State RegulationsCA specific✓ Verified · outline & fact-checked · Sep 2026Difficulty 2/5
Under CIC §250, which event is an insurable event because it 'creates a liability' against the insured?
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Answer & full 3-part explanation (select an option above, or peek)
Why A is correct
Section 250 states that any contingent or unknown event that may damnify a person having an insurable interest, or create a liability against that person, may be insured against. The liability branch covers events that subject the insured to a legal obligation to pay — for example, a physician whose treatment harms a patient and creates a malpractice liability. As long as the event is contingent or unknown and the insured has an insurable interest, the event is insurable.
Why the other options are wrong
- B) Emotional upset without financial harm neither damnifies the insured nor creates a legal liability; there is no loss to indemnify.
- C) A deliberately caused event lacks the contingency and fortuity insurance requires, and intentional acts are generally excluded.
- D) An already-satisfied obligation is a past loss with no remaining uncertainty; it is not a contingent or unknown event.
Memory hook
Liable = insurable, as long as it's a maybe. Section 250 covers the legal 'ouch' too.