Continued on next page question 11 your insured is a

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continued on next page Question 11. Your insured is a sub-contractor who contracted to erect the steel frame of a new convention centre in your city. During the construction process, a large steel truss that formed a major portion of the building’s support system was anchored into the base of the building. The threaded steel bolts that were used for the anchoring process were manufactured by a fastener supply company but ordered by the project’s general contractor. The truss collapsed during installation resulting in the death of one construction worker and injury to several others. The collapse caused significant damage to other portions of the construction project. Investigation into the cause of the collapse revealed that the steel bolts used in the anchoring of the truss were too small and not consistent with the plans and specifications of the building’s design engineer. Discuss the potential liability of your insured as a result of this occurrence. (10 marks) Section D: Case Study ALL STUDENTS Question 12. Students are presented with certain facts and background information about a fictional organization. This material should be carefully reviewed. All parts of the question should be answered. Answers may be in note form but sufficient information, comment, or interpretation should be given to show that the subject matter is understood. TRIPLE A LAUNDRY AND DRY CLEANERS The Triple A Laundry and Dry Cleaning Corporation is a small urban business that operates in rented premises at two locations. The business provides on-site laundering of clothing as well as dry cleaning services. The operation specializes in the dry cleaning and preservation of bridal gowns. The business provides home delivery of customer’s dry cleaning with company-owned vans and employee-owned vehicles. The business’s insurance policy is up for renewal. You are the insurance broker for the drycleaner. (a) Identify TEN (10) liability exposures of Triple A Dry Cleaners. (b) Prepare a recommended liability insurance program for the company, using any of the coverages discussed in this course. Mention all necessary sections of coverage and extensions applicable. (c) The insurance program you have suggested is now in place and the following incident has occurred. While operating a clothes press, an employee of the insured (20 marks) (10 marks)
- 13- C13 I NSURANCE A GAINST L IABILITY – P ART 1 CIP P ROGRAM E XAMINATION A PRIL 2003 accidentally caused a fire when his cigarette fell into a trash bin. The fire caused significant damage to the dry cleaning premises and destruction of all of the customers’ clothing that was on the premises. The fire caused smoke damage to neighbouring businesses. Chemical dry cleaning solutions on the insured premises were ignited by the fire, releasing noxious fumes into the air. Local businesses and residences were evacuated for 24 hours. The businesses are seeking compensation for loss of business and smoke damage. The residents want compensation for hotel and food expenses incurred while they were out of their homes. How would the insurance you have recommended respond to this claim? (10 marks) ♦♦♦♦♦

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