©THEBRIGHT EXAM SOLUTIONS
11/8/2024 12:08 PM
RPLU 18 - Exam Questions And Answers
100% Pass
What does a limitation of liability clause do? - answer✔Allocates potential liability between contractual
parties. * Also includes a maximum dollar amount of liability
What is the difference between Mediation & Arbitration? - answer✔Mediation is less formal and non-
binding, whereas Arbitration is sometimes required, more formal, and can be binding.
Who is covered under a policy? - answer✔1) Named Insured/Policyholder 2) Active officers or
employees of Named Insured 3) Retired/former officers or employees 4) Leased employees 5)
Spouses/executors of insureds
* Note that it must be within the scope of duty * Subcontractors are not covered (Vicariously liable)
What factors regarding Territory affect UW rates, and why? - answer✔* Some states are more litigious
since individuals may be more likely to sue * Courts in states may have set precedents making it easier
to collect from design firms * Location of home office determines the state rate * Need additional
licenses to practice in other states * Coastal regions are issues * California, Florida, and New Jersey are
tough and may pay more for E&O insurance
What are the roles of a claims professional? - answer✔1) Investigate claims 2) Determine if losses are
covered by the policy 3) Establish case reserves 4) Manage litigation 5) Settle claims * Do not defend
against claims
What are some advantages of a project policy? - answer✔* Cover all claims arising from a project *
Effective for the entire construction period * Effective for a run-off period * Higher limits are available *
Covers anyone who works on a project
What are the differences between payment and performance bonds? - answer✔Payment bonds ensure
subcontractors will be properly paid, whereas Performance bonds ensure a project is completed timely
and in accordance with the contract
What are supplemental payments? - answer✔An insurer promises to pay for certain additional costs in
addition to damages covered within limits of liability. * Do not affect policy limits and do not exhaust
limits
, ©THEBRIGHT EXAM SOLUTIONS
11/8/2024 12:08 PM
What can invoke coverage under a Design Professional policy? - answer✔Reporting an incident that is
reasonably expected to result in a claim. (Potential claim event)
Which of the following is not a requirement of an Architect? A) Bachelor's in Architecture B) Masters in
Architecture or lengthy internship C) Architects Principles & Practice examination D) Architect
Registration examination - answer✔Architects Principles & Practice examination
What were some of the key findings of the Ames & Gough Survey? - answer✔* Premiums are trending
upward but remain modest * Recent claims experience (2 years) * Types of projects * 50% cited higher
claim severity with the majority paying a claim of $1 million or more * Only 7% cited higher claim
frequency * Claims experience is improving * Firms need to stay active in claim/risk management
Why do design professionals buy insurance? - answer✔Many contracts require it be purchased
What factors develop a sound defense in a design malpractice claim? - answer✔* Statute of limitations
* Statutes of Repose * Economic loss doctrine * Contractual defenses
What are some common endorsements to E&O policies for design professionals? - answer✔* First dollar
defense * Defense outside the limits * Waiver of subrogation * Specific project/client excess limits
A Notice of a Potential Claim must include? - answer✔* What happened * What service was performed
* What possible injury/damage may have occurred * How the circumstance occurred * When the
insured first became aware
What are the five most relevant exclusions to E&O polices for design professionals? - answer✔*
Contractual liability & warranty or guarantee * Faulty workmanship * Goods or products * Related entity
* Insured vs. Insured
When can a claim first arise? - answer✔* From a written monetary demand * From a written or oral
monetary demand * From a known incident or probable claim event
What are some high-risk project types? - answer✔* Condominiums/Apartments * Bridges * Pools *
Amusement Rides * Mass transit * Subdivisions
What are some low-risk design disciplines? - answer✔* Mechanical engineering * Land Surveying *
Electrical engineering * Interior design * Landscape architecture
What are some high-risk design disciplines? - answer✔* Architecture * Geotechnical/soil engineering *
Structural engineering
Who does the Spearin Doctrine protect? - answer✔Contractors are protected by warranty of designs
handed over by design professionals. * A client-owner impliedly warrants the adequacy of the design
professionals plans when handed over
What is covered by a CGL policy? - answer✔Losses caused by construction methods resulting in BI or PD
from an accident, including ordinary construction methods.
