Insurance Policy and Coverage Flashcard

Front

What is the purpose of an Extended Reporting Period (ERP)?

Back

To extend the time to report a claim

Answer explanation

The purpose of an Extended Reporting Period (ERP) is to extend the time to report a claim after a policy has expired, allowing policyholders to file claims for incidents that occurred during the policy period.

Front

What is true about the Basic Extended Reporting Period for insurance policies?

Back

It provides an additional 60 days to report a claim.

Answer explanation

The Basic Extended Reporting Period provides an additional 60 days for Emma to report claims that occurred during her policy period, allowing her to address any potential issues without needing to renew her policy immediately.

Front

Maximum additional premium for Supplemental Extended Reporting Period coverage?

Back

200% of the annual premium

Answer explanation

The maximum additional premium for a Supplemental Extended Reporting Period is typically 200% of the annual premium, making this the correct choice for Michael's consideration.

Front

What could happen if Olivia switches from a claims-made liability insurance policy to an occurrence form policy?

Back

There may be a gap in coverage

Answer explanation

Switching from a claims-made to an occurrence policy may create a gap in coverage because claims-made policies cover only claims made during the policy period, while occurrence policies cover incidents that occur during the policy period.

Front

Who is considered an insured under the Limited Liability Company designation when purchasing insurance for the company?

Back

Members and managers

Answer explanation

In a Limited Liability Company, members and managers are considered insured under the company's insurance policy. This includes Aria and James as they are the members managing the consulting business.

Front

Emma is listed as the first named insured on a business insurance policy. What is her primary responsibility regarding the policy?

Back

To manage the policy

Answer explanation

As the first named insured, Emma's primary responsibility is to manage the policy, which includes overseeing its terms, ensuring compliance, and making necessary updates.

Front

What does the General Aggregate limit mean in a commercial general liability insurance policy?

Back

The most the insurer will pay in the policy period for Coverages A, B, and C

Answer explanation

The General Aggregate limit refers to the maximum amount the insurer will pay during the policy period for all claims under Coverages A, B, and C, making it crucial for Anika's overall coverage.

Front

What is the Personal and Advertising Injury limit subject to under a business insurance policy?

Back

The General Aggregate limit

Answer explanation

The Personal and Advertising Injury limit is subject to the General Aggregate limit, which caps the total amount payable for all claims during a policy period, making it the correct choice.

Front

What does the Per Occurrence limit refer to in Charlotte's insurance policy?

Back

The most the insurer will pay for any one occurrence

Answer explanation

The Per Occurrence limit in Charlotte's insurance policy refers to the maximum amount the insurer will pay for any one occurrence, such as the damage caused by the customer knocking over the display.

Front

What is the Damage to Premises Rented to the Insured limit subject to?

Back

The Per Occurrence limit

Answer explanation

The Damage to Premises Rented to the Insured limit is subject to the Per Occurrence limit, meaning it applies to each individual incident, such as the small fire that damaged Charlotte's rented storefront.