IIA-CFSA · Question #418
A manufacturer wants to protect the company from financial loss resulting from third-party lawsuits. The manufacturer has learned of several recent jury awards over $7 million for product defects…
The correct answer is B. An umbrella policy to place a protective umbrella over existing coverage. See the full explanation below for the reasoning.
Question
A manufacturer wants to protect the company from financial loss resulting from third-party lawsuits. The manufacturer has learned of several recent jury awards over $7 million for product defects. The manufacturer currently has only $5 million in this type of coverage. The manufacturer has also learned that several automobile claims have been recently awarded against other company’s cars in accidents over $1 million. The manufacturer has damaged his competition and the manufacturer wants to protect his company further than the current policy allows. What insurance coverage product will the manufacturer likely buy?
Options
- AA personal injury protection (PIP) policy to protect others from personal injury
- BAn umbrella policy to place a protective umbrella over existing coverage.
- CA surplus lines policy to protect against claims in surplus of the policy limits.
- DA floater policy to float coverage where needed.
How the community answered
(29 responses)- A7% (2)
- B72% (21)
- C17% (5)
- D3% (1)
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