©THEBRIGHT EXAM SOLUTIONS
11/8/2024 12:08 PM
RPLU 8 - Directors & Officers Intro Exam
Questions And Answers 100% Pass.
Directors & Officers Liability Insurance - answer✔A specialty line of professional liability that protects
directors and officers of corporations and sometimes the entity against legal judgments, settlements
and related expenses resulting from allegations of wrongful acts of directors and officers committed in
their individual capacities as such
10-K - answer✔An annual report that a publicly-traded company files with the SEC
10-Q - answer✔A quarterly report that a publicly-traded company files with the SEC
Adjudicated - answer✔The act of giving a judicial ruling such as a judgment or decree
Advancement - answer✔The practice of providing defense costs to directors and officers before
determining whether the directors and offices will be indemnified and the organization will pay the
costs
Allocation - answer✔The determination of the portion of the loss that the D&O policy covers when less
than 100% of the loss is covered or when some defendants are covered by the policy and others are not
Breach of Duty - answer✔A gap, infraction or violation of the duties of care, loyalty, obedience and
disclosure by the directors or officers
Business Judgment Rule - answer✔A defense used in D&O claims so that others may not second-guess
business decisions. The rule assumes that the directors and officers acted on an informed basis, in good
faith, and in the honest belief that the action taken was in the company's best interest
Claimant - answer✔The party who initiates a lawsuit by filing a complaint against the defendant(s)
demanding damages or performance. Also called the Plaintiff
Claims-Made - answer✔A form of liability coverage that is triggered if (1) an event takes place after the
retroactive date but before the termination of coverage and (2) the claim is made against the insured
while the policy is in effect
Commercial General Liability Insurance (CGL) - answer✔A type of insurance that provides coverage for
commercial risks for losses arising out of business operations involving bodily injury and property
damage, except those specifically excluded or limited within the coverage form or by endorsement. May
include advertising injury/personal injury coverage
, ©THEBRIGHT EXAM SOLUTIONS
11/8/2024 12:08 PM
Codified - answer✔An arranged and labeled system of laws
Common Law - answer✔The body of law established by the courts in earlier cases (precedents) rather
that statutory law written by a legislature. Also called Case Law
Corporate Governance - answer✔The system by which corporations are directed and controlled, and the
relationship between the participants, including the shareholders, directors, officers, and employees
Corporate Indemnity - answer✔An exemption from incurred penalties or liabilities on behalf of the
entire corporation
Corporate Indemnity Reimbursement Coverage - answer✔The part of a D&O policy that reimburses an
organization for indemnification costs
Derivative Claim - answer✔A claim brought by one or more shareholders on the corporation's behalf
that seeks to enforce a corporation's right and whose damages are paid to the corporation, not to the
shareholders
Director - answer✔A member of the governing Board of a corporation or associates elected by the
shareholders or members
Duty to Defend - answer✔The insurer's obligation to appoint counsel and defend against a claim
Duty to Pay - answer✔The insurer's obligation to pay the cost of the insured's defense but not to control
the defense
Endorsement - answer✔A written document attached to the original policy that may add to, delete or
modify the provisions of the original insurance policy. Also called a rider
Entity Coverage or Side C Coverage - answer✔The coverage in a D&O policy that pays for defense costs,
settlements and judgments for securities claims (and possibly other claims) filed against the organization
even if the directors and officers are not named in the action or lawsuit
Excess Insurance - answer✔A type of insurance that protects against catastrophic losses, that provides
higher liability limits over an underlying primary policy or self-insured retention, and that covers losses
in excess of the primary policy's liability limits or the self-insured retention
Extended Reporting Period - answer✔An extension of the claims reporting provisions for a specific time
period beyond the policy expiration date for any claims arising from incidents that occurred after the
retroactive date and before the expiration of a claims-made policy. Also called Tail Coverage
Fiduciary - answer✔A person or institution who manages money or property for another and who must
exercise the standard of care imposed by the law
Form 8-K - answer✔A report filed with the SEC during a fiscal year that presents a change of some
significance
, ©THEBRIGHT EXAM SOLUTIONS
11/8/2024 12:08 PM
Fraud - answer✔The intentional use of deceit, a trick or dishonest means to deprive another of money,
