AIC 32 || 100% Accurate Solutions.
Identity the three parties involved in a liability claim correct answers The Insured
The Insurer
The Claimant
Describe what is meant by damages? correct answers Damages are money claimed by, or a
monetary award to, a party who has suffered bodily injury or property damage for which another
party is legally responsible
Describe the two duties insurers generally agree to perform, under the terms of the insurance
policy, when managing liability claims correct answers 1. Defend the insured against any claim
alleging damages covered under the policy.
2. Pay on the insured's behalf any damages that the insured is legally obligated to pay and that
are covered by the policy.
Describe what is meant by a third-party claim correct answers A third-party claim is 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.
Describe products liability correct answers Products liability refers to the responsibility arising
out of the manufacture, distribution, or sale of allegedly defective or dangerous products.
Identify a unique policy provision found in professional liability policies correct answers The
consent-to-settle clause, or hammer clause, is included in professional liability policies because
claim settlements can affect a professional reputation.
Explain a difficulty in protecting intellectual property correct answers Computers, the internet,
and information technology enable easy reproduction and distribution of digitized information.
When information can be published throughout the world over the internet, protecting the
originator's rights from people who use the work without permission (copyright infringement)
becomes more difficult.
List the four critical tasks that a liability claims representative should complete when dealing
with a claim correct answers 1. Determining coverage
2. Investigate liability
3. Evaluate damages
4. Settle liability claims
Describe two reasons investigation is critical in the liability claims process correct answers To
fulfill good-faith duty to the insured by investigating and to provide needed information to
evaluate liability and damages and to settle the claim properly.
Describe the process of mediation correct answers In mediation, an intermediary, known as a
mediator, acts as a reference between two parties, usually the claims representative or legal
counsel and the claimant with his or her attorney.
, Describe the parties who are generally considered insureds under a liability correct answers The
parties who are generally considered insureds under a liability policy include the named insured.
In addition, other parties such as spouses, business partners, and employee often meet the
definition of an "insured". People who occupy or drive an insured vehicle may be considered
insureds as well.
Describe why punitive damages may not be covered under a liability policy correct answers
Punitive damages may not be covered under a liability policy either because the policy
specifically excludes them or because an applicable state law prohibits insurers from paying
them.
Identify the basic difference between an occurrence-based policy and a claims-made policy
correct answers Under an occurrence-based policy, the alleged bodily injury or property damage
must occur during the policy period to be covered. Under a claims-made policy, the policy in
effect when a claim is first made is the policy that covers the claim - even though the injury or
damage for which the claim is being made have occurred before the policy's inception date.
Describe what is meant by policy conditions that must be met before or after a loss correct
answers Insureds and insurers have obligations under the insurance policy that must be met
before or after a loss. Conditions that must be met before a loss occurs are called conditions
"precedent". Those that must be met after a loss occurs are called conditions "subsequent".
Describe how changes in the legal environment are affecting liability claims practices correct
answers Changes in the legal environment are affecting liability claims practices in three
ways/areas: the application and interpretation of insurance coverages; the creation and expansion
of new areas of liability; and the types of damages allowable and awarded by courts.
Describe what is meant by managed care correct answers Managed care, which has been used in
the health industry for years, refers to a variety of techniques used to contain medical costs while
providing individuals with appropriate care for their injuries.
List the four essential elements of negligence correct answers 1. The defendant owed a legal duty
of care to the plaintiff
2. The defendant breached the duty of care owed to the plaintiff
3. The defendant's negligent act was the proximate cause of the plaintiff's injury or damage
4. The plaintiff suffered actual injury or damage
Describe what a reasonable person test is and how it is used to prove breach of duty correct
answers A reasonable person test is an external, objective test under which the defendant's
individual or personal judgement, or that of other parties involved, is not considered. The test is
based on how a jury perceives that a reasonable person would acted and is a standard for the
degree of care exercised in a situation. Circumstances further quality the reasonable person test.
