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The management of Maryland Marine Co. (MMC) must ensure that proper coverage is obtained for work- related injuries. The employee population of MMC is a mixture of full-time and part-time employees as well as some leased employees. Much of MMC's work is done by independent contractors and temporary employees during peak seasons. Which one of the following statements about these persons is true? Select one: A. Leased employees are co- employees of MMC and the leasing company. B. Injuries to MMC's full-time ship captains are likely to be covered under state workers compensation laws. C. Temporary employees are considered employees of MMC rather than employees of the firm supplying them A. Leased employees are co-employees of MMC and the leasing company.
to MMC. D. The independent contractors are automatically employees under common law. Most of the claims covered by liability insurance are based on A. Tort law. B. Contract law. C. Government statutes. D. Regulatory law. A. Tort law. A mining company has a partial ceiling collapse in one of its mines. Investigators discover that the company neglected maintenance of their safety systems which resulted in serious injury to several of their employees during the mine's ceiling collapse. The legal liability imposed on the company for the injury to its employees is based on A. Negligence. B. Statute C. Intentional Tort. D. Contractual Liability. B. Statute
A. Watercraft B. Automobile C. Airplane D. Mobile equipment Radley Contracting Company is installing new signage on the front of a building. George, a passerby walking near the building is injured when a Radley employee accidentally drops a tool from a crane. George likely has the ability to assert which one the following types of claim? Select one: A. Premises and products liability B. Premises and operations liability C. Completed operations liability D. Incompleted operations liability B. Premises and operations liability Workers compensation benefits are awarded Select one: A. Regardless of whether the injury was work-related. B. On a no-fault basis C. Only if the employer provides unsafe tools or equipment. D. Only if the employer provides an unsafe place to work. B. On a no-fault basis If an employee is operating a vehicle negligently while in the course of employment, which one of the following parties may be found jointly liable as well? Select one: A. Co-worker D. Employer
B. Customer C. Leaseholder D. Employer Which one of the following loss exposures exist when a business can be held legally liable for bodily injury or property damage caused by their repair or contracting work? Select one: A. Products liability B. Completed operations liability C. Operations liability D. Workers' compensation liability B. Completed operations liability An organization's liability loss control activities can usually be classified as either loss prevention activities or loss reduction activities. Which one of the following is best described as a loss reduction activity? Select one: A. Installation of smoke detectors in warehouses B. Purchase of high limits of liability insurance C. Mandatory safety glasses and hard hats in construction areas D. Installation of back-up alarms on delivery vehicles A. Installation of smoke detectors in warehouses
D. Loss reduction. Lee Construction Company is building a manufacturing plant. As the plant resides next to a residential neighborhood, the company places barriers around the construction site and employs round- the- clock security patrols to prevent unauthorized persons from entering the construction site. The risk control technique employed by the construction company is A. Loss prevention B. Avoidance. C. Loss reduction. D. Risk transfer. A. Loss prevention. A growing company is looking to open their new branch office in a seismically active area. The company's management is concerned about earthquake damage and requires that the new office be built in compliance with the most recent building codes. This is an example of A. Loss prevention. B. Claim management. C. Loss reduction D. Risk transfer. C. Loss reduction
Which one of the following would be considered supplementary payments under liability insurance policies? Select one: A. Defense costs B. Claimant's compensable damages C. Cost of surety bonds D. Judgments against the insured C. Cost of surety bonds Under which one of the following types of insurance policies are the insurer's payments for defense costs and supplemental payments typically applied to reduce the policy limits? Select one: A. CGL B. Homeowners C. Commercial auto D. Pollution liability D. Pollution liability The United States common-law system requires the amount of damages awarded to a claimant in a liability claim to compensate the claimant for loss incurred as of the Select one: A. Trial date B. Settlement date. C. Date the claim is reported. D. Date of loss. A. Trial date
Which one of the following statements regarding the extent of damages in liability claims is true? Select one: A. A claimant in a bodily injury or property damage liability claim has a duty to mitigate loss after an accident B. Unlike property damage claims, evaluation of bodily injury claims considers a narrow range of damage elements for the claimant. C. The insured/defendant usually has the burden of proof regarding bodily injury and property damage proximately caused by his or her acts. D. A claimant generally may not recover damages to compensate for loss of use of damaged property. A. A claimant in a bodily injury or property damage liability claim has a duty to mitigate loss after an accident. An intentional tort Select one: A. Must arise out of an ultrahazardous activity. B. Does not have to be performed with malicious intent C. Arises from a breach of contract. D. Is also referred to as one of absolute liability. B. Does not have to be performed with malicious intent Employers are required to pay prescribed benefits for occupational injuries or illness of their employees, even if such injuries or illness do not result from the employers' negligence. This is an example of legal liability based on Select one: C. Statutes
A. Contracts. B. Torts. C. Statutes. D. Hold-harmless agreements. A wrongful act or omission, other than a crime or breach of contract, for which the remedy is usually monetary damages, is known as a A. Tort. B. Breach of warranty. C. Hold harmless breach. D. Statute. A. Tort. John has been found guilty of driving his automobile at a high speed and causing an accident that injured two pedestrians. Which one of the following best describes the type of tort that John is guilty of? Select one: A. Strict B. Intentional C. Statutory D. Negligence D. Negligence An electrical contractor was hired to install a new 100-amp fuse box in the Smith's home. During installation, the contractor inadvertently left a small screwdriver in a duct space behind the panel. Three weeks later, the screwdriver caused an electrical short which led to a fire. Which one of the following loss exposures best categorizes the electrical contractor's legal liability B. Completed operations liability
product. D. The defective condition made the product unreasonably dangerous.
