Chapter 03 - Chapter Objectives Identify the kinds of...

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Chapter Objectives Identify the kinds of property subject to loss and the types of losses that may occur Define the basic payments made under liability insurance contracts Distinguish between criminal law and civil law Understand what a tort is Describe negligence and the characteristics of a negligent act Explain some of the defenses against a claim of negligence Discuss factors that are causing individuals and businesses to maintain higher standards of care Identify the basic types of liability exposure and give an explanation of each 1
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Property Loss Exposures Real property Land, all structures permanently attached to the land, and whatever is growing on the land Examples include buildings, attachments to buildings, crops Personal property All property other than real property Examples include cars, money, clothes, furniture, textbooks, airplanes, animals 2
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Property Loss Exposures Direct loss Occurs when there is damage to property Indirect loss Occurs when a direct loss causes expenses to increase or revenues to decline Many insurance contracts insure both direct and indirect losses in the same contract When dealing with property insurance, there are usually only two parties to the contract The insured and the insurer 3
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Property Values Subject to Loss Property Damaged, Destroyed or Wrongfully Taken Debris Removal Demolition Expenses Removal of undamaged property (which is now useless because of proximate damage) Increased Cost of Construction Part of a pair or set Loss of the “going concern value” Net Income (Business Interruption, Contingent BI, Increased Operating Expenses, Reduced Rental Income) 4 Essentials of Risk Management – Insurance Institute of America
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Chapter 03 - Chapter Objectives Identify the kinds of...

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