91. What is the primary value of insurance to business enterprise?
d. It imposes a duty of utmost good faith on the business enterprise.
92. Under which level of government jurisdiction do insurance policies fall?
a. provincial jurisdiction b. federal jurisdiction
c. executive jurisdiction d. municipal jurisdiction
93, What is the purpose of a deductible in the context of an insurance policy?
94, Which of the following is an implication of the utmost good faith nature of insurance contracts?
95. Which of the following is a distinguishing characteristic of a duty to disclose?
96, Allowing people to insure property that they have no real interest in may lead to the intentional destruction of the property. To which rule does this rationale apply?
a. life insurance rule b. indemnity rule
c. coinsurance rule d. insurable interest rule
97, When an insurer compensates an insured, it has the right to sue a wrongdoer to recover that compensation. What is the legal term for this right?
a. third party rider b. third party endorsement
c. forfeiture d. subrogation
100. Which of the following would occupiers' liability insurance protection strongly support?
Ans 91: Correct Option is B. (It provides a means to shift risk away from the business to an insurer.)
Reason : As the important reason to have a Insurance is to mitigate the uncertain risk which may arise in the future.
Ans 92: Correct option is B. ( federal jurisdiction).
Reason : Previously it was more of a state based till 1970 and after as the insurer faced more and more problems so then it came under the federal jurisdiction after the year 1970.
Ans 93: Correct Option is C. (The insurer is entitled to deduct defence costs from its payout to the insured.)
Reason: As the insurer incur certain cost to provide the insurance and provide the settlement on the same for example legal,documentation etc.
Ans 94: Correct Option is B. (The insured has a duty to disclose)
Reason : When a insurance contract takes place it is treated as the insured has provided all the vital information regarding the purpose and risk associated with the insured product like health,car,life etc has disclosed all the information as it will reduce or increase or decrease the amount of risk associated with a insurance.
Ans 95 : Correct Option is A. (It is applicable to the point in time the insurance application is made.)
Reason : It will help a insurer to evaluate the risk associated with the insurance in a better way and price the product of insurance to the insured in a better way. For example a person with a high Blood Pressure may pay a higher insurance premium as compare to a normal person of same age .
Ans 96 : Correct Option is D. ( Insurable interest rule).
Reason : Insurable interest rule means that if the party does not have any intention to insure it and have a intention to destroy or cause harm in the future then it shows that the insured is not having any insurable interest in the same . So to have a insurance intrest rule both the parties should have a insurable interest on the same.
Ans 97 :Correct Option is D (subrogation).
Reason : The Subrogation enables a insurer to sue and claim the amount of loss caused by him to the insured party .
Ans 98 : Correct Option is B (the insured's right of subrogation).
Reason : As the insurer is having the right to claim on the wrong doer and claim the damages which comes under right of subordination
Ans 99 : Correct Option is B (comprehensive general liability insurance)
Reason : It covers all type of losses as per it clauses like fire,chemical disaster etc which a business can incur during its course of business.
Ans 100 : Correct Option is A.( payment where the insured is held legally responsible for causing loss to a third party)
Reason : This is provided in general insurance where if any loss is caused by the vehical to any third party then it is paid by the insurer.
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