RM 357E Exam 3 questions & correct
answers
Occurrence Policy - correct answer ✔✔Damages occurred on a specific day, therefore that coverage is
applied. Typical insurance.
Occurrence - by means of an ACCIDENT or repeated exposure to the same harmful conditions
Common General Liability Policy (CGL) - correct answer ✔✔Policy issued to businesses to protect them
against liability claims for bodily injury (BI) and property damage (PD) arising from their operations, and
also from advertising and personal injury (PI) liability.
Ex: Fire department service charge.
Claims Made Policy - correct answer ✔✔Only covers claims occurring and after the retroactive date and
the claim is made during the policy period.
Ex: Asbestos manufacturers were sued decades after the occurrence - price of coverage was not priced
for this type of risk (unforeseen). "Claims made" policies were created to prevent this from happening
again
Occurrence - correct answer ✔✔Accident including repeated or continuous exposure to essentially the
same general harmful conditions.
Coverages - correct answer ✔✔Coverage A - bodily injury and property damage liability (BI, PD)
Coverage B - personal and advertising injury liability (PI, AI)
Coverage C - medical payments
Coverages A and B - supplementary payments
"Claims Made" - correct answer ✔✔during the policy period, the occurrence is covered
Retroactive Date - correct answer ✔✔Date set such that any claim of any event that occurred before said
retroactive date (RD) will not be covered.
, "first day of policy"
Extended Reporting Periods - correct answer ✔✔If the accident is not reported during the policy period,
then there is a 90 day period to report the accident.
If reported during the coverage, you have up to 5 years (?????) - let insurance company have some
finality to their coverage for risk.
Employment-Related Practices Liability Insurance - correct answer ✔✔Covers discrimination, sexual
harassment, wrongful termination, failure to promote.
Insuring Agreement - describes covered perils (risk assumed), nature of coverage, or makes references to
the contract between insurer and insured. Summarizes the promises of the insurance company, and
what is covered.
Co-payment provision - unique, requires insured to pay % of loss up to a negotiated limit (pay a certain
percentage amount before receiving relief from insurance company)
Legal Defense - paid legal defense included in policy limit
Exclusions - liquor liability (criminal acts, strikes, lockouts)
Workers' Compensation and Employer's Liability Insurance - correct answer ✔✔Part 1 - Worker's
Compensation Insurance
Part 2 - Employer's Liability Insurance
Worker's Compensation Insurance (1/2) - correct answer ✔✔Covers injuries to employees
Employer's Liability Insurance (2/2) - correct answer ✔✔Arises from employer's inaction: failure to
provide a safe workplace for employees.
Covers business exposure when workers compensation does not.
Employees think employers are still liable.
Loss of companionship from spouse and children.
Third party over losses - third party countersues a business ("you didn't train them well")
Commercial Auto Insurance - correct answer ✔✔Largest point of exposure to businesses - risk arises
from action by an insured
answers
Occurrence Policy - correct answer ✔✔Damages occurred on a specific day, therefore that coverage is
applied. Typical insurance.
Occurrence - by means of an ACCIDENT or repeated exposure to the same harmful conditions
Common General Liability Policy (CGL) - correct answer ✔✔Policy issued to businesses to protect them
against liability claims for bodily injury (BI) and property damage (PD) arising from their operations, and
also from advertising and personal injury (PI) liability.
Ex: Fire department service charge.
Claims Made Policy - correct answer ✔✔Only covers claims occurring and after the retroactive date and
the claim is made during the policy period.
Ex: Asbestos manufacturers were sued decades after the occurrence - price of coverage was not priced
for this type of risk (unforeseen). "Claims made" policies were created to prevent this from happening
again
Occurrence - correct answer ✔✔Accident including repeated or continuous exposure to essentially the
same general harmful conditions.
Coverages - correct answer ✔✔Coverage A - bodily injury and property damage liability (BI, PD)
Coverage B - personal and advertising injury liability (PI, AI)
Coverage C - medical payments
Coverages A and B - supplementary payments
"Claims Made" - correct answer ✔✔during the policy period, the occurrence is covered
Retroactive Date - correct answer ✔✔Date set such that any claim of any event that occurred before said
retroactive date (RD) will not be covered.
, "first day of policy"
Extended Reporting Periods - correct answer ✔✔If the accident is not reported during the policy period,
then there is a 90 day period to report the accident.
If reported during the coverage, you have up to 5 years (?????) - let insurance company have some
finality to their coverage for risk.
Employment-Related Practices Liability Insurance - correct answer ✔✔Covers discrimination, sexual
harassment, wrongful termination, failure to promote.
Insuring Agreement - describes covered perils (risk assumed), nature of coverage, or makes references to
the contract between insurer and insured. Summarizes the promises of the insurance company, and
what is covered.
Co-payment provision - unique, requires insured to pay % of loss up to a negotiated limit (pay a certain
percentage amount before receiving relief from insurance company)
Legal Defense - paid legal defense included in policy limit
Exclusions - liquor liability (criminal acts, strikes, lockouts)
Workers' Compensation and Employer's Liability Insurance - correct answer ✔✔Part 1 - Worker's
Compensation Insurance
Part 2 - Employer's Liability Insurance
Worker's Compensation Insurance (1/2) - correct answer ✔✔Covers injuries to employees
Employer's Liability Insurance (2/2) - correct answer ✔✔Arises from employer's inaction: failure to
provide a safe workplace for employees.
Covers business exposure when workers compensation does not.
Employees think employers are still liable.
Loss of companionship from spouse and children.
Third party over losses - third party countersues a business ("you didn't train them well")
Commercial Auto Insurance - correct answer ✔✔Largest point of exposure to businesses - risk arises
from action by an insured
