Back
0

Contribution and Indemnity

Description: Test your knowledge on the legal principles of Contribution and Indemnity in insurance law.
Number of Questions: 14
Created by:
Tags: insurance law contribution indemnity subrogation
Start the Quiz
Attempted 0/14 Correct 0 Score 0
‹
›

What is the primary purpose of the doctrine of contribution in insurance law?

  1. To allow multiple insurers to share the burden of a loss.

  2. To provide a legal remedy for breach of contract.

  3. To determine the liability of an insured person.

  4. To ensure that the insured receives full compensation for a loss.

Show answer
Correct Option: A
Explanation:

The doctrine of contribution aims to distribute the financial responsibility for a loss among multiple insurers who have provided coverage to the same insured person or property.

Which of the following is a common type of contribution clause found in insurance policies?

  1. Pro rata clause

  2. Excess clause

  3. Coinsurance clause

  4. Subrogation clause

Show answer
Correct Option: A
Explanation:

A pro rata clause specifies that each insurer will contribute to the payment of a loss in proportion to the amount of coverage they have provided.

What is the legal principle that allows an insurer to seek reimbursement from a third party who caused a loss to the insured?

  1. Contribution

  2. Indemnity

  3. Subrogation

  4. Reimbursement

Show answer
Correct Option: C
Explanation:

Subrogation allows an insurer, after paying a claim to its insured, to pursue legal action against a third party who was responsible for causing the loss.

In the context of indemnity, what does the term "hold harmless" typically mean?

  1. To assume full responsibility for a loss.

  2. To share the burden of a loss with other insurers.

  3. To provide legal representation to an insured person.

  4. To reimburse an insured person for expenses incurred.

Show answer
Correct Option: A
Explanation:

A "hold harmless" clause obligates one party to take on the entire liability for a loss or damage, thereby protecting the other party from any financial consequences.

Which of the following is a common defense against a claim for contribution or indemnity?

  1. Statute of limitations

  2. Lack of privity of contract

  3. Failure to mitigate damages

  4. All of the above

Show answer
Correct Option: D
Explanation:

All of the listed options can be used as defenses against a claim for contribution or indemnity, depending on the specific circumstances of the case.

What is the primary purpose of an indemnity clause in an insurance policy?

  1. To limit the insurer's liability for a loss.

  2. To define the scope of coverage provided by the policy.

  3. To specify the conditions under which the insurer will provide coverage.

  4. To protect the insured from financial loss caused by a third party.

Show answer
Correct Option: D
Explanation:

An indemnity clause aims to reimburse the insured for losses suffered as a result of the actions or negligence of a third party.

In the context of contribution, what is the principle of "equitable apportionment"?

  1. Each insurer contributes equally to the payment of a loss.

  2. Each insurer contributes in proportion to the amount of coverage they have provided.

  3. Each insurer contributes based on their respective fault or negligence.

  4. Each insurer contributes based on the terms of their insurance policy.

Show answer
Correct Option: C
Explanation:

Equitable apportionment in contribution requires each insurer to contribute to the payment of a loss in proportion to their respective fault or negligence in causing the loss.

Which of the following is a common type of indemnity clause found in insurance policies?

  1. Full indemnity clause

  2. Limited indemnity clause

  3. Conditional indemnity clause

  4. All of the above

Show answer
Correct Option: D
Explanation:

All of the listed options are common types of indemnity clauses found in insurance policies, each with its own specific terms and conditions.

In the context of contribution, what is the principle of "joint and several liability"?

  1. Each insurer is liable for the entire amount of the loss.

  2. Each insurer is liable for a portion of the loss based on their respective fault or negligence.

  3. Each insurer is liable for a portion of the loss based on the terms of their insurance policy.

  4. None of the above

Show answer
Correct Option: A
Explanation:

Under the principle of joint and several liability, each insurer is individually liable for the entire amount of the loss, regardless of the fault or negligence of other insurers.

What is the difference between contribution and indemnity in insurance law?

  1. Contribution is a legal remedy, while indemnity is a contractual remedy.

  2. Contribution is based on fault or negligence, while indemnity is based on a contractual obligation.

  3. Contribution is a right of an insurer, while indemnity is a right of an insured person.

  4. All of the above

Show answer
Correct Option: D
Explanation:

All of the listed options correctly identify key differences between contribution and indemnity in insurance law.

Which of the following is a common defense against a claim for indemnity?

  1. Breach of contract by the insured

  2. Failure to provide notice of the loss to the insurer

  3. Statute of limitations

  4. All of the above

Show answer
Correct Option: D
Explanation:

All of the listed options can be used as defenses against a claim for indemnity, depending on the specific circumstances of the case.

What is the principle of "subrogation pro tanto" in the context of indemnity?

  1. The insurer is subrogated to the rights of the insured to the extent of the payment made.

  2. The insurer is subrogated to the rights of the insured to the full extent of the loss.

  3. The insurer is not subrogated to the rights of the insured.

  4. None of the above

Show answer
Correct Option: A
Explanation:

Subrogation pro tanto allows the insurer to step into the shoes of the insured and pursue legal action against the third party responsible for the loss, but only to the extent of the payment made to the insured.

What is the principle of "subrogation in its entirety" in the context of indemnity?

  1. The insurer is subrogated to the rights of the insured to the extent of the payment made.

  2. The insurer is subrogated to the rights of the insured to the full extent of the loss.

  3. The insurer is not subrogated to the rights of the insured.

  4. None of the above

Show answer
Correct Option: B
Explanation:

Subrogation in its entirety allows the insurer to step into the shoes of the insured and pursue legal action against the third party responsible for the loss, for the full amount of the loss, regardless of the amount paid to the insured.

Which of the following is a common type of contribution clause found in reinsurance contracts?

  1. Excess of loss clause

  2. Quota share clause

  3. Surplus clause

  4. All of the above

Show answer
Correct Option: D
Explanation:

All of the listed options are common types of contribution clauses found in reinsurance contracts, each with its own specific terms and conditions.

- Hide questions
ADVERTISEMENT

Find more quizzes from top tags

general knowledge
3615 Quizzes
119858 Questions
 technology
307 Quizzes
36705 Questions
 sports
963 Quizzes
19148 Questions
 history
1187 Quizzes
13475 Questions
 physics
598 Quizzes
13441 Questions
 biology
1160 Quizzes
12174 Questions
 science & technology
551 Quizzes
11015 Questions
 chemistry
490 Quizzes
9892 Questions
 maths
518 Quizzes
9324 Questions
 softskills
0 Quizzes
7131 Questions