Ch. 9: Commercial General Liability Coverage
A CGL policy with a general aggregate limit of $300,000 and a per-occurrence limit of $100,000 would have how much remaining after paying a claim for a $200,000 loss, and subsequently a second claim for a $100,000 loss?
100,000
An insured's CGL has a Products and Completed Operations Aggregate Limit of $100,000 with a $20,000 limit per occurrence. Following claims for two separate occurrences in the amounts of $35,000 and $25,000, how much of the aggregate remains for all other claims in the policy period?
60,000
Advertising Injury Coverage includes all of the following, except: A Wrongful entry B Misappropriation of advertising ideas or style of doing business C Violation of copyright, title or slogan D Infringement of copyright
A
Advertising Injury Coverage includes all of the following, except: A Wrongful entry B Violation of copyright, title or slogan C Infringement of copyright D Misappropriation of advertising ideas or style of doing business
A
All of the following are considered an insured under the Commercial General Liability Coverage Part to the Commercial Package Policy, except: A Members of a past partnership not shown as a Named Insured in the Declarations B Anyone named in the Declarations C Executive officers, but only with respect to their duties as the insured's officers or directors D Employees other than executive officers, but only for acts within the scope of their employment
A
All of the following are insured under the CGL, except: A A person participating in an athletic event B A partner C A stockholder D A volunteer worker acting on behalf of the insured
A
All of the following are true of Supplementary Payments under the Commercial General Liability Coverage Forms, except: A Supplementary Payments apply to all Section I coverage B The cost of bail bonds is included up to $250 C They do not reduce the Limit of Liability D Insurer's claim-related expenses are included
A
Choose the false statement about the CGL policy. A Coverage is automatically provided for watercraft liability B Contingent Liability Policies are also called Owners and Contractors Protective Liability C The insurer's written consent is required for any transfer of rights and duties to another person D The insurer may examine the insured's books anytime during the policy period, or within 3 years after the policy ends
A
Choose the false statement about the coverage under the Businessowners Policy. A Products and completed operations coverage under the Commercial General Liability Coverage Forms will cover damage to the insured's products B Contractual liability policies cover liability assumed under designated contracts C Product liability may be based either on negligence or on a warranty D Premises and operation exposures pertain to a building owner or tenant who may be held legally liable in the event of bodily injury or property damage arising out of conditions on or away from premises
A
Personal Injury includes all of the following, except: A Bodily Injury from eviction B Malicious prosecution C Libel and Slander D False Arrest
A
Personal injury liability insurance does not cover which of the following? A Bodily Injury B False Arrest C Malicious prosecution D Libel and Slander
A
Under a CGL, at what point in time is the earned premium determined by the premium audit? A At the end of the policy period B Monthly C At the beginning of the policy period D At the time the premium deposit is made
A
Under the CGL, which of the following would exclude from coverage the legal liability associated with a product? A Expected or intended injury B Breach of warranty C Strict liability D Negligence
A
Which country is not included in the CGL coverage territory? A Mexico B United States C Puerto Rico D Canada
A
Which injury would be covered by a CGL policy? A A customer injured while standing in an area marked 'For Employees Only' B The spouse of a sole proprietor injured carrying boxes into the shop C An employee injured by the transportation of mobile equipment during the manufacturing process D A leased worker injured on the production line
A
Which of the following conditions would not be found in Section IV of the CGL? A An insured's insolvency relieves the insurer of any obligations under the policy B Insurance applies as if each named insured were the only named insured, and separately to each insured against whom the claim is brought C The insured cannot sue the insurer until all terms of the policy have been fully complied with D The insured must maintain records necessary so the insurer may compute the premium
A
Which of the following conditions would not be found in a CGL policy written on the occurrence form? A The Insured's Right to Claim Information B Representations C Severability D Duties in the Event of Occurrence, Claim, or Suit
A
Which of the following injuries would not be covered under CGL Medical Payments? A A child accidentally overdoses on cough medication he drank from his parent's medicine cabinet B A carpet installer accidentally staples a customer's hand while installing carpet C A customer is injured by a flying lug nut while a mechanic is changing her flat tire D A retail customer slips and falls from a leaking pipe in the store's restroom
A
Which of the following is not a contingent liability exposure? A Premises liability exposure B Owners and Contractors Protective liability exposure C Contractual liability exposure D Liability exposure of insured's sub-contractors
A
Which of the following is not an example of personal injury? A A broken leg B Infringement of copyright C False arrest D Misappropriation of a title or slogan
A
Which of the following is not considered a product liability exposure? A Goods stored on the insured premises B Product consumed by a person at a restaurant C Product distributed to customers D Goods manufactured and sold to customers
A
