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1. To establish a prima facie case of negligence against a defendant, a plaintiff must prove four elements. Which of the following is NOT one of them?

Negligence requires (1) duty, (2) breach, (3) proximate (legal) cause, and (4) actual damages. Intent is NOT an element of negligence; it is the distinguishing feature of an intentional tort such as battery or false imprisonment. A negligent defendant may be liable even though he or she never intended any harm.

2. A jury finds that a California plaintiff was 80% at fault for an auto accident and the defendant was 20% at fault. Total damages are $100,000. Under California's negligence rule, how much may the plaintiff recover from the defendant?

California follows PURE comparative negligence under Li v. Yellow Cab Co. The plaintiff's recovery is reduced by his or her own percentage of fault, but is not barred even if the plaintiff is more than 50% (or even 99%) at fault. An 80% at-fault plaintiff therefore recovers 20% of $100,000, or $20,000. States that use modified comparative negligence would bar this plaintiff, but California does not.

3. A plaintiff in California suffers $300,000 in economic damages (medical bills, lost wages) and $200,000 in non-economic damages (pain and suffering). Defendant A is 10% at fault; Defendant B (insolvent) is 90% at fault. Under Civil Code §1431.2, what may the plaintiff collect from Defendant A?

Proposition 51 (Civil Code §1431.2) retained joint and several liability for ECONOMIC damages but limited liability for NON-ECONOMIC damages to each defendant's percentage of fault. So Defendant A is jointly liable for the full $300,000 of economic damages, plus only 10% of the $200,000 in non-economic damages ($20,000), for a total of $320,000. The plaintiff cannot collect more non-economic damages from A because B is insolvent.

4. A delivery driver, while making deliveries during work hours in a company van, negligently rear-ends another vehicle. The injured party sues the driver's employer. Under what doctrine may the employer be held liable for the driver's negligent act?

Respondeat superior (Latin: 'let the master answer') makes an employer vicariously liable for the negligent acts of an employee committed within the course and scope of employment. The driver was performing job duties when the accident occurred, so the employer is jointly liable with the employee. Strict liability applies to abnormally dangerous activities (e.g., blasting); res ipsa loquitur is an evidentiary doctrine; assumption of risk is a defense to negligence.

5. Under the standard ISO Commercial General Liability (CGL) form CG 00 01, Coverage A pays sums the insured becomes legally obligated to pay as damages because of:

The standard CGL has three coverages. Coverage A pays for BODILY INJURY and PROPERTY DAMAGE caused by an OCCURRENCE during the policy period in the coverage territory. Coverage B addresses Personal and Advertising Injury (libel, slander, etc.). Coverage C is Medical Payments paid without regard to fault. Pollution is generally excluded under Coverage A subject to limited exceptions.

6. A small business is sued because its president, in a public speech, falsely accused a competitor of fraud. Which Coverage of the standard CGL is most likely to respond to this defamation suit?

Coverage B of the CGL (Personal and Advertising Injury) covers specific intentional, non-bodily-injury offenses, including: oral or written publication of material that slanders or libels a person or organization (defamation), violation of right of privacy, false arrest, malicious prosecution, wrongful eviction, and infringement of copyright/slogan in the named insured's advertisement. Defamation is therefore a classic Coverage B claim.

7. An OCCURRENCE-based CGL policy with a one-year term ending December 31, 2024, is in force. Bodily injury occurs on October 1, 2024, but the claim is not filed against the insured until April 2027. Which policy responds?

Under an OCCURRENCE policy, coverage is triggered by the date of the OCCURRENCE (the bodily injury or property damage), not the date the claim is reported or filed. Even though the claim was filed almost three years later, the October 2024 policy responds. A CLAIMS-MADE policy works the opposite way: it would be triggered only if the claim were made (and reported) during the policy period.

8. A CLAIMS-MADE CGL policy contains a retroactive date of January 1, 2022, and is in force from January 1, 2024, to January 1, 2025. The insured then non-renews and does NOT purchase an extended reporting period ("tail"). When is a claim covered?

A claims-made trigger requires TWO conditions: (1) the underlying injury occurred on or after the RETROACTIVE DATE (here, Jan. 1, 2022), and (2) the claim is first MADE against the insured AND reported to the insurer during the policy period (or during an ERP, if purchased). Without an ERP, a claim reported after Jan. 1, 2025 is not covered. A basic 5-year supplemental ERP is available for an additional premium, but the insured did not buy it.

9. A standard CGL declarations page shows a $1,000,000 Each Occurrence Limit and a $2,000,000 General Aggregate Limit. The insured pays a $700,000 bodily injury claim early in the policy year and later faces an unrelated $600,000 claim. Assuming both are Coverage A losses subject only to the General Aggregate, how much will the insurer pay on the second claim?

Each individual occurrence is capped by the EACH OCCURRENCE LIMIT ($1,000,000); $600,000 is well within that. The General Aggregate caps the TOTAL the insurer pays during the policy period for covered losses (other than Products-Completed Operations). After paying $700,000, the aggregate retains $1,300,000, so the full $600,000 second claim is paid. (The Products-Completed Operations Aggregate is a separate limit.)

10. A general contractor finishes building a deck. Two months later, the deck collapses due to faulty workmanship and injures the homeowner. Which part of the contractor's CGL coverage would respond to the lawsuit?

Products-Completed Operations covers bodily injury and property damage arising AFTER the contractor's work is finished and away from the contractor's premises. Once the deck was complete and the contractor had left the job site, any later injury caused by that work falls under the Products-Completed Operations Hazard. Premises and Operations applies to injuries occurring at the insured's location or during ongoing work.

