Reference no: EM132150740

Workshop

1. Joseph is the named insured under a Homeowners 3 policy (special form) with a liability limit of $100,000 per occurrence and a $1,000 limit for medical payments to others. For each of the following situations, explain whether the loss is covered under Section II of Joseph's homeowner's policy.

a. Joseph is a self-employed accountant who works out of his home. One of Joseph's clients sues him for negligence in the preparation of a tax return and is awarded a $3,000 judgment against him.

b. Joseph's 25-year-old son, who recently married and now lives in his own apartment, negligently kills another hunter in a hunting accident. The son is sued for $1 million in a wrongful-death lawsuit.

2. Martha rents an apartment and is the named insured under a Homeowners 4 policy (contents broad form) with a liability limit of $100,000 per occurrence and $1,000 medical payments. For each of the following situations, indicate to what extent, if any, the loss is covered under Section II of Martha's homeowner's policy. Assume there are no special endorsements, and each situation is an independent event.

a. Martha attends a party at a friend's house. She accidentally burns a hole in a couch with her cigarette. Itwillcost $500 to repair the damaged couch.
b. Martha rents a snowmobile at a ski resort and accidentally collides with a skier. Martha issuedfor $200,000 bytheinjuredskier.

3. Explain whether each of the following losses would be covered under Section II in the homeowner's policy. If the loss is not covered, explain how coverage can be obtained.

a. The insured owns a restaurant in a large city. The insured is sued by several customers who allege they became seriously ill from a contaminated banana cream pie served at the restaurant.
b. While operating a 30-foot sailboat, the insured injures a swimmer.
c. The named insured is sued by his ex-wife, who alleges her reputation has been ruined because the insured lied about her relationship with another man.