Commercial General Liability (CGL)

Dewey's ISO pollution liability coverage form has a $1 million limit applicable to each pollution incident and a $2 million aggregate limit. Pollution claims made against Dewey during the current policy term resulted in judgments of $500,000, $1.2 million and $2.4 million, respectively. How much will Dewey's insurer pay in total for these three claims? $1 million $3 million $2 million $4.1 million

$2 million

Coverage under the Insurance Services Office, Inc. (ISO) limited pollution liability extension endorsement is written subject to which two policy limits? "Each pollution incident" limit and an "each location" limit Per claim limit and a per occurrence limit Aggregate limit and an "each location" limit Aggregate limit and an "each occurrence incident" limit

Aggregate limit and an "each occurrence incident" limit

While working at the rural convenience store she owns, Beryl mistakenly filled the tank of a customer's truck with gasoline rather than diesel fuel. The truck broke down a few miles down the road. Beryl's insurance policy requires her to perform certain duties in responding to the trucker's liability claim for damages. Which is not one of those duties? Promptly forward any loss notice or summons to her insurer. Assist the insurer in making a settlement. Attempt to negotiate a reasonable settlement on her own. Promptly notify the insurer of the claim.

Attempt to negotiate a reasonable settlement on her own.

Advertising injury is covered, if at all, under which part of the commercial general liability policy? Personal injury is not covered under the commercial general liability policy. Coverage C Coverage B Coverage A

Coverage B

Personal injury is covered, if at all, under which part of the commercial general liability policy? Coverage A Personal injury is not covered under the commercial general liability policy. Coverage C Coverage B

Coverage B

Personal injury is covered, if at all, under which part of the commercial general liability policy? Coverage B Personal injury is not covered under the commercial general liability policy. Coverage A Coverage C

Coverage B

Mark is the president and chief executive officer of Gunston Music School, Inc. For claims involving school-related activities, all of the following are insureds under Gunston's CGL, EXCEPT: Gunston Music School. Gunston's music students. Mark. Gunston's stockholders.

Gunston's music students.

Laura and her sister Amy operate Fish Restaurant as a partnership. Laura's husband Jonathan runs a shoe repair business as a sole proprietor, and Laura is his bookkeeper. Amy is single and is not involved in any other business activities. The partnership is the only named insured listed under the restaurant's CGL. Who is covered as an insured under the restaurant's CGL? Laura, and Amy, and Jonathan with respect to any business activities. Laura, Amy, and Fish Restaurant, but only with respect to the restaurant business. Laura only. Laura and Amy with respect to any business activities.

Laura, Amy, and Fish Restaurant, but only with respect to the restaurant business.

Cory Contractor is told by his insurance agent that his CGL policy includes an endorsement that expands his pollution liability coverage to include a release of pollutants at Cory's premises and a release of pollutants taken to a construction site by Cory or his subcontractors. However, Cory does not have coverage with respect to waste disposal sites or underground storage tanks. Cory's policy has which of the following endorsements attached? Limited Pollution Liability Extension endorsement. Named Peril Short Term Pollution Event endorsement. Comprehensive Pollution Liability endorsement. Broad Form Pollution Exclusion endorsement.

Limited Pollution Liability Extension endorsement.

The commercial general liability (CGL) policy contains three coverage sections. Which of the following is not one of those sections? Part A-Liability (bodily injury liability) Part B-Personal and Advertising Injury Liability Part A-Liability (bodily injury and property damage liability) Part C-Medical Payments

Part A-Liability (bodily injury liability)

As a result of a chemical plant explosion, two residents of an adjacent neighborhood were killed and five were seriously burned. Others later developed a lung disease as a result of inhaling the fumes of the fire. A few who were not physically injured complained of recurring nightmares. As defined by the CGL, which of these conditions does not qualify as bodily injury? Death Burns Recurring nightmares Lung disease

Recurring nightmares

Travis's industrial operation includes a number of processes that some might consider hazardous. Which one of the following does not involve a pollutant as that term is defined in the Insurance Services Office, Inc. (ISO) pollution liability coverage forms? Black smoke pours out of Travis's smokestack. Travis's cooling towers discharge hot water into a nearby creek. Travis's welding operation creates electrical interference with a neighbor's cellphone reception. Cinders produced by one of Travis's processes pile up in the land behind his plant.

Travis's welding operation creates electrical interference with a neighbor's cellphone reception.

Corey's CGL is a claims-made policy, which means coverage is triggered when the insured suffers injury or damage. an injury or damage occurs. a claim is settled in court. a claim arising out of the covered injury or damage is made against the insured.

a claim arising out of the covered injury or damage is made against the insured.

