Chapter 3

H owns a small restaurant that is a local favorite. one night H’s restaurant catches fire which will cause his business to be shut down for the next six months causing H to lose revenue during repairs. H’s loss of revenue because of the fire is known as a

consequential loss

the process for an insurer to determine what premiums to charge is known as

rate making

the type of liability imposed upon an individual or commercial entity without regard to fault or negligence is known as

strict liability

the cost or repairing or replacing damaged property less a deduction for depreciation best describes

actual cash value

which one of the following list all of the required elements for establishing a charge of negligence

legal duty owed, breach of legal duty owed, proximate cause, damages

an insurance carrier has a expense ratio of 120% this indicates

an underwriting loss has occurred

a common law defense that prevents an injured third party from recovery if they were also negligent involves

contributory negligence

which of the following is not one of the standard elements of an insurance policy

insurable interest

what statement does not describe necessary elements for negligence to be present

each party must willfully enter into a contract

what would not be covered by a liability policy

bodily injury to an insured

when must insurable interest be present under a property policy

at the time of loss

which of the following statements about open peril coverage is true

open peril contracts cover losses resulting from unusual causes that are not excluded by the policy

which of the following statements about all-risk coverage is true

all risk policies cover unusual losses from undefined perils

the replacement cost of property minus a deduction for depreciation caused by wear and tear or obsolescence best describes

actual cash value

an insurance contract may be modified mid-term by a

endorsement

one of the primary purposes of liability insurance is to deal with

unintentional torts or “wrongs”

a common law defense (against being sued for negligence) in which it is argued that since the injured person agreed to participate in the activity causing the injury he or she accepted all risk of injury is

doctrine of dual causality

a condition that may increase or heighten the chance that a loss may occur is known as

hazard

L is reading over his property policy and the contract states that coverage begins may 1, 2019 and ends on may 1 2020 the provision in the contract that would state this information would be

policy period

all of the following are sections on an insurance policy except

inclusions