AIC 32 LIABILITY CLAIMS EXAM STUDY GUIDE
2026 PRACTICE QUESTIONS AND SOLUTIONS
◉Third Party Claims . Answer: a demand against an insd by a person
or organization other than the insd or the insrr seeking to recover dmgs
that may be payable by the insds liability insurance.
◉consent to settle clause . Answer: an ins policy provision, usually
found only in professional liability policies that requires the insrr to
obtain consent from the insd before settling a claim
◉Employment Practices liability . Answer: liability based on claims
made by employees or job applicants against employers for wrongful
employment practices such as harassment, discrimination, wrongful
termination, violation of civil rights, and failure to enforce adequate and
consistent company policies.
◉Sexual harrassment . Answer: a form of discrimination against an
employee by an employer based on the employees gender, whereby the
employer engages in unwelcome sexual conduct as a condition of the
worker's employment. Complaints are broken down into 2
categories:quid pro quo and hostile work environment
,◉Hostile Work Environment . Answer: An enviro that exists when an
employee is subjected to harassment that is so severe or pervasive that it
alters the conditions of his or her employment and creates an abusive
working enviro
◉Tort . Answer: A wrongful act or an omission, other than a crime or
breach of contract that invades a legally protected right.
◉Negligence . Answer: The failure to exercise the degree of care that a
reasonable person in a similar situation would exercise to avoid harming
others
◉Tortfeasor . Answer: A person or an org that has committed a tort
◉Defendant . Answer: the party in a lawsuit against whom a complaint
is filed
◉plaintiff . Answer: the person or entity who files a lawsuit and is
named as a party
◉legal duty . Answer: an obligation imposed by law for the
preservation of the legally protected rights of others.
◉Statute . Answer: A written law passed by a legislative body at either
the federal or state level
,◉Contract . Answer: A legally enforceable agreement between 2 or
more parties in which each party makes some promise to the other.
◉Common Law (case law) . Answer: Laws that develop out of court
decisions in particular cases and establish precedents for future cases.
◉Reasonable Person test . Answer: A std for the degree of care
exercised in a situation that is measured by what a reasonably cautious
person would or would not do under similar circumstances
◉Common Carriers . Answer: Airlines, railroads, or trucking
companies that furnish transportation to any member of the public
seeking their offered services
◉Proximate Cause . Answer: A cause that, in a natural and continuous
sequence unbroken by any new and independent cause, produces an
event and without which the event would not have happened
◉"but for" rule . Answer: A rule used to determine whether a
defendants act was the proximate cause of a plaintiff's harm based on the
determination that the plaintiffs harm could not have occurred but for the
defendants act.
, ◉Substantial factor rule . Answer: A rule used to determine proximate
cause of a loss by determining which of the acts are significant factors in
causing the harm.
◉Foreseeability rule . Answer: a rule used to determine proximate
cause when a plaintiff's harm is the natural and probable consequence of
the defendants wrongful act and when an ordinary reasonable person
would have foreseen the harm.
◉Intervening Act . Answer: An act, independent of an original act and
not readily foreseeable that breaks the chain of causation and sets a new
chain of events in motion that causes harm.
◉Concurrent Causation . Answer: a legal doctrine stating that if a loss
can be attributed to two or more independent concurrent causes one or
more excluded by the policy and one covered then the policy covers the
loss.
◉Bailee . Answer: The party temporarily possessing the personal
property in a bailment
◉Negligence per se . Answer: An act that is considered inherently
negligent because of a violation of a law or an ordinance
2026 PRACTICE QUESTIONS AND SOLUTIONS
◉Third Party Claims . Answer: a demand against an insd by a person
or organization other than the insd or the insrr seeking to recover dmgs
that may be payable by the insds liability insurance.
◉consent to settle clause . Answer: an ins policy provision, usually
found only in professional liability policies that requires the insrr to
obtain consent from the insd before settling a claim
◉Employment Practices liability . Answer: liability based on claims
made by employees or job applicants against employers for wrongful
employment practices such as harassment, discrimination, wrongful
termination, violation of civil rights, and failure to enforce adequate and
consistent company policies.
◉Sexual harrassment . Answer: a form of discrimination against an
employee by an employer based on the employees gender, whereby the
employer engages in unwelcome sexual conduct as a condition of the
worker's employment. Complaints are broken down into 2
categories:quid pro quo and hostile work environment
,◉Hostile Work Environment . Answer: An enviro that exists when an
employee is subjected to harassment that is so severe or pervasive that it
alters the conditions of his or her employment and creates an abusive
working enviro
◉Tort . Answer: A wrongful act or an omission, other than a crime or
breach of contract that invades a legally protected right.
◉Negligence . Answer: The failure to exercise the degree of care that a
reasonable person in a similar situation would exercise to avoid harming
others
◉Tortfeasor . Answer: A person or an org that has committed a tort
◉Defendant . Answer: the party in a lawsuit against whom a complaint
is filed
◉plaintiff . Answer: the person or entity who files a lawsuit and is
named as a party
◉legal duty . Answer: an obligation imposed by law for the
preservation of the legally protected rights of others.
◉Statute . Answer: A written law passed by a legislative body at either
the federal or state level
,◉Contract . Answer: A legally enforceable agreement between 2 or
more parties in which each party makes some promise to the other.
◉Common Law (case law) . Answer: Laws that develop out of court
decisions in particular cases and establish precedents for future cases.
◉Reasonable Person test . Answer: A std for the degree of care
exercised in a situation that is measured by what a reasonably cautious
person would or would not do under similar circumstances
◉Common Carriers . Answer: Airlines, railroads, or trucking
companies that furnish transportation to any member of the public
seeking their offered services
◉Proximate Cause . Answer: A cause that, in a natural and continuous
sequence unbroken by any new and independent cause, produces an
event and without which the event would not have happened
◉"but for" rule . Answer: A rule used to determine whether a
defendants act was the proximate cause of a plaintiff's harm based on the
determination that the plaintiffs harm could not have occurred but for the
defendants act.
, ◉Substantial factor rule . Answer: A rule used to determine proximate
cause of a loss by determining which of the acts are significant factors in
causing the harm.
◉Foreseeability rule . Answer: a rule used to determine proximate
cause when a plaintiff's harm is the natural and probable consequence of
the defendants wrongful act and when an ordinary reasonable person
would have foreseen the harm.
◉Intervening Act . Answer: An act, independent of an original act and
not readily foreseeable that breaks the chain of causation and sets a new
chain of events in motion that causes harm.
◉Concurrent Causation . Answer: a legal doctrine stating that if a loss
can be attributed to two or more independent concurrent causes one or
more excluded by the policy and one covered then the policy covers the
loss.
◉Bailee . Answer: The party temporarily possessing the personal
property in a bailment
◉Negligence per se . Answer: An act that is considered inherently
negligent because of a violation of a law or an ordinance
