Unit 7

An insured had a CGL policy with limits of $100,000 each occurrence BI and PD, $100,000 Personal and Advertising Injury, $300,000 General Aggregate, $300,000 Products Aggregate, $5,000 Medical Payments and $50,000 Fire Damage Liability. Assume covered occurrences and claims were all during the current policy period: Three persons were injured in an accident. There are no liability claims, but there are medical expenses of $3,000 for one person, $7,000 for the second person and, $12,000 for the third person. How much is payable? $____ is payable, maximum $____ per person under medical payments.

$13,000, $5,000

An insured had a CGL policy with limits of $100,000 each occurrence BI and PD, $100,000 Personal and Advertising Injury, $300,000 General Aggregate, $300,000 Products Aggregate, $5,000 Medical Payments and $50,000 Fire Damage Liability. Assume covered occurrences and claims were all during the current policy period: The company paid a $30,000 liability claim for fire damage to the building rented by the tenant. What limit is available if the same type of loss should occur again at the same building? A $____ - limit applies per fire.

$50,000

An insured had a CGL policy with limits of $100,000 each occurrence BI and PD, $100,000 Personal and Advertising Injury, $300,000 General Aggregate, $300,000 Products Aggregate, $5,000 Medical Payments and $50,000 Fire Damage Liability. Assume covered occurrences and claims were all during the current policy period: The company paid a $60,000 PD claim for an occurrence during an ongoing construction job. After this claim, how much coverage is available to the insured for the next claim for BI or PD? General aggregate: $____ ($____ original less $60,000 paid to date) Products Aggregate: $____ (no claims paid).

240,000, 300,000, 300,000

What is the "general aggregate" limit in a CGL Policy? A limit, which applies to "all claims" during each annual policy period for all policy coverage except for BI and PD claims arising from the insured products and completed operations. The lowest limit is $50,000. A limit, which applies to "all claims" during each annual policy period for all policy coverage except for BI and PD claims arising from the insured products and completed operations. A separate products-completed operations aggregate limit for those hazards. The lowest limit is $50,000. A separate products-completed operations aggregate limit for those hazards. A limit, which applies to "all claims" during each annual policy period for all policy coverage except for BI and PD claims arising from the insured products and completed operations. The lowest limit is $50,000. A separate products-completed operations aggregate limit for those hazards.

A limit, which applies to "all claims" during each annual policy period for all policy coverage except for BI and PD claims arising from the insured products and completed operations. The lowest limit is $50,000. A separate products-completed operations aggregate limit for those hazards.

The insured purchased a Commercial General Liability policy. The insured, suspecting illegal activities by a tenant, checked the tenant's apartment while the tenant was absent. The tenant sued for damages claiming wrongful entry. Which coverage under the Commercial General Liability policy applies? Select one: A. Personal and Advertising Injury B. Medical Payments C. Supplementary Payments D. Bodily Injury and Property Damage

A. Personal and Advertising Injury

An insured with coverage under a Commercial General Liability policy buys a new crane and immediately drives the crane on the highway to a job site. While driving on the highway, the insured had an at-fault accident. Which of the following describes how the insurer will respond? Select one: A. The insurer will deny the claim as the crane was operated on the highway under its own power B. The insurer will deny the claim because only specifically scheduled equipment is covered C. The insurer will pay the claim only if the insured has a Business Auto policy D. The insurer will cover the loss since mobile equipment is covered and the crane meets the definition of mobile equipment covered by the policy

A. The insurer will deny the claim as the crane was operated on the highway under its own power

What types of equipment are included in the definition of mobile equipment in the CGL? Select one: A. Vehicles maintained solely for use on or next to the premises the insured owns or rents. B. Bulldozers, farm machinery, forklifts and other vehicles designed primarily for road use C. Transportation of mobile equipment by automobile D. All of the answers are correct

A. Vehicles maintained solely for use on or next to the premises the insured owns or rents.

Explain what is covered by supplementary payments? True or False: Supplementary payments cover several costs related to claims. Supplementary payments are payable in addition to the policy limits. Most policies cover all defense cost including court cost, prejudgment interest, interest on judgments, and the cost of bonds to release attachments. Supplementary payments will also pay up to $25,000 for the cost of bail bonds. The insured is reimbursed for expenses incurred at the insurer's request related to any investigation or defense of a claim, including up to $25,000 per day for loss of earnings because of time off from work.

False Supplementary payments cover several costs related to claims. Supplementary payments are payable in addition to the policy limits. Most policies cover all defense cost including court cost, prejudgment interest, interest on judgments, and the cost of bonds to release attachments. Supplementary payments will also pay up to $250 for the cost of bail bonds. The insured is reimbursed for expenses incurred at the insurer's request related to any investigation or defense of a claim, including up to $250 per day for loss of earnings because of time off from work.

7.1a The CGL Contract:

General liability insurance provides coverage for a business at their premises, for their general operations (ongoing and after completion of the job) and for products manufactured or sold. The primary policy form for covering liability is the Commercial General Liability (CGL) form. General liability is a field of insurance, which embraces business liability hazards other than those dealt with by more specialized forms of coverage such as automobile, aviation, marine, professional and worker's compensation, etc. The CGL form contains the following: a declarations page; common policy conditions; one of the two coverage forms, occurrence or claims-made; and a nuclear energy liability exclusion endorsement.

7.11b Professional Liability Insurance:

Hospitals - The hospital professional liability form covers liability for "medical incidents" which are defined as acts or omissions in the furnishing of professional health care services including food, beverages, medications, appliances, and postmortem handling of bodies and arising from service by members by the named insured's professional boards or committees. The definition of insured includes the named insured, partners for their liability as such if the named insured is a partnership, and the executive officers, the hospital administrator, stockholders, directors, trustees for governors while acting as such if the named insured is other than a sole proprietorship or partnership. Coverage excludes liability for injuries to employees or obligations under any worker's compensation or similar law, liability of an individual insured for such individual's own acts or omissions, and liability for motor vehicles, trailers, watercraft or aircraft. One limit of liability applies "per medical incident" and another as aggregate for all clients during the policy period; the basic limits are $250,000 per medical incident and $750,000 aggregate. Miscellaneous Medical Professions Blood Banks - A blood bank may be covered under the hospital form by endorsement. "Medical incident" includes making a blood donation under the supervision of the insured. Coverage excludes injuries to employees and worker's compensation or similar obligations, liability assumed under a contract, and the insured's activities as a doctor of medicine. Medical or X-Ray Laboratories - A medical or x-ray laboratory may be covered under the hospital form by endorsement. "Medical incident" includes an act or omission in furnishing professional services in performance of clinical-pathological exams and services for diagnosing the status of health, disease or injury of humans or animals and taking of x-ray pictures. In addition, products liability coverage is included for therapeutic agents prepared, sold, handled or distributed by the named insured. Property damage to the named insured's product is excluded. Optometrists - The PS&D form may be amended to cover "optometric incidents" which are defined to mean acts or omissions in the furnishing of professional optometric services. Veterinarians - The PS&D for may be amended to defined "medical incident" as any act or omission in the furnishing of professional veterinarian services. Liability for theft of an animal is excluded. Lawyers - Lawyers Professional Liability covers acts or omissions in rendering professional services as a lawyer, including activities as an administrator, conservator, executor, guardian, trustee or similar fiduciary responsibilities. An insured can be: (1) a sole proprietor where the individual is the named insured; (2) a partnership where the partners are covered as a named insureds; (3) a corporation or association where the entity and individuals who are stockholders or members are covered as named insureds; (4) attorneys employed by the named insured are covered; (5) attorneys who were previously insureds after termination of their relationship with the firm are covered but only for activities while they were associated with the firm insured. The lawyers professional liability form excludes claims arising out of dishonest, fraudulent, criminal or malicious acts or omissions of any insured or employee; claims by an employer against an insured if a salaried employee of such employer; claims for bodily injury or property damage; claims for loss sustained by an insured as the beneficiary or distributor of a trust or estate; certain activities in which lawyers engage where protection for the lawyer is normally provided through the insuring of such activities (i.e. various federal acts involving the purchase, sale or offering of securities; activities as a fiduciary under the Employees Retirement Income Security Act (ERISA); businesses other than the practice of law in which the insured is involved as owner, partner or manager; dual capacity functions as both a lawyer and a principal in another business or as a public official or employee of a governmental body). A major difference in this form is that defense costs or claim expenses are a part of not in addition to the limits of liability. Claim expenses are first deducted and the remainder of the limits may be used for payment of damages. One limit applies to all claims and claim expenses arising out of the same or related professional services. The aggregate limit applies for all claims and claim expenses during the policy period. Basic limits are $25,000 per claim, $75,000 aggregate, with higher optional limits.

