RMIN 5100S - Test 3 (Atkinson)\\ RMIN 5100S Test
3 (Atkinson) – Complete Study Guide & Practice
Questions 2025
Desk
- people with an organized desk tend to prefer property, while people with an unorganized desk tend to
like liability
Liability Risk
you are responsible for someone else or their stuff.
Legal Liability
- Criminal: crimes against society. Punishable by imprisonment and fines
- Civil: breach of duty owed to others. Punishable by money and injunctions.
- A single act can be both: 2008-09 Salmonella Outbreak. Major recall in 46 states of products that were
contaminated with salmonella (especially Peanut Butter paste).thecompany was continuing to
selltheproducts even after bad tests.theCEO was sentenced to 28 years in prison.
3 Bases for Legal Liability
1. Tort
2. Legal Liability Based on Contracts
3. Legal Liability Based on Statutes
Tort
3 types of Tort:
1. Negligence
2. Intentional
3. Strict Liability
Negligence (a type of tort)
Is based on:
- a duty of care
- breach of duty
- injury or damage
There must be proximate cause (a connection betweenthebreach of duty andtheinjury/damage)
- This is by farthe#1 reason why we have liabilities
Intentional (a type of tort)
- 2 Types:
1. Act - intends to dotheaction, but no intent to harm (You run a red light and hit a car).
2. Injury - Purpose is to cause harm (assault, battery, invasion)
,Strict Liability (a type of tort)
- liability intheabsence of Negligence and Intentional tort (aka Absolute Liability)
- liability that is imposed even thoughthedefendant acted neither negligently or withtheintent to cause
harm
- also used to describe liability from statutes (Workers Comp., Dram Shop)
- examples include owning wild animals, blasting/explosive operations, and dangerously defective
products
Legal Liability Based on Contracts
Breach of Contract
- failure of a seller to fulfill its promise
- intheeyes ofthelaw,theseller "warrants" that a product is fit for its intended use
- if a product fails to function well,thebuyer will likely want to their money back (this is not covered by
insurance).
- things get a bit more serious iftheproduct's failure results in BI/PD (this is covered by insurance)
- Ex: a kid was able to open a child-proof container and drink Draino (the parents can sue Draino
andthelatch-maker)
Hold Harmless and Indemnification Agreements
- assume legal liability for another's liability
- If Party A agrees to hold harmless and/or indemnify Party B, then Party A has assumed a Contractual
Liability
- these stipulate which company will be held legally responsible for costs of lawsuits intheevent that a
component causes BI or PD
- Ex: car companies and supplying manufacturers. In 1993, Ford Explorers started rolling over with
Firestone tires, so Ford starting using different tires (led to big rivalry)
- Hold harmless: "we won't sue each other"
- Indemnify: "if someone sues you, we will handle it"
Hold Harmless and Indemnification Agreements (Liability Based On Contracts)
- assume legal liability for another's liability
- If Party A agrees to hold harmless and/or indemnify Party B, then Party A has assumed a Contractual
Liability
- these stipulate which company will be held legally responsible for costs of lawsuits intheevent that a
component causes BI or PD
- Ex: car companies and supplying manufacturers. In 1993, Ford Explorers started rolling over with
Firestone tires, so Ford starting using different tires (led to big rivalry)
- Hold harmless: "we won't sue each other"
- Indemnify: "if someone sues you, we will handle it"
Legal Liability Based on Statutes
- State/Federal: Statutes
- Local: ordinances
, - laws passed by a legislative body that may increase liability or make a party strictly liable
- Common Statutes:
1. Workers Comp. pays 100% of medical expenses and up to 2/3 of lost salaries for employees
2. Dram Shop Laws: GA laws allow an injured person to hold a seller of alcohol liable iftheestablishment
willingly serves to someone under 21, knowingly serves to noticeably intoxicated, and knows that
person will be driving a motor vehicle.
Major Categories of Liability Loss Exposures
CGL:
1. Premises and Operations
2. Products and Completed Operations
Other Policies:
1. Auto
2. Workers Comp
3. Professional, Cyber, Environmental, MGMT, Marine, Aviation
CGL Premises and Operations
- Liability arising out of your business or operations
- If a business is conducting operations away from its own premises, thentheplace of operations
becomesthebusiness' premises forthetime that they are conducting operations
- Depending onthebusiness, these may be closely related
- common exposures to many businesses
- may also be referred to as "OL&T" exposures: owners, landlords, and tenants
General Liability Exposures: Premises
-theowner or tenant owes a varying degree of care to those who enterthepremises (invitees, licensees,
or trespassers
General Liability Exposures: Operations
- activities that occur on your premises or off
- Ex: a glass blower is doing a demonstration for onlookers. One oftheonlookers gets burned bythetorch.
How lawyers are paid
- Defendant's lawyers are paid bythehour
- Plaintiff's lawyers are paid by a % ofthewinnings
CGL Products and Completed Operations
- while products and completed operations are very different exposures, they are often grouped
together because they share an aggregate limit intheCGL Policy, which is separate fromtheGeneral
Aggregate Limit
General Liability Exposures: Products
3 (Atkinson) – Complete Study Guide & Practice
Questions 2025
Desk
- people with an organized desk tend to prefer property, while people with an unorganized desk tend to
like liability
Liability Risk
you are responsible for someone else or their stuff.
