CPCU 552 All Terms Definitions
Questions & Answers
1. Liability Loss - ANSWER ✔ - Any loss that a person or an organization sustains as a result of a claim or suit
against that person or organization by someone seeking damages or some other remedy permitted by law
1. Legal Liability - ANSWER ✔ - legally enforceable obligation of a person or an organization to pay a sum of
money (damages) to another person or organization
1. Civil law - ANSWER ✔ - classification of law that applies to legal matters not governed by criminal law and that
protects rights and provides remedies for breaches of duties owed to others
1. Criminal Law - ANSWER ✔ - branch of the law that imposes penalties for wrongs against society
1. Tort - ANSWER ✔ - A wrongful act or an omission, other than a crime or a breach of contract that involves a
legally protected right.
3 categories: 1) negligence, 2) intentional, 3) strict liability
1. Strict Liability (absolute) - ANSWER ✔ - Liability imposed by a court or by a statute in the absence of fault
when harm results from activities or conditions that are extremely dangerous, unnatural, ultra-hazardous,
extraordinary, abnormal or inappropriate
1. Breach of contract - ANSWER ✔ - failure, without legal excuse, to fulfill a contractual promise
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,1. Statute - ANSWER ✔ - written law passed by a legislative body, at either the federal or state level
1. Common-law system - ANSWER ✔ - legal system in which the body of law is derived more from court
decisions as opposed to statutes or constitutions
1. Tort Law - ANSWER ✔ - the branch of civil law that deals with civil wrongs other than breaches of contract
1. Statutory Law - ANSWER ✔ - formal laws or statutes enacted by federal, state or local legislative bodies
1. Tort - 4 elements - ANSWER ✔ - 1. Wrongful invasion (breach), 2. Of a legally protected right (duty), 3.
Resulting in (caused) 4. Proximate or direct damages (damage)
1. Warranty - ANSWER ✔ - a promise made by a seller about its product
2. Premise and Operations Liability - ANSWER ✔ - liability for Bodily Injury and Property Damage caused by: (1)
an accident occurring on the premise owned, leased, rented, (premise liability) (2) an accident away from the
premise caused by the person/organizations ongoing operations (operations liability)
2. Products and Completed Operations Liability - ANSWER ✔ - the legal responsibility of the manufacturer,
distributor, and or retailer of a product to the product customer (1) the product was defective when it left (2)
the defect made the product unreasonably dangerous (3) the product was the proximate cause of the injury
Completed operations: liability arising out of completed work.
2. Auto liability - ANSWER ✔ - liability for BI and PD arising from the ownership, maintenance, or use of autos
(but not mobile equipment)
2. Negligent entrustment - ANSWER ✔ - loaning a vehicle to someone who is not fit to drive.
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,2. No-fault laws - ANSWER ✔ - provide benefits to injured persons without the need to prove fault
2. Avoidance, Loss prevention, loss reduction, separation - ANSWER ✔ - 4 risk control techniques
2. Root causes - ANSWER ✔ - real causes of accidents, rather than symptoms
2. Commercial General Liability Coverage Form (CGL) - ANSWER ✔ - coverage form commonly used for insuring
an organizations premises and operations liability loss exposures and products/completed operations liability
loss exposure
2. Bodily Injury - ANSWER ✔ - Physical Injury to a person, including sickness disease and death
2. Contractual Liability Coverage - ANSWER ✔ - coverage for liability that the insured has assumed under
contract
2. Amendment of Insured Contract Definition Endorsement - ANSWER ✔ - the endorsement that modifies the
CGL form so that subpart f. of the insured contract definition will not include bodily injury or property damage
caused solely by an indemnitee of the named insured
2. Host Liquor Liability - ANSWER ✔ - Coverage for a person or an organization that serves alcoholic beverages to
others, but is not in the alcoholic beverage business; it covers the insured host against liability for accidents
caused by persons who become intoxicated as a result of the insured's serving of alcoholic beverages.
2. Exclusive Remedy - ANSWER ✔ - workers compensation law grants benefits as the employees' sole source of
recovery against the employer, so employees lose the right to sue their employers for injuries covered by
workers comp.
2. Dual-capacity doctrine - ANSWER ✔ - a legal doctrine giving the employee the right to sue the employer when
the employer acts in a capacity other than that of employer
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, 2. Montrose Language - ANSWER ✔ - in the occurrence version of the CGL eliminates coverage for progressive
injury or damage if the insured knew of the injury or damage before the current policy period
2. Progressive Injury or Damage - ANSWER ✔ - Injury or damage that spans more than one policy period
2. The amendment of the Liquor Liability Exclusion Endorsement - ANSWER ✔ - more restrictive then the basic
liquor liability endorsement
2. third-party actions - ANSWER ✔ - injured employee sues and recovers from a negligent 3rd party and then the
3rd part sues the employer for joint negligence
2. Auto - ANSWER ✔ - land motor vehicle, trailer, or semitrailer, designed from use on public roads, including
any attached machinery or equipment
2. Products liability coverage - ANSWER ✔ - coverage for BI caused by product and PD to property other than the
product
2. Completed operations coverage - ANSWER ✔ - cover for BI caused by defective work and PD to property other
than the product caused by defective work
2. Exclusion--Damage to Work performed by Subcontractors on Your behalf Endorsement - ANSWER ✔ -
eliminates coverage for work completed by subcontractors
2. Fire Legal Liability - ANSWER ✔ - applies to liability for Fire damage to premise rented to or temporarily
occupied by the named insured
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Questions & Answers
1. Liability Loss - ANSWER ✔ - Any loss that a person or an organization sustains as a result of a claim or suit
against that person or organization by someone seeking damages or some other remedy permitted by law
1. Legal Liability - ANSWER ✔ - legally enforceable obligation of a person or an organization to pay a sum of
money (damages) to another person or organization
1. Civil law - ANSWER ✔ - classification of law that applies to legal matters not governed by criminal law and that
protects rights and provides remedies for breaches of duties owed to others
1. Criminal Law - ANSWER ✔ - branch of the law that imposes penalties for wrongs against society
1. Tort - ANSWER ✔ - A wrongful act or an omission, other than a crime or a breach of contract that involves a
legally protected right.