Which forms do the physicians, surgeons and dentists (PS&D) professional liability insurance have? _I____ professional liability and _p____, _a____ or _c____ professional liability.

Individual, partnership, association, corporation

A Cyber Liability Policy is also known as an I____ S____ P____ Policy.

Information Security Protection Policy

7.2b Coverage A - Bodily Injury and Property Damage

Insuring Agreement: Coverage Limitations: Under the CGL form, the bodily injury or property damage must be caused by an "occurrence" which takes place in the "coverage territory." An occurrence is defined to be an accident including continuous or repeated exposure to substantially the same general harmful conditions. An accident is a sudden, unexpected event. The requirement for a continuous and repeated exposure allows an occurrence to happen over a period of time (the recent asbestos claims are an example of injuries to repeated exposure). The coverage territory is the United States, its territories or possessions, Puerto Rico and Canada including international waters and airspace between these places. Products made or sold by the insured are covered anywhere in the world so long the suit resulting from an injury is filed within the United States, its territories or possessions, Puerto Rico or Canada. The insurer has both the right and duty to defend the insured until the limits of coverage on the policy have been exhausted in payment of settlements or claims.

Describe the coverage for recall of the insured's product? L____ or e____ related to recall of the insured's products or work is excluded.

Liability, expense

7.11a Professional Liability Insurance:

Professional Liability insurance covers liability arising from the rendering of or failure to render professional services by a professional. The study manual discusses several forms of coverage. The standard forms are available on both an "occurrence" and "claims-made" coverage basis. Physicians, Surgeons and Dentists (PS&D) - The form for PS&D liability insurance has two coverages: (1) Individual Professional Liability; and (2) Partnership, Association or Corporation Professional Liability. The individual professional coverage applies to each person named in the declarations page as an insured as well as the insured's employees, or anyone else under the personal direction, control or supervision of the insured, including services by the insured on any professional board or committee. Coverage excludes any liability incurred as a member, partner, officer, director or stockholder of any professional partnership, association or corporation. Claims are paid for legal liability resulting from any "medical incident" defined as the furnishing of medical or dental services. The second coverage applies to the same medical incidents but the insured is the organization named in the declarations page and coverage is provided for services furnished by a member, partner, officer, director, stockholder or employee or others acting under the direction, control or supervision of the insured. The PS&D policy excludes: (1) criminal acts of the insured; (2) liabilities as a proprietor, hospital administrator, office, stockholder, director, trustee or governor of any health care facility or other enterprise; and (3) injuries to employees or obligations under any worker's compensation or similar laws. Limits of liability are written with one limit applying per claim and another limit applying as aggregate for all claims during the policy period. The basic limits are $250,000 per claim and $750,000 aggregate; higher limits are available. Defense costs are payable in addition to the policy limit. Other liability policies pay on behalf of the named insured and most insurers use their own discretion when deciding whether to defend or settle a claim. Most professional liability policies will not allow the insurer to settle a claim without the approval of the named insured. In addition to medical doctors, the basic PS&D form also applies to chiropodists, chiropractors and physiotherapists. The PS&D form may be endorsed to include coverage for employed professionals such as dental hygienists, laboratory technicians, X-ray technicians and pharmacists.

Describe property damage as used in the CGL policy. Property damage includes loss of use of tangible property that has not been physically damaged. Property damage does not include loss to intangible property or loss of use of intangible property such as copyrights or patents. Property damage (PD) means physical injury to tangible property including loss of use of that property. Property damage also includes loss of use of tangible property that has not been physically damaged. Property damage (PD) means physical injury to tangible property including loss of use of that property. Property damage also includes loss of use of tangible property that has not been physically damaged. Property damage does not include loss to intangible property or loss of use of intangible property such as copyrights or patents. Property damage (PD) means physical injury to tangible property including loss of use of that property.

Property damage (PD) means physical injury to tangible property including loss of use of that property. Property damage also includes loss of use of tangible property that has not been physically damaged. Property damage does not include loss to intangible property or loss of use of intangible property such as copyrights or patents.

7.5 Supplementary Payment:

Supplementary payments cover several costs related to claims. Supplementary payments are payable in addition to the policy limits. Most policies cover all defense cost including court cost, prejudgment interest, interest on judgments, and the cost of bonds to release attachments. Supplementary payments will also pay up to $250 for the cost of bail bonds. The insured is reimbursed for expenses incurred at the insurer's request related to any investigation or defense of a claim, including up to $250 per day for loss of earnings because of time off from work.

7.2c Coverage A - Bodily Injury and Property Damage Insuring Agreement:

The "Coverage Trigger:" The CGL form maybe written on either an "occurrence" or "claims-made" basis. The occurrence form provides coverage for any claim, which occurs during the policy period, regardless of when the claim is actually made. The claims-made form provides coverage for any claim where the claim is made after a "retroactive date" (a separate date stated on the claims-made policy) and the expiration date of the policy. Normally the retroactive date is the same date as the effective date of the first claims-made policy issued for the insured. If the policy has no retroactive date, the insurer would be providing coverage for any claim made during the policy period regardless of when the claim occurred. Special care must be given to policies written on an occurrence basis if the previous policy was written on a claims-made basis. The new policy written on an occurrence basis would only provide coverage for claims, which occurred after the inception date of the new policy. If a claim had occurred on the previous claims-made policy but had not yet been reported, the claim would not be covered by either policy. The claims-made form has a provision for "extended reporting periods" which help fill such coverage gaps.

7.2d Coverage A - Bodily Injury and Property Damage Insuring Agreement:

The basic extended reporting period provision applies if a policy is canceled or not renewed, is renewed with a retroactive date later than the date stated in the declarations page of the current policy, or is renewed by a policy not written on a claims-made basis. The basic extended reporting period provision allows claims to be made within sixty days after policy expiration or within five years after policy expiration, if the occurrence was reported not later than 60 days after policy expiration under the existing claims made policy. When properly reported the claim is handled as if the claim had been made on the last day of the policy period. The basic extended reporting period provision is automatic, cannot be canceled, and is free of charge. The basic extended reporting period provision does not increase or reinstate policy limits. The insured also has the option to purchase supplemental extended reporting period coverage. This coverage must be requested by the insured in writing within sixty days after policy expiration. This option extends the basic extended reporting period provision to unlimited duration. The supplemental extended reporting period provides two separate aggregate limits (aggregate means within the policy period). The supplemental extended reporting period provides a limit equal to the expiring policy's general aggregate and products-completed operations aggregate. This coverage is provided by endorsement to the policy and does charge the insured an additional premium. With either the basic extended reporting period provision or the supplemental extended reporting period coverage, the claim must still happen after the retroactive date shown in the policy and before the expiration date. A Modified Insuring Agreement: On November 1, 1999 an endorsement, Amendment of Insuring Agreement Known Injury or Damage, became mandatory on the CGL policy. The endorsement was a result of the court case, which stated that a known loss could be insured, under certain circumstances. Basically, the court case resolves an insurance principal known as the Known Loss Rule. The endorsement imposes coverage restrictions with respect to "known injury or damage." The endorsement stipulates that if the insured knew that bodily injury or property damage had occurred before the CGL effective date (being any known or unknown continuation of that bodily injury or property damage during or after the CGL effective date) would be a known loss, and excluded under the CGL policy.

