C13: Insurance Against Liability-Part 1 flashcards

32 cards. Read the term and the definition here. The deck at the top of this page is optional.

Third-party liability coverage

Insurance that pays sums the insured is legally obligated to pay to others and funds defense of covered claims, in contrast to first-party coverage that pays the insured's own loss.

Compensatory damages

Money awarded to restore an injured claimant for medical expenses, lost wages, and pain and suffering; punitive damages are separate and often uninsurable.

Four elements of negligence

Duty owed to the claimant, breach of that duty, proximate cause linking breach to injury, and actual damages; all four must be shown for recovery.

Joint and several liability

A rule allowing a claimant to collect the entire judgment from any one liable defendant, who may then seek contribution from other responsible parties.

Negligence per se

A doctrine treating violation of a protective statute as negligence when the claimant belongs to the class the statute protects and the violation caused the injury.

Res ipsa loquitur

A doctrine permitting an inference of negligence when the injuring instrumentality was under the defendant's exclusive control and the event ordinarily would not occur without negligence.

Comparative negligence

A defense reducing the claimant's recovery in proportion to the claimant's own fault; pure versions allow recovery despite greater fault, modified versions bar it.

Assumption of risk

A defense barring recovery when the claimant voluntarily and knowingly exposed himself or herself to a known danger created by the defendant.

Coverage A grant

The CGL promise to pay sums the insured becomes legally obligated to pay as damages because of bodily injury or property damage caused by an occurrence.

Bodily injury definition

Bodily harm, sickness, disease, or death sustained by a person; emotional distress alone generally is not bodily injury unless tied to physical injury.

Property damage definition

Physical injury to tangible property, including resulting loss of use, or loss of use of tangible property that has not been physically injured.

Duty to defend

The insurer's obligation to defend suits seeking covered damages even if allegations are groundless, false, or fraudulent; broader than the duty to indemnify.

Groundless allegations

Claims that may be false or unsupported still trigger the defense duty when they potentially fall within coverage; the insurer defends under a reservation of rights.

Personal and advertising injury

Injury arising from offenses such as false arrest, malicious prosecution, libel, slander, invasion of privacy, and infringement of copyright or slogan in advertising.

Offense-based coverage

Coverage B is triggered by the offense itself occurring during the policy period, not by the resulting injury or the date a claim is filed.

Knowing violation exclusion

Bars Coverage B for injury caused by an offense committed by or at the direction of the insured with knowledge that the act was false.

Breach of contract exclusion

Bars personal and advertising injury arising out of breach of contract, except breach of an implied contract to protect another's reputation or privacy.

Coverage C medical payments

No-fault payment of reasonable medical expenses incurred within one year of an accident on the insured's premises or arising from the insured's operations.

Medical payments exclusions

Coverage C excludes the insured, employees entitled to workers compensation, tenants, and persons engaged in the insured's business.

Medical payments sublimit

A small separate limit, commonly five or ten thousand dollars per person, that does not reduce the Coverage A per-occurrence limit.

Expected or intended injury

A CGL exclusion barring coverage for bodily injury or property damage the insured expected or intended, though reckless conduct may still be covered.

Contractual liability exclusion

Bars coverage for liability assumed under contract, with exceptions for insured contracts such as leases, easements, and certain indemnity agreements.

Absolute pollution exclusion

A broad exclusion barring bodily injury and property damage arising from actual or threatened discharge of pollutants, with narrow exceptions in the base form.

Separation of insureds

A condition providing that coverage applies as if each insured were the only insured, except for limits and specified exclusions.

Occurrence policy

A liability policy covering injury or damage that occurs during the policy period, regardless of when the claim is later reported.

Claims-made policy

A liability policy covering claims first made during the policy period for wrongful acts occurring on or after the stated retroactive date.

Retroactive date

The date before which wrongful acts are not covered under a claims-made policy; prior-acts endorsements can move the date earlier.

Extended reporting period

A tail provision extending the time to report claims made after a claims-made policy expires; it does not extend coverage for new wrongful acts.

Umbrella liability

Coverage above scheduled underlying policies that can also drop down to fill gaps in underlying coverage, subject to a self-insured retention.

Professional liability

Errors and omissions coverage for negligent acts, errors, or omissions in rendering professional services, frequently written on a claims-made basis.

General aggregate limit

The maximum the insurer pays for all covered Coverage A and B claims in a policy period, excluding products-completed operations claims.

Self-insured retention

A specified amount the insured retains before coverage applies; unlike a deductible, the insured typically controls defense of claims within the retention.