CISR Commercial Casualty II flashcards

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

Workers' compensation benefit structure

Statutory benefits paid without regard to fault: unlimited medical care, wage-loss indemnity subject to state maximums, permanent disability benefits, death benefits to dependents, and rehabilitation services.

Part One: Workers' Compensation

Agrees to pay all benefits the insured is required to provide under the applicable state workers' compensation statute; no dollar limit and no deductible applies.

Part Two: Employers' Liability

Covers the employer's tort liability for employee injury or disease outside the statutory benefit system; limits are stated per accident and per employee for disease, plus a disease aggregate.

Part Three: Other States

Extends coverage to a state not listed in Item 3.A only when the employer has filed for benefits there or the state law requires the employer to provide them.

Experience modification factor

Compares the insured's actual losses with expected losses for its classification; a factor above 1.00 increases premium and below 1.00 produces a credit.

Workers' compensation premium basis

Payroll per $100 of remuneration multiplied by the classification rate, then adjusted by the experience modification; minimum premium and premium basis appear on the Information Page.

Employers' liability key exclusions

Excludes liability assumed under contract, punitive damages, intentional injury, injury covered by a federal program such as FELA or the Jones Act, and penalties for willful statutory violations.

Who counts as an employee

Sole proprietors, partners, and LLC members are generally excluded from the definition; corporate officers may be included or excluded by endorsement, so coverage must be elected deliberately.

Sole proprietor coverage election

A sole proprietor is not automatically an employee under the policy; coverage for the owner's own work injury requires a specific endorsement and additional premium.

Retrospective rating plan

A rating plan in which the final premium is adjusted after the policy period based on actual losses, subject to a stated minimum and maximum premium.

Business auto symbol 1

Any auto: covers all owned, hired, and nonowned autos for liability, making it the broadest symbol available on the Business Auto Coverage Form.

Business auto symbol 7

Specifically described autos: only the autos listed in the schedule are covered, and coverage applies for the coverages indicated for each listed auto.

Business auto symbol 8

Hired autos only: covers autos the insured leases, hires, rents, or borrows, but not autos owned by the insured or used by employees for personal errands.

Business auto symbol 9

Nonowned autos only: covers autos the insured does not own, hire, rent, or borrow, such as an employee's personal auto used in the insured's business.

Business auto liability insuring agreement

Pays sums the insured is legally obligated to pay as damages for bodily injury or property damage caused by an accident arising out of ownership, maintenance, or use of a covered auto.

Supplementary payments

Amounts paid in addition to the liability limit, including defense costs, bail bonds up to the stated amount, and appeal bond costs; they do not reduce the limit.

Garagekeepers coverage

Covers damage to customers' autos left in the insured's care; written on a legal liability basis or, by endorsement, on a direct basis covering all physical damage.

Comprehensive physical damage

Covers loss to a covered auto from causes other than collision or overturn, including fire, theft, vandalism, and glass breakage, subject to the stated deductible.

Collision coverage

Covers loss to a covered auto caused by collision with another object or by overturn, with a deductible that is usually written separately from the comprehensive deductible.

Fellow employee exclusion

Bars liability claims by an employee of the insured injured in the course of employment, preserving workers' compensation as the remedy; it does not bar claims outside employment.

Who is insured for liability

The named insured and anyone using a covered auto with permission; for physical damage, the named insured, the owner, and anyone holding a security interest.

Drive-other-car in business auto

Not automatic: an employee's use of a personal auto in the insured's business requires symbol 1 or 9, while the named insured's use of a nonowned auto is covered.

Mobile equipment exclusion

Autos designed mainly for use off public roads, such as bulldozers and forklifts, are excluded from the auto definition and are covered instead under general liability.

Commercial umbrella two duties

Provides excess coverage over scheduled underlying policies and drop-down coverage, subject to a self-insured retention, for losses covered by the umbrella but not the underlying policy.

Self-insured retention

The amount the insured pays before the umbrella responds when a loss is covered by the umbrella but not by any scheduled underlying policy.

Following-form excess policy

Adopts the terms, conditions, and exclusions of the scheduled underlying policy and pays only after that policy's limit is exhausted; it does not broaden coverage.

Maintenance of underlying coverage

A condition requiring the insured to keep scheduled underlying policies in force; reducing or canceling them can restrict drop-down coverage or leave the insured responsible for the gap.

Umbrella defense costs

Payable in addition to the limit when the umbrella is excess of underlying coverage; usually included within the limit and subject to the retention when it drops down.

Umbrella aggregate limit

Caps total covered losses for the policy period and generally sits above the combined underlying general liability and products-completed operations aggregates.

Typical umbrella program

A $1 million umbrella layer written above $1 million underlying general liability, auto liability, and employers' liability limits; required underlying limits appear in the schedule.

Umbrella gap limitation

The umbrella does not automatically cover losses barred by an underlying policy's unique exclusion; comparing exclusions in both policies reveals uninsured gaps.

Umbrella workers' compensation exclusion

The umbrella typically excludes workers' compensation benefits and obligations prohibited by law, so the statutory benefit obligation remains with the Part One coverage.