Chapter 6 : Introduction To Liability Insurance

9 Questions | Total Attempts: 344

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Questions and Answers
  • 1. 
    Failure to use the care that is required to protect others from the unreasonable chance of harm is called what?
    • A. 

      Proximate cause

    • B. 

      Negligence

    • C. 

      A criminal act

    • D. 

      An intervening cause

  • 2. 
    All of the following must be present to establish negligence except which one?
    • A. 

      Proximate cause

    • B. 

      Legal duty owed and breach of duty

    • C. 

      Damages

    • D. 

      Willful action

  • 3. 
    An action that, in a natural and continuous sequence, produces a loss is the
    • A. 

      Hazard.

    • B. 

      Proximate cause.

    • C. 

      Appraisal point.

    • D. 

      Exposure.

  • 4. 
    Liability that is imposed as a matter of law without regard to negligence is called what?
    • A. 

      Vicarious liability

    • B. 

      Absolute liability

    • C. 

      Breach liability

    • D. 

      Proximate liability

  • 5. 
    Liability that an insured incurs because of the actions of others, such as employees, is called what?
    • A. 

      Vicarious liability

    • B. 

      Absolute liability

    • C. 

      Breach liability

    • D. 

      Proximate liability

  • 6. 
    Theresa, a spectator at a baseball game, is injured when an errant ball hits her in the head. She sues the stadium owners for negligence. Which one of the following defenses against negligence would the owners probably use?
    • A. 

      Assumption of risk

    • B. 

      Comparative negligence

    • C. 

      Contributory negligence

    • D. 

      Statute of limitations

  • 7. 
    Lee sues Pat for injuries sustained in an auto accident. During the trial, it is determined that Lee's negligence contributed to the loss. Under comparative negligence laws, what can Lee recover?
    • A. 

      Lee cannot recover any damages from Pat.

    • B. 

      Lee's damages will be reduced to the extent of her own liability for the loss.

    • C. 

      Lee can recover the full amount of the loss from Pat.

    • D. 

      Lee might only recover 50% of the damages she claims regardless of her degree of negligence.

  • 8. 
    As a result of a successful lawsuit, Agnes receives $10,000 to cover her specific losses, an additional $40,000 for pain and suffering, and because the defendant was considered to have acted with willful disregard for others' safety, Agnes was awarded an additional $75,000. This additional $75,000 award can best be described as what type of damages?
    • A. 

      General damages

    • B. 

      Compensatory damages

    • C. 

      Liability damages

    • D. 

      Punitive damages

  • 9. 
    George accidentally hits Elaine's car with his car. The accident causes $3,000 of damage to Elaine's car, plus Elaine is injured and her medical bills come to $1,000. George's car also sustains $500 damage in the accident, but George isn't hurt. What will George's auto liability coverage pay for?
    • A. 

      The damage to Elaine's car only

    • B. 

      The damage to Elaine's car and Elaine's medical bills only

    • C. 

      The damage to George's and Elaine's cars only

    • D. 

      The damage to George's and Elaine's cars, and Elaine's medical bills

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