Because Danielle's CGL policy has a claims-made coverage trigger, for coverage to apply a claim must first be made against the insured during the policy period (or an extended reporting period). the claim can be filed at any time. only property damage is covered. the bodily injury or property damage insured under Coverage A must occur during the policy period.

a claim must first be made against the insured during the policy period (or an extended reporting period).

The transfer of rights of recovery against others to us condition in a CGL policy is also known as contractual liability coverage. a subrogation clause. a recovery transfer provision. taking third-party-over action.

a subrogation clause.

Although the products-completed operations aggregate of Althea's CGL policy has been exhausted, she still has coverage available under the general aggregate limit. That is because the general aggregate limit of the CGL policy is the most the insurer will pay for all bodily injury and property damage claims (other than those involving the products completed operations hazard) and all personal and advertising injury claims during the policy period. all bodily injury and property damage claims up to $200,000. each claim of bodily injury or property damage. all bodily injury and property damage claims.

all bodily injury and property damage claims (other than those involving the products completed operations hazard) and all personal and advertising injury claims during the policy period.

Delilah has carried occurrence-basis CGL insurance in the past, but she began several years ago to instead purchase annual CGL policies on a claims-made basis. The retroactive date in Delilah's first claims-made CGL coincided with the inception date of that policy. To avoid a coverage gap, the retroactive date in subsequent claims-made CGL policies should include a supplemental extended reporting period (SERP). be the same as the inception dates of those policies. be the same as the retroactive date in her first claims-made CGL. include a basic extended reporting period (BERP).

be the same as the retroactive date in her first claims-made CGL.

Although Sheppard's claims-made CGL has an extended reporting period, coverage applies only for claims that arise from injury or damage that occurs during the extended reporting period. at any time, regardless of policy expiration and retroactive date. after the retroactive date regardless of the policy expiration. before the end of the policy period and on or after the retroactive date.

before the end of the policy period and on or after the retroactive date.

Efren was arrested for allegedly kidnapping a child and holding her in the basement of his store while he attempted to collect ransom money from her parents. Because the store's CGL policy includes detention or imprisonment as one of the listed personal and advertising injury offenses, Efren asked his insurer to defend him in the resulting court case. The insurer denied coverage for Efren's claim because Coverage B of his CGL policy excludes criminal acts. false imprisonment. contractual liability. acts involving minors.

criminal acts.

Lacey's careless use of a space heater resulted in $200,000 in fire damage to the office building she rented. Although the loss is within the $300,000 general aggregate limit of her commercial general liability (CGL) insurance policy, the insurer pays only $100,000 of this property damage liability claim because of the policy's products-completed operations aggregate. each-occurrence limit. damage to premises rented to you limit. personal and advertising injury limit.

damage to premises rented to you limit.

Ivy's CGL provides primary liability coverage with a $100,000 limit, while her commercial umbrella policy provides excess coverage with a $1 million limit. If she must pay $55,000 in damages because she is responsible for an accident in which somebody is injured, her CGL and her umbrella policy will both pay $27,500. her commercial umbrella policy will pay $55,000. her CGL will pay $5,000 and her umbrella policy will pay $50,000. her CGL will pay $55,000.

her CGL will pay $55,000.

Roman Bath Company hosts receptions for its retail distributors at which alcoholic beverages are served. The liquor liability exclusion in Roman's CGL applies to three distinct sources of legal liability in connection with making, selling, or serving alcoholic beverages. They include all of the following EXCEPT: liability arising out of laws against selling alcohol to a minor or to someone already under the influence of alcohol. host liquor liability. any other law that regulates the sale, gift, distribution, or use of alcoholic beverages. both bodily injury and property damage arising out of, causing, or contributing to a person's intoxication.

host liquor liability.

There is some dispute as to the date when the claim against Greg was made. Under his claims-made policy, a claim is considered made when it is received and recorded by the insured or the insurer, or when the adjuster reviews the paperwork. second claim for the same injury is filed. insurer makes a settlement, whichever happens first. claimant reaches the legal age of maturity.

insurer makes a settlement, whichever happens first.

Steve wrote a letter to the newspaper editor in which he knowingly and falsely stated that Allen Corporation had ties to organized crime. After the newspaper published Steve's letter, Steve's insurer refused to defend him against Allen's resulting claim because the personal and advertising injury coverage in Steve's CGL excludes coverage for knowing violation of rights of another. insureds in media and internet-type businesses. material published with knowledge of its falsity. criminal acts.

material published with knowledge of its falsity.

Mary, an employee of Medical Center, invited her friend Spike to participate in an informal after-work volleyball game at the Center's outdoor volleyball court. While running for the ball, Spike collided with the metal pole supporting the volleyball net and cut his forehead. Believing Medical Center responsible for these dangerous conditions, he asked Medical Center to pay for his stitches. The medical payments coverage of Medical Center's CGL will not pay for this claim because stitches are considered first aid. pay for this claim because Medical Center was responsible for Spike's injury. not pay for this claim because of an exclusion for athletic activities. pay for this claim because it happened on Medical Center premises.

not pay for this claim because of an exclusion for athletic activities.

