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INSURANCE Terminology Insurer Premium Beneficiary Insured Wagering contract Insurance contract Life Insurance Contracts Whole Life Insurance Ordinary or straight life Cash surrender value Term Life Insurance Guaranteed renewability Guaranteed convertibility
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Terminology • Insurer • Premium • Beneficiary • Insured • Wagering contract • Insurance contract
Life Insurance Contracts • Whole Life Insurance • Ordinary or straight life • Cash surrender value • Term Life Insurance • Guaranteed renewability • Guaranteed convertibility
Property Insurance Contracts • Types of Losses Covered • Covered Perils • Excluded Perils • Additional Coverage • Personal Property Insurance • Homeowners’ policies
Property Insurance Contracts • Types of Policies • Valued Policies • Open Policies • Special Terms • Coinsurance Clause • Pro Rata Clause
Liability Insurance Contracts • Liability Coverage • Personal Liability Policies • Business Liability Policies • Malpractice insurance
Insurer’s Obligations • Duty to Defend • Each liability insurance provider has a duty to defend the insured when a third party files a legal claim against the insured that falls within the coverage terms of the policy • Duty to Pay • Each liability insurance provider has a duty to defend the insured when a third party files a legal claim against the insured that falls within the coverage terms of the policy
Health Insurance Contracts • Coverage • Group Policies • Portable health insurance • COBRA • Payment Obligations • Deductible
Insurance Policies as Contracts • Offer and Acceptance • Binder • Misrepresentation • Misstatement of Age Clause • Incontestability Clause • Warranties • Capacity • Form and Content • Interpreting Insurance Contracts • Third Parties and Insurance Contracts
Insurable Interest • Insurable Interest in Life Insurance • In life insurance contracts, the requested insurable interest must exist at the time the policy was issued • Insurable Interest in Property Insurance • Those who have an insurable interest in property must have that interest at the time the loss occurs • Video 60:
Notice and Proof of Loss • Time Limits • In most insurance policies, notice and proof of loss must be given within a specified period of time • Rights of Subrogation • Insurer obtains all of the insured’s rights to pursue legal remedies against anyone who may have negligently or intentionally damaged property
Cancellation and Lapse • Cancellation • Generally, the insurer cannot cancel a life insurance contract • The insured can cancel a life insurance policy by surrendering the policy to the insurer • Lapse • Insurance policies that are written for a stated period of time lapse at the expiration of the policy term
Workers’ Compensation • State law • Benefits for work-related injuries and illnesses. • Benefits might be paid by • Insurance company • Employer • State
Work-related injury or illness • Must occur within the scope of employment • Must not be intentional self-inflicted • Employee must not be drugged or intoxicated
Workers’ Compensation statutes began being passed in the early 1900s • Before that employers had a number of defenses if an employee was injured • Contributory negligence • Assumption of risk • Fellow-servant rule
What does Workers’ Compensation typically cover? • Medical bills • Lost income (2/3 of salary. Not subject to income tax.) • Recovery for loss of use of body parts. • Rehabilitation • Death benefits for dependents
Who is covered? • In some states, employers do not have to provide coverage if they have fewer employees than a certain number. (In GA, it is 3.) • Some workers are covered under similar federal laws • Federal Employer’s Liability Act • Longshore & Harbor Workers’ Compensation Act • Merchant Marines Act (Jones Act)
Advantages to Workers’ Compensation • Employer is strictly liable • Do not care who is at fault • Less for employee to have to prove. Should be paid faster
Disadvantages to Workers’ Compensation • Employees collect less than in a lawsuit • Workers’ Compensation is “the exclusive remedy against the employer.” The employer can not be sued in negligence. • What additional damages could an employee collect if s/he could sue in negligence? • 100% lost income (unlimited) • Pain and suffering • Punitive damages
Employee cannot sue the employer in negligence, but what about a third party? • Employer/insurance carrier usually have a right of SUBROGATION.
What defenses can an employer raise? • Worker is not an employee. S/he is an independent contractor. • Not work related. Not within the scope of employment. • Employee is actually able to work.
Georgia State Board of Workers’ Compensation • Georgia State Board of Workers’ Compensation