Question 1

What does 'liability insurance' protect the insured against?

Accepted Answer

Liability insurance protects the insured against claims arising from bodily injury or property damage caused to third parties for which the insured is legally responsible.

Question 2

What is the difference between 'occurrence' and 'claims-made' liability coverage triggers?

Accepted Answer

An occurrence policy covers losses that happen during the policy period regardless of when the claim is filed, while a claims-made policy only covers claims reported during the policy period.

Question 3

What is a 'retroactive date' in a claims-made liability policy?

Accepted Answer

A retroactive date is the earliest date from which an occurrence must arise for a claim to be covered under a claims-made policy; incidents before this date are excluded.

Question 4

What does 'personal and advertising injury' liability cover under a CGL policy?

Accepted Answer

It covers offenses such as libel, slander, false arrest, malicious prosecution, copyright infringement in advertising, and invasion of privacy.

Question 5

Under a Commercial General Liability (CGL) policy, what are the three coverage parts?

Accepted Answer

The three coverage parts are Coverage A (Bodily Injury and Property Damage Liability), Coverage B (Personal and Advertising Injury Liability), and Coverage C (Medical Payments).

Liability Insurance – P&C License Exam Flashcards

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