Telephone Company installs fiber-optic cable using a trenching machine that digs a trench, buries the cable, fills in the trench, and reseeds, all in one pass. The trenching machine can install cable in a fifty-home neighborhood in one day. A day after the trenching machine passes by, a member of the community steps on the trenched area, sinks in, and breaks his leg. This is an example of a liability loss exposure arising out of Select one: A. Completed operations. B. Products. C. Premises. D. Professional. A. Completed operations. The liability loss exposure that exists when an organization is legally responsible for bodily injury or property damage caused by an accident that occurs on an organization's owned, leased, or rented property is Select one: A. Property liability. B. Professional liability. C. Operations liability. D. Premises and operations liability. D. Premises and operations liability.
B. Separation C. Loss prevention D. Loss reduction Which one of the following statements about considerations that need to be evaluated in the development of risk control techniques is true? Select one: A. Risk control techniques are of little value to the public's perception of an organization. B. Legal requirements must be considered in developing all risk control techniques. C. As long as losses will be adequately controlled, there is little need to be concerned with the cost of a risk control technique. D. Risk control techniques should be developed independent of the risk aversion of an organization's senior management. B. Legal requirements must be considered in developing all risk control techniques. Loss reduction techniques are intended to reduce the Select one: A. Probability of losses. B. Frequency of losses. C. Possibility of losses. D. Severity of losses. D. Severity of losses.
Generally, in a liability claim, the burden of proof regarding what bodily injury or property damage losses were proximately caused by the insured belongs to the Select one: A. Insurer. B. Claimant. C. Jury. D. Insured. B. Claimant. If a liability claim goes to trial, although the policy limits restrict the insurer's liability, the jury and judge are not bound to confine an award to the amount of such policy limits. If the court awards a judgment that exceeds policy limits, which one of the following parties is responsible for paying the excess award? Select one: A. The insurer B. The insured/defendant C. The surety on a court bond D. The state guaranty fund B. The insured/defendant Company T has a liability policy with Insurer A with a $1 million policy limit. Company T was found liable for a $700,000 judgment. Defense costs amounted to $400,000. Assuming the insurer's payments for defense costs are applied to reduce the policy limit, how much would Insurer A pay toward the $700, judgment? Select one:
C. $600,
Which one of the following statements is true regarding contractual liability? Select one: A. The liability assumed through a hold- harmless agreement is commonly covered under liability insurance policies. B. An individual who purchases a product with an implied warranty assumes liability for the use of that product. C. Liability for injury resulting from a seller's breach of warranty is not commonly insurable. D. Contractual liability must be imposed by written law for it to be insurable under liability insurance policies. A. The liability assumed through a hold-harmless agreement is commonly covered under liability insurance policies. Legal liability based on contracts can arise out of Select one: A. A statute that imposes penalties for violations. B. An agreement to assume the liability of another party. C. An intentional tort resulting in damage or injury. D. A failure to comply with civil laws that result in a civil wrong. B. An agreement to assume the liability of another party.
A family recently purchased a new home constructed by a residential home builder. Two months after taking possession, several of the family members were injured when the roof suddenly collapsed. The family sued the construction company and was awarded monetary damages for their injuries. This is an example of which one of the following types of commercial liability loss exposure for the construction company? A. Premises and operations liability B. Completed operations liability C. Employers liability D. Products liability B. Completed operations liability Bruce is driving a company car while on business for Fox Company, for which he works. During a personal errand but while driving the company car, Bruce ignores a stop sign and collides with a bicyclist at an intersection. Generally, Fox will likely not be held legally liable because Bruce deviated from his Select one: A. Statutory insurance requirements. B. Scope of employment. C. Personnel manual. D. Job description. B. Scope of employment. Some state no-fault laws preserve the tort system but require insurers to offer personal injury protection (PIP) insurance that provides specified first-party benefits. This is referred B. An add-on no-fault law.
