Texas General Lines — Property and Casualty flashcards

A type of Commercial General Liability policy where coverage is triggered when a claim is first made against the insured during the policy period or during an Extended Reporting Period (ERP), provided the injury or damage occurred on or after the retroactive date.

• Claim must be made (reported) during policy period or ERP.
• Injury/damage must occur on or after the retroactive date.
• Retroactive date limits how far back occurrences are covered.

Memory trick: Report Right, or Retroactive's Rejection.

A comprehensive insurance policy designed to cover the unique property and liability exposures of farming operations, including dwellings, farm structures, machinery, livestock, and crops.

• Combines property and liability
• Tailored for farming operations
• Covers dwellings, structures, equipment, livestock, crops

Memory trick: Farm Coverage: All of the farm, all in one policy.

Insurance that covers goods being transported by sea against maritime perils such as sinking, stranding, collision, piracy, and sometimes general average.

• Covers goods transported by sea
• Protects against maritime perils
• Can be 'all-risk' or 'named perils'

Memory trick: Ocean Marine: Cargo sailing the sea, protected by thee.

A type of Crime Insurance that protects businesses from financial losses resulting from dishonest acts committed by their employees, such as embezzlement, fraudulent transfers, or theft of money, securities, or other property.

• Covers losses caused by employee dishonesty.
• Applies to theft of money, securities, and other property.
• Often includes fraudulent wire transfers by employees.
• Can be written on a schedule or blanket basis.

Memory trick: Don't let an 'Employee' steal your 'Theft' protection.

An Inland Marine policy that covers the insured's (the bailee's) legal liability for loss or damage to customers' property (bailor's property) while in the insured's care, custody, or control.

• Specifically for businesses that hold property of others (e.g., dry cleaners, repair shops).
• Covers legal liability for damage to customer property.
• Often written on an 'all-risks' basis.

Memory trick: Bailee's Burden: Belongings Burn, Blame Binds.

A specialized insurance policy that protects businesses from financial losses and expenses arising from cyber incidents, such as data breaches, cyberattacks, network security failures, and business interruption due to these events.

• Covers first-party costs (e.g., forensic, notification, business interruption).
• Covers third-party liability (e.g., lawsuits from affected customers).
• Essential for businesses handling sensitive data or relying on technology.

Memory trick: When cyber threats loom, 'Cyber Liability' saves from gloom.

Within CGL Coverage A, the 'products-completed operations hazard' covers bodily injury and property damage occurring away from the insured's premises and arising out of the insured's product or work after it has been put to its intended use.

• Part of Coverage A (Bodily Injury and Property Damage)
• Applies once product/work is completed and off-premises
• Covers BI/PD claims from products or completed work

Memory trick: CGL's A, B, C: Accidents, Bad words, and Caring payouts.

A Commercial Auto Coverage Form designed for businesses that transport property or passengers for hire, covering both owned and non-owned vehicles and addressing specific regulatory requirements.

• For businesses transporting goods/passengers for hire
• Covers owned and non-owned vehicles
• Addresses unique motor carrier liabilities

Memory trick: Auto forms: Business for general, Garage for fixing, Motor for hauling.

An Inland Marine coverage form that provides 'all-risks' coverage for scheduled valuable items such as fine art, cameras, musical instruments, and other specialized articles, often covering them at various locations, in transit, or in storage.

• Covers scheduled items of high value.
• Provides broad 'all-risks' coverage.
• Ideal for portable valuable property not typically covered by standard property forms.

Memory trick: Articles' Artful Adventures: Always Afoot.

The maximum amount the insurer will pay under Coverage A (Bodily Injury and Property Damage) for all damages arising out of the 'products-completed operations hazard' during the policy period.

• Applies to all claims from completed operations.
• Is an aggregate limit, not per occurrence.
• Reduces with each payment until exhausted.

Memory trick: Aggregates are like a budget pot, once spent, it's done for the lot.

Coverage A of the Commercial General Liability (CGL) policy provides coverage for 'property damage' for which the insured is legally liable, arising from an 'occurrence'. This includes damage caused by the insured's products or completed operations.

• Covers legal liability for physical damage to property of others.
• Triggered by an 'occurrence' (accident).
• Includes 'products-completed operations' hazard.

Memory trick: CGL Covers Claims: A for Accidents, B for Bad-Mouth, C for Care.

A professional liability insurance policy that covers financial losses suffered by third parties due to the insured's negligent acts, errors, or omissions in the performance of their professional services.

