Umbrella Liability Coverage

Transcription

1 Umbrella Liability Coverage Analyses Workbook 3rd Edition TP.indd 1 5/5/06 7:02:57 PM

2 At press time, this edition contains the most complete and accurate information currently available. Owing to the nature of license examinations, however, information may have been added recently to the actual test that does not appear in this edition. Please contact the publisher to verify that you have the most current edition. This publication is designed to provide accurate and authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought. To submit comments or suggestions, please send an to errata@kaplan.com. UMBRELLA LIABILITY COVERAGE ANALYSES WORKBOOK, 3rd Edition 1989, 2005, 2006 DF Institute, Inc. All rights reserved. The text of this publication, or any part thereof, may not be reproduced in any manner whatsoever without written permission from the publisher. Published by DF Institute, Inc. Printed in the United States of America. ISBN: PPN: J F M A M J J A S O N D TP.indd 2 5/5/06 7:02:58 PM

3 Worksheets ANALYSIS PERSONAL UMBRELLA LIABILITY POLICY Instructions: These worksheets may be used to analyze your company s Personal Umbrella Liability policy. Read the policy and check off or fill in, as appropriate, the various sections of the worksheets that are applicable to that policy. Use the Notes section to record any other details about the policy that are not noted in the worksheet outline. Policy Issue 1. Issued as a separate policy 2. Issued as an endorsement to the following policies: Policy Limit of Insurance Requirements 1. Minimum: 2. Maximum: 3. Additional limits: _ Required Underlying Limits 1. Personal liability: _ 2. Auto liability: 3. Watercraft liability: 4. Recreational vehicle liability: 5. Employers liability (nonbusiness): 6. Other: _ 1 Workbook.indd 1 5/5/06 7:04:06 PM

4 2 Worksheets Insureds 1. Named insured and spouse 2. Family members Must be under age: Related by blood, marriage or adoption Ward or foster child 3. Legal representatives 4. Anyone using the named insured s auto 5. Anyone using the named insured s watercraft 6. Anyone using the named insured s recreational vehicle 7. Other insureds: Insuring Agreements Policy will Pay on behalf of the insured Indemnify the insured Obligations must be legal obligations Yes _ No Policy uses the term Ultimate net loss Net final loss Loss Other: Coverages include Bodily injury Property damage Personal injury Other: Workbook.indd 2 5/5/06 7:04:06 PM

5 Worksheets 3 5. Definition of personal injury Sickness Disease Death Disability Shock Mental anguish Mental injury False arrest False imprisonment Wrongful entry Wrongful eviction Wrongful detention Malicious prosecution Humiliation Libel Slander Defamation of character Invasion of privacy Assault and battery not committed or directed by a covered person Other: _ Definition of occurrence An accident, including continuous or repeated exposure to substantially the same general conditions Other: Definition of bodily injury Bodily harm, sickness or disease, including required care, loss of services and resulting death Other: Definition of property damage Physical injury to, destruction of, or loss of use of tangible property Other: Definition of auto Land motor vehicle Trailer Semitrailer Farm tractors, trailers and implements Motorcycles Workbook.indd 3 5/5/06 7:04:06 PM

6 4 Worksheets Recreational vehicles Excludes unlicensed vehicles designed and used to maintain residential premises Other: Defense costs Are paid in addition to the limit of liability Reduce the limit of liability Are not paid Covered defense costs Premiums on appeal bonds Expenses the company incurs Court costs Interest accruing after judgment Insured s expenses incurred at the company s request Lost earnings up to $ per day Policy territory Anywhere in the world U.S., its territories and possessions, Puerto Rico and Canada Suits anywhere in the world Suits in U.S. or Canada only Exclusions 1. Workers compensation 2. Damage to property an insured owns, rents or occupies 3. Damage to property in the insured s care, custody or control applies to Real property Personal property Only liability assumed under contract 4. Damage to alienated premises 5. Watercraft Owned Covers liability assumed under contract or agreement Workbook.indd 4 5/5/06 7:04:06 PM

7 Worksheets 5 Nonowned Chartered with crew Chartered without crew Maximum horsepower specified: _ Maximum length specified: _ 6. Aircraft Owned Covers liability assumed under contract or agreement Nonowned 7. Uninsured/underinsured motorists 8. Anyone while engaged in auto business 9. Anyone while engaged in watercraft business 10. Anyone while engaged in recreational vehicle business 11. Intentional injury or damage Covers reasonable force 12. Punitive damages 13. Nuclear hazard By endorsement 14. Pollution 15. War 16. Autos or watercraft owned by family members 17. Bodily injury to insureds 18. Business pursuits 19. Business property Includes rental or holding for rental of premises Does not include farms 20. Professional services 21. Acts as officer, trustee or director of corporation or association Does not include not-for-profit corporation or association 22. Advertising, broadcasting or telecasting activities Does not include such activities if incidental to pursuits not otherwise excluded Workbook.indd 5 5/5/06 7:04:06 PM

