AU 62 Questions with 100% Correct Answers
Liability loss exposure
Any condition or situation that presents the possibility of a claim alleging legal responsibility
of a person or business for injury or damage suffered by another party
Legal liability
The legally enforceable obligation of a person or an organization to pay a sum of money
(called damages) to another person or organization.
Civil law
A 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
Criminal law
The branch of the law that imposes penalties for wrongs against society
Civil wrong
A wrong against a person or persons, for which remedies include damages awarded to the
victim and court-ordered injunctions to prevent further injury.
Crimes
Certain activities deemed by society to be harmful to public welfare
Damages
Money claimed by, or a monetary award to, a party who has suffered loss or injury for which
another party is legally responsible
Tort
,A wrongful act or an omission, other than a crime or a breach of contract, that invades a
legally protected right
Negligence
The failure to exercise the degree of care that a reasonable person in a similar situation would
exercise to avoid harming others.
Intentional tort
A tort committed by a person who foresees (or should be able to foresee) that his or her act
will harm another person
Strict liability (absolute liability)
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, ultrahazardous,
extraordinary, abnormal, or inappropriate
Contract
A legally enforceable agreement between two or more parties
Breach of contract
The failure, without legal excuse, to fulfill a contractual promise.
Hold-harmless agreement (or indemnity agreement)
A contractual provision that obligates one of the parties to assume the legal liability of
another party.
Statute
A written law passed by a legislative body at either the federal or state level.
, Loss of consortium
The loss of benefits that one spouse is entitled to receive from the other, including
companionship, affection, and sexual relations resulting from the injury or death of a spouse
Loss prevention
A risk control technique that reduces the frequency of a particular loss.
Loss reduction
A risk control technique that reduces the severity of a particular loss.
Commercial Lines Manual (CLM)
An ISO publication that includes rules and rating procedures for several major lines of
commercial insurance
Premium base
The unit in which the exposure is measured, such as gross sales or payroll
Gross sales
A premium base that reflects the gross amount of money charged by the named insured for all
goods or products sold or distributed, operations performed, or rentals made
Intercompany sales
The exchange or sale of goods between two or more separate legal entities that are named
insureds on the same policy.
Payroll
A premium base used in general liability insurance that reflects the insured's liability
exposure arising from the work of employees
Liability loss exposure
Any condition or situation that presents the possibility of a claim alleging legal responsibility
of a person or business for injury or damage suffered by another party
Legal liability
The legally enforceable obligation of a person or an organization to pay a sum of money
(called damages) to another person or organization.
Civil law
A 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
Criminal law
The branch of the law that imposes penalties for wrongs against society
Civil wrong
A wrong against a person or persons, for which remedies include damages awarded to the
victim and court-ordered injunctions to prevent further injury.
Crimes
Certain activities deemed by society to be harmful to public welfare
Damages
Money claimed by, or a monetary award to, a party who has suffered loss or injury for which
another party is legally responsible
Tort
,A wrongful act or an omission, other than a crime or a breach of contract, that invades a
legally protected right
Negligence
The failure to exercise the degree of care that a reasonable person in a similar situation would
exercise to avoid harming others.
Intentional tort
A tort committed by a person who foresees (or should be able to foresee) that his or her act
will harm another person
Strict liability (absolute liability)
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, ultrahazardous,
extraordinary, abnormal, or inappropriate
Contract
A legally enforceable agreement between two or more parties
Breach of contract
The failure, without legal excuse, to fulfill a contractual promise.
Hold-harmless agreement (or indemnity agreement)
A contractual provision that obligates one of the parties to assume the legal liability of
another party.
Statute
A written law passed by a legislative body at either the federal or state level.
, Loss of consortium
The loss of benefits that one spouse is entitled to receive from the other, including
companionship, affection, and sexual relations resulting from the injury or death of a spouse
Loss prevention
A risk control technique that reduces the frequency of a particular loss.
Loss reduction
A risk control technique that reduces the severity of a particular loss.
Commercial Lines Manual (CLM)
An ISO publication that includes rules and rating procedures for several major lines of
commercial insurance
Premium base
The unit in which the exposure is measured, such as gross sales or payroll
Gross sales
A premium base that reflects the gross amount of money charged by the named insured for all
goods or products sold or distributed, operations performed, or rentals made
Intercompany sales
The exchange or sale of goods between two or more separate legal entities that are named
insureds on the same policy.
Payroll
A premium base used in general liability insurance that reflects the insured's liability
exposure arising from the work of employees