• Crucial for service-based businesses and professionals.
• Covers financial damages, defense costs.
• Distinguished from CGL, which covers BI/PD.

Memory trick: When professional work goes wrong, 'E&O' makes you strong.

A package insurance policy that combines property, liability, and often business interruption coverage into a single policy, designed for small to medium-sized businesses that meet specific eligibility requirements.

• Simplifies insurance for eligible small businesses.
• Bundles common coverages at a competitive price.
• Eligibility often based on size, revenue, and industry.

Memory trick: For small businesses, a 'BOP' makes the insurance journey hop.

A type of commercial insurance that covers direct physical damage to covered equipment, and sometimes business interruption, resulting from a sudden and accidental breakdown of that equipment.

• Covers mechanical, electrical, and pressure system failures.
• Often includes business interruption and extra expense.
• Supplements standard property policies, which typically exclude these perils.

Memory trick: For mechanical mayhem, 'Equipment Breakdown' is the game.

A specialized form of property insurance that covers buildings and structures while they are under construction, including materials and equipment on-site.

• Covers property during the construction phase.
• Protects against perils like fire, wind, vandalism.
• Coverage typically ceases when the project is completed and occupied.

Memory trick: Building a project needs a 'Builder's' shield.

The core coverage part of a Commercial General Liability policy that protects the insured against claims of bodily injury or property damage for which they are legally liable.

• Covers bodily injury and property damage.
• Applies to premises and ongoing operations.
• Subject to policy limits and exclusions.

Memory trick: A business needs protection from Aches, Bumps, and Cures.

An Inland Marine coverage form designed to insure specific types of valuable, movable property, such as fine art, cameras, and musical instruments, for professionals or dealers, often including coverage during transit.

• Covers movable property of a professional nature.
• Includes items like fine art, cameras, musical instruments.
• Provides broad coverage, often worldwide and in transit.
• Suitable for galleries, photographers, musicians.

Memory trick: Floater forms follow the 'Art' wherever it roams.

Insurance that covers direct physical loss to specified equipment due to sudden and accidental breakdown, as well as indirect losses like business interruption resulting from the breakdown.

• Covers mechanical, electrical, or pressure system breakdowns.
• Includes repair/replacement of damaged equipment.
• Often includes business income and extra expense coverage.
• Typically excludes damage covered by standard property policies (e.g., fire).

Memory trick: Broken machines need 'Breakdown' protection.

Coverage that pays for the loss of business income sustained after the business resumes operations, until income returns to pre-loss levels, up to a specified maximum period.

• Starts after direct business income period ends (operations resume)
• Pays until income returns to normal or max period expires
• Commonly 30, 60, or 90 days, can be endorsed for longer

Memory trick: Extended Income: After repair, it's a race against the clock.

Business Income coverage replaces lost net income and covers continuing expenses when a business is shut down due to a covered direct physical loss. Extra Expense coverage pays for additional costs incurred to minimize the suspension of business operations and continue at a temporary location.

• Business Income covers lost profits and ongoing expenses.
• Extra Expense covers costs to speed up restoration or continue operations.
• Both are triggered by direct physical loss to covered property.

Memory trick: Income's Inconvenience: Extra's Expedite.

Within a Businessowners Policy (BOP), Medical Payments coverage provides for the payment of reasonable medical expenses for bodily injury caused by an accident on the insured's premises or operations, regardless of fault, up to a specified limit.

• No-fault coverage
• Covers medical expenses for bodily injury
• Applies to accidents on premises or from operations

Memory trick: BOP's liability: A (Accidents), B (Bad Words), C (Care for minor injuries).

An Inland Marine coverage form designed for film production companies, providing 'all-risks' coverage for cameras, lighting, sound equipment, negatives, and other production-related property while on location, in transit, or in storage.

• Specialized for motion picture and television production.
• Covers a wide range of production equipment.
• Can include coverage for negatives, videotape, and even props.

Memory trick: Film's Fantastic Flicks: Floater's Full Focus.

The Building and Personal Property Coverage Form (BPP) provides coverage for improvements and betterments made by a tenant to a building, which are fixtures, alterations, or additions that become part of the building.

• Covers tenant-made alterations to leased premises.
• Considered part of 'Your Business Personal Property' if made by the tenant.
• Can be covered under the 'Building' definition if made by the building owner.

Memory trick: Building's Best Protection for Tenants' Touches.

A component of Workers' Compensation insurance that provides compensation to employees for a portion of their lost wages due to a work-related injury or illness that prevents them from working.

• Replaces a percentage of the employee's average weekly wage.
• Paid for temporary or permanent disability.
• Subject to state-specific maximums and waiting periods.