7.12 Farm Liability:

As discussed previously, a farmer has both personal and business exposures. The farm liability coverage form is designed to cover both exposures. Farm liability coverage is normally combined with the farm property coverage form to provide complete package of insurance coverage. The farm liability form provides coverage for both bodily injury and property damage arising out of farm operations or personal activities. The form also covers personal injury and advertising injury liability along with medical payments coverage. Exclusions in the farm liability form are: liability for pollutants and for injury to farm employees; liability arising out of motor vehicles (except as specifically described); bodily injury and property damage liability arising out of the insured's performance or failure to perform farming operations for others; damage from aircraft spraying; and damage to the insured's own products. The custom farming endorsement provides coverage for liability arising from the insured's performance of farming operations for another for a charge under a contract or agreement. The basic policy provides coverage for incidental farming operations for another so long as the insured's receipts for the custom farming are less than $5,000 annually. The farm employers' liability/medical payments endorsement applies basic liability and medical payments coverage to injuries to farm employees so long as the employees are not eligible for worker's compensation benefits.

What coverage is provided by coverage a of the CGL form? Select one: A. The claim must be against someone who has the status of "insured" B. All of the answers are correct C. The form states: "We will pay those sums that the insured becomes legally obligated to pay as damages because of "bodily injury" (BI) or "property damage"" (PD) to which this insurance applies". D. There must be a legal obligation to pay and that obligation must be for damages.

B. All of the answers are correct

Which of the following describes the EPL form? Select one: A. The EPL policy has several exclusions B. All of the answers are correct C. The EPL policy provides employers with claims-made coverage for liability arising out of claims for injury to an employee because of an employment-related offense D. Unlike policies with a deductible, the EPL policy has a co-payment provision. Under this provision, the insured shares payment for claims subject to a maximum amount.

B. All of the answers are correct

What is the coverage territory of the CGL policy? Select one: A. The U.S. and its territories or possessions, Puerto Rico and Canada including international waters and airspace between these places B. Both of the answers are correct C. The entire world if the product was made or sold by the insured in the defined territory and if the suit or claim is filed in the defined territory D. None of the answers are correct

B. Both of the answers are correct

What is an example of a business's liability for the existence of "indirect" hazards? Select one: A. All of the answers are correct B. The business being held liable for actions of an independent contractor to whom the insured has subcontracted a part of the general contract work. C. The business being held liable for liability ordinarily belonging to another, but the business agreed by contract to indemnify or hold harmless one whose direct actions produced the claim. D. A person being injured by an allegedly unsafe condition in premises owned or occupied by the insured.

B. The business being held liable for actions of an independent contractor to whom the insured has subcontracted a part of the general contract work.

7.2e Coverage A - Bodily Injury and Property Damage Insuring Agreement:

BI and PD Exclusions: The study manual briefly describes several exclusions under the bodily injury and property damage section of the CGL policy as follows: Intentional Injury - The CGL policy excludes bodily injury or damage, which is intended or expected by the insured. This exclusion does not apply if the injury or damage was the use of reasonable force to protect persons or property. Contractual - Liability assumed under contract is excluded subject to two exceptions: (1) the exclusion does not apply if the insured would have been legally liable regardless of the contractual assumption: and (2) leases, sidetrack agreements (railroads), easement agreements, and certain other agreements entered into prior to the bodily injury or property damage are not subject to the exclusion. Liquor Liability - Liquor liability is excluded if the insured is in the business of manufacturing, distributing, selling, servicing or furnishing alcoholic beverages. An insured in the business of selling etc. alcoholic beverages purchases coverage on a separate policy. Employee Injuries - The CGL policy excludes employee injuries or any liability under the worker's compensation or similar laws. These injuries or liabilities are insured under a separate worker's compensation and employers' liability policy, which will be discussed in a later unit. Pollution - Subject to minor exceptions, there is no coverage for injury, damage or clean-up cost caused by pollutants. Aircraft, Automobiles, Watercraft - The CGL policy excludes liability for aircraft, automobiles or watercraft subject to a few exceptions: (1) watercraft ashore on the insured's premises or if less than 26 feet long and not owned by the insured and not being used to carry persons or property for a charge; (2) parking of an automobile not owned by, or rented or loaned to the insured next to the insured premises; (3) liability for aircraft and watercraft assumed under a contract and not excluded by the contractual exclusion. In addition, some types of "mobile equipment" are covered. Mobile equipment is defined as any of the following types of land vehicles and attached equipment: bulldozers, farm machinery, forklifts and other vehicles designed primarily for off-road use, vehicles maintain solely for use on or next to the premises the insured owns or rents, vehicles on crawler treads, vehicles maintained to provide mobility to mounted power cranes, shovels, loaders, diggers, or drills or road construction or reconstruction equipment, and vehicles used to provide mobility for air compressors, pumps, generators and cherry pickers or similar devices. Mobile Equipment - There is no coverage for transportation of mobile equipment by automobile or use of mobile equipment in association with racing activities. Mobile equipment being transported by automobile is covered for liability by the commercial automobile policy. The damage to mobile equipment itself is covered by an inland marine policy, which will be discussed in a future unit. Mobile equipment not listed above is not covered under the CGL policy. Miscellaneous Property Damage - Subject to various exceptions, the CGL policy excludes damage for various kinds of property including: (1) property which the insured owns, rents, occupies or has on loan; or personal property in the insured's care, custody or control; (2) damage arising out of a premises the insured has sold, given away or abandoned; (3) damage to real property the insured occupies, operates, or has in their care, custody or control; and (4) that particular part of any property that must be restored, repaired, or replaced because work of the insured was incorrectly performed while the work was in progress. Insured's Products - Damage to the insured's own products arising out of the product itself are excluded. Insured's Work - The CGL policy excludes damage to the insured's own work. Damage arising out of the insured's work even after completion is excluded. Work done by a subcontractor is covered. Defects, Delays - There is no coverage for claims based on defect, deficiency, inadequacy or dangerous condition in the insured's product or work, or from delay or failure to properly perform a contract, in so far as it makes property which contains the insured's product or work useless or less useful, or results in loss of use without physical harm to the property. This exclusion does not apply to loss of use of other property when there is sudden and accidental injury to the insured's products or work, after it has been put to its intended use. Recall - Liability or expense related to recall of the insured's products or work, because of a known or suspected deficiency, is excluded. A separate Product Withdrawal Coverage Form is available for this exposure.

What is an example of a business's liability being assumed under a contract? Select one: A. All of the answers are correct B. The business being held liable for actions of an independent contractor to whom the insured has subcontracted a part of the general contract work. C. The business being held liable for liability ordinarily belonging to another, but the business agreed by contract to indemnify or hold harmless one whose direct actions produced the claim. D. A person being injured by an allegedly unsafe condition in premises owned or occupied by the insured.