Christine Contractor has a limited pollution liability extension endorsement attached to her CGL policy. This endorsement provides Christine with coverage for government-ordered clean-up costs. pollution arising from her disposal of waste at a landfill. pollution emanating from an above ground storage tank on her premises. pollution emanating an underground storage tank on her premises.

pollution emanating from an above ground storage tank on her premises.

Horton's ISO pollution liability coverage form has a $1 million limit applicable to each pollution incident and a $3 million aggregate limit. Pollution claims made against Horton during the current policy term resulted in judgments of $1.2 million and $2.4 million, respectively. How much will Horton's insurer pay in total for these two claims? $3 million $3.6 million $2 million $1 million

$2 million

Shaw's ISO pollution liability coverage form has a $1 million limit applicable to each pollution incident and a $4 million aggregate limit. Pollution claims made against Shaw during the current policy term resulted in judgments of $500,000, $1.2 million and $2.4 million, respectively. How much will Shaw's insurer pay in total for these three claims? $3 million $4 million $2.5 million $4.1 million

$2.5 million

What is the basic limit of medical payments to others under Coverage F of a CGL policy? $25,000 $1,000 $5,000 $10,000

$5,000

Carol tells her insurance agent she is worried that more than one loss might occur during the course of a policy year. Carol is not sure if the $300,000 per occurrence limit is enough. Carol's agent explains how the CGL policy is designed to handle more than one claim per policy year. What policy limit(s) does the agent explain to Carol? Medical payment limit Claims-made limit Aggregate limit Fire legal liability limit

Aggregate limit

Evidence points to Zeta Construction's negligence as the cause of a stage collapse that resulted in the death of Bonita, a famous performer. Zeta Construction's commercial general liability (CGL) policy with Alpha Insurance Company has limits of $300,000 that would apply to the multimillion dollar claim of Bonita's estate. Under the circumstances, Alpha's obligations can be discharged only by a final court judgment. Alpha should seek a declaratory judgment to determine whether it has an obligation to defend Zeta. Alpha has a duty to defend Zeta until Alpha has paid $300,000 in judgments or reached a settlement. Alpha may conclude its obligations by immediately paying $300,000 to Bonita's estate.

Alpha has a duty to defend Zeta until Alpha has paid $300,000 in judgments or reached a settlement.

When Leona rents the storefront space to open a store, she signs a lease in which she assumes responsibility for liability to anybody who is injured inside her store, even if the injury is her landlord's fault. What kind of general liability exposure that she would not otherwise have does Leona assume as a result of this lease? Contractual liability Products and completed operations liability Premises and operations liability Independent contractor liability

Contractual liability

Tim's commercial general liability policy has paid six bodily injury claims in the past year. On the seventh claim, the policy does not pay the full amount of the claim. What do we know about Tim's CGL policy limits? The seventh claim exceeded the limit for a single occurrence under Coverage A. Only six claims are allowed per year. Either the occurrence limit or the aggregate limit has been reached. The seventh claim exhausted the policy's limit.

Either the occurrence limit or the aggregate limit has been reached.

Nicolas, an electrician, accidentally shorts a live wire in a fuse box he is working on. The resulting sparks destroy the fuse box and set fire to the adjacent wall. What will Nicolas's CGL policy cover? Fire damage to the fuse box but not to the wall Fire damage to the fuse box and the wall Fire damage to neither the fuse box nor the wall Fire damage to the wall but not to the fuse box

Fire damage to the wall but not to the fuse box

Compadre Insurance Company does not want to renew Ahmad's occurrence-basis CGL policy. According to the CGL coverage form (disregarding any applicable endorsements), which of the following is Compadre required to do? Give 30 days' advance written notice to the insured. Offer Ahmad an extended reporting period. Have a legitimate reason for the nonrenewal. Simply let the policy expire.

Give 30 days' advance written notice to the insured.