Explain what concurrent causation is and how it relates to negligence correct answers Concurrent
causation is a legal doctrine stating that if a loss can be attributed to two or more independent
Identity the three parties involved in a liability claim correct answers The Insured
The Insurer
The Claimant
Describe what is meant by damages? correct answers Damages are money claimed by, or a
monetary award to, a party who has suffered bodily injury or property damage for which another
party is legally responsible
Describe the two duties insurers generally agree to perform, under the terms of the insurance
policy, when managing liability claims correct answers 1. Defend the insured against any claim
alleging damages covered under the policy.
2. Pay on the insured's behalf any damages that the insured is legally obligated to pay and that
are covered by the policy.
Describe what is meant by a third-party claim correct answers A third-party claim is 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.
Describe products liability correct answers Products liability refers to the responsibility arising
out of the manufacture, distribution, or sale of allegedly defective or dangerous products.
Identify a unique policy provision found in professional liability policies correct answers The
consent-to-settle clause, or hammer clause, is included in professional liability policies because
claim settlements can affect a professional reputation.
Explain a difficulty in protecting intellectual property correct answers Computers, the internet,
and information technology enable easy reproduction and distribution of digitized information.
When information can be published throughout the world over the internet, protecting the
originator's rights from people who use the work without permission (copyright infringement)
becomes more difficult.
List the four critical tasks that a liability claims representative should complete when dealing
with a claim correct answers 1. Determining coverage
2. Investigate liability
3. Evaluate damages
4. Settle liability claims
Describe two reasons investigation is critical in the liability claims process correct answers To
fulfill good-faith duty to the insured by investigating and to provide needed information to
evaluate liability and damages and to settle the claim properly.
Describe the process of mediation correct answers In mediation, an intermediary, known as a
mediator, acts as a reference between two parties, usually the claims representative or legal
counsel and the claimant with his or her attorney.
, Describe the parties who are generally considered insureds under a liability correct answers The
parties who are generally considered insureds under a liability policy include the named insured.
In addition, other parties such as spouses, business partners, and employee often meet the
definition of an "insured". People who occupy or drive an insured vehicle may be considered
insureds as well.
Describe why punitive damages may not be covered under a liability policy correct answers
Punitive damages may not be covered under a liability policy either because the policy
specifically excludes them or because an applicable state law prohibits insurers from paying
them.
Identify the basic difference between an occurrence-based policy and a claims-made policy
correct answers Under an occurrence-based policy, the alleged bodily injury or property damage
must occur during the policy period to be covered. Under a claims-made policy, the policy in
effect when a claim is first made is the policy that covers the claim - even though the injury or
damage for which the claim is being made have occurred before the policy's inception date.
Describe what is meant by policy conditions that must be met before or after a loss correct
answers Insureds and insurers have obligations under the insurance policy that must be met
before or after a loss. Conditions that must be met before a loss occurs are called conditions
"precedent". Those that must be met after a loss occurs are called conditions "subsequent".
Describe how changes in the legal environment are affecting liability claims practices correct
answers Changes in the legal environment are affecting liability claims practices in three
ways/areas: the application and interpretation of insurance coverages; the creation and expansion
of new areas of liability; and the types of damages allowable and awarded by courts.
Describe what is meant by managed care correct answers Managed care, which has been used in
the health industry for years, refers to a variety of techniques used to contain medical costs while
providing individuals with appropriate care for their injuries.
List the four essential elements of negligence correct answers 1. The defendant owed a legal duty
of care to the plaintiff
2. The defendant breached the duty of care owed to the plaintiff
3. The defendant's negligent act was the proximate cause of the plaintiff's injury or damage
4. The plaintiff suffered actual injury or damage
Describe what a reasonable person test is and how it is used to prove breach of duty correct
answers A reasonable person test is an external, objective test under which the defendant's
individual or personal judgement, or that of other parties involved, is not considered. The test is
based on how a jury perceives that a reasonable person would acted and is a standard for the
degree of care exercised in a situation. Circumstances further quality the reasonable person test.
Explain what concurrent causation is and how it relates to negligence correct answers Concurrent
causation is a legal doctrine stating that if a loss can be attributed to two or more independent