C. The business being held liable for liability ordinarily belonging to another, but the business agreed by contract to indemnify or hold harmless one whose direct actions produced the claim.

7.3 Coverage B Personal and Advertising Injury:

Coverage B of the CGL policy covers personal and advertising injury liability. The "coverage triggers" (occurrence or claims-made forms) are the same as applies to Coverage A. Personal injury liability protects the insured against claims for false arrest, detention or imprisonment, malicious prosecution, wrongful entry or eviction, libel, slander, or violation of rights of private occupancy. Advertising injury liability protects the insured against claims for misappropriation of advertising ideas or style of doing business or infringement of copyright, title or slogan. Coverage B exclusions include: liability from oral or written publications made with knowledge of falsity or occurring before the policy period; willful violation of law with knowledge or consent of the insured; liability assumed under contract; breach of contract; failure of products or services to meet advertising standards; wrong price descriptions in advertising; any offense committed by an insured whose business is advertising, broadcasting, publishing or telecasting; and pollution.

7.4 Coverage C Medical Payments:

Coverage C is a non-legal coverage. Payments are made on a voluntary basis without admitting liability. Payments are made for medical, dental, hospital and funeral services incurred within one year from the date of accident. The claimant must suffer bodily injury by accident (1) on or next to the insured's premises or (2) because of the insured's operation. Several exclusions apply to Coverage C: injuries to any insured: injuries to tenant; injuries to an employee of the insured; injuries to anyone entitled to worker's compensation or similar law benefits; injuries to anyone participating in athletic event; or anyone injured away from the insured's premises or by the insured's work after completion or by the insured's product. Additionally, all of the exclusions for bodily injury and property damage liability apply to Coverage C. A basic limit of $5,000 per person applies to medical payments. Medical Payments is also subject to both the general aggregate limit and each occurrence limit, which will be discussed later.

7.13 Employment-Related Practices Liability (EPL):

Coverage The EPL policy provides employers with claims-made coverage for liability arising out of claims for injury to an employee because of an employment-related offense. The EPL policy has several exclusions: (1) criminal, fraudulent or malicious acts are excluded subject to an exception which allows defense coverage prior to legal determination of responsibility; (2) injury resulting from failure to comply with accommodations associated with the Americans With Disabilities Act; (3) violation of responsibilities or duties required by federal, state or local statutes, rules are regulations except for Title VII of the Civil Rights Act, Age Discrimination in Employment Act, Equal Pay Act, Pregnancy Discrimination Act, Immigration Reform Control Act and the Family and Medical Leave Act; (4) injury to employees while striking or locked-out or replaced as a result of a labor dispute; (5) committing an act of sexual harassment (coverage does exists for vicarious liability i.e. liability of an employer) (defense coverage is provided prior to legal determination of a sexual offense); (6) coverage for injury arising out of termination, relocation or reassignment; (7) coverage for liability for an intentional act of discrimination or coercion (defense coverage is provided prior to legal determination of a intentional act); (8) retaliation against whistleblowers. Insureds - Named insureds may include an individual, a partnership or joint venture partner, a limited liability company, or a corporation including employees who hold managerial or supervisory positions. Limits of Insurance - This form is written with a single limit of insurance, which includes both damages and defense expenses. Co-Payment - Unlike policies with a deductible, the EPL policy has a co-payment provision. Under this provision, the insured shares payment for claims subject to a maximum amount. Conditions - Conditions in the EPL policy are: bankruptcy, consent to settle, duties in the event of a claim, legal action against the insurer, other insurance, premium audit, representation, separation of insureds, transfer of rights of recovery against others to the insurer, permission to retain defense counsel, transfer of duties when the limit of insurance is exhausted, and options when the insurer does not renew the policy. Extended Reporting Period - An extended reporting period endorsement is available for a period of three years at an additional charge. Definitions The coverage territory includes the United States and Puerto Rico and all other parts of the world providing the suit is brought in the United States or Puerto Rico and the insurer agrees to the resulting settlement. Defense Expenses are payments allocated to claims including fees and salaries of an insurer's attorneys and paralegals, fees of attorneys and paralegals retained by the insured, litigation and administrative hearing expenses, reasonable expenses incurred by the insured at the insurer's requests, and cost taxed against the insured in a suit. Discrimination is a violation of a person's civil rights with respect to that person's race, color, national origin, religion, gender, marital status, age, sexual orientation or preference, physical or mental condition, or any other protected class or characteristic established by a federal, state or local statute, rule or regulation. Injury is defined as one or more of the following offenses: refusal to employ, termination, demotion, or failure to promote, negative evaluation, reassignment, discipline, defamation or humiliation based on discrimination; coercing the person to commit an unlawful act or omission within the scope of their employment; work related sexual harassment; other work-related verbal, physical, mental or emotional abuse because of race, color, national origin, gender, marital status, age, sexual orientation or preference, physical or mental condition or any other protected class or characteristic. Sexual Harassment includes unwelcome sexual advances; verbal, visual or physical conduct of a sexual nature if that conduct affects or interferes with another's employment or job performance, or creates an intimidating, hostile or offensive working environment. Suit is defined as a civil proceeding alleging damages including arbitration, alternative dispute resolutions or administrative hearings conducted by a government agency.

The insured under a Commercial General Liability policy rents an additional warehouse. He would be covered without notice to the agent or the insurer for which of the following? Select one: A. Remainder of the policy term B. 60 days C. 30 days D. 90 days

D. 90 days

What is an example of a business's liability for the existence of "direct" hazards? Select one: A. The business being held liable for actions of an independent contractor to whom the insured has subcontracted a part of the general contract work. B. All of the answers are correct C. The business being held liable for liability ordinarily belonging to another, but the business agreed by contract to indemnify or hold harmless one whose direct actions produced the claim. D. A person being injured by an allegedly unsafe condition in premises owned or occupied by the insured.

D. A person being injured by an allegedly unsafe condition in premises owned or occupied by the insured.

A product purchased in the U.S. subsequently injured a claimant in Europe. Which of the following best explains the merchant's coverage under his Product's Liability coverage? Select one: A. No coverage as loss was outside the U.S. B. Covered only if the policy is endorsed to provide European coverage C. Not covered as product was out of the physical possession of the insured D. Covered if any suits are brought in the U.S. or one of the covered territories

D. Covered if any suits are brought in the U.S. or one of the covered territories

Assume, for each of the following, the insured had calendar year policies: occurrence policies in 2000 and 2001, claims-made policies in 2002 and 2003, both stating retroactive date 1-1-02. The insured retired from business and did not renew or replace the 2003 policy. If there is a BI or PD from a covered occurrence, which policy or policies (if any) apply for; "Claimant injured in 2002. Claim was first made against insured on 7-1-03?" Select one: A. The occurrence policy would still apply and the 2002 claims-made policy would also apply (with no retroactive date, it applies to claims for all prior occurrences if first made during its term) B. 2001 occurrence policy applies (occurrence form applies to BI/PD which occurs during the policy term). The 2002 claims-made policy does not apply because the occurrence happened before retroactive date. C. All of the policies would apply D. The 2002 claims-made policy applies (occurrence after retroactive date, claim fist made during its term).

D. The 2002 claims-made policy applies (occurrence after retroactive date, claim fist made during its term).

Identify the three different legal theories of recovery that CGL insurance may protect an insured against? D____; i____ or c____; and c____

Declarations, inspections, cancellations, changes

Explain personal injury coverage in a CGL Policy? True or False: Personal injury liability does not protect the insured against claims for false arrest, detention or imprisonment, malicious prosecution, wrongful entry or eviction, libel, slander, only against violation of rights of private occupancy.