Josiah runs a luggage repair business as a sole proprietor, and his wife Bonnie keeps the books. Josiah is the only named insured listed under the shop's commercial general liability (CGL) insurance policy. Bonnie's sister Ruth is a part-time employee of Josiah's business. Who is covered as an insured under the luggage repair shop's CGL policy? Josiah and Bonnie with respect to any business activities Josiah, Bonnie, and Ruth with respect to any business activities Josiah and Bonnie, but only with respect to the luggage business Josiah only

Josiah, Bonnie, and Ruth with respect to any business activities

The swimming pool in the atrium of the Highland Court Apartment Building creates a humid environment that encourages mold growth. To limit its exposure to mold-related claims, what kind of endorsement could the insurance company providing the CGL coverage add? Limited pollution liability extension endorsement Pollution liability exclusion endorsement Limited fungi or bacteria coverage endorsement Fungi or bacteria exclusion endorsement

Limited fungi or bacteria coverage endorsement

Alphonso stores lubricants, solvents, and other chemicals in sealed drums in his garage. Which of the following standard CGL endorsements would extend coverage for injury or damage caused by an accidental spill or leak of these substances at the garage? Limited pollution liability extension endorsement. Limited fungi or bacteria coverage endorsement. Broad pollution liability exclusion endorsement. No endorsement is needed as the CGL policy covers this exposure.

Limited pollution liability extension endorsement.

Alphonso stores lubricants, solvents, and other chemicals in sealed drums in his garage. Which of the following standard CGL endorsements would extend coverage for injury or damage caused by an accidental spill or leak of these substances at the garage? No endorsement is needed as the CGL policy covers this exposure. Limited pollution liability extension endorsement. Broad pollution liability exclusion endorsement. Limited fungi or bacteria coverage endorsement.

Limited pollution liability extension endorsement.

Mitch is an adjuster who must inform a policyholder, Bob, that his CGL policy doesn't cover a claim. Bob's claim involves a customer who claims injury from an advertising brochure that Bob published. What coverage will Mitch discuss with Bob? Part D Part A Part C Part B

Part B

Andrew owns an insurance agency protected by a CGL policy. At a gathering of local insurance agents, Andrew makes comments about a competitor and is later sued for slander. Which coverage will respond to the lawsuit? Personal and advertising injury liability Property damage liability Professional liability Bodily injury liability

Personal and advertising injury liability

Andrea, her husband Don, and their friend Bruce own and operate Pet Zoo as a limited liability company (LLC) and employ Chester to manage the business. As respects their responsibilities in the conduct of this business, who qualifies as an insured under Pet Zoo's CGL? Pet Zoo and Chester only. Pet Zoo, Andrea, Don, and Bruce. Pet Zoo as a business entity only. Andrea and Don only.

Pet Zoo, Andrea, Don, and Bruce.

Various hazardous processes are involved in manufacturing Pete's products. Which one of the following does not involve a pollutant as that term is defined in the Insurance Services Office, Inc. (ISO) pollution liability coverage forms? e's smokestack. Ash produced by one of Pete's processes accumulates in the land behind his plant. Pete's welding operation creates electrical interference with television signals. Pete's cooling towers discharge hot water into a nearby creek.

Pete's welding operation creates electrical interference with television signals.

When it replaces the liability exclusion in the CGL insurance policy, what does the limited pollution liability extension endorsement do? Restore coverage for losses resulting from bacteria and fungi Replace the CGL policy's definition of pollutants Completely eliminate all pollution coverage Provide significantly broader coverage

Provide significantly broader coverage

When Eduardo sold a piano to Sheri through an online auction service, he included assurances that he would deliver it in good condition after the financial part of the transaction had been completed. However, the moving company van that carried the piano was involved in an accident on the way to Sheri's house, and the piano was damaged. What is true about coverage for this loss under Eduardo's CGL policy? Since the piano was not in Eduardo's care, custody, and control at the time of the loss, the loss is covered. The CGL policy's contractual liability coverage covers the loss. The damage is covered because the piano was not in Eduardo's truck at the time of the loss. The contractual liability exclusion precludes coverage for the loss.

The contractual liability exclusion precludes coverage for the loss.

Coleman purchased an ISO pollution liability policy as required by a Brown County regulation that applies to a particular type of project. The regulation requires that Brown County be notified if the policy is canceled. Having completed the project, Coleman requested his insurer to cancel the policy, effective immediately, and return the unearned premium to Coleman. Why did the insurer refuse to comply with Coleman's request? The policy cannot be canceled until Coleman or the insurer has provided the required notice of cancellation to Brown County. Pollution liability policies cannot be canceled before their normal expiration date. Brown County, not Coleman, must request the cancellation. Pollution liability coverage premiums are fully earned when the policy is issued.

The policy cannot be canceled until Coleman or the insurer has provided the required notice of cancellation to Brown County.

Horton Company is insured under both a commercial general liability (CGL) policy and an ISO pollution liability coverage form. How, if at all, do the supplementary payments provisions of these two forms differ? The CGL is more restrictive in its coverage of prejudgment interest. The supplementary payments sections of both forms are essentially identical. The pollution liability coverage form adds coverage for pollution-related fines. The pollution liability coverage form excludes supplementary payments for defense costs.

The supplementary payments sections of both forms are essentially identical.