11. A customer slips and falls in a grocery store. The CGL Medical Payments (Coverage C) section will respond:

Coverage C – Medical Payments is a no-fault, good-will coverage. It pays reasonable medical expenses for bodily injury caused by an accident on the insured's premises or operations, regardless of whether the insured was legally at fault. Limits are typically small ($5,000 to $10,000 per person). It is intended to discourage small claims from escalating into lawsuits under Coverage A.

12. A licensed real estate agent is sued by a buyer for failing to disclose a known leaky roof. Which type of policy is most likely to cover this claim?

Professional Liability (also called Errors & Omissions or E&O) covers claims arising from the rendering of, or failure to render, professional services. A real estate agent's duty to disclose material defects is a professional duty, not a premises hazard. Standard CGL Coverage A excludes liability arising from professional services. Most E&O policies are written on a CLAIMS-MADE basis.

13. Shareholders sue the board of directors of a corporation for breach of fiduciary duty in approving an unfavorable merger. Which policy is designed to cover the directors' defense costs and any settlement?

Directors & Officers (D&O) Liability protects directors and officers from personal liability for 'wrongful acts' committed in their corporate capacity, such as alleged breaches of fiduciary duty, mismanagement, or misleading disclosures. EPLI covers employment-related wrongs (discrimination, harassment, wrongful termination), not duties owed to shareholders.

14. A former employee sues her ex-employer alleging sexual harassment by a supervisor and wrongful termination in retaliation for complaining. Which type of liability policy is specifically designed to respond to these allegations?

Employment Practices Liability Insurance (EPLI) covers wrongful acts arising out of the employment relationship: sexual or other harassment, discrimination based on protected class, wrongful termination, retaliation, failure to promote, and similar claims. Workers' comp covers bodily-injury type work injuries (not intentional acts against employees). CGL Coverage A excludes injury arising out of the employment relationship.

15. A California retailer suffers a ransomware attack that exposes the personal data of 50,000 customers. The retailer's CGL policy excludes 'damages arising from access to or disclosure of confidential information.' Which separate policy is most likely intended to respond?

Cyber Liability policies cover both first-party costs (forensic investigation, notification under California Civil Code §1798.82, credit monitoring, ransomware payments, business interruption) and third-party liability (regulatory fines, customer lawsuits). Modern CGL forms now include a 'data breach' exclusion (ISO CG 21 06 or similar), making stand-alone cyber coverage essential.

16. Which statement BEST distinguishes a commercial umbrella policy from a true excess liability policy?

An UMBRELLA policy provides both (1) excess limits over the underlying policies AND (2) broader coverage that can 'drop down' to function as primary coverage where the underlying does not respond (subject to a self-insured retention). A true EXCESS policy follows form: it sits on top of the underlying limits but covers only what the underlying covers. Excess is narrower; umbrella is broader.

17. Under California's Dram Shop law, a bar that sells alcohol to an OBVIOUSLY INTOXICATED MINOR who then causes a fatal car crash:

California generally bars dram-shop suits (Cal. Bus. & Prof. Code §25602(b)), but §25602.1 carves out a key exception: a licensed seller who furnishes alcohol to an OBVIOUSLY INTOXICATED MINOR may be civilly liable for resulting injuries. Because the standard CGL Liquor Liability Exclusion (CG 00 01) excludes liability of an insured 'in the business' of selling alcohol, a separate Liquor Liability policy is required.

18. California Insurance Code §11580 requires every liability policy issued or delivered in California to include a clause that:

Section 11580(b)(2) requires every California liability policy to permit a third-party judgment creditor, after obtaining a final judgment against the insured judgment debtor and after the insured's insolvency or bankruptcy, to bring a DIRECT ACTION against the insurer up to the policy limits. This protects injured plaintiffs when the insured cannot pay personally.

19. A California resident slips and breaks her arm on June 1, 2024. She does not file her personal injury lawsuit until July 1, 2026. Under California's statute of limitations, the lawsuit will MOST LIKELY be:

Code of Civil Procedure §335.1 sets a 2-year statute of limitations for personal injury or wrongful death actions in California. The injury occurred on June 1, 2024, so the deadline to file was June 1, 2026. Filing on July 1, 2026 is one month late and will be barred. (Written contract claims have 4 years under §337; oral contracts have 2 years under §339.)

20. Which of the following BEST describes the difference between tort liability and contract liability?

A TORT is a civil wrong arising from the breach of a duty IMPOSED BY LAW for the protection of others (e.g., the duty of reasonable care). A CONTRACT obligation arises from a duty the parties have VOLUNTARILY UNDERTAKEN by their agreement. The same facts can sometimes give rise to both (a doctor's malpractice can be both a tort and breach of contract), but the distinction in source of duty is fundamental.

21. A bar owner intentionally punches a customer during an argument and is sued for battery. The bar owner submits the claim under his CGL policy. The insurer will MOST LIKELY:

CGL Coverage A excludes bodily injury or property damage 'expected or intended from the standpoint of the insured.' Intentional torts such as battery, assault, and trespass are precisely what this exclusion targets. (Some exceptions exist, such as reasonable force to protect persons or property.) The insurer would owe no defense or indemnity for the deliberate punch.

22. A spectator at a baseball game is struck by a foul ball and sues the stadium. Under California law, which defense is the stadium MOST LIKELY to assert?

Under Knight v. Jewett, California recognizes 'primary assumption of risk' as a complete defense when a plaintiff voluntarily participates in (or attends) an activity with risks that are INHERENT to that activity. Being hit by a foul ball is an inherent risk of attending a baseball game (the 'Baseball Rule'), so the stadium owes no duty to protect spectators from that risk beyond reasonable measures. California abolished CONTRIBUTORY negligence as a complete bar in 1975 (Li v. Yellow Cab).