CISR Commercial Casualty I Lesson Exam 48 Questions with Answers,100% CORRECT

CISR Commercial Casualty I Lesson Exam 48 Questions with Answers Legal Liability - CORRECT ANSWER A responsibility or obligation to others, which courts recognize and enforce. In general failure to meet this duty often results in the imposition of monetary damages. 3 Types of Legal Liability - CORRECT ANSWER Tort Liability, Statutory Liability, Contractual Liability 4 Types of Tort Liability - CORRECT ANSWER Negligence, Intentional Torts, Strict Liability, Absolute Liability Name the four requirements of a negligent tort (long version) - CORRECT ANSWER 1. Duty owed by negligent party to another party, 2. Breach of that Duty, 3. Actual Injury or Loss must occur, 4. There has to be a close cause and effect (proximate cause) relationship between the breach of that duty and the injury or loss. 4 requirements of a negligent tort (short version) - CORRECT ANSWER 1. Duty owed, 2. Breach of Duty, 3. Proximate Cause, 4. Damages Intentional Tort Definition - CORRECT ANSWER An intentional or voluntary act where the person or organization committing the act is expressly or implicitly deemed to have possessed intent or purpose to injure. The person or organization committing the act can be held legally liable for that injury or loss. Intentional Tort Examples - CORRECT ANSWER 1. Libel, 2. Slander, 3. Wrongful entry or wrongful eviction, 4. Assault and/or battery, 5. Wrongful detention, 6. False Arrest, 7. Copyright infringement, trademark infringement, etc... Strict Liability (Tort) Definition - CORRECT ANSWER Concept applied by the courts in product liability suits in which a manufacturer, distributor or seller is liable for any and all defective or hazardous products that unduly threaten a consumer's health and safety. Strict Liability (Tort-Products Liability) Coverage trigger - CORRECT ANSWER Has to be proved that the product that caused the damage was defective and the defect rendered that product unreasonably dangerous. The element of proximate cause is not applicable. Defective Product (Tort-Strict/Products Liability) - CORRECT ANSWER A defect in manufacture, design or failure to adequately warn of a hazard involved in the foreseeable use of the product. (ladder that only holds 250 pounds but doesn't have that clearly displayed as a warning on the product) Absolute Liability (Tort) Definition - CORRECT ANSWER When conditions or activities are inherently dangerous. Liability without regard to fault. Certain activities create such a serious risk of harm that it is justifiable to place liability for any injury or damage on the person or organization engaging in the activity, even what every precaution to prevent or reduce damages has been taken. All that has to be proved is that an injury or damage occurred because of the activities. Absolute Liability (Tort) Examples - CORRECT ANSWER 1. Explosive or blasting operations, 2. Dangerous animals, 3. Hazardous material operations Statutory Liability Definition - CORRECT ANSWER Liability arising out of specific rules or laws (statutes) enacted by a legislative body providing direction or prohibition. Statutory Liability Examples - CORRECT ANSWER 1. Workers Compensation Statutes, 2. Dram Shop or Liquor Liability Statutes, 3. Environmental Protection Statutes, 4. Americans With Disabilities Act, related rulings and state statutes, 5. Employment Liability through statutes and EEOC rulings Contractual Liability Definition - CORRECT ANSWER Coverage for Insured Contracts (Only Insured Contracts) Contract Definition - CORRECT ANSWER An agreement between two or more parties, which creates and obligation to do or not to do a particular thing. Often in contracts, one party assumes the financial consequences of certain liabilities of another. Hold Harmless and /or Indemnity Agreement - CORRECT ANSWER Assumption of responsibility for the liability of another Parties commonly involved in a hold harmless and/or indemnity agreement - CORRECT ANSWER 1. Lessor-Lessee, 2. Owner-Contractor, 3. Contractor-Subcontractor, 4. Manufacturer-Distributor Breach of Contract Example - CORRECT ANSWER A breach of warranty claim, Contractual Liability Examples - CORRECT ANSWER Tenant/Landlord lease, Equipment Lease Implied Warranty - CORRECT ANSWER Product is fit for the ordinary purpose for which it is used (Breach of Warranty Example: The first time you use a hammer a large piece breaks off and injures you) Direct Liability Definition - CORRECT ANSWER Results from the conduct of a person or organization that is responsible for injury or property damage to another. Direct Liability Example - CORRECT ANSWER Market fails to clean up a food spill in the aisle and a patron slips on the food and falls and is injured. Vicarious Liability Definition - CORRECT ANSWER Liability of one party based on upon the liability of another. Liability is imputed (transferred from one party to the other. Vicarious Liability Example - CORRECT ANSWER Employee