False Personal injury liability protects the insured against claims for false arrest, detention or imprisonment, malicious prosecution, wrongful entry or eviction, libel, slander, only against violation of rights of private occupancy.

7.8 Conditions:

The conditions section of the CGL policy includes provisions for duties related to claims, to suits against the insurer, to premium audit procedures, to the insured's representations and subrogation. Two conditions are given special note in the study manual. The other insurance condition details how the policy will interact with other policies covering the same claim. Except as otherwise noted, the CGL policy is primary insurance (primary meaning the policy will pay first up to the limits of the policy). If another CGL policy is in force which also is primary, then the first CGL policy will share the claim as follows: (1) a claims-made CGL policy including any coverage provided under a retroactive date or extended reporting period provision is excess over any policy which is not a claims-made form; (2) the CGL policy is excess over a property policy covering the insured's completed work or property rented to the insured; (3) the CGL policy is excess over any limited coverage afforded by an aircraft, automobile or watercraft policy; (4) if conditions 1 - 3 do not exist, each insurer contributes equal amounts until its limits are reached (known as equal shares); (5) if the equal shares basis is not permitted by one of the policies, each insurer contributes based on its limit in proportion to the limits of all policies. The separation of insureds condition states that coverage applies separately to each insured, as if that interest were the only insured. One insured cannot make a claim against another insured.

Assume, for each of the following: an insured had calendar year policies: occurrence policies in 2000 and 2001, claims-made policies in 2002 and 2003, both stating retroactive date 1-1-02. The insured retired from business and did not renew or replace the 2003 policy. If there is a BI or PD from a covered occurrence, which policy or policies (if any) apply for; "Claimant injured in 2002. Claim was first made against insured on 3-1-03?" True or False: The 2003 claims-made policy applies (occurrence after retroactive date, claim first made during its term). The 2002 claims-made policy does not apply because it has expired.

True

Assume, for each of the following: an insured had calendar year policies: occurrence policies in 2000 and 2001, claims-made policies in 2002 and 2003, both stating retroactive date 1-1-02. The insured retired from business and did not renew or replace the 2003 policy. If there is a BI or PD from a covered occurrence, which policy or policies (if any) apply for; "Insured sold product which caused injury in 2000, it injured claimant in 2001, claimant first made claim against insured in 2002?" True or False: 2001 occurrence policy applies (occurrence form applies to BI/PD which occurs during the policy term). The 2002 claims-made policy does not apply because the occurrence happened before retroactive date.

True

Assume, for each of the following: an insured had calendar year policies: occurrence policies in 2000 and 2001, claims-made policies in 2002 and 2003; the 2002 claims-made policy contained no retroactive date; the 2003 policy had a retroactive date of 1-1-02. The insured retired from business and did not renew or replace the 2003 policy. If there is a BI or PD from a covered occurrence, which policy or policies (if any) apply for; "Insured sold product which caused injury in 2000, it injured claimant in 2001, claimant first made claim against insured in 2002?" The 2001 occurrence policy would still apply and the 2002 claims-made policy would also apply (with no retroactive date, it applies to claims for all prior occurrences if first made during its term); the occurrence policy would be primary; the claims-made coverage would be excess.

True

Describe the exclusion for aircraft, automobiles, and watercraft? True or False: The CGL policy excludes liability for aircraft, automobiles or watercraft subject to a few exceptions: (1) watercraft ashore on the insured's premises or if less than 26 feet long and not owned by the insured and not being used to carry persons or property for a charge; (2) parking of an automobile not owned by, or rented or loaned to the insured next to the insured premises; (3) liability for aircraft and watercraft assumed under a contract and not excluded by the contractual exclusion.

True

Describe the liquor liability coverage form. True or False: The CGL policy excludes coverage for liability for having caused or contributed to a person's intoxication, or furnishing liquor to minors or furnishing liquor in violation of statute for those who are in the business of manufacturing, distributing, selling, servicing or furnishing alcoholic beverages. This form provides coverage for those in the business of selling etc. alcoholic beverages. Coverage is available on either an occurrence or a claims-made form.

True

Describe the owner's and contractor's protective liability (OCP) Form. True or False: The OCP form is designed to cover the insured for liability arising from the operations of an independent or subcontractor. This coverage is also provided on the CGL form. The form protects the insured against claims for bodily injury and property damage arising out of work performed for the insured by another, including the named insured's acts or omissions in general supervision. This form is most commonly used to protect an owner for operations being performed by general contractor. The separate policy is on written on an occurrence form of coverage.

True

Describe the umbrella form. True or False: An umbrella form operates much like a stand-alone policy, except it will also provide coverage not included in the underlying policies. The umbrella form has its own terms, conditions, provisions, coverages, and exclusions. The umbrella form is subject to a deductible known as a self-insured retention (SIR); the SIR only applies to claims covered by the umbrella policy but not covered by the underlying policies.

True

How are employees covered under the CGL policy? True or False: Employees are considered insureds while acting within the scope of their employment. Coverage is excluded for employees who cause bodily injury or personal injury to the named insured, partners, members or another employee. Employees are not covered for acts or omissions in providing professional healthcare service. Employees are not covered for damage to property owned, occupied, rented to or loaned to an employee, partner or joint venture. Employees are insured, except for injury to fellow employees or damage to property owned by the named insured, while operating mobile equipment covered under the CGL policy.

True

How do the two coverages apply in the PS&D insurance policy? True or False: The individual professional coverage applies to each person named in the declarations page as an insured as well as the insured's employees, or anyone else under the personal direction, control or supervision of the insured, including services by the insured on any professional board or committee. The second coverage applies to the same medical incidents but the insured is the organization named in the declarations page and coverage is provided for services furnished by a member, partner, officer, director, stockholder or employee or others acting under the direction, control or supervision of the insured.

True

How is injury defined in the EPL policy? True or False: Injury is defined as one or more of the following offenses: refusal to employ, termination, demotion, or failure to promote, negative evaluation, reassignment, discipline, defamation or humiliation based on discrimination; coercing the person to commit an unlawful act or omission within the scope of their employment; work-related sexual harassment; other work-related verbal, physical, mental or emotional abuse because of race, color, national origin, gender, marital status, age, sexual orientation or preference, physical or mental condition or any other protected class or characteristic.

True

Is the "coverage territory" limited to the U.S. and its territories for products claims under Coverage A of a CGL Policy? True or False: Territory is expanded to include the entire world as to BI and PD caused by products made or sold by the insured in the defined territory, and activities of the insured while away from the defined territory for a short time on business. If a suit results from such an injury, it must be filed within the more limited territory i.e., "The U.S. and its territories etc., etc."

True

What are coverage B exclusions? True or False: Coverage B exclusions included: liability from oral or written publications made with knowledge of falsity or occurring before the policy period; willful violation of law with knowledge or consent of the insured; liability assumed under contract; breach of contract; failure of products or services to meet advertising standards; wrong price descriptions in advertising; any offense committed by an insured whose business is advertising, broadcasting, publishing or telecasting; and pollution.

True

What are the exclusions under coverage C - medical payments? True or False: Several exclusions applied to Coverage C: injuries to any insured: injuries to tenant; injuries to an employee of the insured; injuries to anyone entitled to worker's compensation or similar law benefits; injuries to anyone participating in athletic event; or anyone injured away from the insured's premises or by the insured's work after completion or by the insured's product. Additionally, all of the exclusions for bodily injury and property damage liability apply to Coverage C.

