Recovery Questions Exam 2 & 3

by Sandie Donelson, June 2014

300 words

1 page

essay

Question 1: What are the requirements for coverage for an incident to be covered under an occurrence liability policy?

In a business environment, occurrence liability policy protects a business against all incidences occurring when the business is running. For a business to be fully covered for incidents occurring, there are various requirements needed. First, there has to be an injury or a damage that takes place during the policy period. Also, cooperation of the insured business with the law is paramount (Crews, 2010). This policy is like having money in the bank where it is easy to go back to other policies if it does not work. However it is another requirement to have a stable business and ability to pay premium before occurrence of the incidents. This incident must also be one that poses a big threat to the closure of business.

Question 2: List the important factors a surety will consider before offering a contractor a construction bond.

Surety bonds are guarantees that second parties fulfill obligations to third parties. Factors to consider are: The capital or the financial position of the contractor in the financial statements also matters. This is through the current and the present expressions of working for which reveal a compilation of the financial statements and the way a company has been profitable or not in the past. The capacity is another requirement. This relates to the ability of performance of the project at hand. This is done through a review of previous record of work.

The credit of the contractor is another issue (Crews, 2010). This is the understanding of the ability of the contractor to meet financial obligations and also an understanding of the willingness of contractor to meet financial obligations.

Question 3: Please explain what situations are covered by the medical expense protection part of the Personal Auto policy?

The situations that are covered by the medical expense protection part of auto policy are the care of medical expenses and other related costs for instance during rehabilitation or during a funeral. This could be as a result of an accident that involves the driver and passengers (Crews, 2010). The policy also covers the family of the insured especially if an accident occurs due to injuries by other cars while walking or riding a bicycle.

Question 4: Describe what is the conversion privilege of an individual term life insurance policies?

Some of the insurance policies there are often allow the life insurance policy holders to convert their policies into permanent life insurance. This is usually an application of the early year’s term policy before expiration (Beam, & McFadden, 2001). This conversion is attractive to the individuals who are interested in purchasing a permanent life insurance, and cannot be in a position to get higher premiums. As the income of a family grows, a decision can be made to take advantage of cash features by the permanent life policies.

References

Crews, T. B. (2010). Fundamentals of insurance. Mason, OH: South-Western Cengage Learning.

Beam, B. T., & McFadden, J. J. (2001). Employee benefits. …

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