Insurance Products & Coverage Types Flashcards
7 cards from real CU practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Insurance Products & Coverage Types flashcards as text
Which clause in a property insurance policy requires the insured to maintain coverage equal to a specified percentage of the property's value to avoid a co-insurance penalty?
Answer: Coinsurance clause
The coinsurance clause penalizes insureds who underinsure their property by reducing claim payments proportionally when coverage falls below the required percentage.
Directors & Officers (D&O) liability insurance primarily protects against claims alleging:
Answer: Wrongful acts by company leaders in managing the organization
D&O policies cover defense costs and damages arising from management decisions that allegedly harm shareholders, creditors, or other stakeholders.
Under the commercial general liability (CGL) policy, 'products-completed operations' coverage applies to bodily injury or property damage occurring:
Answer: After the product is sold or the work is completed and relinquished
Products-completed operations coverage responds to losses that arise after a product leaves the manufacturer's control or after a contractor finishes a job.
A 'tail' endorsement (extended reporting period) on a claims-made policy allows the insured to:
Answer: Report claims after the policy expires for incidents that occurred during the policy period
A tail endorsement extends the window during which claims can be reported after a claims-made policy ends, for incidents within the original policy period.
In health insurance, a 'stop-loss' provision benefits the insured by:
Answer: Capping the total out-of-pocket costs the insured must pay in a plan year
The out-of-pocket maximum (stop-loss) ensures that once the insured reaches a specified spending threshold, the insurer covers 100% of remaining covered expenses.
A 'blanket' property policy differs from a 'scheduled' property policy in that a blanket policy:
Answer: Provides a single aggregate limit covering multiple locations or items
Blanket policies apply one shared limit across multiple locations or property categories, offering flexibility but requiring adequate overall limits.
Which type of health insurance plan requires members to select a primary care physician (PCP) and obtain referrals to see specialists?
Answer: Health Maintenance Organization (HMO)
HMOs use a gatekeeper model where the PCP coordinates all care and must issue referrals before the plan covers specialist visits.