James Purchased Liability Insurance with a $100,000 Limit from Insurer

question 32

Multiple Choice

James purchased liability insurance with a $100,000 limit from Insurer A.When Insurer A denied a claim that James thought should be covered,he bought a second liability insurance policy with a $150,000 limit from Insurer B.Before he cancelled the policy with Insurer A,a $60,000 loss occurred.If this loss is settled on a pro rata basis,how much must each insurer pay?

• A)Insurer A will pay $10,000 and Insurer B will pay $50,000.
• B)Insurer A will pay $20,000 and Insurer B will pay $40,000.
• C)Insurer A will pay $24,000 and Insurer B will pay $36,000.
• D)Insurer A will pay $40,000 and Insurer B will pay $20,000.

---

Definitions:

New-Product Development

The process of bringing a new product to the marketplace, from idea generation to commercialization.

Commercialization

The process of bringing a new product or service to the market, involving production, distribution, marketing, and sales strategies.

Full-Scale Production

The phase in manufacturing where products are produced at the maximum capacity following the completion of pilot runs and testing.

New-Product Development

The complete process of bringing a new product or service to market, from concept creation and development to commercialization.