CPCU 552 EXAM QUESTIONS AND ANSWERS WITH
COMPLETE SOLUTIONS GRADED A++
Civil Law
A classification of law that applies to legal matters not governed by criminal law and that
protects rights and provides remedies for breaches of duties owed to others.
Criminal law
The branch of the law that imposes penalties for wrongs against society. And insurance
can not respond to criminal charges
legal liability
The legally enforceable obligation of a person or an organization to pay a sum of money
(called damages) to another person or organization.
liability loss
Any loss that a person or an organization sustains as a result of a claim or suit against
that person or organization by someone seeking damages or some other remedy
permitted by law.
liability insurance
insurance that pays damages assessed against an insured
What are 3 sources of legal liability?
1.) Torts
2.) Contracts
3.) Statutes
,What is a tort?
A wrongful act or an omission, other than a crime or a breach of contract, that invades a
legally protected right
What are the 3 types of torts?
1.) Negligence
2.) Intentional
3.) Strict liability
What is a negligence tort?
The failure to exercise the degree of care that a reasonable person in a similar situation
would exercise to avoid harming others
What is an intentional tort?
An act committed by a person who knows (or should know) that his act will harm
another person
What is strict liability?
Liability imposed by a court or by a statute in the absence of fault when harm results
from activities or conditions that are extremely dangerous, unnatural, ultrahazardous,
extraordinary, abnormal or inappropriate. Example= Blasting sites and worker's
compensation
What is a hold-harmless agreement or an indemnity agreement?
A contractual provision that obligates one of the parties to assume the legal liability of
another party
What is a statute?
a written law passed by a legislative body at either the federal or state level
, What are the 5 pre-accident techniques?
1.) Cost-effectiveness
2.) Legal requirements
3.) Insurer requirements and recommendations
4.) Public Perception
5.) Management risk aversion
loss prevention
A risk control technique that reduces the frequency of a particular loss (a sign versus
action)
loss reduction
A risk control technique that reduces the severity of a particular loss.
loss avoidance
a risk control technique that involves ceasing or never undertaking an activity so that the
possibility of a future loss occurring from that activity is eliminated
What is common law or case law?
Laws that develop out of court decisions in particular cases and establish precedents for
future cases
What is tort law?
the branch of civil law that deals with civil wrongs other than breaches of contract
What is statutory law?
A formal law passed by federal, state or local legislature. Example= Workers
Compensation
What is a warranty?
COMPLETE SOLUTIONS GRADED A++
Civil Law
A classification of law that applies to legal matters not governed by criminal law and that
protects rights and provides remedies for breaches of duties owed to others.
Criminal law
The branch of the law that imposes penalties for wrongs against society. And insurance
can not respond to criminal charges
legal liability
The legally enforceable obligation of a person or an organization to pay a sum of money
(called damages) to another person or organization.
liability loss
Any loss that a person or an organization sustains as a result of a claim or suit against
that person or organization by someone seeking damages or some other remedy
permitted by law.
liability insurance
insurance that pays damages assessed against an insured
What are 3 sources of legal liability?
1.) Torts
2.) Contracts
3.) Statutes
,What is a tort?
A wrongful act or an omission, other than a crime or a breach of contract, that invades a
legally protected right
What are the 3 types of torts?
1.) Negligence
2.) Intentional
3.) Strict liability
What is a negligence tort?
The failure to exercise the degree of care that a reasonable person in a similar situation
would exercise to avoid harming others
What is an intentional tort?
An act committed by a person who knows (or should know) that his act will harm
another person
What is strict liability?
Liability imposed by a court or by a statute in the absence of fault when harm results
from activities or conditions that are extremely dangerous, unnatural, ultrahazardous,
extraordinary, abnormal or inappropriate. Example= Blasting sites and worker's
compensation
What is a hold-harmless agreement or an indemnity agreement?
A contractual provision that obligates one of the parties to assume the legal liability of
another party
What is a statute?
a written law passed by a legislative body at either the federal or state level
, What are the 5 pre-accident techniques?
1.) Cost-effectiveness
2.) Legal requirements
3.) Insurer requirements and recommendations
4.) Public Perception
5.) Management risk aversion
loss prevention
A risk control technique that reduces the frequency of a particular loss (a sign versus
action)
loss reduction
A risk control technique that reduces the severity of a particular loss.
loss avoidance
a risk control technique that involves ceasing or never undertaking an activity so that the
possibility of a future loss occurring from that activity is eliminated
What is common law or case law?
Laws that develop out of court decisions in particular cases and establish precedents for
future cases
What is tort law?
the branch of civil law that deals with civil wrongs other than breaches of contract
What is statutory law?
A formal law passed by federal, state or local legislature. Example= Workers
Compensation
What is a warranty?