Memory trick: When an injury strikes, Workers' Comp brings the 'MIRL' of benefits.

An Inland Marine coverage form that provides broad coverage for mobile equipment, tools, and machinery owned by contractors, protecting them against various perils while at job sites, in transit, or stored at their premises.

• Covers mobile equipment and tools.
• Designed for contractors and construction businesses.
• Provides coverage regardless of location.
• Protects against perils like theft, fire, and collision.

Memory trick: Contractors need their 'Equipment' to 'Float' everywhere.

Insurance that protects the personal assets of corporate directors and officers from claims arising from wrongful acts committed in their capacity as corporate managers.

• Protects personal assets of D&Os
• Covers wrongful acts in management capacity
• Often includes entity coverage for the corporation

Memory trick: D&O: Directors' Decisions, Officers' Obligations.

The 'Building' category in a Building and Personal Property Coverage Form includes the structure, completed additions, fixtures, machinery, and equipment permanently installed, and outdoor signs attached to the building.

• Covers the structure itself
• Includes permanently installed fixtures and machinery
• Covers outdoor signs attached to the building

Memory trick: Building's fixtures are like its permanent tattoos.

A Commercial Auto coverage form that covers damage to customers' vehicles that are left in the insured's care, custody, or control, such as for service, repair, or parking.

• Specifically for businesses handling customer vehicles.
• Covers direct physical damage.
• Can be written with 'legal liability' or 'direct primary' options.

Memory trick: If you keep customer cars, 'Garagekeepers' saves your stars.

An Inland Marine policy that covers the insured's legal liability for loss or damage to cargo belonging to others while being transported by the insured's trucks, or the insured's own cargo if specified.

• Covers cargo in transit by truck.
• Can be for common carriers, contract carriers, or private carriers.
• Often covers perils like fire, collision, overturn, theft.

Memory trick: Inland Marine covers 'MAPS' of movable property.

Coverage B of the Commercial General Liability (CGL) policy provides coverage for legal liability arising from 'personal injury' (e.g., false arrest, wrongful eviction, libel, slander) and 'advertising injury' (e.g., copyright infringement in advertising, misappropriation of advertising ideas).

• Covers non-physical harms.
• Includes libel, slander, false arrest, malicious prosecution.
• Covers copyright infringement in advertising, misappropriation of advertising ideas.

Memory trick: CGL's Coverage B: Bad-Mouth, Bad-Branding, Bad-Behavior.

In a Businessowners Policy (BOP), the 'Special' causes of loss form provides 'open perils' coverage, meaning it covers all direct physical losses unless they are specifically excluded.

• Provides broad 'open perils' coverage.
• Covers direct physical loss to covered property.
• Theft and vandalism are typically covered perils.
• Exclusions must be specifically listed in the policy.

Memory trick: Basic, Broad, Special – know your peril protection.

The Business Personal Property coverage within a Businessowners Policy (BOP) protects movable property owned by the business, such as furniture, fixtures, equipment, and stock.

• Covers movable business assets
• Includes furniture, equipment, stock
• Part of the property coverage section of a BOP

Memory trick: BOP's property: Building is fixed, Personal is portable.

An Inland Marine policy specifically designed to cover valuable artworks (paintings, sculptures, etc.) against various perils, often on an 'all-risk' basis, including while in transit and at temporary exhibition locations.

• Covers valuable art pieces
• Often 'all-risk' coverage
• Includes coverage in transit and at temporary locations

Memory trick: Inland Marine: Specialized 'Floater' for 'Floating' valuables.

A type of liability insurance that provides additional limits of coverage above underlying primary policies and also offers broader coverage, acting as primary insurance for some exposures not covered by the underlying policies (subject to a self-insured retention).

• Provides higher limits (vertical coverage).
• Offers broader coverage (horizontal coverage/gap filler).
• Requires a Self-Insured Retention (SIR) for claims not covered by underlying policies.

Memory trick: For soaring limits and broader scope, a 'Umbrella' gives you hope.

A Commercial Property coverage form designed to insure the property of a condominium association, including the building, common elements, and sometimes fixtures within individual units, as defined by the association's bylaws.

• Covers the building structure and common areas.
• Excludes individual unit owner's personal property.
• Coverage details are often influenced by condominium bylaws.
• Distinct from individual unit-owners coverage.

Memory trick: Associations protect the 'Association' property.

A type of liability insurance that covers employers against claims made by employees, former employees, or potential employees alleging wrongful termination, discrimination, harassment, and other employment-related issues.

