Page 1 of 64
CIP - C120 UNDERWRITING ESSENTIALS EXAM |
{LATEST 2026/ 2027 UPDATE} COMPLETE
ACTUAL AND AUTHENTIC EXAM | BRAND NEW!
What is a CGL policy primarily intended to protect?
- the insured from legal liability for unintentionally caused bodily
injury or property damage to other people
What must the plaintiff prove in BI/PD cases?
1. the defendant owed the plaintiff a duty of care
2. the defendant broke that duty of care by his or her actions
3. the defendant's actions caused injury to the plaintiff
Why is liability insurance more difficult to underwrite than other types
of insurance?
Complexity and lack of certainty
1. An applicant can be sued for any harm for which another person or
organization wants to recover damages for from the applicant
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2. Once a lawsuit has gone to trial, it is uncertain whether the
applicant will be found legally liable for the third party's loss or injury.
Nor is it possible, if the applicant is found liable, to be sure of the
damages that the court will require the applicant to pay
Before a third party's injury or loss can become a loss under a liability
policy:
- the third party must consider the injury or loss SERIOUS ENOUGH TO
PURSUE A GRIEVANCE
- the grievance must be difficult enough to resolve that the parties to
the lawsuit are UNABLE TO SETTLE IT OUT OF COURT
- resulting trial must end IN FAVOUR OF THE THIRD PARTY
Third Party's on a Liability Policy:
Would the 3rd party be added as an additional named insured
(becoming first party's)
- policy wordings usually ensure that coverage for third party's extend
only to liability they might incur from their relationship to the original
insured
- many insurers will only add as additional insureds
- larger corporations and government entities may insist on being
added as additional named insureds (will be ok when the third party
,Page 3 of 64
in question seems unlikely to by its activities create a liability loss for
the insurer)
What is the primary consideration for liability underwriters?
- whether the exposures to loss presented by an applicant are unusual
- Not whether the applicant could be sued and found legally liable for
someone else's harm but whether that development is likely
What is legal liability subject to?
System of civil law
- civil courts determine fault and compensation
What is civil courts role in Quebec?
To settle disputes according tot he Civil Code by interpreting the
existing law
- they will apply general principles of justice set out in the code if Code
does not cover a specific dispute
, Page 4 of 64
What law system supersedes the other in Common Law?
Statute Law supersedes case law
What two ways may civil law impose liability?
1. Tort
2. breach of contract
Tort
- most common was the law imposes liability
- finding that someone has committed a tort (wrongful act) causing
damage or injury to another
Wrongful act may be:
1. an intentional act
2. a negligent act
3. a failure to act
What is negligence?
- omitting to do something a reasonable person would be or not do
CIP - C120 UNDERWRITING ESSENTIALS EXAM |
{LATEST 2026/ 2027 UPDATE} COMPLETE
ACTUAL AND AUTHENTIC EXAM | BRAND NEW!
What is a CGL policy primarily intended to protect?
- the insured from legal liability for unintentionally caused bodily
injury or property damage to other people
What must the plaintiff prove in BI/PD cases?
1. the defendant owed the plaintiff a duty of care
2. the defendant broke that duty of care by his or her actions
3. the defendant's actions caused injury to the plaintiff
Why is liability insurance more difficult to underwrite than other types
of insurance?
Complexity and lack of certainty
1. An applicant can be sued for any harm for which another person or
organization wants to recover damages for from the applicant
,Page 2 of 64
2. Once a lawsuit has gone to trial, it is uncertain whether the
applicant will be found legally liable for the third party's loss or injury.
Nor is it possible, if the applicant is found liable, to be sure of the
damages that the court will require the applicant to pay
Before a third party's injury or loss can become a loss under a liability
policy:
- the third party must consider the injury or loss SERIOUS ENOUGH TO
PURSUE A GRIEVANCE
- the grievance must be difficult enough to resolve that the parties to
the lawsuit are UNABLE TO SETTLE IT OUT OF COURT
- resulting trial must end IN FAVOUR OF THE THIRD PARTY
Third Party's on a Liability Policy:
Would the 3rd party be added as an additional named insured
(becoming first party's)
- policy wordings usually ensure that coverage for third party's extend
only to liability they might incur from their relationship to the original
insured
- many insurers will only add as additional insureds
- larger corporations and government entities may insist on being
added as additional named insureds (will be ok when the third party
,Page 3 of 64
in question seems unlikely to by its activities create a liability loss for
the insurer)
What is the primary consideration for liability underwriters?
- whether the exposures to loss presented by an applicant are unusual
- Not whether the applicant could be sued and found legally liable for
someone else's harm but whether that development is likely
What is legal liability subject to?
System of civil law
- civil courts determine fault and compensation
What is civil courts role in Quebec?
To settle disputes according tot he Civil Code by interpreting the
existing law
- they will apply general principles of justice set out in the code if Code
does not cover a specific dispute
, Page 4 of 64
What law system supersedes the other in Common Law?
Statute Law supersedes case law
What two ways may civil law impose liability?
1. Tort
2. breach of contract
Tort
- most common was the law imposes liability
- finding that someone has committed a tort (wrongful act) causing
damage or injury to another
Wrongful act may be:
1. an intentional act
2. a negligent act
3. a failure to act
What is negligence?
- omitting to do something a reasonable person would be or not do