11/8/2024 12:08 PM
RPLU 18 - Exam Questions And Answers
100% Pass
What does a limitation of liability clause do? - answer✔Allocates potential liability between contractual
parties. * Also includes a maximum dollar amount of liability
What is the difference between Mediation & Arbitration? - answer✔Mediation is less formal and non-
binding, whereas Arbitration is sometimes required, more formal, and can be binding.
Who is covered under a policy? - answer✔1) Named Insured/Policyholder 2) Active officers or
employees of Named Insured 3) Retired/former officers or employees 4) Leased employees 5)
Spouses/executors of insureds
* Note that it must be within the scope of duty * Subcontractors are not covered (Vicariously liable)
What factors regarding Territory affect UW rates, and why? - answer✔* Some states are more litigious
since individuals may be more likely to sue * Courts in states may have set precedents making it easier
to collect from design firms * Location of home office determines the state rate * Need additional
licenses to practice in other states * Coastal regions are issues * California, Florida, and New Jersey are
tough and may pay more for E&O insurance
What are the roles of a claims professional? - answer✔1) Investigate claims 2) Determine if losses are
covered by the policy 3) Establish case reserves 4) Manage litigation 5) Settle claims * Do not defend
against claims
What are some advantages of a project policy? - answer✔* Cover all claims arising from a project *
Effective for the entire construction period * Effective for a run-off period * Higher limits are available *
Covers anyone who works on a project
What are the differences between payment and performance bonds? - answer✔Payment bonds ensure
subcontractors will be properly paid, whereas Performance bonds ensure a project is completed timely
and in accordance with the contract
What are supplemental payments? - answer✔An insurer promises to pay for certain additional costs in
addition to damages covered within limits of liability. * Do not affect policy limits and do not exhaust
limits
, ©THEBRIGHT EXAM SOLUTIONS
11/8/2024 12:08 PM
What can invoke coverage under a Design Professional policy? - answer✔Reporting an incident that is
reasonably expected to result in a claim. (Potential claim event)
Which of the following is not a requirement of an Architect? A) Bachelor's in Architecture B) Masters in
Architecture or lengthy internship C) Architects Principles & Practice examination D) Architect
Registration examination - answer✔Architects Principles & Practice examination
What were some of the key findings of the Ames & Gough Survey? - answer✔* Premiums are trending
upward but remain modest * Recent claims experience (2 years) * Types of projects * 50% cited higher
claim severity with the majority paying a claim of $1 million or more * Only 7% cited higher claim
frequency * Claims experience is improving * Firms need to stay active in claim/risk management
Why do design professionals buy insurance? - answer✔Many contracts require it be purchased
What factors develop a sound defense in a design malpractice claim? - answer✔* Statute of limitations
* Statutes of Repose * Economic loss doctrine * Contractual defenses
What are some common endorsements to E&O policies for design professionals? - answer✔* First dollar
defense * Defense outside the limits * Waiver of subrogation * Specific project/client excess limits
A Notice of a Potential Claim must include? - answer✔* What happened * What service was performed
* What possible injury/damage may have occurred * How the circumstance occurred * When the
insured first became aware
What are the five most relevant exclusions to E&O polices for design professionals? - answer✔*
Contractual liability & warranty or guarantee * Faulty workmanship * Goods or products * Related entity
* Insured vs. Insured
When can a claim first arise? - answer✔* From a written monetary demand * From a written or oral
monetary demand * From a known incident or probable claim event
What are some high-risk project types? - answer✔* Condominiums/Apartments * Bridges * Pools *
Amusement Rides * Mass transit * Subdivisions
What are some low-risk design disciplines? - answer✔* Mechanical engineering * Land Surveying *
Electrical engineering * Interior design * Landscape architecture
What are some high-risk design disciplines? - answer✔* Architecture * Geotechnical/soil engineering *
Structural engineering
Who does the Spearin Doctrine protect? - answer✔Contractors are protected by warranty of designs
handed over by design professionals. * A client-owner impliedly warrants the adequacy of the design
professionals plans when handed over
What is covered by a CGL policy? - answer✔Losses caused by construction methods resulting in BI or PD
from an accident, including ordinary construction methods.
