APP APP Insurance and Indemnification Strategies

Question 1

Which type of insurance policy provides the broadest personal liability coverage above existing underlying policies in an asset protection plan?

Accepted Answer

Umbrella liability policy

Answer

Directors and officers policy

Answer

Professional liability policy

Answer

Errors and omissions policy

Question 2

An indemnification clause in a business contract is primarily designed to:

Accepted Answer

Transfer the risk of loss from one party to another

Answer

Increase the contract value for both parties

Answer

Reduce the tax liability of the contracting parties

Answer

Establish governing law for dispute resolution

Question 3

What is the primary purpose of a 'hold harmless' agreement in the context of asset protection?

Accepted Answer

To prevent one party from seeking damages against another

Answer

To establish a trust for asset segregation

Answer

To limit the duration of an insurance policy

Answer

To define the scope of professional services

Question 4

Which coverage is most appropriate for protecting a business owner's personal assets against claims arising from professional negligence?

Accepted Answer

Professional liability (E&O) insurance

Answer

Commercial general liability insurance

Answer

Product liability insurance

Answer

Business interruption insurance

Question 5

In a US asset protection plan, a captive insurance company is used primarily to:

Accepted Answer

Self-insure risks while keeping premiums within the owner's control

Answer

Provide publicly traded insurance to third parties

Answer

Replace all commercial insurance policies

Answer

Avoid all state insurance regulations

Question 6

Directors and Officers (D&O) liability insurance protects against claims alleging:

Accepted Answer

Wrongful acts in the management of a company

Answer

Physical damage to company property

Answer

Workers' compensation injuries

Answer

Environmental cleanup costs