Vance's pollution liability policy has a $25,000 deductible that applies to both damages and cleanup costs. damages but not cleanup costs. defense costs arising out of a covered pollution incident. cleanup costs but not damages.

both damages and cleanup costs.

Sherry, an installer for Cable TV Company, was trained to be very careful when using the repair truck's maneuverable truck-mounted open bucket to reach cables on a telephone pole. One day while maneuvering the bucket into position, she severs a telephone wire. The telephone company makes a claim for damages against Cable TV which, in turn, makes a claim under its CGL policy. Cable TV's CGL policy will cover this claim under an exception to the aircraft, auto, watercraft exclusion. not cover this claim because it should be covered by a business auto policy. not cover this claim because the bucket was mounted on the repair truck, which is an automobile. not cover this claim because it was caused by the negligence of a Cable TV employee.

cover this claim under an exception to the aircraft, auto, watercraft exclusion.

Phillip's laptop computer burst into flames after he upgraded the operating system. He sued the manufacturer seeking damages for the loss of the computer for the injury he sustained from inhaling toxic fumes. If Phillip's claim is valid, the manufacturer's CGL policy will pay for the damage to the computer but deny coverage for the smoke-related injuries on grounds of the pollution exclusion. immediately suspend coverage under the policy. deny coverage for the computer under the "Damage to Your Product Exclusion." pay for damage to the computer and the smoke-related injuries.

deny coverage for the computer under the "Damage to Your Product Exclusion."

While handling a claim under Althea's CGL, the adjuster is asked why the premium audit condition in Althea's policy requires her to give the insurer access to Althea's financial records. The adjuster should answer that the insurer needs access to the Althea's financial and other business records so that it can determine Althea's audit premium. stipulate business and financial practices for Althea to follow. determine how much potential claims against Althea can be settled for. determine Althea's loss exposures of a financial nature.

determine Althea's audit premium.

The property, circumstances, activities, and events that can give rise to an insured loss are called loss exposures mistakes accidents violations

loss exposures

A customer of the Perky Coffee Shop slips on a wet floor that has just been mopped and breaks an ankle. The customer's resulting claim against Perky is an example of a products liability loss. contractual liability loss. completed operations liability loss. premises and operations liability loss.

premises and operations liability loss.

All of the following types of exposures are covered by the CGL policy, EXCEPT: products liability contractual liability premises liability professional liability

professional liability

Because the named insured in Rasmussen LLC's liability policy is a limited liability company, Rasmussen's members are also insureds with respect to the conduct of company business. their personal liability. the conduct of their other businesses not covered by the CGL. their personal conduct.

the conduct of company business.

Although Monte thought his CGL policy included personal and advertising injury coverage, he belatedly discovered that the utterance or publication of a false and disparaging statement about another person is not covered if the statement is so obviously false that nobody would believe it. the false statement is made without the knowledge that it is false. the statement is true. the false statement is made with the knowledge that it is false.

the false statement is made with the knowledge that it is false.

Cowbell Ice Cream Parlor is the named insured in a CGL. Under Coverage C-medical payments of Cowbell's policy, injuries sustained by members of the general public while on the insured's premises or otherwise exposed to the insured's operations are covered as long as the claimant is deemed to be at fault. without regard to the legal liability of the insured. if the injuries are life-threatening. as long as the insured is deemed legally liable.

without regard to the legal liability of the insured.

Coverage under the Insurance Services Office, Inc. (ISO) pollution liability forms is subject to which two policy limits? Aggregate limit and an "each location" limit Aggregate limit and an "each pollution incident" limit "Each pollution incident" limit and an "each location" limit Per claim limit and a per occurrence limit

Aggregate limit and an "each pollution incident" limit

Dollie is killed when her office building collapses. The collapse appears to have resulted from defective construction by Buckner. Buckner's commercial general liability (CGL) policy with Alpha Insurance Company has limits of $300,000 that would be payable to Dollie's estate if Buckner is found to be liable for her death. Dollie's estate sues Buckner. Which statement is correct about Alpha's duty to defend Buckner? Alpha must defend Buckner until Alpha has paid $300,000 in judgments or reached a settlement. Alpha must seek a declaratory judgment to determine whether it is obligated to defend Buckner. Alpha's obligations can be discharged only by a court judgment. Alpha may fulfill its duty by immediately paying $300,000 to Buckner, which Buckner can apply toward its defense..

Alpha must defend Buckner until Alpha has paid $300,000 in judgments or reached a settlement.

When Leona rents the storefront space to open a store, she signs a lease in which she assumes responsibility for liability to anybody who is injured inside her store, even if the injury is her landlord's fault. What kind of general liability exposure that she would not otherwise have does Leona assume as a result of this lease? Premises and operations liability Contractual liability Independent contractor liability Products and completed operations liability

Contractual liability

Guadalupe's business is sued for negligence by an injured customer. Which one of the following is a duty that Guadalupe's CGL policy requires her to fulfill? Cooperate with the insurer in the investigation. Hire an attorney. Pay the claimant and submit documentation to the insurer for reimbursement. Notify the police.

