occurrence limit.

PGI Insurance Practice Test

PGI Insurance Practice Test

PGI Liability Insurance 2