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The Role of Insurance in Tort Claims
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Flashcards
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Duty to Defend
Insurance companies have a duty to defend the insured in a lawsuit alleging covered acts.
Indemnification
Insurance provides financial protection to the insured against losses resulting from a tort claim.
Liability Limits
Insurance policies have limits which cap the amount the insurer will pay on a tort claim.
Subrogation Rights
Insurers have the right to step into the shoes of the insured and seek recovery from third parties responsible for the loss.
Insurance Premiums
Higher risk of tort liability may result in higher insurance premiums for the insured.
Deductibles
The insured must pay a specified amount before the insurance coverage applies to a tort claim.
Bad Faith Claims
Insured can commence a tort action against an insurer for failing to handle claims in a reasonable and fair manner.
Claims-Made vs. Occurrence Policies
The insurance coverage for tort claims depends on the policy type: either occurring during the policy period (occurrence) or claims made while the policy is active (claims-made).
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