True

What are the limits of insurance in a CGL Policy? True or False: Limits apply to each occurrence for BI, PD and medical payments. (1) The lowest limit available is $25,000. Higher limits such as $100,000; $300,000; $500,000 or $1,000,000 are commonly written. A limit applies to all damages sustained by one person for personal and advertising injury, which is usually in the same amount as under BI and PD. For medical payments a basic limit of $5,000 applies to each person.

True

What are the two forms of excess coverage listed in the study manual? True or False: The study manual lists two forms of excess coverage the follow form and the stand-alone form. Both forms require underlying policies to be in effect. A follow form policy provides the exact same coverages, provisions, and exclusions as the underlying policies; the follow form policy simply provides excess or higher limits than the underlying policies. Stand-alone policies also provide the same coverage as the underlying policies but each stand-alone form has its own terms, conditions and provisions.

True

What is meant by the term "work" as used in the CGL policy. True or False: Work means any job or operations performed by the insured or on the insured's behalf including materials, parts for equipment furnished in connection with such work or operation. Work is completed at the earliest of (1) when all work called for in the contract is completed, (2) when all of the work at the site has been completed if work is done at more than one site, or (3) when that part of the work at the job site has been put to its intended use by any person or organization other than another contractor or subcontractor.

True

What is professional liability insurance? True or False: A policy which covers liability arising from rendering of or failure to render professional services for physicians, surgeons and dentists; hospitals and lawyers. By adding endorsements, the policy may apply to blood banks, medical and x-ray laboratories, nurses, optometrists and veterinarians.

True

What is the basic extended reporting period provision? True or False: The basic extended reporting period provision allows claims to be made within sixty days after policy expiration or within five years after policy expiration, if the occurrence was reported not later than 60 days after policy expiration under the existing claims made policy as if the claim had been made on the last day of the policy period. The basic extended reporting period provision is automatic, cannot be canceled, and is free of charge. The basic extended reporting period probation does not increase or reinstate policy limits.

True

What is the cancellation clause in the CGL? True or False: The policy states the insurer must give thirty days written notice of cancellation except a 10-day notice is required for nonpayment of premium. Florida law supersede this provision requiring as with other policies that cancellation during the first 90 days the policy is in force provide a 20 day written notice, except for material misrepresentation or misstatement or failure to comply with underwriting standards. After the first 90 days, a 45-day written notice of cancellation or nonrenewal is required. A 10-day notice is required for nonpayment of the premium.

True

What is the contractual liability exclusion in a CGL Policy? True or False: Liability assumed under contract is excluded subject to two exceptions: (1) the exclusion does not apply if the insured would have been legally liable regardless of the contractual assumption: and (2) leases, sidetrack agreements (railroads), easement agreements, and certain other agreements entered into prior to the bodily injury or property damage are not subject to the exclusion.

True

What is the contractual liability exclusion in a CGL Policy? True or False: Liability assumed under contract is excluded subject to two exceptions: (1) the exclusion does not apply if the insured would have been legally liable regardless of the contractual assumption: and (2) leases, sidetrack agreements (railroads), easement agreements, and certain other agreements entered into prior to the bodily injury or property damage are not subject to the exclusion.

True

What is the other insurance condition of the CGL policy? True or False: The other insurance condition details how the policy will interact with other policies covering the same claim. Except as otherwise noted, the CGL policy is primary insurance (primary meaning the policy will pay first up to the limits of the policy).If another CGL policy is in force which also is primary, then the first CGL policy will share the claim as follows: (1) a claims-made CGL policy including any coverage provided under a retroactive date or extended reporting period provision is excess over any policy which is not a claims-made form; (2) the CGL policy is excess over a property policy covering the insured's completed work or property rented to the insured; (3) the CGL policy is excess over any limited coverage afforded by an aircraft, automobile or watercraft policy; (4) if conditions 1 - 3 do not exist, each insurer contributes equal amounts until its limits are reached (known as equal shares); (5) if the equal shares basis is not permitted by one of the policies, each insurer contributes based on its limit in proportion to the limits of all policies.

True

What types of mobile equipment are covered by the CGL Policy? True or False: Mobile equipment is defined as any of the following types of land vehicles and attached equipment: bulldozers, farm machinery, forklifts and other vehicles designed primarily for off-road use, vehicles maintained solely for use on or next to the premises the injured owns or rents, vehicles on crawler treads, vehicles maintained to provide mobility to mounted power cranes, shovels, loaders, diggers, or drills or road construction or reconstruction equipment, and vehicles used to provide mobility for air compressors, pumps, generators and cherry pickers or similar devices. There is no coverage for transportation of mobile equipment by automobile or use of mobile equipment in association with racing activities. Mobile equipment being transported by automobile is covered for liability by the commercial automobile policy. The damage to mobile equipment itself is covered by an inland marine policy, which will be discussed in a future unit. Mobile equipment not listed above is not covered under the CGL policy.

True

Which forms are contained in a complete CGL policy? True or False: The forms are: declarations; common policy conditions; one of the two coverage forms, occurrence, or claims-made; and a nuclear energy liability exclusion endorsement. Other endorsements may be attached to broaden or restrict coverage provided by these basic forms.

True

Who is insured under the CGL policy? True or False: "Who is insured" is usually determined by the insured's form of legal entity (corporation, partnership, or sole proprietor). If the named insured is an individual, the spouse is also an insured while conducting business. Legal successors are also insureds in the event that the sole proprietor dies. If the named insured is a partnership or joint venture, the partners and their spouses are insureds while conducting business. If the named insured is a limited liability company, the members and managers are insured while conducting business. If the named insured is a corporation, executive officers, directors and stockholders are insured in their status as such.

True

7.10 Excess Liability/Umbrellas:

When limits available under the CGL or automobile liability forms are not sufficient for the insured needs, the insured can purchase either excess liability coverage or an umbrella policy. Both of these policies add their limits to those provided by the underlying coverages. Neither of these forms is standard; meaning different insurers issue policies developing their own language, coverage descriptions and exclusions. Excess Liability - The study manual lists two forms of excess coverage the follow form and the stand-alone form. Both forms require underlying policies to be in effect. A follow form policy provides the exact same coverages, provisions, and exclusions as the underlying policies; the follow form policy simply provides excess or higher limits than the underlying policies. Stand-alone policies also provide the same coverage as the underlying policies but the stand-alone form has its own terms, conditions and provisions. Umbrellas - An umbrella form operates much like a stand-alone policy, except it will also provide coverage not included in the underlying policies. The umbrella form has its own terms, condition, provisions, coverages, and exclusions. The umbrella form is subject to a deductible known as a self-insured retention (SIR); the SIR only applies to claims covered by the umbrella policy but not covered by the underlying policies.