3 categories: 1) negligence, 2) intentional, 3) strict liability
1. Strict Liability (absolute) - ANSWER ✔ - Liability imposed by a court or by a statute in the absence of fault
when harm results from activities or conditions that are extremely dangerous, unnatural, ultra-hazardous,
extraordinary, abnormal or inappropriate
1. Breach of contract - ANSWER ✔ - failure, without legal excuse, to fulfill a contractual promise
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,1. Statute - ANSWER ✔ - written law passed by a legislative body, at either the federal or state level
1. Common-law system - ANSWER ✔ - legal system in which the body of law is derived more from court
decisions as opposed to statutes or constitutions
1. Tort Law - ANSWER ✔ - the branch of civil law that deals with civil wrongs other than breaches of contract
1. Statutory Law - ANSWER ✔ - formal laws or statutes enacted by federal, state or local legislative bodies
1. Tort - 4 elements - ANSWER ✔ - 1. Wrongful invasion (breach), 2. Of a legally protected right (duty), 3.
Resulting in (caused) 4. Proximate or direct damages (damage)
1. Warranty - ANSWER ✔ - a promise made by a seller about its product
2. Premise and Operations Liability - ANSWER ✔ - liability for Bodily Injury and Property Damage caused by: (1)
an accident occurring on the premise owned, leased, rented, (premise liability) (2) an accident away from the
premise caused by the person/organizations ongoing operations (operations liability)
2. Products and Completed Operations Liability - ANSWER ✔ - the legal responsibility of the manufacturer,
distributor, and or retailer of a product to the product customer (1) the product was defective when it left (2)
the defect made the product unreasonably dangerous (3) the product was the proximate cause of the injury
Completed operations: liability arising out of completed work.
2. Auto liability - ANSWER ✔ - liability for BI and PD arising from the ownership, maintenance, or use of autos
(but not mobile equipment)
2. Negligent entrustment - ANSWER ✔ - loaning a vehicle to someone who is not fit to drive.
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,2. No-fault laws - ANSWER ✔ - provide benefits to injured persons without the need to prove fault
2. Avoidance, Loss prevention, loss reduction, separation - ANSWER ✔ - 4 risk control techniques
2. Root causes - ANSWER ✔ - real causes of accidents, rather than symptoms
2. Commercial General Liability Coverage Form (CGL) - ANSWER ✔ - coverage form commonly used for insuring
an organizations premises and operations liability loss exposures and products/completed operations liability
loss exposure
2. Bodily Injury - ANSWER ✔ - Physical Injury to a person, including sickness disease and death
2. Contractual Liability Coverage - ANSWER ✔ - coverage for liability that the insured has assumed under
contract
2. Amendment of Insured Contract Definition Endorsement - ANSWER ✔ - the endorsement that modifies the
CGL form so that subpart f. of the insured contract definition will not include bodily injury or property damage
caused solely by an indemnitee of the named insured
2. Host Liquor Liability - ANSWER ✔ - Coverage for a person or an organization that serves alcoholic beverages to
others, but is not in the alcoholic beverage business; it covers the insured host against liability for accidents
caused by persons who become intoxicated as a result of the insured's serving of alcoholic beverages.
2. Exclusive Remedy - ANSWER ✔ - workers compensation law grants benefits as the employees' sole source of
recovery against the employer, so employees lose the right to sue their employers for injuries covered by
workers comp.
2. Dual-capacity doctrine - ANSWER ✔ - a legal doctrine giving the employee the right to sue the employer when
the employer acts in a capacity other than that of employer
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, 2. Montrose Language - ANSWER ✔ - in the occurrence version of the CGL eliminates coverage for progressive
injury or damage if the insured knew of the injury or damage before the current policy period
2. Progressive Injury or Damage - ANSWER ✔ - Injury or damage that spans more than one policy period
2. The amendment of the Liquor Liability Exclusion Endorsement - ANSWER ✔ - more restrictive then the basic
liquor liability endorsement
2. third-party actions - ANSWER ✔ - injured employee sues and recovers from a negligent 3rd party and then the
3rd part sues the employer for joint negligence
2. Auto - ANSWER ✔ - land motor vehicle, trailer, or semitrailer, designed from use on public roads, including
any attached machinery or equipment
2. Products liability coverage - ANSWER ✔ - coverage for BI caused by product and PD to property other than the
product
2. Completed operations coverage - ANSWER ✔ - cover for BI caused by defective work and PD to property other
than the product caused by defective work
2. Exclusion--Damage to Work performed by Subcontractors on Your behalf Endorsement - ANSWER ✔ -
eliminates coverage for work completed by subcontractors
2. Fire Legal Liability - ANSWER ✔ - applies to liability for Fire damage to premise rented to or temporarily
occupied by the named insured
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