8 6 Worksheets Conditions 23. Other exclusions: 1. Notice of occurrence Insurer must be notified as soon as possible Notice must be in writing Insured must give notice of any occurrence with potential for claim or suit 2. Appeals Insurer may appeal at own expense 3. Legal action against the insurer Insured must comply with all terms of the policy Insurer must agree in writing that insured is obligated to pay or the amount of payment has been set by judgment after trial 4. Other insurance Umbrella policy pays only excess over primary insurance Condition does not apply to policy that is specifically written to apply over the Umbrella policy 5. Maintaining underlying insurance Insured required to maintain Policy not invalid if insured does not maintain Policy pays only to extent it would have paid if underlying insurance had been maintained Insured required to notify insurer of any change in underlying insurance Bankruptcy/insolvency of primary insurer does not affect this condition 6. Insurer s right to recover payment (subrogate) Order for reimbursement is: Insured must do whatever is required to help the insurer exercise its rights 7. Changes Waiver or change of the policy must be in writing Workbook.indd 6 5/5/06 7:04:07 PM

9 Worksheets 7 8. Cancellation Insured Must notify insurer in writing of cancellation date Premium refund on short rate basis Insurer Must give insured written notice of cancellation within specified number of days Time limit: days Cancellation by the insurer for nonpayment of premium Time limit: days Premium refund on pro rata basis 9. Separation of insureds Policy applies separately to each insured 10. Bankruptcy Bankruptcy or insolvency of the insured or the insured s estate does not affect the policy 11. Other conditions: ANALYSIS COMMERCIAL UMBRELLA LIABILITY POLICY Instructions: These worksheets may be used to analyze your company s Commercial Umbrella Liability policy. Read the policy and check off or fill in, as appropriate, the various sections of the worksheets that are applicable to that policy. Use the Notes section to record any other details about the policy that are not noted in the worksheet outline. Required Underlying Limits of Insurance 1. Commercial general liability: Commercial auto liability: Employers liability: Other: _ Workbook.indd 7 5/5/06 7:04:07 PM

10 8 Worksheets Umbrella Limits of Insurance Insureds 1. Apply in same way as underlying policies 2. Apply separately to each consecutive annual period Apply to any remaining period of less than 12 months 3. Aggregate limit Minimum: _ Maximum: _ Applies to all coverages Applies to specific coverages: Personal and advertising injury limit Minimum: Maximum: Per occurrence limit Minimum: _ Maximum: _ Commercial auto liability limit Minimum: _ Maximum: _ 4. Other: 1. Individual and spouse when conducting business of which named insured is sole owner 2. Partnership 3. Joint venture 4. Other organization Owner Executive officers and directors with respect to their duties Stockholders with respect to liability as stockholders Employees other than executive officers for acts within scope of employment Workbook.indd 8 5/5/06 7:04:07 PM

11 Worksheets 9 Newly acquired or formed organization Does not include partnership or joint venture Does not apply to occurrences before the new organization was acquired or formed 5. Anyone using an auto the named insured owns, hires or borrows with permission 6. Persons acting for the named insured until a legal representative is appointed 7. Legal representative of deceased insured 8. Real estate manager with respect to autos and aircraft 9. Other: Insuring Agreements Policy will Pay on behalf of the insured Indemnify the insured Obligations must be legal obligations Yes _ No Policy uses the term Ultimate net loss Net final loss Loss Other: Drop down provision Included _Not included Coverages Bodily injury Property damage Personal and advertising injury Other: Workbook.indd 9 5/5/06 7:04:07 PM

12 10 Worksheets 6. Definition of personal injury Sickness Disease Death Disability Shock Mental anguish Mental injury False arrest False imprisonment Wrongful entry Wrongful eviction Wrongful detention Malicious prosecution Humiliation Libel Slander Defamation of character Invasion of privacy Assault and battery not committed or directed by a covered person Other: Definition of occurrence An accident, including continuous or repeated exposure to substantially the same general conditions Other: Definition of bodily injury Bodily harm, sickness or disease, including required care, loss of services and resulting death Other: Definition of property damage Physical injury to, destruction of, or loss of use of tangible property Other: Defense costs Are paid in addition to the limit of liability Reduce the limit of liability Are not paid Workbook.indd 10 5/5/06 7:04:07 PM