What is meant by the "retroactive date" in a CGL Policy? The claims-made form provides coverage for any claim where the claim is made a____ a "retroactive date" (a separate date stated on the claims-made policy) and the e____ date of the policy.

after, expiration

What does Coverage A of the CGL form state? "We will pay those sums that the insured becomes legally obligated to pay as damages because of "b____ i____" (BI) or "p____ d____" (PD) to which this insurance applies."

bodily injury, property damage

What is general liability Insurance? A field of insurance, which embraces b____ l____ h____ other than those dealt with by more specialized forms of coverage such as automobile, aviation, marine, professional and worker's compensation etc.

business liability hazards

What coverage is provided by an EPL policy? The EPL policy provides employers with _c____-m____ coverage for liability arising out of claims or injury to an employee because of an _e____-r____ offense.

claims-made, employment-related

Describe vicarious liability. When one person is liable for another's actions, he or she has vicarious liability. Vicarious liability may arise from a c____ or from several r____ such as employer/employee or principal/agent (agents or subcontractors) relationships.

contract, relationships

What is the difference between the "occurrence" and the "claims-made" versions of the CGL Policy? Occurrence applies to BI or PD claims which o____ during the policy period, regardless of any later time at which a claim is made. Claims-made applies to BI or PD which occur on or after the "r____ date" and for which the claim is received or recorded by an insured or the company during the policy period.

occur, retroactive

A CGL contract must contain a declarations page, the common policy conditions, and a nuclear energy endorsement. What other form is necessary to complete the contract? The contract must include coverage form- either an o____ or c____ form.

occurrence, claims-made

Name the two coverage forms for the CGL policy? the "o____" and the "c____" forms

occurrence, claims-made

Are there any coverage limitations to the BI and PD coverage in a CGL Policy? The insuring agreement states that the BI or PD must be caused by an "o____" which takes place in the "c____ t____." (Coverage territory is the U.S. and its territories or possessions, Puerto Rico and Canada, including international waters and airspace between these places.

occurrence, coverage territory

Is an insured's (business) liability "direct" to the business in a general liability insurance policy? Yes it could be, such as, a person being injured by an allegedly unsafe condition in premises o____ or o____ by the insured.

owned, occupied

What is coverage B of the CGL Policy? In addition to BI and PD the policy covers "p____ injury" and "a____ injury."

personal, advertising

What exposures is the farm liability coverage designed to cover? Both _p____ and _b____ exposures.

personal, business

How are new businesses covered under the CGL? New businesses, which are not a partnership, joint venture or limited liability company, which are formed during the p____ t___, are automatically covered for 90 days. Partnerships, joint ventures or limited liability companies not named on the policy are not covered.

policy term

What are the limits of coverage for fire legal liability in a CGL Policy? A $100,000 fire damage limit applies with respect to damages for each fire to premises r____ to the insured; higher limits are available.

rented

What is the separation of insureds condition of the CGL policy? The separation of insureds condition states that coverage applies s____ to each insured, as if that interest were the only insured. One insured cannot make a claim against another i____.

separately, insured

Describe bodily injury as used in the CGL policy. Bodily injury (BI) means physical harm including s____ or d____ or d____ resulting there from. Bodily injury does not include non-physical injuries such as damage to reputation.

sickness, disease, death

Describe the coverage for the insured's work or product? Damage to the insured's own products arising out of the product itself are excluded. The CGL policy excludes damage to the insured's own work. Damage arising out of the insured's work even after completion is excluded. Work done by a s____ is covered.

subcontractor

What is meant by the term "coverage trigger" for BI and PD damage liability coverage in a CGL Policy? It deals with how the policy will apply to occurrences and claims, depending upon their t____, which is the "coverage trigger" or difference between the CGL forms- the "occurrence" and "claims-made" versions.

timing

What is the supplemental extended reporting period provision? This option extends the basic extended reporting period provision to unlimited duration. The supplemental provides two separate aggregate limits (aggregate means within the policy period). The supplemental provides a limit equal to the expiring policy's general aggregate and products-completed operations aggregate. This coverage is provided by endorsement to the policy and does charge the insured an additional premium. This option extends the basic extended reporting period provision to unlimited duration. The supplemental provides a limit equal to the expiring policy's general aggregate and products-completed operations aggregate. This coverage is provided by endorsement to the policy and does charge the insured an additional premium. This option extends the basic extended reporting period provision to unlimited duration. The supplemental provides two separate aggregate limits (aggregate means within the policy period). The supplemental provides a limit equal to the expiring policy's general aggregate and products-completed operations aggregate. This option extends the basic extended reporting period provision to unlimited duration. The supplemental provides two separate aggregate limits (aggregate means within the policy period). This coverage is provided by endorsement to the policy and does charge the insured an additional premium.

This option extends the basic extended reporting period provision to unlimited duration. The supplemental provides two separate aggregate limits (aggregate means within the policy period). The supplemental provides a limit equal to the expiring policy's general aggregate and products-completed operations aggregate. This coverage is provided by endorsement to the policy and does charge the insured an additional premium.

How does coverage apply in the hospital, blood banks, x-ray laboratories, optometrists and veterinarians liability policies? Generally each of the forms applies to "_m____ _i____" defined as an act of _o____ in furnishing of professional services specific to each of the professionals' forms.

medical incidents, omission

Explain advertising injury liability coverage in a CGL Policy? Advertising injury liability protects the insured against claims for m____ of advertising ideas or style of doing business or infringement of copyright, title or slogan.

misappropriation

7.2a Coverage A - Bodily Injury and Property Damage

Insuring Agreement: Coverage Provided: Coverage A of the CGL form states: "We will pay those sums that the insured becomes legally obligated to pay as damages because of bodily injury (BI) or property damage (PD) to which this insurance applies." In order for coverage to respond, the claim must be against someone who had the status of an "insured." There must be a legal obligation to pay (a moral obligation is not sufficient) and that obligation must be for damages (what a court would assess, in money, for the claimant's injury or property damage). Bodily injury (BI) means physical harm including sickness or disease or death resulting there from. Bodily injury does not include non-physical injuries such as damage to reputation. Property damage (PD) means physical injury to tangible property including loss of use of that property. Property damage also includes loss of use of tangible property that has not been physically damage. Property damage does not include loss to intangible property or loss of use of intangible property such as copyrights or patents. Liability Exposures Covered: One of the most important liability exposures is premises and operations exposure. Premises and operations exposure commonly includes slips and falls on the insured's property. A business also faces liability exposure from any products sold or from work completed. Products sold or manufactured may include lawnmowers, food products, clothes, or other items. A product not sold or still in possession of the insured is not covered. Product means any goods or products, other than real property, manufactured, sold, handled, distributed, or disposed of by the insured, others trading under the insured's name, or a person or organization acquired by the insured. Products also include containers (not vehicles), materials, parts or equipment furnished in connection with such goods or products. Work means any job or operations performed by the insured or on the insured's behalf including materials, parts for equipment furnished in connection with such work or operation. Work is completed at the earliest of (1) when all work called for in the contract is completed, (2) when all of the work at the site has been completed if work is done at more than one site, or (3) when that part of the work at the job site has been put to its intended use by any person or organization other than another contractor or subcontractor. Examples of businesses with completed operations exposures are contractors, subcontractors, or others who generally provide service away from their premises. Businesses may assume the liability of another business by contract (some contracts have a hold harmless agreement). The CGL form provides contractual liability coverage for such an agreement. There are many situations when a business can become liable for the actions of others. When one person is liable for another's actions, he or she has vicarious liability. Vicarious liability may arise from a contract or from several relationships such as employer/employee or principal/agent (agents or subcontractors) relationships.

7:14 Cyber Liability Insurance: Businesses today collect and store data from their customers. This includes credit card data, social security numbers, birthdays, etc. An example of this Amazon. Cyber Liability insurance protects the business from:

Intentional or unintentional liability Repairing or replacing computer systems The cost of notifying clients Lawsuits A Cyber Liability policy is also known as an Information Security Protection Policy. It includes the following coverages: Web Publishing Liability Security Breach Liability Programming Error & Omission Liability Replacement or Restoration of Electronic Data Extortion Threats Business Income and Extra Expense Public Relations Expense Security Breach Expense Cyber Liability Insurance excludes: War Bodily injury Interruption of normal computer function or network services due to power surge or process transactions Any claims or lawsuits against the insured prior to the policy period.