• Covers claims from employees/ex-employees
• Includes wrongful termination, discrimination, harassment
• Protects employer from employment-related lawsuits

Memory trick: EPLI: Employees' Problems, Legal Insurance.

A Commercial Property Causes of Loss form that provides 'all-risks' coverage, meaning it covers all direct physical losses to covered property unless specifically excluded. It's broader than 'Basic' or 'Broad' forms.

• Covers all perils except those specifically excluded.
• Common exclusions include earthquake, flood, government action, power failure (off-premises), and mechanical breakdown/electrical surge.
• Requires careful review of exclusions for comprehensive understanding.

Memory trick: Special's Scope: Storm's Strengths, Surge's Sins.

Coverage that pays for necessary expenses incurred by the insured to continue operations during the period of restoration after a direct physical loss or damage.

• Covers costs beyond normal operating expenses.
• Aims to minimize business interruption.
• Often paired with Business Income coverage.

Memory trick: When the building burns, extra expenses are a must to keep the business churning.

The timeframe within which a Texas-licensed insurance producer must inform the Commissioner of Insurance about any change to their mailing address.

• Ensures accurate communication from TDI.
• Applies to both residential and business addresses.
• Failure to notify can result in penalties.

Memory trick: Address change? Thirty days or less, for TDI to address your mess!

Split limits in a Personal Auto Policy (PAP) specify three separate maximums: per person for bodily injury, total per accident for bodily injury, and total per accident for property damage.

• Format: BI per person / BI per accident / PD per accident.
• Per person limit applies to each individual injured.
• Per accident limit is the total paid for all bodily injuries in one incident.

Memory trick: Remember 'People, Piles, Property' for your split limits.

The maximum administrative fine imposed by the Commissioner for failing to comply with a cease and desist order.

• Up to $25,000 per violation.
• Reflects the seriousness of defying a direct regulatory order.
• In addition to penalties for the initial violation.

Memory trick: Defy the cease, and pay the twenty-five grand peace.

A method of property valuation where the insurer and insured agree on a specific value for the insured property at the time the policy is issued. In the event of a total loss, this predetermined amount is paid.

• Value set at policy inception
• Eliminates depreciation disputes
• Often used for unique or difficult-to-value items (e.g., antiques, fine art)

Memory trick: Agreed Value: We agree on the value beforehand.

A Homeowners policy form designed for older homes where the replacement cost of the dwelling significantly exceeds its market value, providing basic perils coverage and Actual Cash Value (ACV) settlement for both dwelling and personal property.

• For older homes where replacement cost is high relative to market value.
• Provides 'named perils' coverage (similar to HO-1 or DP-1 basic perils).
• Losses are settled on an Actual Cash Value (ACV) basis.
• Often used when meeting strict building codes for replacement would be cost-prohibitive.

Memory trick: HO-8 is for 'Old Homes' needing 'ACV' for 'Basic' protection.

The practice of offering a discount to a policyholder when they purchase multiple insurance policies (e.g., auto and home) from the same insurance carrier.

• Common and legal marketing strategy for insurers.
• Provides convenience and cost savings for policyholders.
• Must be transparent and not involve unfair discrimination.

Memory trick: Bundling policies is like a package deal for your home and car, saving you money.

In a Personal Auto Policy, a 'covered auto' refers to specific types of vehicles for which coverage applies, including scheduled vehicles, newly acquired vehicles, trailers, and temporary substitute vehicles.

• Any vehicle shown in the Declarations.
• A newly acquired private passenger auto or trailer.
• A trailer designed to be pulled by a private passenger auto.
• A temporary substitute auto used while a covered auto is out of service.

Memory trick: Your PAP covers your primary ride, new additions, and temporary wheels.

The specified period before a proposed effective date that an insurer must submit new or revised rates to the Texas Commissioner of Insurance for review.

• Applies to most property and casualty rates.
• Allows the Commissioner to review for fairness and adequacy.
• Ensures consumer protection.

Memory trick: Sixty days for rates, or your new prices won't circulate.

A Commercial Inland Marine Policy covers property that is movable, in transit, or involved in transportation, often providing broad 'all-risk' coverage for specialized items or goods.

• Covers property away from the insured's premises.
• Often 'open perils' (all-risk) coverage.
• Suitable for unique, valuable, or mobile business property.

Memory trick: When your business items are on the move, think 'Inland Marine' for protection.

HO-4 (Contents Broad Form) policies primarily provide Coverage C (Personal Property) on a named-peril basis for renters, protecting their belongings.