13 Worksheets Covered defense costs Premiums on appeal bonds Expenses the company incurs Court costs Interest accruing after judgment Insured s expenses incurred at the company s request Lost earnings up to $ per day Policy territory Anywhere in the world U.S., its territories and possessions, Puerto Rico and Canada Suits anywhere in the world Suits in U.S. or Canada only Coverage Triggers 1. Occurrence 2. Claims-made Actual claim must be made Retroactive date provision Extended Reporting Periods Claims-Made 1. Provided if current claims-made policy is cancelled or nonrenewed 2. Provided if current claims-made policy is renewed with another claims-made policy with retroactive date later than retroactive date of current policy 3. Provided if current claims-made policy is replaced with an occurrence policy 4. May not be longer than extended reporting period of underlying policy 5. Basic (automatic) Time of period: No reinstatement of aggregate limits 6. Supplemental (optional) Insured must request and pay additional premium within: days of policy termination Unlimited period Aggregate limits reinstated Workbook.indd 11 5/5/06 7:04:08 PM

14 12 Worksheets Exclusions 1. Workers compensation 2. Damage to property an insured owns, rents or occupies 3. Damage to property in the insured s care, custody or control Real property Personal property Only liability assumed under contract 4. Damage to alienated premises 5. Use of auto the named insured owns, hires or borrows, by anyone employed by or engaged in duties of auto business the named insured does not operate 6. Watercraft Owned Covers liability assumed under contract or agreement Nonowned Chartered with crew Chartered without crew Maximum horsepower specified: Maximum length specified: 7. Aircraft Owned Covers liability assumed under contract or agreement Nonowned 8. Uninsured/underinsured motorists 9. Intentional injury or damage Covers reasonable force 10. Bodily injury by employee to named insured or fellow employee in course of employment Not excluded if coverage is afforded in underlying insurance 11. Property damage by employee to property owned or occupied by or rented or loaned to employee 12. Property damage by employee to property owned or occupied by or rented or loaned to partner or member if named insured is partnership or joint venture 13. Punitive damages Workbook.indd 12 5/5/06 7:04:08 PM

15 Worksheets Nuclear hazard By endorsement 15. Pollution 16. War Excludes only liability assumed under contract Covers in U.S. or Canada 17. Personal injury and advertising injury Breach of contract Does not include misappropriation of advertising ideas under an implied contract Failure to conform with advertised quality or performance Wrong description of price Committed by insured whose business is advertising, broadcasting, publishing, or telecasting Oral or written publication if insured knows the information is false Injury that arises out of criminal act committed by insured Exclusion does not apply to liability insured assumes in a contract or agreement Exclusion does not apply when insured would have been liable in absence of contract or agreement 18. Discrimination 19. Damage to real property and work in progress 20. Faulty workmanship 21. Damage to the insured s product 22. Damage to the insured s work 23. Impaired or not physically injured property (failure to perform) Includes delay or failure to perform a contract Exclusion does not apply to loss of use to other property resulting from sudden and accidental damage to insured s product or work after it has been put to use 24. Products recall liability (sistership liability) 25. Other exclusions: Workbook.indd 13 5/5/06 7:04:08 PM

16 14 Worksheets Conditions 1. Notice of occurrence Insurer must be notified as soon as possible Notice must be in writing Insured must give notice of any occurrence with potential for claim or suit 2. Appeals Insurer may appeal at own expense 3. Legal action against the insurer Insured must comply with all terms of the policy Insurer must agree in writing that insured is obligated to pay or the amount of payment has been set by judgment after trial 4. Other insurance Umbrella policy pays only excess over primary insurance Condition does not apply to policy that is specifically to apply over the Umbrella policy 5. Maintaining underlying insurance Insured required to maintain Policy not invalid if insured does not maintain Policy pays only to extent it would have paid if underlying insurance had been maintained Insured required to notify insurer of any change in underlying insurance Bankruptcy/insolvency of primary insurer does not affect this condition 6. Insurer s right to recover payment (subrogate) Order for reimbursement is: Insured must do whatever is required to help the insurer exercise its rights 7. Changes Waiver or change of the policy must be in writing 8. Cancellation Insured Must notify insurer in writing of cancellation date Premium refund on short rate basis Workbook.indd 14 5/5/06 7:04:08 PM

17 Worksheets 15 Insurer Must give insured written notice of cancellation within specified number of days Time limit: days Cancellation by the insurer for nonpayment of premium Time limit: days Premium refund on pro rata basis 9. Separation of insureds Policy applies separately to each insured 10. Bankruptcy Bankruptcy or insolvency of the insured or the insured s estate does not affect the policy 11. Examination of books and records At any time during the policy period up to specified time of: years thereafter Within specified time of: after a final settlement 12. Inspections and surveys 13. Premium audit 14. Other conditions: Workbook.indd 15 5/5/06 7:04:08 PM

18 Workbook.indd 16 5/5/06 7:04:08 PM