CPCU-552 CHAPTER 8- PROFESSIONAL LIABILITY EXPOSURES AND INSURANCE EXAM QUESTIONS AND ANSWERS WITH COMPLETE SOLUTIONS VERIFIED

CPCU-552 CHAPTER 8- PROFESSIONAL LIABILITY EXPOSURES AND INSURANCE EXAM QUESTIONS AND ANSWERS WITH COMPLETE SOLUTIONS VERIFIED Consquential damages A payment awarded by a court to indemnify an injured party for losses that result indirectly from a wrong such as a breach of contract. Liquidated damages A reasonable estimation of actual damages, agreed to by contracting parties and included in the contract, to be paid in the event of a breach for neligence. Nominal damages An award that indicates that while the plaintiff has sustained some harm, the injury is not one warranting substantial monetary relief. One basis for establishing professional liability is breach of contract. What damages are recoverable in a breach of contract action (4): Comensatory damages- generally limited to monetary Consequential damages - such as loss of profits Liquidated damages - for amount stipulated in contract Nominal damages - such as one dollar awarded when breach of contract didn't result in comprehensible injury What must a plaintiff show in order to recover from a professional under tort priciples: The plaintiff must show that a professional made an error or omission that a reasonably competent professional in the same field would not have made. Why is a tort action, rather than a contract action, likely to result when a professional's performance causes bodily injury: A tort action is likely to result because in general, the injured party cannot sue for emotional damage or other pain and suffering in a breach of contract action. Give an example of how statutes can affect professional liabiltiy of certain professionals: State or federal securitites laws can impose performance standards on stock brokers, as well as on attorneys or accountants, whose practices include securities related law or accounting When a client suffers harm as a result of the professionals failure to meet those standards, the professional can be held liable. Whi is expert witness testimony often required in professional liability trials: Expert witness testimony is often required in professional liability trials because the jury needs to be informed of the standards that pertain to that particular profession. Typically, these standards are established by expert witnesses. In what professional liability situations might expert witness testimony not be needed: 1.) Cases in which a layperson can understand that a professional has committed a negligent act or omission (such as removing a patience healthy kidney instead of a sick one) or 2.) Cases in which the doctrine of res ipsa liquitor ("the thing speaks for itself") applies (such as when a surgeon has left a sponge in the patients body. Client hired someone to install games and outlined performance and time, they were installed incorrectly and staff was acting inappropriately, explain if breach of contract or tort actions can be made: Professionals have a duty to perform the services in which they were hired, and they also have a duty to perform those services in accordance with the appropriate standards of conduct. Consequentally, a professionals violation of a duty or dutied owed with a client can result in a brach of contract action, or tort action, or both types of actions alleging tort liability. In what circumstances might a commercial general liability (CGL) policy covera a professional liability claim: A CGL policy might cover a professional liability claim if the claim was for bodily injury or property damage and the policy did not contain an applcable exclusion of professional services. In what circumstances would a CGL policy provide no coverage for a professional liability claim even though the policy contained no applicable professioanl services exclusion: