CPCU 552 Professional Liability Study Questions with Answers

What are the three legal foundations of Professional Liability? 1. Breach of Contract - plaintiff shows the professional failed to perform the services for which he was hired 2. Tort action - plaintiff shows the professional failed to render service that met the standard expected 3. Statutes and Regulations - plaintiff shows that the professional violated a statute or regulation What are 4 types of damages recoverable under breach of contract? 1. Compensatory damages - indemnify injured party for monetary loss sustained due to breach of contract 2. Consequential damages - indemnify the injured party for losses related to civil wrong 3. Liquidated damages - specified amount named in contract, to be recovered due to breach 4. Nominal damages - small amount (often $1) awarded when a breach of contract occurs but does not product compensable injury Why do Professional Liability trials often need expert witness testimony? Because jurors are not experts in defendants area, and need help to determine if a professional used the required level of skill or care. Does the CGL offer professional liability? No, insurers routinely endorse their CGL policies to specifically exclude professional liability losses. What are the six common characteristics of PL policies? 1. Covered acts and consequences - professional services related to occupation: can be as limited as only negligent acts/e&o, or as broad as all wrongful acts 2. Persons and Organizations Insured - most cover insured and owners, directors, officers, partners, and stockholders. 3. Defense coverage - most pay defense costs, some pay in addition to limits, some have it included in limits 4. Claims-made provisions - most contain auto 1-3 year extended reporting 5. Coverage territory - most cover acts committed anywhere, if brought to suit in US or Canada 6. Exclusions - most exclude intentional injury, EL, WC, and pollution What are the 7 legal foundations of a Healthcare Professional's Professional Liability exposures? 1. Duties of healthcare providers - thorough examination, appropriate diagnoses, follow-up care, prescribe appropriate meds 2. Standard of care - plaintiff must establish proper standard of care and establish connection between injury and professional's failure to provide standard