property or a legal right
Indemnification - answer✔The compensation for a loss. Organizations indemnify directors and officers
for defense cost, settlements and judgments based on state statutes and the organization's articles of
incorporation
Jurisdiction - answer✔The legal authority given to a court to try cases and rule on legal matters within a
particular geographic area and/or over certain types of legal cases
Material Information - answer✔Information that is relevant and significant; distinguished from the
information that is irrelevant or of minor importance
Negligence - answer✔A type of tort that occurs when a professional fails to meet the standard of care
required of someone in that profession, under similar circumstances and that causes the plaintiff to
suffer injury or damages proximately caused by the professional's breach of duty
Monitoring/Coverage Counsel - answer✔The insurer's counsel who monitors the litigation, who advises
the insurer on policy coverage and obligations and who may work with the insured's counsel to achieve
more cost-effective litigation and settlement
Nonprofit Organization - answer✔An organization (1) that is incorporated under state laws and
approved by both the state's Secretary of State and the state's taxing authority and (2) that operates for
education, charitable, social, religious, civic or humanitarian purposes
Notice of Circumstances - answer✔The notice the insured gives to the insurer of facts or circumstances
that may give rise to a future claim. Any future claim that results will be treated as a claim made during
the current policy period
Occurrence - answer✔An accident, including continuous or repeated exposure to substantially the
general harmful condition
Officer - answer✔A high-level management official of a corporation or an unincorporated business,
hired by the corporation's Board of Directors or the business' owner, such as a president, vice president,
secretary, financial officer, or chief executive officer
Presumptive Indemnification - answer✔A clause in a D&O policy confirming that the insurer presumes
that if there is a claim, the insured will indemnify the director and officers to the fullest extent allowed
by law.
Private Organization or Company - answer✔A for-profit company whose shares are not publicly traded
and which has a limited number of, or no, shareholders
Prospectus - answer✔A disclosure document a company prepares and distributes in connection with its
offer to sell stocks or other securities
11/8/2024 12:08 PM
RPLU 8 - Directors & Officers Intro Exam
Questions And Answers 100% Pass.
Directors & Officers Liability Insurance - answer✔A specialty line of professional liability that protects
directors and officers of corporations and sometimes the entity against legal judgments, settlements
and related expenses resulting from allegations of wrongful acts of directors and officers committed in
their individual capacities as such
10-K - answer✔An annual report that a publicly-traded company files with the SEC
10-Q - answer✔A quarterly report that a publicly-traded company files with the SEC
Adjudicated - answer✔The act of giving a judicial ruling such as a judgment or decree
Advancement - answer✔The practice of providing defense costs to directors and officers before
determining whether the directors and offices will be indemnified and the organization will pay the
costs
Allocation - answer✔The determination of the portion of the loss that the D&O policy covers when less
than 100% of the loss is covered or when some defendants are covered by the policy and others are not
Breach of Duty - answer✔A gap, infraction or violation of the duties of care, loyalty, obedience and
disclosure by the directors or officers
Business Judgment Rule - answer✔A defense used in D&O claims so that others may not second-guess
business decisions. The rule assumes that the directors and officers acted on an informed basis, in good
faith, and in the honest belief that the action taken was in the company's best interest
Claimant - answer✔The party who initiates a lawsuit by filing a complaint against the defendant(s)
demanding damages or performance. Also called the Plaintiff
Claims-Made - answer✔A form of liability coverage that is triggered if (1) an event takes place after the
retroactive date but before the termination of coverage and (2) the claim is made against the insured
while the policy is in effect
Commercial General Liability Insurance (CGL) - answer✔A type of insurance that provides coverage for
commercial risks for losses arising out of business operations involving bodily injury and property
damage, except those specifically excluded or limited within the coverage form or by endorsement. May
include advertising injury/personal injury coverage
, ©THEBRIGHT EXAM SOLUTIONS
11/8/2024 12:08 PM
Codified - answer✔An arranged and labeled system of laws
Common Law - answer✔The body of law established by the courts in earlier cases (precedents) rather
