69. Your HO-3 insured wants to make sure he has liability protection against claims for false arrest, libel and slander. You should
Answer: A
He should add the Personal Injury endorsement.
The Personal Injury endorsement provides crucial liability protection against claims for false arrest, libel, and slander, which are not covered under the standard terms of an HO-3 policy.
A) tell him he should add the Personal Injury endorsement.
This option is correct because the Personal Injury endorsement specifically addresses liability issues related to false arrest, libel, and slander. Without this endorsement, the homeowner would not have protection against these types of personal injuries, which could lead to significant financial exposure.
B) tell him not to worry; this coverage is in the basic policy.
This option is incorrect, as the basic HO-3 policy does not include coverage for personal injuries such as false arrest, libel, or slander. The homeowner would be at risk for claims in these areas unless additional coverage is obtained.
C) tell him this coverage is not available under a Homeowners policy. He must buy a commercial liability coverage.
This option is misleading. While it is true that commercial liability coverage provides broader protections, the Personal Injury endorsement can be added to a Homeowners policy to protect against the specified claims. Therefore, suggesting that he must resort to commercial coverage is unnecessary and incorrect.
D) suggest he add the Ordinance or Law coverage.
This option is incorrect because Ordinance or Law coverage pertains to the costs associated with compliance with building codes or ordinances during repairs or rebuilding after a loss. It does not provide any liability protection for false arrest, libel, or slander.
Conclusion
The option to add the Personal Injury endorsement is essential for ensuring that the homeowner has adequate liability coverage against specific personal injury claims. All other options either fail to provide the necessary coverage or misinterpret the types of protection available under an HO-3 policy. Therefore, the endorsement is the most effective solution for the insured's liability concerns.