AIC 302 VERIFIED STUDY GUIDE
First-party claim - Answers - A demand by an insured person or organization seeking to
recover from its insurer for a loss that its insurance policy may cover.
Third-party claim - Answers - A demand against an insured by a person or organization
other than the insured or the insurer, seeking to recover damages that may be payable
by the insured's liability insurance.
Negligence - Answers - The failure to exercise the degree of care that a reasonable
person in a similar situation would exercise to avoid harming others.
Proximate cause - Answers - 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.
Dram shop act - Answers - A statute holding establishments that serve alcoholic
beverages responsible for harm that results from serving patrons alcohol in violation of
the statute.
Negligent entrustment - Answers - The act of leaving a dangerous article with a person
who the lender knows, or should know, is likely to use it in an unreasonably risky
manner.
Negligence per se - Answers - An act that is considered inherently negligent because of
a violation of a law or an ordinance.
Vicarious liability - Answers - A legal responsibility that occurs when one party is held
liable for the actions of a subordinate or an associate because of the relationship
between the two parties.
Agent - Answers - In the agency relationship, the party that is authorized by the principal
to act on the principal's behalf.
Principal - Answers - The party in an agency relationship that authorizes the agent to
act on that party's behalf.
Rescue doctrine - Answers - A legal doctrine providing that a party causing an accident
can be liable to any people involved in rescue efforts as a result of the accident.
Joint and several liability - Answers - The liability of multiple defendants either
collectively or individually for the entire amount of damages sought by the plaintiff
regardless of their relative degree of responsibility.
Tortfeasor - Answers - A person or organization that has committed a tort.
, Successive tortfeasors - Answers - Parties whose independent acts do not produce a
single event but unite to cause a single injury that can be easily apportioned among the
wrongdoers.
Bailee - Answers - The party temporarily possessing the personal property in a
bailment.
Bailor - Answers - The owner of the personal property in a bailment.
Compensatory damages - Answers - A payment awarded by a court to reimburse a
victim for actual harm.
Punitive damages (exemplary damages) - Answers - A payment awarded by a court to
punish a defendant for a reckless, malicious, or deceitful act to deter similar conduct;
the award need not bear any relation to a party's actual damages.
Uninsured motor vehicle - Answers - A land motor vehicle or trailer that is not insured
for bodily injury liability, is insured for less than the financial responsibility limits, is a hit-
and-run vehicle, or whose insurer denies coverage or becomes insolvent.
Split limit basis - Answers - Separate coverage limits that allow one limit for bodily injury
to each person; a second, usually higher, limit for bodily injury to all persons in each
accident; and a third limit for all property damage in each accident.
Single-limits basis - Answers - One coverage limit that applies to all damages arising
from bodily injury or property damage or both, resulting from a single accident.
Arbitration - Answers - An alternative dispute resolution (ADR) method by which
disputing parties use a neutral outside party to examine the issues and develop a
settlement, which can be final and binding.
Personal loss exposure - Answers - Any condition or situation that presents the
possibility of a financial loss to an individual or a family by such causes as death,
sickness, injury, or unemployment.
Commercial package policy (CPP) - Answers - Policy that covers two or more lines of
business by combining ISO's commercial lines coverage parts.
Monoline policy - Answers - Policy that covers only one line of business.
Garagekeepers coverage - Answers - Coverage for damage to customer's autos left in
the named insured's care while the insured is attending, servicing, repairing, parking, or
storing them.
First-party claim - Answers - A demand by an insured person or organization seeking to
recover from its insurer for a loss that its insurance policy may cover.
Third-party claim - Answers - A demand against an insured by a person or organization
other than the insured or the insurer, seeking to recover damages that may be payable
by the insured's liability insurance.
Negligence - Answers - The failure to exercise the degree of care that a reasonable
person in a similar situation would exercise to avoid harming others.
Proximate cause - Answers - 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.
Dram shop act - Answers - A statute holding establishments that serve alcoholic
beverages responsible for harm that results from serving patrons alcohol in violation of
the statute.
Negligent entrustment - Answers - The act of leaving a dangerous article with a person
who the lender knows, or should know, is likely to use it in an unreasonably risky
manner.
Negligence per se - Answers - An act that is considered inherently negligent because of
a violation of a law or an ordinance.
Vicarious liability - Answers - A legal responsibility that occurs when one party is held
liable for the actions of a subordinate or an associate because of the relationship
between the two parties.
Agent - Answers - In the agency relationship, the party that is authorized by the principal
to act on the principal's behalf.
Principal - Answers - The party in an agency relationship that authorizes the agent to
act on that party's behalf.
Rescue doctrine - Answers - A legal doctrine providing that a party causing an accident
can be liable to any people involved in rescue efforts as a result of the accident.
Joint and several liability - Answers - The liability of multiple defendants either
collectively or individually for the entire amount of damages sought by the plaintiff
regardless of their relative degree of responsibility.
Tortfeasor - Answers - A person or organization that has committed a tort.
, Successive tortfeasors - Answers - Parties whose independent acts do not produce a
single event but unite to cause a single injury that can be easily apportioned among the
wrongdoers.
Bailee - Answers - The party temporarily possessing the personal property in a
bailment.
Bailor - Answers - The owner of the personal property in a bailment.
Compensatory damages - Answers - A payment awarded by a court to reimburse a
victim for actual harm.
Punitive damages (exemplary damages) - Answers - A payment awarded by a court to
punish a defendant for a reckless, malicious, or deceitful act to deter similar conduct;
the award need not bear any relation to a party's actual damages.
Uninsured motor vehicle - Answers - A land motor vehicle or trailer that is not insured
for bodily injury liability, is insured for less than the financial responsibility limits, is a hit-
and-run vehicle, or whose insurer denies coverage or becomes insolvent.
Split limit basis - Answers - Separate coverage limits that allow one limit for bodily injury
to each person; a second, usually higher, limit for bodily injury to all persons in each
accident; and a third limit for all property damage in each accident.
Single-limits basis - Answers - One coverage limit that applies to all damages arising
from bodily injury or property damage or both, resulting from a single accident.
Arbitration - Answers - An alternative dispute resolution (ADR) method by which
disputing parties use a neutral outside party to examine the issues and develop a
settlement, which can be final and binding.
Personal loss exposure - Answers - Any condition or situation that presents the
possibility of a financial loss to an individual or a family by such causes as death,
sickness, injury, or unemployment.
Commercial package policy (CPP) - Answers - Policy that covers two or more lines of
business by combining ISO's commercial lines coverage parts.
Monoline policy - Answers - Policy that covers only one line of business.
Garagekeepers coverage - Answers - Coverage for damage to customer's autos left in
the named insured's care while the insured is attending, servicing, repairing, parking, or
storing them.
