Difficulty: Easy

Average Score: 88%

Your HO-3 insured wants to make sure he has liability protection against claims for false arrest, libel and slander. You should

Rationale

Tell him he should add the Personal Injury endorsement.

The Personal Injury endorsement provides essential coverage for claims related to false arrest, libel, and slander, which are not typically included in standard homeowners policies. This endorsement expands the liability coverage to protect against these specific personal injury claims.

A (tell him he should add the Personal Injury endorsement.) CORRECT

This is the correct choice because the Personal Injury endorsement specifically extends liability coverage to include situations like false arrest, libel, and slander. Without this endorsement, the insured would not be protected against these types of claims under a standard homeowners policy.

B (tell him not to worry; this coverage is in the basic policy.) YOUR ANSWER

This choice is incorrect because standard homeowners policies do not include coverage for personal injury claims such as false arrest, libel, and slander. The insured would need to add the Personal Injury endorsement to have that protection.

C (tell him this coverage is not available under a Homeowners policy. He must buy a commercial liability coverage.) YOUR ANSWER

While it is true that commercial liability policies can provide broader coverage, this statement is misleading. Homeowners policies can include this coverage through the Personal Injury endorsement; thus, the insured does not necessarily have to purchase a commercial policy for such claims.

D (suggest he add the Ordinance or Law coverage.) YOUR ANSWER

Ordinance or Law coverage pertains to costs associated with rebuilding or repairing structures to comply with current building codes after a loss, rather than providing liability protection for personal injury claims. Therefore, this choice does not address the insured's needs regarding false arrest, libel, and slander claims.

Conclusion

For homeowners seeking liability protection against claims like false arrest, libel, and slander, adding the Personal Injury endorsement is essential. This endorsement specifically addresses these risks, ensuring that the insured has the necessary coverage. The other choices either misinterpret the coverage available under standard homeowners policies or suggest unrelated endorsements, making them unsuitable for the insured's needs.

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