Question 1

The declarations page usually describes which of the following aspects of liability?

Accepted Answer

The declarations page of an insurance policy typically describes the limits of liability, which specify the maximum amount the insurance company will pay for covered losses.

Question 2

A policy was in effect from July 1, 2000, through August 31, 2015. A claim was made on the policy on October 24, 2017, related to an incident that happened while coverage was in effect. Which type of policy is most likely to cover the claim?

Accepted Answer

Occurrence-basis policies provide coverage for incidents that occur during the policy period, regardless of when the claim is made. Since the incident happened while the coverage was in effect, an occurrence-basis policy would cover the claim.

Question 3

What is the best way to notify an insurer if a claim has been made against an insured person or facility?

Accepted Answer

Sending a letter by certified mail, return receipt requested, is the best way to notify an insurer of a claim. This method provides proof that the letter was sent and received, which is important for documentation and meeting any notification deadlines in the insurance policy.

Question 4

Several people sue a physician for medical professional liability over the course of a year, such that the limits of the policy are exceeded. What type of coverage may cover amounts over the limit of the regular policy?

Accepted Answer

Umbrella coverage is designed to provide additional coverage beyond the limits of the underlying policy, making it the correct choice for covering amounts over the limit of a regular policy.

Question 5

If a policy was in effect from January 1, 2011, through December 31, 2016, and a liability claim was filed on June 23, 2017, what type of coverage could cover the claim, if purchased?

Accepted Answer

Tail coverage extends the period in which a claim can be reported after a policy has expired, making it applicable for claims like the one described, which was filed after the policy period ended.

Question 6

In general, an insurance carrier will settle a lawsuit if the claimant has a ___% chance of winning at trial.

Accepted Answer

Insurance carriers often consider settling a lawsuit if the claimant has a 50% or greater chance of winning at trial, as this represents a significant risk to the carrier. Settling can be a more cost-effective and less risky option than going to trial with uncertain outcomes.

Question 7

Which of the following claims would most likely be excluded from a professional liability policy?

Accepted Answer

Professional liability policies, also known as malpractice insurance, typically cover errors, omissions, or negligence in the provision of professional services. Sexual assault, as mentioned in option C, is a criminal act rather than a professional error or negligence, and thus would be excluded from coverage under such policies.

Question 8

The declarations page of a policy would not include which of the following items?

Accepted Answer

The declarations page of a policy typically includes the names of the persons or institutions covered, the period of time for which the policy is in effect, and the amount of aggregate coverage, but not the detailed specifics of the coverage, which are usually found in the policy document itself.

Question 9

If the insurer determines that individuals not named in the claim played a role in the incident that led to the filing, the insurer may exercise the right of

Accepted Answer

The right of contribution allows an insurer to seek a portion of the payment from other insurers who are also liable for the same loss. This is applicable when multiple parties or policies could be responsible for a claim.

Question 10

What is the best reason to carry a professional liability policy?

Accepted Answer

The answer of What is the best reason to carry...

Question 11

If an insurer pays a claim even though the physician contends that he or she was not at fault, the insurer may be exercising the right to

Accepted Answer

The insurer is exercising the right to settlement, which means they have decided to pay the claim to resolve the matter, even if the physician believes they were not at fault. This is a common practice to avoid the costs and uncertainties of litigation.

Question 12

The primary objective of obtaining liability coverage is to

Accepted Answer

Liability coverage is primarily intended to protect the policyholder's assets by covering settlements or judgments in the claimant's favor.

Question 13

Liability insurers are interested in whether individuals or facilities have ever had which of the following filed against them?

Accepted Answer

The answer of Liability insurers are interested in whether individuals...

Question 14

Most physicians' offices carry a liability policy. Which would not be covered under the policy?

Accepted Answer

Liability policies in physicians' offices are designed to cover the medical professionals and staff for their actions within the scope of their employment. Patients, however, are not covered under such policies as they are the recipients of the service, not providers.

Question 15

Which statement regarding individual liability insurance policies is correct?

Accepted Answer

Independent contractors may not be fully covered by a healthcare facility's insurance policy for all actions or incidents. Therefore, having individual liability coverage can provide additional protection against potential lawsuits or claims.

Question 16

Provisions in a policy usually allow an insurer to cancel or refuse to do which of the following with respect to the policy?

Accepted Answer

Insurers typically reserve the right to refuse to renew a policy upon its expiration, based on their assessment of risk or for other reasons outlined in the policy provisions. This does not generally apply to paying for, filing a claim against, or processing claims, which are obligations of the insurer once a policy is in effect.

Question 17

Which is not an advantage of a personal professional liability policy?

Accepted Answer

A personal professional liability policy is designed to offer protection and benefits, such as peace of mind, resolving potential conflicts, and covering acts not included in an employer's policy. Being expensive is considered a disadvantage, not an advantage.

Question 18

Liability policies usually require annual payment of which of the following?

Accepted Answer

Liability policies, like most insurance policies, require the payment of a premium. The premium is the amount paid by the insured to the insurance company in exchange for the coverage provided by the policy.

Question 19

When there are disagreements about a claim-related accident, exclusions in an employer's liability policy can cause which of the following?

Accepted Answer

Exclusions in an employer's liability policy can lead to conflicts when there are disagreements about a claim-related accident, as parties may dispute over what is covered or excluded, leading to disagreements or disputes.

Question 20

Which individual is probably an independent contractor?

Accepted Answer

The answer of Which individual is probably an independent contractor?
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Quiz 9: Professional Liability Insurance