Exam (elaborations)
(RPLU) Professional Liability Insurance: Intro – Definitions 100% Solved
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(RPLU) Professional Liability Insurance: Intro – Definitions 100% Solved
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(RPLU) Professional Liability Insurance:Intro – Definitions 100% Solved
Run Off Correct Ans-An extended reporting period that allows an insured to report claims for
a period of time in the future and that often is used when a professional retires or ends a practice
Self-Insured Retention (SIR or Retention) Correct Ans-A dollar amount of loss that is the
insured's responsibility to pay BEFORE the insurance policy will respond to covered losses and
that may include damages and/or defense expenses
Separate Limit Correct Ans-A limit granted in addition to an applicable limit of liability
Settling Within Retention Clause Correct Ans-A policy provision that allows the insured to
settle a claim without the insurer's approval if the claim amount is under the policy's self-insured
retention
Settlement Correct Ans-An agreement in which the parties have resolved a dispute,
established a decision or payment, and have determined each party's rights and obligations
Severability Correct Ans-A policy provision that limits the effect of application
misrepresentations and prevents the wrongful acts of one insured from being imputed to other
insureds
, Short-Rate Basis Correct Ans-A method that is used to refund premiums when an insured
cancels a policy and that is based on the number of days the policy was in effect, MINUS 10%
Standard of Care Correct Ans-The degree of care that a reasonable member of the profession
with similar skills would exhibit in similar circumstances and that is the benchmark against
which a professional's conduct is judged
Statutory Violation Correct Ans-A violation of a state or federal law opposed to common law
or court rulings
Straight Hammer Clause Correct Ans-A policy provision that requires the insured to pay for
all defense costs and damages that exceed the recommended settlement offer
Sublimit Correct Ans-A separate, usually smaller limit within the limits of liability that applies
to specific types of claims or losses
Supplemental Payment Correct Ans-A type of coverage enhancement in which the insurer
promises to pay for certain additional costs or expenses (costs of defense outside the limit of
liability) in addition to those damages and expenses that are covered within the limits of liability
specified in the policy
Unconditional Settlement Clause Correct Ans-A policy provision that allows the insured to
control the settlement
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