FAQs
The term "against all risks", also known as all-risk insurance, refers to an insurance policy that provides coverage against all types of loss or damage. Exclusions can still be included in an against all risks policy, but the insured is covered against any risks that are not specifically named.
Which of the following is the basis for a claim against an insurance policy? ›
Which of the following is the basis for a claim against an insurance policy? Loss. “Claims result from losses by a peril insured against in an insurance policy.”
Which of these is defined as the maximum limit of coverage available? ›
Final answer: The maximum limit of coverage available under a liability policy during a policy year, regardless of the number of claims that may be made or the number of accidents that may occur, is known as the Aggregate limit of liability.
Which of the following does the term proximate cause refer to? ›
Proximate cause refers to the primary event or series of events that directly leads to an insured loss. It is the direct cause that sets in motion a chain of events, which ultimately results in the damage or loss covered by an insurance policy.
Which of the following types of insurance are mandatory? ›
Compulsory insurance is insurance that must be legally owned to do an activity, such as auto insurance and driving a car. Other types of compulsory insurance include workers' compensation and professional liability insurance.
What five risks Cannot be covered by any insurance policy? ›
While some coverage is available, these five threats are considered mostly uninsurable: reputational risk, regulatory risk, trade secret risk, political risk and pandemic risk.
Which of the following is not a consideration in a policy? ›
All of the following are considerations in an insurance policy EXCEPT: Option 1: The promise to pay covered losses.
Is it better to have claims-made or occurrence insurance? ›
Claims-made coverage is portable. You can take the coverage from one insurance company to another. The advantage to an occurrence policy is its permanence. The period of time you are insured under an occurrence policy is protected forever by the policy you had that year.
What are three ways in which an insurer can be liable for bad faith? ›
Insurance Bad Faith – Frequently Asked Questions
- interpreting the language of the policy in an unreasonable manner;
- unreasonably failing to reimburse the insured for the entire amount of the loss;
- unreasonably failing to settle the lawsuit;
- unreasonable refusal to defend a lawsuit;
Liability limits are the maximum dollar amount of damages (“indemnity”) an insurance carrier will pay on your behalf. Limits are broken down into two categories: the per claim limit and the aggregate limit.
A limitation of liability clause, if found to be enforceable, can “cap” the number of potential damages incurred. The liability cap may be applied to all claims that arise during the term of the agreement, or it might be restricted to specific claims.
What are the three limits of insurance policies? ›
Types of Insurance Policy Limits
- Per-occurrence limits: The maximum amount an insurer will pay for a single event/claim.
- Per-person limits: The maximum amount an insurer will pay for one person's claims.
- Combined limits: A single limit that can be applied to several coverage types.
It is the direct cause of a loss event. The principle of proximate cause is the cause that is primary to the occurred event. It could also be the most significant incident which cascades into the loss event. The insurer will entertain the claim only if this significant cause is close enough to the loss.
Why is proximate cause important in insurance? ›
Proximate Cause Insurance Definition
When determining the extent of the insurer's liability, the proximate cause is the first factor taken into account. Thus, if the direct cause of damage is a recognised risk that is covered by insurance, the insurer is required to compensate the insured for their loss.
What is proximate cause in insurance law? ›
Proximate cause is the cause having the most significant impact in bringing about the loss under a first-party property insurance policy, when two or more independent perils operate at the same time (i.e., concurrently) to produce a loss.
What type of insurance policy insures against all risks of loss that are not specifically excluded by the policy quizlet? ›
What type of insurance policy insures against all risks of loss that are not specifically excluded by the policy? Open peril policy.
What type of policy insurance for all perils that are not specifically excluded? ›
Open peril home insurance — also called “all peril” or “all-risk” coverage — means that your property insurer covers any peril not specifically excluded in your policy.
What is an insurance policy that covers all losses except those specifically excluded? ›
All–risk coverage, under which all losses are covered except those losses specifically excluded. If the loss is not excluded, then it is covered. Life insurance policies are typically all-risk policies.
What type of insurance covers all risks? ›
"All risks" insurance (also referred to as open peril insurance) refers to a type of insurance coverage that automatically covers any risk that the contract does not explicitly omit. You can find all risks insurance in a variety of industries. Examples include agriculture, business, machinery, and real estate.