delivering for employer causes an auto accident in which people were injured. Vicarious Liability Relationship Examples - CORRECT ANSWER 1. Employer/Employee, 2. Principal/Agent, 3. Owner/Manager 4.Owner/Contractor, 5. Contractor/Sub-Contractor Types of damages that can be awarded in liability claims - CORRECT ANSWER Compensatory damages or Punitive or exemplary damages Compensatory Damages Definition - CORRECT ANSWER Sums of money that will, as far as possible, compensate for the loss 2 Types of Compensatory Damages - CORRECT ANSWER Special Damages and General Damages Special Damages Definition - CORRECT ANSWER Specific Dollar amounts that cover specific costs Special Damages Examples - CORRECT ANSWER Medical Bills, lost income, rehabilitation expenses, repair or replacement of property, loss of use of property, etc... General Damages Definition - CORRECT ANSWER Subjective dollar amounts that cover intangible losses General Damages Example - CORRECT ANSWER Pain and suffering, disfigurement, loss of consortium, etc... Punitive or exemplary damages Definition - CORRECT ANSWER sums of money, more than are required to compensate for loss, which are imposed in order to punish wrongdoer conduct now and deter such conduct in the future Punitive or exemplary damages Example - CORRECT ANSWER In addition to compensatory damages, the defendant is ordered to pay $100,000 in punitive damages for texting while driving. Punitive or exemplary damages restrictions - CORRECT ANSWER Statutes may restrict the amount of exemplary or punitive damages that can be recovered. State law may also restrict liability policies from paying for exemplary or punitive damages. Some liability polices have exclusions that prohibit paying for exemplary or punitive damages. Common Business Exposures that can lead to Legal Liability Examples - CORRECT ANSWER 1. Premises, 2. Operations, 3. Products, 4. Completed Operations, 5. Ownership, Maintenance, or Use of Autos, 6. Ownership, Maintenance or Use of Other Conveyances, 7. Employing Workers, 8. Liquor, 9. Environmental Impairment, 10. Professional Activities, 11. Bailee Liability Legal Liability Exposure: Premises Definition - CORRECT ANSWER Legal liability results out of an injury and/or damage due to the ownership, maintenance or use of a location. Legal Liability Exposure: Operations Definition - CORRECT ANSWER Legal liability results when injury and/or damages arise out of business activities such as construction, processing, manufacturing, repairing or loading and unloading of goods. Legal Liability Exposure: Products Definition - CORRECT ANSWER Legal liability results when injury and/or damages arise out of defects in product design, manufacture or the failure to warn. Legal Liability Exposure: Completed Operations Definition - CORRECT ANSWER Legal liability results out of an injury and/or damage arises out of defective or improper workmanship. The exposure applies to the insured's work. The exposure begins once the operations have been completed and the insured leaves the work site. Legal Liability Exposure: Ownership, Maintenance or Use of Automobiles Definition - CORRECT ANSWER Legal liability results when injury and/or damages arises out of the ownership, maintenance or use of an auto. Almost every commercial client has this exposure. Legal Liability Exposure: Ownership, Maintenance or Use of Other Conveyances Definition - CORRECT ANSWER Legal liability results when injury and/or damage arises out of the ownership, operation, maintenance or use of conveyances other than an auto. This exposure will vary from business to business. Legal Liability Exposure: Employing Workers Definition - CORRECT ANSWER Legal liability arises from the statutory obligations employers have to employees regarding work-related injuries or occupational disease. The exposure is subject to the laws and regulations covering workers compensation, employers liability, and other employment-related issues in each state. Legal Liability Exposure: Liquor Definition - CORRECT ANSWER Legal liability is imposed when injury and/or damage arises from the business of manufacturing, distributing, selling, serving or furnishing of alcoholic beverages. The exposure will vary and is subject to statutes and case law in each state. Legal Liability Exposure: Environmental Impairment Definition - CORRECT ANSWER Legal liability exposure that may arise from direct or indirect involvement with pollution and/or pollution-related situations. Legal Liability Exposure: Professional Activities Definition - CORRECT ANSWER Legal liability results from injury and/or damage arising from the giving or failure to give professional advice or service. The exposure will vary depending on the nature of the business and by state statute and case law. Legal Liability Exposure: Bailee Definition - CORRECT ANSWER Legal liability results from injury and/or damage arising out of the insured's possession of others property. Exposure will vary on the nature of the business.