CIC Commercial Multi-line Exam Prep
(100% Correct Answers)
Identify and describe the three primary purposes of excess liability/umbrella policies
(LO1) - Answer- 1. Provide additional limits that are excess over underlying limits of
insurance
2. Provide primary coverage when underlying policy does not respond because its
aggregate limits of insurance are exhausted.
3. Provide broader coverage than the existing underlying insurance
Excess liability coverage forms and commercial umbrella liability policy - Answer- 1.
Follow forms
- hella short
- "basically what underlying says but more money"
- does NOT provide broader coverage
2. Excess liability
- own insuring agreement and stuff
- could be the same, narrower, broader
3. Commercial umbrella liability policy
- own insuring agreement and stuff
- broader coverage
Define "Self-Insured Retention" (SIR) and apply it (LO2) - Answer- SIR is the dolllar
amount listed in the declarations paid by the named insured before the excess
insurance becomes applicable
Applies only when the excess policy provide broader insurance protection
Does not apply when the umbrella drops down over exhausted limits or when exceee
over underlying limits.
SIR may be written per occurrence or policy period basis
, CIC Commercial Multi-line Exam Prep
(100% Correct Answers)
Explain the importance of concurrent dates and be able to provide solutions for non-
concurrency situations (LO3) - Answer- Concurrent dates means the policy period of the
excess/umbrella policy are the same as those of the underlying insurance policies
The declarations of the excess liability has a schedule of underlying insurance that
indicates the required limits that are to be in effect at its effective date.
The underlying limits must be unimpaired at the effective debate of the excess liability
Describe the underlying insurance requirements of excess liability/commercial umbrella
policies and apply the in a practical applications. (LO4)*** - Answer- Coverage
Most insures typically require CGL, Business Auto and Employer Liability
Other liability policies may be required for other known exposure such as aircraft, Iiquor
liability, watercraft
Limits of Insruance
Limits required by varies by insurer
Some exposures require higher underlying limits
The required limits must be in full effect at the effective date of the policy period
Compare and contract the insuring agreement known as pay on behalf and indemnify
(LO5) - Answer- Pay on Behalf of
- The insure has stricter control of defense, investigation or settlements
- The insurer pays damages directly to third party on behalf of
-The insure has the duty to defend when the underlying does not provide coverage
Indemnify
- strict indemnity (insured uses their own funds directly to pay claims and insurer
reimburses)
- based on legal obligations to pay (insured still has control but indemnity is based on
legal obligation to pay - insurer write checks to insured)
, CIC Commercial Multi-line Exam Prep
(100% Correct Answers)
Types of damages, defense costs, and ultimate net loss in Excess liability and umbrella
policies
What is the coverage area - Answer- damages
- follow form follows underlying
- excess liability/commercial umbrella (pay because of bodily injury and property
damage as defined or pays because of personal advertising injury as defined)
Defense
- duty to defend
- not duty to defend in some cases (still right to defend)
- defense cost included within the SIR is often referred to as first dollar defense
Ultimate net loss (different ways to pay this- what the court says must be paid)
- all sums paid or payable in settlement
- all sums paid or payable as damages
Coverage area
- worldwide or anywhere in universe, could also be limited
Exclusions for excess and umbrella - Answer- - aircraft
- watercraft
- contractual liability
- liquor liability
- pollution
- damage to property
- damage to your work
- imparted property
- electronic data liability
, CIC Commercial Multi-line Exam Prep
(100% Correct Answers)
- professional
- uninsured and underinsured motorists
- Employment related practices
Layering options for excess liability and umbrella policies - Answer- 1. Single
2. Layering
3. Quota share
4. Buffer layer
Identify common cyber exposures (LO1) - Answer- - data storage both active and at rest
- collection of private information on employees, clients, vendors, etc
- A website and or social media presence
- Access to the internet and integration, sharing or transmission of dates and/or
communications with others vita the internet
- E-commerce business transactions
- Credit card transactions
- E&O or professional liability
- Internet of Things
- Subject to State and Federal Laws
Reasons for cyber coverage - Answer- - everyone uses the internet
- for those who have data in their CCC
- the policies are flexible
Coverage for cyber includes assets and intellectual property
Possible third party losses (not all covered by insurance) - Answer- - Unintended
disclosure of information
- Disclosure of incorrect or damaging information or information that could result in a
violation of privacy.