7.7a Limits of Insurance:

The CGL policy is written with several basic limits, which state the maximum the insurer will pay in the event of a loss. A basic limit of $100,000 applies to each occurrence for bodily injury and property damage; lower limits of $25,000 or $50,000 are available; higher limits of $200,000, $300,000, $500,000 or $1,000,000 are commonly written. A limit applies to all damages sustained by any one person for personal and advertising injury liability. The normal limit is $100,000 but the same limits as apply for each occurrence for bodily injury or property damage liability are available. A basic limit of $5,000 normally applies to each person under medical payments; other limits are available. A $100,000 fire damage limit applies with respect to damages for each fire to premises rented to the insured; higher limits are available. A basic limit of $200,000 applies to the general aggregate limit; general aggregate means the maximum the insurer will pay during the policy period (normally annually) for all claims except bodily injury and property damage claims arising from the insured's products and completed operations. A separate products-completed operations aggregate limit with a basic limit of $200,000 states the maximum the insurer will pay during the policy period for claims involving products or completed operations. The lowest aggregate limit available is $50,000; other limits are available; the aggregate limit must be equal to or higher than the per occurrence limit purchased. As previously discussed, if any insured purchases "supplemental extended reporting period" coverage under a claims-made form, the original policy aggregate limits are reinstated for the extended period. The original policy aggregate limits are not reinstated for the extended period under the automatic "basic extended reporting period" provision in the claims-made form.

7.9 Miscellaneous Forms of General Liability Insurance:

There are several additional forms of liability insurance: Owner's and Contractor's Protective Liability (OCP) Form -The OCP form is designed to cover the insured for liability arising from the operations of an independent or subcontractor. This coverage is also provided on the CGL form. The form protects the insured against claims for bodily injury and property damage arising out of work performed for the insured by another, including the named insured's acts or omissions in general supervision. This form is most commonly used to protect an owner for operations being performed by general contractor. The separate policy is on written on an occurrence form of coverage. Liquor Liability Coverage Form - The CGL policy excludes coverage for liability for having caused or contributed to a person's intoxication, or furnishing liquor to minors or furnishing liquor in violation of statute for those who are in the business of manufacturing, distributing, selling, servicing or furnishing alcoholic beverages. This form provides coverage for those in the business of selling etc. alcoholic beverages. Coverage is available on either an occurrence for a claims-made form. Products-Completed Operations Liability Coverage Form - Coverage for products-completed operations liability is covered by the CGL policy. Coverage for various reasons is sometimes written on a separate policy. Pollution Liability Coverage and Pollution Liability - Two forms are available to cover the pollution liabilities exposures excluded in the CGL form. A "pollution incident," means emission of pollutants into or on land, the atmosphere or water causing environmental damage. The broader form covers liability for cleanup costs. Both forms are written on a claims-made basis.

7.1b The CGL Contract:

There are three different legal theories of recovery that the CGL insurance may protect the insured against: Direct (such as, a person being injured by an allegedly unsafe condition in premises owned or occupied by the insured); indirect or contingent (contingent or indirect liability; examples would be being held liable for actions of an independent contractor to whom the insured has subcontracted a part of general contract work and agreed to "hold harmless" the subcontractor whose direct actions produced the claim); and contractual. Declarations: The declarations page identifies the named insured and their address, states the policy period and premium, gives miscellaneous information about the insured, and specifies the limits of coverage that apply. Common Policy Conditions: Cancellation - The policy states the insurer must give thirty days written notice of cancellation except a 10-day notice is required for nonpayment of premium. Florida law supersede this provision requiring as with other policies that cancellation during the first 90 days the policy is in force provide a 20 day written notice, except for material misrepresentation or misstatement or failure to comply with underwriting standards. After the first 90 days, a 45-day written notice of cancellation or nonrenewal is required. A 10-day notice is required for nonpayment of the premium. Changes - All changes to the policy must be in writing by endorsement and agreed to by both the insurer and the first named insured shown on the policy. Examination of Books and Records - The insurer may audit the insured's books and records at any time during the policy period and for up to three years after expiration of the policy. Inspections and Surveys -The insurer reserves the right to make inspections, and give reports and recommendations but disclaims any liability for such inspections or recommendations. The insurer is under no obligation to make inspections or give recommendations. Premiums - The first named insured listed on the policy is required to pay all premiums when due and will receive any return premiums from the insurer. Transfer - The insured may not transfer any rights or duties under the policy except with the written consent of the insurer. Rights and duties are automatically transferred if the insured dies, first to the temporary custodian of the property and then to the legal representative. Nuclear Endorsement: The nuclear energy liability exclusion endorsement excludes all hazards related to nuclear energy.

What is the supplemental extended reporting period provision? This option extends the basic extended reporting period provision to unlimited duration. The supplemental provides two separate aggregate limits (aggregate means within the policy period). This coverage is provided by endorsement to the policy and does charge the insured an additional premium. This option extends the basic extended reporting period provision to unlimited duration. The supplemental provides two separate aggregate limits (aggregate means within the policy period). The supplemental provides a limit equal to the expiring policy's general aggregate and products-completed operations aggregate. This coverage is provided by endorsement to the policy and does charge the insured an additional premium. This option extends the basic extended reporting period provision to unlimited duration. The supplemental provides two separate aggregate limits (aggregate means within the policy period). The supplemental provides a limit equal to the expiring policy's general aggregate and products-completed operations aggregate. This option extends the basic extended reporting period provision to unlimited duration. The supplemental provides a limit equal to the expiring policy's general aggregate and products-completed operations aggregate. This coverage is provided by endorsement to the policy and does charge the insured an additional premium.

This option extends the basic extended reporting period provision to unlimited duration. The supplemental provides two separate aggregate limits (aggregate means within the policy period). The supplemental provides a limit equal to the expiring policy's general aggregate and products-completed operations aggregate. This coverage is provided by endorsement to the policy and does charge the insured an additional premium.

7.6 Who is Insured:

Who is insured is usually determined by the insured's form of legal entity (corporation, partnership, or sole proprietor). If the named insured is an individual, the spouse is also an insured while conducting business. Legal successors are also insureds in the event that the sole proprietor dies. If the named insured is a partnership or joint venture, the partners and their spouses are insureds while conducting business. If the named insured is a limited liability company, the members and managers are insured while conducting business. If the named insured is a corporation, executive officers, directors and stockholders are insured In their status as such. Employees are considered insureds while acting within the scope of their employment. Coverage is excluded for employees who cause bodily injury or personal injury to the named insured, partners, members or another employee. Employees are not covered for acts or omissions in providing professional health care service. Employees are not covered for damage to property owned, occupied, rented to or loaned to an employee, partner or member of a joint venture. Employees are insured, except for injury to fellow employees or damage to property owned by the named insured, while operating mobile equipment covered under the CGL policy. A real estate manager even if not an employee is an insured. New businesses, which are not a partnership, joint venture or limited liability company, which are formed during the policy term, are automatically covered for 90 days. Partnerships, joint ventures or limited liability companies not named on the policy are not covered.

Why do businesses require this special class of "business liability insurance"? To protect their businesses from the liability arising from premises, g____ o____ (ongoing and after completion) and products m____ or s____.

general operations, manufactured, sold

In what way would liability be "indirect" to an insured in a general liability insurance policy? Contingent or indirect liability examples would be being held liable for actions of an independent contractor to whom the insured has subcontracted a part of general contract work and agreed to "h____ h____" the subcontractor whose direct actions produced the claim.

hold harmless

Explain what is covered by coverage C -medical payments? The final CGL coverage is a "voluntary" or non-legal coverage. Payment is for medical, dental, hospital and funeral services incurred within one year from the date of the accident to persons who suffer BI by accident (1) on or next to the i____ owned or rented premises, or (2) because of the i____ operations.

insured's, insured's