Cooperate with the insurer in the investigation.

Ichabod, a dyslexic caretaker for the Sleepy Cemetery, received a court order to exhume the coffin of the late John Henry. Ichabod instead removed the coffin of the late Henry John from its grave. Henry John's relatives made a property damage claim against both Ichabod and Sleepy Cemetery. How will Sleepy's CGL policy respond to the claim? Refuse coverage because the result of Ichabod's action was intentional. Reject the claim because the coffin was in Ichabod's care, custody, and control. Pay the claim because Ichabod did not intentionally remove the wrong coffin. Deny the claim because Ichabod's actions were intentional.

Pay the claim because Ichabod did not intentionally remove the wrong coffin.

Fred, an adjuster, is handling a claim for GH Manufacturing Company. One of the tools GH manufactured caused injury to a customer who is suing for $400,000. This is the second claim submitted against GH during this policy period. Once Fred confirms that $400,000 is less than the per occurrence limit, what other policy limit must he check? Medical payments limit Products-completed operations aggregate Personal injury limit General aggregate

Products-completed operations aggregate

From 2010 through 2015, Pennington was continuously covered by a series of one-year ISO pollution liability coverage forms that were renewed every year. All policies have a retroactive date of January 1, 2010. During 2015, Pennington receives notice that Pennington's chemical spill that occurred in 2008 has now contaminated a neighboring property's well. How, if at all, does Pennington's pollution policy apply to this loss? The loss is covered because the claim was made during the current policy period. The loss is not covered because the pollution incident occurred before the retroactive date. The loss is covered because the damage was discovered during the policy period. The loss is covered because the damage was discovered after the retroactive date.

The loss is not covered because the pollution incident occurred before the retroactive date.

When Alpha Insurance Company nonrenewed Bernard Corporation's pollution liability policy, Bernard requested that a one-year extended reporting period (ERP) endorsement be added to the expiring policy, for which Bernard paid the necessary premium. Ninety days after the policy's expiration date, Bernard received notice of a pollution claim. How should Alpha handle this claim? Regardless of any claims already paid under the policy, the claim will be handled subject to the policy's original aggregate limits. The claim will be handled as though it was made on the last day of the policy period. The policy's expiration date becomes the ERP endorsement's retroactive date, and the claim will be handled accordingly. The claim will be denied because it was made after the policy expired.

The policy's expiration date becomes the ERP endorsement's retroactive date, and the claim will be handled accordingly.

Because it faces some significant pollution exposures, Luna Enterprises, Inc. is insured under both a commercial general liability (CGL) policy and an ISO pollution liability coverage form. In terms of who is insured, what, if anything, is the difference between these two forms? The pollution liability coverage form limits coverage to the named insured listed in the declarations. The pollution liability coverage form extends coverage to corporate shareholders. Only the CGL covers any person or entity subject to a pollution claim. There is no significant difference.

There is no significant difference.

What statement is true about policy conditions? They clarify the way in which other parts of the policy will be interpreted or specify additional duties that the insured or the insurer must meet in the event of a covered loss. They provide general information about the insured. They describe the circumstances under which a policy is issued. They define the sections of a policy that apply to a particular claim.

They clarify the way in which other parts of the policy will be interpreted or specify additional duties that the insured or the insurer must meet in the event of a covered loss.

How many coverage sections are there in a commercial general liability (CGL) policy? Seven Four Three Two

Three

Some of Patricia's sales can be attributed to the public's confusing her product with a competitor's more popular product. If Patricia wrongfully appropriates the competitor's business or product name for her own product, the personal and advertising injury coverage of her commercial general liability (CGL) insurance policy will cover potential claims filed against Patricia. cover expenses related to ending the misappropriation. be determined by the court. exclude claims filed against Patricia.

exclude claims filed against Patricia.

Because Watkins is insured under a claims-made CGL, he is entitled to an extended reporting period only if the insurer cancels or does not renew the policy. if the insurer cancels or does not renew the policy, if the insured cancels or does not renew the policy, or if the insurer renews or replaces the policy with one specifying a later retroactive date. only if the insurer renews or replaces the policy with one specifying a later retroactive date. only if the insured cancels or does not renew the policy.

if the insurer cancels or does not renew the policy, if the insured cancels or does not renew the policy, or if the insurer renews or replaces the policy with one specifying a later retroactive date.

