RMIN 5100S Chapter Notes - Chapter 10: Punitive Damages, Insurance Policy, Malicious Prosecution

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CHAPTER 10
1) Insurance Policy Basics
a) Insurance Service Organization (ISO) standard forms; that is all that means
(THIS IS WHAT WE ARE STUDYING)
b) Proprietary Insurance Companies and Brokers may have their own forms that
they provide to many clients (form that insurance company can sell to its
customers can be very specific)
c) Manuscript written specifically for a client (work with broker to make specific
for client’s needs – can be an endorsement)
d) Version Date
2) Parts of a Policy
a) Declarations Page not part of the policy form but makes up the policy,
describes the specifics of what is being insured, including Named Insured, Policy
Term, Premium, Agent/Broker, Forms and Endorsements attached at policy
inception
b) )nsurance agreement, definitions, exclusions, and conditions make up the policy
form
c) Endorsements not part of the policy itself, added to the policy form and amends
it
3) Commercial General Liability Insurance policy (CGL or GL) we are studying these
without endorsements (most common form)
a) Very commonly used to insure a liability loss exposures of an organization’s:
i) Premises (where you are) and Operations (what you do)
ii) Products and Completed Operations
iii) Professional Liability if a doctor makes a mistake (CGL does not cover
because it is medical malpractice), if the hospital bed breaks (CGL covers)
b) Coverage Triggers
i) May be written on either occurrence basis or claims-made basis (REVIEW
NOTES FROM CHAPTER 2) only policy that can be written as both
ii) Most CGL forms are written on Occurrence Form (over 90%)
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iii) Insurance Companies may require a claims-made form on insureds with long-
tail claims
c) Coverage A Bodily Injury and Property Damage (BI/PD); when people think of a
CGL policy, they often think coverage A; it is the most frequently used part of CGL
i) )nsuring Clause: we will pay those sums that the insured becomes legally
obligated to pay as damages because of bodily injury or property damage to
which this insurance applies
(1) Insured must be legally obligated to pay damages (MUST be a claim filed
against you)
(a) Covers legal wrongs (tort, contract, etc.) but only those within the
scope of the Insuring agreement and not excluded elsewhere; must be
committed by the insured OR committed by someone for whom the
insured is held vicariously liable
(b) Who decides if Insured if legally wrong? Courts (plaintiff wins a
judgment) AND the insurance company (they hate to waste money so
if they want to settle and not go to court, the insured has no say)
(2) The damages must result from BI/PD and the policy must apply to the
BI/PD that the insured is responsible for
(3) Insuring Clause adds several conditions:
(a) B)/PD must be resulting from an Occurrence
(b) Must take place in the coverage territory
(c) Must occur during the policy period
(d) Was not known to the named insured or certain other persons before
policy inception
ii) Which damages will CGL pay?
(1) Compensatory damages ALL OF THEM (even pain and suffering if the
insured is obligated to pay them)
(2) Punitive damages NONE CLG is silent on punitive damages
(a) However, you can buy a punitive wrap policy
iii) Damages for BI/PD
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