In Addition to Covering an Insured's Liability Due to Bodily

question 4

Multiple Choice

In addition to covering an insured's liability due to bodily injury or property damage, the insurer promises to defend against suits claiming such injuries.The insurer's obligation to defend against liability ends when:

• A)the claims are filed after the retroactive date.
• B)a number of exclusions are intended to standardize the risk and/or to limit duplicate coverage.
• C)it has paid out its limits for any of the coverages in settlements or judgments.
• D)the claims are filed after the extended reporting period.
• E)the time lag between premium payments and loss payments is smaller.

---

Definitions:

Deadweight Loss

The loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved or is not achievable.

Monopoly

A market structure characterized by a single seller dominating the market, with no close substitutes for the product or service offered, leading to limited competition.

Average Cost

The total cost of production divided by the number of goods produced, representing the cost per unit of output.

Marginal Revenue

The additional income that is gained from selling one more unit of a product or service.