Why Must an Insured Avoid Acknowledging Liability for a Loss

question 49

Multiple Choice

Why must an insured avoid acknowledging liability for a loss?

• A) because the insurer has a duty to defend
• B) because it could jeopardize the insurer's right of subrogation
• C) because it may result in increased premiums
• D) because it would constitute a breach of the insured's fiduciary duty

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Definitions:

Transatlantic Telegraph Cable

An undersea cable laid across the Atlantic Ocean used for telegraph communications, first successfully completed in 1866, markedly reducing communication time between Europe and North America.

Underwater

The term "underwater" refers to being submerged in or covered by water, often used in the context of diving, marine environments, or submerged objects.

Annexationists

Advocates for the acquisition of territories not currently under their country’s control, often for strategic, economic, or political reasons.

Hawaiian Government

The governing body of the Hawaiian Islands, which has evolved from a kingdom to a republic to a territory, and finally became the 50th state of the United States in 1959.