that statutory law written by a legislature. Also called Case Law
Corporate Governance - answer✔The system by which corporations are directed and controlled, and the
relationship between the participants, including the shareholders, directors, officers, and employees
Corporate Indemnity - answer✔An exemption from incurred penalties or liabilities on behalf of the
entire corporation
Corporate Indemnity Reimbursement Coverage - answer✔The part of a D&O policy that reimburses an
organization for indemnification costs
Derivative Claim - answer✔A claim brought by one or more shareholders on the corporation's behalf
that seeks to enforce a corporation's right and whose damages are paid to the corporation, not to the
shareholders
Director - answer✔A member of the governing Board of a corporation or associates elected by the
shareholders or members
Duty to Defend - answer✔The insurer's obligation to appoint counsel and defend against a claim
Duty to Pay - answer✔The insurer's obligation to pay the cost of the insured's defense but not to control
the defense
Endorsement - answer✔A written document attached to the original policy that may add to, delete or
modify the provisions of the original insurance policy. Also called a rider
Entity Coverage or Side C Coverage - answer✔The coverage in a D&O policy that pays for defense costs,
settlements and judgments for securities claims (and possibly other claims) filed against the organization
even if the directors and officers are not named in the action or lawsuit
Excess Insurance - answer✔A type of insurance that protects against catastrophic losses, that provides
higher liability limits over an underlying primary policy or self-insured retention, and that covers losses
in excess of the primary policy's liability limits or the self-insured retention
Extended Reporting Period - answer✔An extension of the claims reporting provisions for a specific time
period beyond the policy expiration date for any claims arising from incidents that occurred after the
retroactive date and before the expiration of a claims-made policy. Also called Tail Coverage
Fiduciary - answer✔A person or institution who manages money or property for another and who must
exercise the standard of care imposed by the law
Form 8-K - answer✔A report filed with the SEC during a fiscal year that presents a change of some
significance
, ©THEBRIGHT EXAM SOLUTIONS
11/8/2024 12:08 PM
Fraud - answer✔The intentional use of deceit, a trick or dishonest means to deprive another of money,
property or a legal right
Indemnification - answer✔The compensation for a loss. Organizations indemnify directors and officers
for defense cost, settlements and judgments based on state statutes and the organization's articles of
incorporation
Jurisdiction - answer✔The legal authority given to a court to try cases and rule on legal matters within a
particular geographic area and/or over certain types of legal cases
Material Information - answer✔Information that is relevant and significant; distinguished from the
information that is irrelevant or of minor importance
Negligence - answer✔A type of tort that occurs when a professional fails to meet the standard of care
required of someone in that profession, under similar circumstances and that causes the plaintiff to
suffer injury or damages proximately caused by the professional's breach of duty
Monitoring/Coverage Counsel - answer✔The insurer's counsel who monitors the litigation, who advises
the insurer on policy coverage and obligations and who may work with the insured's counsel to achieve
more cost-effective litigation and settlement
Nonprofit Organization - answer✔An organization (1) that is incorporated under state laws and
approved by both the state's Secretary of State and the state's taxing authority and (2) that operates for
education, charitable, social, religious, civic or humanitarian purposes
Notice of Circumstances - answer✔The notice the insured gives to the insurer of facts or circumstances
that may give rise to a future claim. Any future claim that results will be treated as a claim made during
the current policy period
Occurrence - answer✔An accident, including continuous or repeated exposure to substantially the
general harmful condition
Officer - answer✔A high-level management official of a corporation or an unincorporated business,
hired by the corporation's Board of Directors or the business' owner, such as a president, vice president,
secretary, financial officer, or chief executive officer
Presumptive Indemnification - answer✔A clause in a D&O policy confirming that the insurer presumes
that if there is a claim, the insured will indemnify the director and officers to the fullest extent allowed
by law.
Private Organization or Company - answer✔A for-profit company whose shares are not publicly traded
and which has a limited number of, or no, shareholders
Prospectus - answer✔A disclosure document a company prepares and distributes in connection with its
offer to sell stocks or other securities
