Discuss the insurance issues that jack should consider
Risk Management
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.
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.
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.
4. Jane’s’ Jewelry Shop has a Commercial General Liability (CGL) policy with the following limits:
General Aggregate Limit $1,000,000
Products-Completed Operations Aggregate $1,000,000
Each Occurrence Limit $500,000
Personal and Advertising Injury Limit $500,000
Fire Damage Limit $100,000
Medical Expense Limit $5,000
What dollar amount, if any, will Jane’s CGL insurer pay for each of the following losses that occurred during the same policy period? (assume the losses were paid in the order presented below.) If a loss is not covered or not fully covered explain why.
a. John a customer, slipped on recently waxed floors in Jane’s shop and suffered severe back injury. John successfully sued Jane’s Jewelry Shop for negligence and was awarded damages of $250,000.
b. When one of Jane’s employees accidentally dropped a heavy box on a glass display case in Jane’s shop, the glass broke, causing glass to fly everywhere. Helen, one of Jane’s customers, was permanently blinded in one eye by flying glass and sued Jane’s Jewelry Shop. The court awarded Helen $500,000 in damages. Jane’s employee was cut on the arm and had $500 in medical expenses.
c. When Jane publicly accused Arthur, a customer, of shoplifting, Arthur proved to be innocent. However Arthur sued Jane for slander. Arthur was awarded $300,000 by the court
5. ABC Corporation is covered by two CGL policies. Policy A has limits of $500,000. Policy B has limits of $1,000,000. Both of these policies provide primary coverage for a $750,000. loss. What dollar amount will each policy pay toward this loss if each of the following methods of sharing is used?
A. Contribution by equal shares
B. Contribution by limits.
6. Describe the purpose of certificates of insurance and explain the special problems that can arise in regards to (A) the requirements for notice of cancellation and (B) the inclusion of an additional inured.
7. Fresh Foods Galore, Inc. is a wholesale distributor of fresh produce and fresh meats. They currently have the following insurance coverage:
General Liability
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.
For each scenario below determine if coverage applies and if so the amount paid
Meat delivered to a restaurant was found to be bad after being served to customers at the restaurant. Five persons were taken ill and hospitalized. The court awarded $100,000 to each of the stricken persons.
While unloading one of their trucks with a hand truck, employees of FFG ran into a pedestrian on the sidewalk causing a severe concussion. The pedestrian was out of work for several months. The insured settlement for medical bills and loss time from work was $150,000.
Ralph an employee for FFG was also injured in the unloading incident and had hospital bills of $5,000
FFG is blamed for a fire at the warehouse that they lease. The total loss was $200,000
FFG has a retirement party for a key employee where alcohol is served. Following the party an FFG employee fails to yield at an intersection and collides with another vehicle. It is determined that the employee was intoxicated. The victims sue FFG and the court awards the victims $300,000 for their injuries.