Legal Liability
- Criminal: crimes against society. Punishable by imprisonment and fines
- Civil: breach of duty owed to others. Punishable by money and injunctions.
- A single act can be both: 2008-09 Salmonella Outbreak. Major recall in 46 states of products that were
contaminated with salmonella (especially Peanut Butter paste).thecompany was continuing to
selltheproducts even after bad tests.theCEO was sentenced to 28 years in prison.
3 Bases for Legal Liability
1. Tort
2. Legal Liability Based on Contracts
3. Legal Liability Based on Statutes
Tort
3 types of Tort:
1. Negligence
2. Intentional
3. Strict Liability
Negligence (a type of tort)
Is based on:
- a duty of care
- breach of duty
- injury or damage
There must be proximate cause (a connection betweenthebreach of duty andtheinjury/damage)
- This is by farthe#1 reason why we have liabilities
Intentional (a type of tort)
- 2 Types:
1. Act - intends to dotheaction, but no intent to harm (You run a red light and hit a car).
2. Injury - Purpose is to cause harm (assault, battery, invasion)
,Strict Liability (a type of tort)
- liability intheabsence of Negligence and Intentional tort (aka Absolute Liability)
- liability that is imposed even thoughthedefendant acted neither negligently or withtheintent to cause
harm
- also used to describe liability from statutes (Workers Comp., Dram Shop)
- examples include owning wild animals, blasting/explosive operations, and dangerously defective
products
Legal Liability Based on Contracts
Breach of Contract
- failure of a seller to fulfill its promise
- intheeyes ofthelaw,theseller "warrants" that a product is fit for its intended use
- if a product fails to function well,thebuyer will likely want to their money back (this is not covered by
insurance).
- things get a bit more serious iftheproduct's failure results in BI/PD (this is covered by insurance)
- Ex: a kid was able to open a child-proof container and drink Draino (the parents can sue Draino
andthelatch-maker)
Hold Harmless and Indemnification Agreements
- assume legal liability for another's liability
- If Party A agrees to hold harmless and/or indemnify Party B, then Party A has assumed a Contractual
Liability
- these stipulate which company will be held legally responsible for costs of lawsuits intheevent that a
component causes BI or PD
- Ex: car companies and supplying manufacturers. In 1993, Ford Explorers started rolling over with
Firestone tires, so Ford starting using different tires (led to big rivalry)
- Hold harmless: "we won't sue each other"
- Indemnify: "if someone sues you, we will handle it"
Hold Harmless and Indemnification Agreements (Liability Based On Contracts)
- assume legal liability for another's liability
- If Party A agrees to hold harmless and/or indemnify Party B, then Party A has assumed a Contractual
Liability
- these stipulate which company will be held legally responsible for costs of lawsuits intheevent that a
component causes BI or PD
- Ex: car companies and supplying manufacturers. In 1993, Ford Explorers started rolling over with
Firestone tires, so Ford starting using different tires (led to big rivalry)
- Hold harmless: "we won't sue each other"
- Indemnify: "if someone sues you, we will handle it"
Legal Liability Based on Statutes
- State/Federal: Statutes
- Local: ordinances
, - laws passed by a legislative body that may increase liability or make a party strictly liable
- Common Statutes:
1. Workers Comp. pays 100% of medical expenses and up to 2/3 of lost salaries for employees
2. Dram Shop Laws: GA laws allow an injured person to hold a seller of alcohol liable iftheestablishment
willingly serves to someone under 21, knowingly serves to noticeably intoxicated, and knows that
person will be driving a motor vehicle.
Major Categories of Liability Loss Exposures
CGL:
1. Premises and Operations
2. Products and Completed Operations
Other Policies:
1. Auto
2. Workers Comp
3. Professional, Cyber, Environmental, MGMT, Marine, Aviation
CGL Premises and Operations
- Liability arising out of your business or operations
- If a business is conducting operations away from its own premises, thentheplace of operations
becomesthebusiness' premises forthetime that they are conducting operations
- Depending onthebusiness, these may be closely related
- common exposures to many businesses
- may also be referred to as "OL&T" exposures: owners, landlords, and tenants
General Liability Exposures: Premises
-theowner or tenant owes a varying degree of care to those who enterthepremises (invitees, licensees,
or trespassers
General Liability Exposures: Operations
- activities that occur on your premises or off
- Ex: a glass blower is doing a demonstration for onlookers. One oftheonlookers gets burned bythetorch.
How lawyers are paid
- Defendant's lawyers are paid bythehour
- Plaintiff's lawyers are paid by a % ofthewinnings
CGL Products and Completed Operations
- while products and completed operations are very different exposures, they are often grouped
together because they share an aggregate limit intheCGL Policy, which is separate fromtheGeneral
Aggregate Limit
General Liability Exposures: Products