(100% Correct Answers)
Identify and describe the three primary purposes of excess liability/umbrella policies
(LO1) - Answer- 1. Provide additional limits that are excess over underlying limits of
insurance
2. Provide primary coverage when underlying policy does not respond because its
aggregate limits of insurance are exhausted.
3. Provide broader coverage than the existing underlying insurance
Excess liability coverage forms and commercial umbrella liability policy - Answer- 1.
Follow forms
- hella short
- "basically what underlying says but more money"
- does NOT provide broader coverage
2. Excess liability
- own insuring agreement and stuff
- could be the same, narrower, broader
3. Commercial umbrella liability policy
- own insuring agreement and stuff
- broader coverage
Define "Self-Insured Retention" (SIR) and apply it (LO2) - Answer- SIR is the dolllar
amount listed in the declarations paid by the named insured before the excess
insurance becomes applicable
Applies only when the excess policy provide broader insurance protection
Does not apply when the umbrella drops down over exhausted limits or when exceee
over underlying limits.
SIR may be written per occurrence or policy period basis
, CIC Commercial Multi-line Exam Prep
(100% Correct Answers)
Explain the importance of concurrent dates and be able to provide solutions for non-
concurrency situations (LO3) - Answer- Concurrent dates means the policy period of the
excess/umbrella policy are the same as those of the underlying insurance policies
The declarations of the excess liability has a schedule of underlying insurance that
indicates the required limits that are to be in effect at its effective date.
The underlying limits must be unimpaired at the effective debate of the excess liability
Describe the underlying insurance requirements of excess liability/commercial umbrella
policies and apply the in a practical applications. (LO4)*** - Answer- Coverage
Most insures typically require CGL, Business Auto and Employer Liability
Other liability policies may be required for other known exposure such as aircraft, Iiquor
liability, watercraft
Limits of Insruance
Limits required by varies by insurer
Some exposures require higher underlying limits
The required limits must be in full effect at the effective date of the policy period
Compare and contract the insuring agreement known as pay on behalf and indemnify
(LO5) - Answer- Pay on Behalf of
- The insure has stricter control of defense, investigation or settlements
- The insurer pays damages directly to third party on behalf of
-The insure has the duty to defend when the underlying does not provide coverage
Indemnify
- strict indemnity (insured uses their own funds directly to pay claims and insurer
reimburses)
- based on legal obligations to pay (insured still has control but indemnity is based on
legal obligation to pay - insurer write checks to insured)
, CIC Commercial Multi-line Exam Prep
(100% Correct Answers)
Types of damages, defense costs, and ultimate net loss in Excess liability and umbrella
policies
What is the coverage area - Answer- damages
- follow form follows underlying
- excess liability/commercial umbrella (pay because of bodily injury and property
damage as defined or pays because of personal advertising injury as defined)
Defense
- duty to defend
- not duty to defend in some cases (still right to defend)
- defense cost included within the SIR is often referred to as first dollar defense
Ultimate net loss (different ways to pay this- what the court says must be paid)
- all sums paid or payable in settlement
- all sums paid or payable as damages
Coverage area
- worldwide or anywhere in universe, could also be limited
Exclusions for excess and umbrella - Answer- - aircraft
- watercraft
- contractual liability
- liquor liability
- pollution
- damage to property
- damage to your work
- imparted property
- electronic data liability
, CIC Commercial Multi-line Exam Prep
(100% Correct Answers)
- professional
- uninsured and underinsured motorists
- Employment related practices
Layering options for excess liability and umbrella policies - Answer- 1. Single
2. Layering
3. Quota share
4. Buffer layer
Identify common cyber exposures (LO1) - Answer- - data storage both active and at rest
- collection of private information on employees, clients, vendors, etc
- A website and or social media presence
- Access to the internet and integration, sharing or transmission of dates and/or
communications with others vita the internet
- E-commerce business transactions
- Credit card transactions
- E&O or professional liability
- Internet of Things
- Subject to State and Federal Laws
Reasons for cyber coverage - Answer- - everyone uses the internet
- for those who have data in their CCC
- the policies are flexible
Coverage for cyber includes assets and intellectual property
Possible third party losses (not all covered by insurance) - Answer- - Unintended
disclosure of information
- Disclosure of incorrect or damaging information or information that could result in a
violation of privacy.
