CPCU 530 TEST ACTUAL QUESTIONS WITH VERIFIED

CPCU 530 TEST ACTUAL / QUESTIONS WITH VERIFIED

ANSWERS

Products liability defenses: - ---Answers_---• State of the art

• Compliance with statutes and regulations • Compliance with product specifications • Open and obvious danger • Plaintiffs knowledge • Comparative negligence vs. the assumption of risk

Compensatory damages: - ---Answers_---• Special Damages

• awards sum of money to specific, identifiable expenses

associated with loss such as medical expenses • General damages - monetary award to compensate victim for losses such as pain and suffering. Not specific, measurable, expenses

Types of expanded liability concepts: - ---Answers_---•

Enterprise liability - requires each member of an industry responsible for manufacturing a harmful or defective product to share liability when a manufacturer at fault cannot be identified • Alternative liability - Shifts burden of proof to each of several defendants in a tort case when there is uncertainty regarding which defendant's action was the proximate cause of the harm 1 / 4

• Market share liability - When a product that has harmed a consumer cannot be traced to a single manufacturer, all manufacturers responsible for a substantial share of market are named in lawsuit and liable for their proportional share • Conspiracy • Concert of action - When all defendants acted together or cooperatively • Joint venture

Mass tort litigation - ---Answers_---based on tort law rather than contract law

Class action lawsuit - ---Answers_---Lawsuit in which one person or a small group of people represent the interests of an entire class of people in litigation

Features of class action law suit - - ---Answers_---• Numerosity • Commonality • Typicality • Adequacy of representation

Family purpose doctrine - ---Answers_---holds owners of an auto kept for family use vicariously liable for damages incurred by a family member

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Product disparagement AKA Trade libel - ---Answers_--- Intentional false and misleading statement about a characteristic of a plaintiff's product, resulting in financial damage to the plaintiff

4 conditions for effective ratification: - ---Answers_---• Agent

must have purported to act for the principal • The principal must ratify the entire transaction • The principal must ratify the agreement before the 3rd party elects to withdraw from the agreement • The principal must have all material facts available before the ratification is binding

Ratification - ---Answers_---Creation of an agency relationship when a principal adopts the act of another who has purported to act for the principal and has neither power nor authority to perform the act for the principal

Apparent Authority - ---Answers_---A 3rd party's reasonable belief that an agent has authority to act on the principal's behalf

Agent's duties to principal: - ---Answers_---• Loyalty

• Obedience • Reasonable care • Accounting • Information 3 / 4

Exceptions to the non-delegation rule: - ---Answers_---•

Ministerial duties • Customary appointments • Emergency appointments

Principal duties to agent: - ---Answers_---• Agreed-on period

of employment • Compensation • Reimbursement for expenses • Indemnity for losses

Death or incapacity can terminate agency in 3 ways: - ---

Answers_---• Death of either principal or agent terminates the agency • Incapacity of the principal terminates the agency • Principal has the right to terminate the agency upon learning of the agent's incapacity

Brokers typical duties: - ---Answers_---• Procure insurance

for the insurance customer-principal • To select the insurer to provide the desired coverage • To arrange for the payment of premiums • To cancel and receive unearned premiums on a policy the broker has obtained

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