The claims-made CGL policy Conestoga Insurance Company issued to Garcia included a retroactive date of June 10 this year. Therefore, any bodily injury or property damage that occurred before that date is covered as long as it is filed during the policy period. is not covered even if the injury or damage produces a claim during the policy period. is covered even if the claim is filed outside the policy period. is covered as per the policy definitions of bodily injury and property damage.

is not covered even if the injury or damage produces a claim during the policy period.

Horne Company published an advertisement that listed the ingredients in a competitor's product although this information was a trade secret. When the competitor sued Horne for damages for the resulting personal and advertising injury, Horne's CGL insurer denied coverage because Horne's policy excludes coverage for breach of contract. unauthorized use of another's name. knowing violation of rights of another. material published with knowledge of its falsity.

knowing violation of rights of another.

Sopa Company produced a defective quantity of mushroom soup, and many customers who ate it had to be treated in hospital emergency rooms as a result. Anticipating claims, Sopa immediately ordered retailers to remove its mushroom soup from store shelves. Sopa also notified its commercial general liability (CGL) insurer and asked the insurer to cover its expenses in removing the product to minimize future liability losses. Sopa's CGL policy will cover recall expenses but will not cover liability claims from consumers who eat the defective soup. neither recall expenses nor claims from consumers. liability claims from consumers who eat the defective soup but not recall expenses. both recall expenses and claims from consumers.

liability claims from consumers who eat the defective soup but not recall expenses.

Marge, a circus trapeze artist, fell to a safety net and sustained back injuries. While she was recovering, her husband hired a maid to perform household chores. Marge and her husband sued the circus to recover the cost of hiring the maid. The insurer providing the circus's CGL will pay Marge's medical bills but not the cost of the maid. not pay the claim because of the workers compensation exclusion. pay the cost of the maid but not Marge's medical bills. not pay the claim because of the employers liability exclusion.

not pay the claim because of the employers liability exclusion.

Out-on-a-Limb Tree Service removed a large and valuable pine tree from the front lawn of a house at 478 Rooster Drive. Unfortunately, the customer who had ordered the tree removal lived at 478 Brewster Street. Out-on-a-Limb has an occurrence-basis CGL that imposes certain duties upon the insured. To comply with its duties, Out-on-a-Limb should contact the Rooster Drive resident and attempt to negotiate a settlement. notify its insurer immediately of this occurrence that could lead to a claim. notify its insurer only if the Rooster Drive resident makes a claim. delay giving notice to the insurer as long as practicable.

notify its insurer immediately of this occurrence that could lead to a claim.

Toni's business is the named insured under an Insurance Services Office, Inc. (ISO) pollution liability form. This form includes an extended reporting period option that permits Toni to extend the period for reporting claims if she decides not to renew her current policy. obtain an endorsement providing coverage for claims based on events occurring within one year after the policy period ends. obtain an endorsement providing coverage for claims reported within one year after the policy period ends. extend the policy's retroactive date coverage so it will apply to prior losses.

obtain an endorsement providing coverage for claims reported within one year after the policy period ends.

Within the liability insuring agreement of a CGL policy, the insurer promises to pay sums that the insured becomes legally obligated to pay as damages because of bodily injury or property damage that the policy covers. conduct safety inspections of the insured's premises and operations. subrogate against other parties who file claims against the insured for bodily injury or property damage. respond to the insured's obligation under an order of injunctive relief.

pay sums that the insured becomes legally obligated to pay as damages because of bodily injury or property damage that the policy covers.

Because Dominic is confused by the six different dollar limits shown in the declarations of his CGL policy, he asks his insurance agent for clarification as to what these limits apply to. Among other things, the agent explains that the CGL policy's limits apply regardless of the number of persons making a claim or bringing a suit, the number of claims or suits brought against the insured, or the number of insureds against whom a claim is made. persons making a claim or bringing a suit. claims or suits brought against the insured. insureds against whom a claim is made.

persons making a claim or bringing a suit, the number of claims or suits brought against the insured, or the number of insureds against whom a claim is made.

Because Sergio's insurer was willing to add the limited pollution liability extension endorsement to his CGL insurance policy, Sergio will now have coverage for bodily injury or property damage claims resulting from any of the following incidents EXCEPT: pollutants seeping from Sergio's leaky aboveground storage tank contaminate a neighbor's land. pollutants seeping from Sergio's leaky underground storage tank contaminate a neighbor's well water. Sergio is held responsible for cleanup costs to remediate property damage caused by his pollutants. pollutants from Sergio's manufacturing plant's smokestack allegedly damage nearby crops.

pollutants seeping from Sergio's leaky underground storage tank contaminate a neighbor's well water.

A customer of the Perky Coffee Shop breaks his tooth on a bagel he bought at the shop. The injury occurred at the customer's home. The customer's resulting claim against Perky is an example of a contractual liability loss. premises and operations liability loss. completed operations liability loss. products liability loss.

products liability loss

The "damage to your product" exclusion eliminates coverage for damage the buyer does to the product. property damage to the named insured's product when the damage arises out of the product itself or any part of the product. damage the product causes to a customer's property. damage to real property.

property damage to the named insured's product when the damage arises out of the product itself or any part of the product.

