Property and Liability Name 10/23/12 1. The ABC Company had crime coverage in the amount of $5,000. Following a covered crime loss of $10,000. the insurance company recovered $8,000. Describe how the...

Property and Liability Exam#2 Part 2
Property and Liability
Name
10/23/12
1. The ABC Company had crime coverage in the amount of $5,000. Following a covered crime loss of $10,000. the insurance company recovered $8,000. Describe how the recovered amount would be distributed between the parties involved.
Answer:
Limit of the Insurance policy is $5,000
Covered crime loss = $10,000
Amount recovered by Insurance company = $8,000
Ratio of Limit of insurance policy to the covered crime loss = 5,000/10,000 = ½
Distribution of the recovered amount will be in the same proportion as the ratios between the limit of insurance policy to the covered crime loss.
Thus the amount to be distributed to ABC company = ½ * $8,000 = $4,000
Amount distributed to the insurance company = $8,000 – 4,000 = $4,000
2. Jack owns a manufacturing company that regularly received deliveries of of raw material from a supplier. Discuss the insurance issues that Jack should consider in regards to these shipments.
Answer:
The insurance issues that should be considered in regards to these shipments are:
a. The insurance against the accident or theft of the goods in transit.
b. The insurance should provide for against the short delivery of the material from the supplier.
c. The Insurance against the quality of the material provided by the supplier
3. ABC Corp. is insured under a CGL with the following limits:
General Aggregate
$2,000,000.
Products/ Completed Operations Aggregate
$2,000,000.
Personal & Advertising Injury Limit
$1,000,000.
Each Occurrence Limit
$1,000,000.
Fire Damage Limit
$50,000.
Medical Expense Limit
$5,000.
What dollar amount if any will be paid if the following losses occur? If a loss is not covered or is not fully covered explain why. What is the aggregate balance left if all claims occur in the same policy period?
a. A defective appliance built by ABC causes injury to Joe who bought the
appliance. The court awards Joe $800,000.
b. One of ABC's drivers has an accident while making a delivery in an ABC truck. The other driver has a loss of $10,000. for property damage and $100,000. for bodily injury.
c. ABC is blamed for a fire in a building they rent. The total damage is
$25,000.
d. A forklift truck turned over in the warehouse injuring a customer. His
liability claim was $50,000.
e. An ABC employee was also injured in the forklift accident and had
medical bills of $1,500.
Answer:
a. The amount that will be paid by the insurance policy will be $ 800,000. Since the Aggregate limit and each occurrence limit and personal injury limit all are above the amount of loss.
b. The loss will be made good upto the extent of $2000,000 under the CGL policy as the Bodily Injury and property damage liability. The total loss of $110,000 will be paid under the insurance policy.
c. The claim will not be paid at all because the CGL policy excludes property owned or rented or occupied by the insured.
d. The event will be covered by the CGL policy and ABC will be paid the amount of $5,000 which is the limit of the medical expenses under the policy.
e. The amount will not be paid because the CGL policy...