IRMI Update Quiz
Which of the following statements about insuring contract risk allocations is not correct?
A. Clear indemnity and insurance provisions can significantly reduce disputes over which party's policy responds to a loss.
B. Additional insured status always guarantees coverage equal to the named insured's limits and scope.
C. Courts frequently analyze policy language first before considering external risk transfer agreements.
D. Ambiguous contract wording often increases litigation risk and coverage uncertainty.
Correct Answer: B. Additional insured status does not automatically guarantee identical limits or coverage scope. Coverage depends on policy wording, endorsements, and the underlying contract. Additional insured status helps, but problems remain. Learn more if your company subscribes to Contractual Risk Transfer.