ISO offers two standard pollution liability insurance forms. The difference between the Pollution Liability Coverage Form (CG 00 39) and the Pollution Liability Limited Coverage Form (CG 00 40) is that the CG 00 40 form has a lower dollar limit. covers cleanup costs. provides no coverage for cleanup costs. has a higher dollar limit.

provides no coverage for cleanup costs.

The insuring agreement of a commercial general liability (CGL) policy, like the insuring agreement of most other personal and commercial liability policies, covers claims for bodily injury. The policy then defines bodily injury as sickness or disease. death resulting from an injury which occurred while the policy was in effect. injury from violent action. sickness or disease, injury from violent action, or death resulting from an injury which occurred while the policy was in effect.

sickness or disease, injury from violent action, or death resulting from an injury which occurred while the policy was in effect.

Alphonso's business is bankrupt but his CGL premium is paid up through the current policy term. If a products liability claim is made against Alphonso, the insurer can automatically cancel the policy. no longer has to pay damages or meet its other obligations under the policy. will only have to pay a percentage of the damages in a suit. still has a duty to pay damages and meet its other obligations under the policy.

still has a duty to pay damages and meet its other obligations under the policy.

Because her CGL policy from QDP Insurance Company recently expired, Lisa is surprised to find QDP's premium auditor at her office door asking to review her records as provided for by the CGL policy's premium audit condition. The purpose of this premium audit is to determine the actual exposures on which Lisa's premium is based whether Lisa is entitled to a partial premium refund whether Lisa owes an additional premium how Lisa made her last premium payment

the actual exposures on which Lisa's premium is based

Gil's CGL, like most CGL policies, has an occurrence trigger. Under the occurrence coverage trigger, the claim must first be made against the insured during the policy period (or an extended reporting period) for coverage to apply. a covered occurrence can have taken place at any time. the bodily injury or property damage insured under Coverage A must occur during the policy period. only bodily injury is insured under Coverage A.

the bodily injury or property damage insured under Coverage A must occur during the policy period.

For the past four years, Cheryl's business has been insured by four different insurers under commercial general liability (CGL) insurance policies with an occurrence trigger. For a claim to be covered by Cheryl's current policy, the injury or damage must have occurred during the current policy period. the act that produced the claim must have taken place while a previous CGL policy was in effect. the event that produced the injury or damage must have taken place during the current policy period. the claim against Cheryl must be made during the current policy period.

the injury or damage must have occurred during the current policy period.

Marty drove to Ritzy Restaurant where a parking valet opened the car door so Marty could get out. As he stepped out, Marty slipped on the icy driveway and broke his ankle. Two months later, he submitted a medical bill for $1,000 to Ritzy Restaurant. Ritzy's commercial general liability (CGL) insurer will pay this claim under Coverage C-medical payments for all of the following reasons EXCEPT: the injury was caused by the insured's negligence. the expense was reported within a year of the accident. the injury occurred on the insured's premises. the injury occurred to a member of the public.

the injury was caused by the insured's negligence.

Tito parked his car in the Pasquale Restaurant private parking lot the day after a snow storm. Because the lot had not been cleared, Tito slipped on the ice and broke his leg. Two months later, he submitted his $1,000 medical bill to the restaurant. The restaurant's CGL insurer will pay this claim under Coverage C-medical payments for all of the following reasons, EXCEPT: no exclusion applies. the injury occurred on the insured's premises. the injury was caused by the restaurant's negligence. the injury occurred to a member of the public.

the injury was caused by the restaurant's negligence.

Jerry drove to a hotel, where an employee opened the door so Jerry could get out of the car. While stepping out of the car, Jerry caught his foot on the seat belt and fell, breaking his hip. After partially recovering from the injury months later, Jerry submitted $75,000 in medical bills to the hotel. These medical bills probably do not qualify for payment in full under the hotel's CGL under Coverage C-medical payments because the injury was caused by Jerry's own negligence. the expenses were not reported within the necessary time period. the medical expenses exceed the hotel's Medical Payments limit. the injury occurred on the insured's premises.

the medical expenses exceed the hotel's Medical Payments limit.

Dora's CGL has an occurrence coverage trigger. Under an occurrence coverage trigger, the claim must be filed immediately after the occurrence. the claim must be filed as soon as the bodily injury is discovered. the occurrence must immediately cause the bodily injury or property damage. the occurrence and the bodily injury or property damage arising from that occurrence can take place at different times.

the occurrence and the bodily injury or property damage arising from that occurrence can take place at different times.