Insurance Policies & Coverage Analysis Flashcards
7 cards from real RIMS practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Insurance Policies & Coverage Analysis flashcards as text
An 'umbrella' liability policy differs from an 'excess' liability policy primarily because an umbrella policy:
Answer: Can provide broader coverage than underlying policies and may drop down to cover gaps
Umbrella policies can offer broader terms than underlying policies and may drop down to pay claims not covered by underlying insurance, unlike a true excess policy that simply adds limits.
A crime policy's 'employee theft' coverage requires that the loss be caused by:
Answer: A dishonest act by an identified employee with manifest intent to profit
Employee theft coverage requires a dishonest or fraudulent act by an employee intended to cause the insured a loss and to gain an improper financial benefit.
Which standard commercial auto coverage part pays for damage to the insured's own vehicles regardless of fault?
Answer: Physical damage – collision and comprehensive
Physical damage coverage (collision and comprehensive/other-than-collision) pays for damage to the insured's own vehicles without regard to fault.
Under a professional liability (E&O) policy, the 'wrongful act' trigger typically includes all of the following EXCEPT:
Answer: Intentional fraud committed by the insured
Professional liability policies cover negligence, errors, and omissions but exclude intentional or fraudulent acts by the insured.
A 'pollution legal liability' (PLL) policy is distinct from a CGL policy because it is specifically designed to cover:
Answer: Gradual pollution conditions and cleanup costs that are excluded from most CGL policies
PLL policies cover gradual or long-term pollution conditions, third-party bodily injury, property damage, and cleanup costs that are broadly excluded under standard CGL forms.
The 'other insurance' provision in a liability policy that states the policy pays its proportional share of a loss alongside other applicable insurance is known as:
Answer: Pro rata clause
A pro rata (contribution by equal shares or limits) clause requires the insurer to share the loss proportionally with other insurers covering the same risk.
In the context of captive insurance programs, a 'pure captive' (single-parent captive) is best described as:
Answer: An insurer wholly owned by one parent company to insure only that parent's risks
A pure captive is a wholly-owned subsidiary that insures only the risks of its single parent company or affiliated entities.