RPLU 18 - Exam Questions And Answers
100% Pass
What does a limitation of liability clause do? - answerAllocates potential liability between contractual
parties. * Also includes a maximum dollar amount of liability
What is the difference between Mediation & Arbitration? - answerMediation is less...
What does a limitation of liability clause do? - answer✔Allocates potential liability between contractual
parties. * Also includes a maximum dollar amount of liability
What is the difference between Mediation & Arbitration? - answer✔Mediation is less formal and non-
binding, whereas Arbitration is sometimes required, more formal, and can be binding.
Who is covered under a policy? - answer✔1) Named Insured/Policyholder 2) Active officers or
employees of Named Insured 3) Retired/former officers or employees 4) Leased employees 5)
Spouses/executors of insureds
* Note that it must be within the scope of duty * Subcontractors are not covered (Vicariously liable)
What factors regarding Territory affect UW rates, and why? - answer✔* Some states are more litigious
since individuals may be more likely to sue * Courts in states may have set precedents making it easier
to collect from design firms * Location of home office determines the state rate * Need additional
licenses to practice in other states * Coastal regions are issues * California, Florida, and New Jersey are
tough and may pay more for E&O insurance
What are the roles of a claims professional? - answer✔1) Investigate claims 2) Determine if losses are
covered by the policy 3) Establish case reserves 4) Manage litigation 5) Settle claims * Do not defend
against claims
What are some advantages of a project policy? - answer✔* Cover all claims arising from a project *
Effective for the entire construction period * Effective for a run-off period * Higher limits are available *
Covers anyone who works on a project
What are the differences between payment and performance bonds? - answer✔Payment bonds ensure
subcontractors will be properly paid, whereas Performance bonds ensure a project is completed timely
and in accordance with the contract
What are supplemental payments? - answer✔An insurer promises to pay for certain additional costs in
addition to damages covered within limits of liability. * Do not affect policy limits and do not exhaust
limits
What can invoke coverage under a Design Professional policy? - answer✔Reporting an incident that is
reasonably expected to result in a claim. (Potential claim event)
Which of the following is not a requirement of an Architect? A) Bachelor's in Architecture B) Masters in
Architecture or lengthy internship C) Architects Principles & Practice examination D) Architect
Registration examination - answer✔Architects Principles & Practice examination
What were some of the key findings of the Ames & Gough Survey? - answer✔* Premiums are trending
upward but remain modest * Recent claims experience (2 years) * Types of projects * 50% cited higher
claim severity with the majority paying a claim of $1 million or more * Only 7% cited higher claim
frequency * Claims experience is improving * Firms need to stay active in claim/risk management
Why do design professionals buy insurance? - answer✔Many contracts require it be purchased
What factors develop a sound defense in a design malpractice claim? - answer✔* Statute of limitations
* Statutes of Repose * Economic loss doctrine * Contractual defenses
What are some common endorsements to E&O policies for design professionals? - answer✔* First dollar
defense * Defense outside the limits * Waiver of subrogation * Specific project/client excess limits
A Notice of a Potential Claim must include? - answer✔* What happened * What service was performed
* What possible injury/damage may have occurred * How the circumstance occurred * When the
insured first became aware
What are the five most relevant exclusions to E&O polices for design professionals? - answer✔*
Contractual liability & warranty or guarantee * Faulty workmanship * Goods or products * Related entity
* Insured vs. Insured
When can a claim first arise? - answer✔* From a written monetary demand * From a written or oral
monetary demand * From a known incident or probable claim event
What are some high-risk project types? - answer✔* Condominiums/Apartments * Bridges * Pools *
Amusement Rides * Mass transit * Subdivisions
What are some low-risk design disciplines? - answer✔* Mechanical engineering * Land Surveying *
Electrical engineering * Interior design * Landscape architecture
What are some high-risk design disciplines? - answer✔* Architecture * Geotechnical/soil engineering *
Structural engineering
Who does the Spearin Doctrine protect? - answer✔Contractors are protected by warranty of designs
handed over by design professionals. * A client-owner impliedly warrants the adequacy of the design
professionals plans when handed over
What is covered by a CGL policy? - answer✔Losses caused by construction methods resulting in BI or PD
from an accident, including ordinary construction methods.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller Thebright. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.49. You're not tied to anything after your purchase.
