Helen and John both own automobiles on which they carry liability insurance. If Helen is negligent and has an accident while driving John's car with his permission, how will each insurer respond to any liability judgment against Helen?
A) The insurers will pay the judgment on a pro rata basis.
B) John's insurer will pay on an excess basis if Helen's insurance is insufficient to cover the judgment.
C) Helen's insurance will pay on an excess basis if John's insurance is insufficient to cover the judgment.
D) The policies will pay the judgment on the basis of contribution by equal shares.
Answer: C
You might also like to view...
Why is corporate income tax in Germany based on financial accounting income?
A. Germany had rules for financial accounting before it had a corporate income tax. B. The German Accounting Standards Board has more authority than the Bundestag. C. German financial accounting standards reflect true economic income. D. Germany was following the practice set by the United Kingdom.
Your friend tells you he is working on setting up a business. He tells you he has a business partner who shares in all decision making, it has been fairly easy to set up, he will only be taxed once on company profits, and he has limited liability for the company. What kind of business has your friend most likely described?
(A) General partnership (B) Service cooperative (C) Limited liability partnership (D) Limited partnership