• Designed for tenants/renters.
• Does not provide Coverage A (Dwelling) or Coverage B (Other Structures).
• Coverage C is the main focus, protecting personal belongings from specified perils.

Memory trick: HO-4 is like a 'box' for your stuff in a rented 'house'.

Medical Payments coverage in a Personal Auto Policy pays for reasonable and necessary medical and funeral expenses for the insured and passengers injured in an auto accident, regardless of fault.

• Coverage is typically per person, per accident.
• It is a 'no-fault' coverage.
• Covers the insured, family members, and other occupants of the covered vehicle.

Memory trick: Med Pay is like a 'first aid kit' for everyone in your car, no questions asked about fault.

A federal law that requires financial institutions, including insurance companies, to explain their information-sharing practices to their customers and to safeguard sensitive data.

• Protects nonpublic personal financial information.
• Requires privacy notices to consumers.
• Mandates security measures for data protection.

Memory trick: GLBA guards financial data, HIPAA health, FCRA credit, FTC fair trade.

An association that provides basic property insurance coverage to qualified individuals who cannot obtain it in the standard insurance market due to reasons other than coastal catastrophe risk.

• Serves as an insurer of last resort for specific property risks.
• Coverage is typically basic, not comprehensive.
• Aims to ensure availability of essential property insurance statewide.

Memory trick: Fair Plan for hard-to-insure homes, not coastal storms.

A method of valuation that calculates the cost to replace damaged property with new property of like kind and quality, less depreciation.

• Replacement Cost - Depreciation
• Common in property insurance
• Results in lower payout than RCV

Memory trick: ACV: Always Consider Value-Depreciation.

Specific dollar limits applied to certain categories of personal property, restricting the amount an insurer will pay for a loss to those items, regardless of the overall Coverage C limit.

• Applies to specific perils like theft for certain items.
• Limits are often lower than the item's actual value.
• Common categories include jewelry, firearms, stamps, and money.

Memory trick: Special treasures need special limits, like a lock on a jewel box.

The DP-2 Dwelling Policy covers all perils included in DP-1 (Basic Form) plus additional 'broad form' perils such as falling objects, weight of ice/snow/sleet, accidental discharge or overflow of water, and sudden and accidental tearing apart of heating/AC systems.

• Includes DP-1 perils (Fire, Lightning, Internal Explosion, EC, V&MM).
• Adds 12 specific broad perils, including plumbing/heating system rupture.
• Excludes common perils like flood, earthquake, and damage from animals.

Memory trick: DP-2 broadens protection, covering more than just the basics.

Making false statements of material fact regarding the terms, benefits, advantages, or dividends of any insurance policy.

• Involves providing incorrect information.
• Can be oral or written.
• Prohibited under Texas insurance law.

Memory trick: Don't twist, misrepresent, defame, or unfairly discriminate in Texas insurance.

The authority of the Texas Commissioner of Insurance to mandate the delivery of a producer's records when the producer ceases operations or surrenders their license.

• Ensures proper handling of client data.
• Prevents abandonment of records.
• Records may include policy, claim, and financial information.

Memory trick: Records are for 5 years, but if you quit, the Commissioner may seize!

Coverage in a Personal Auto Policy that pays for reasonable and necessary medical and funeral expenses incurred by an insured or passengers due to an auto accident, regardless of fault.

• Applies per person, per accident.
• Covers the named insured, family members, and occupants of the insured's vehicle.
• Pays regardless of who was at fault for the accident.

Memory trick: MedPay is like a personal first-aid kit for everyone in your car.

Prohibited actions by insurers or adjusters during the claims handling process that are deemed unfair or deceptive by law.

• Includes delaying payments, misrepresenting coverage, and failing to investigate promptly.
• Protects policyholders from predatory claims handling.
• Violations can lead to fines and license suspension.

Memory trick: Each practice has its own forbidden zone.

Coverage B under a DP-3 policy insures structures on the premises that are separated from the dwelling by clear space, such as detached garages or sheds.

• Covers structures not attached to the main dwelling.
• Typically 10% of Coverage A limit.
• Applies to perils covered for the dwelling.

Memory trick: Dwelling policies cover more than just the house; look for its separated siblings.

Provisions in an insurance policy that define the rights and duties of the insured and the insurer, and specify rules of conduct for both parties.

• Outline responsibilities of insured and insurer.
• Specify circumstances for coverage to apply or be suspended.
• Examples include duties after a loss, cancellation provisions, and vacancy clauses.

Memory trick: DICE-E defines every policy's core.