Which of the following is not true of the supplemental extended reporting period under the Claims-Made Form of the CGL? A The insurer may void it after the premium has been paid by the insured B The one time premium may not exceed 200% of the annual premium for the coverage part C It must be purchased within 60 days after the end of the policy D It is an optional extended reporting period of unlimited duration
A
Which of the following is true concerning the Premium Audit condition of the Commercial General Coverage Part to the Commercial Package Policy? A Premium audit determines what the earned premium will be at the end of the policy period B Premium Audit is the action taken by the insurer to see that the insured's rating is properly classified C Premium Audit is the comparison of the insured's premium with the average premium in the insured's rating classification D Premium Audit refers to the right of the insured to contest the premium after policy issuance
A
Which of the following is true regarding Completed Operations coverage? A The coverage will pay for bodily injury and/or property damage caused by negligent or faulty work by the insured, but not for the cost of replacing the work that caused the loss B If faulty work causes damage to other property of the claimant, then coverage extends to include the faulty work C Bodily injury arising from negligent or faulty work of the insured is not covered if it occurs after the work is completed and turned over to its owner D Coverage applies only during the period that the insured has custody and control of the work deemed faulty or inadequately performed
A
Which of the following legal liability exposures is covered if bodily injury or property damage is caused by the insured's negligent or faulty work? A Completed operations B Premises and Operations C Contingent liability D Products
A
Which of the following legal liability exposures is covered if the employee of a business causes bodily injury to another person while working at the insured's business location? A Premises and Operations B Completed operations C Products D Contingent liability
A
Which of the following would be found in Section I of a CGL? A Coverage for bodily injury and property damage B The policy definitions C The Commercial General Liability conditions D List of insureds under the policy
A
Which statement is false regarding Supplementary Payments under the Commercial General Liability policy? A Payments made under this section reduce the limits of the policy B The cost of bail bonds is included up to $250 C Claim related expenses are included D Coverage only applies to Coverages A and B
A
Why is bodily injury to an employee excluded in Commercial General Liability Insurance? A Coverage is provided under Workers' Compensation B It falls under the doctrine of contributory negligence C The employee is considered an insured D It falls under the doctrine of assumption of risk
A
Contingent Liability
A home remodeling company that hires subcontractors to perform its installations is responsible for the actions or work of a subcontractor
Contractual Liability
A large department store leases space from a shopping mall and is responsible for the actions of parties as specified in the language of the lease
Occurrence Form
An occurrence form provides coverage for losses that take place during the policy period; doesn't matter when the loss is reported
All of the following are true of the extended reporting period, except: A The extended reporting period does not increase the policy limits B The supplemental extended reporting period must be purchased at the beginning of the policy period C Under the mini tail, the insurer must be notified of a claim within 60 days after the end of the policy period D Under the supplemental extended reporting period, the insured must request coverage within 60 days after the end of the policy
B
Choose the false statement about the CGL policy. A Changes to a CGL policy may be made only by endorsement issued by the insurer B A Products and Completed Operations Liability claim will reduce the General Aggregate Limit C A bodily injury claim must be caused by an occurrence and it must have taken place in covered territory D The General Aggregate Limit will be reduced by a medical payment
B
Each of the following provides buy back coverage for the insured, except: A Limited pollution liability coverage B Modified pollution extension endorsement C Pollution extension endorsement D Pollution liability coverage for designated sites
B
Product liability would cover: A Contractual liability B A restaurant customer who contracts food poisoning C A vending machine that injured a customer's hand D Product recall
B
Under the CGL, which of the following would exclude from coverage the legal liability associated with a product? A Breach of warranty B Expected or intended injury C Negligence D Strict liability
B
Which of the following is not a type of personal and advertising Injury under the CGL? A Slander B Breach of contract C Infringement of copyright D Malicious prosecution
B
Which of the following is not covered under the Limited Pollution Liability coverage and Pollution Extension endorsement? A Waste disposal leaks B Clean up costs C Threatened discharge of pollutants D Escape of pollutants
B
Which of the following is true regarding the Products exposure of the CGL? A Products Liability Coverage commences immediately upon sale of the product even before the purchaser leaves the insured's premises B Coverage applies to the bodily injury (BI) and property damage (PD) the product causes but not to the product itself C Coverage commences immediately upon sale of the product even before the purchaser leaves the insured's premises D Products liability Coverage includes Liquor Liability and Dram Shop Liability insurance
B
Which of the following legal liability exposures is covered if a business employs an independent contractor? A Products B Contingent liability C Premises and Operations D Completed operations
B
Which of the following statements is incorrect about Supplementary Payments under the CGL? A The insurer's claim-related expenses are included B Supplementary payments apply to losses under all Section I coverages C Payments do not reduce the Limit of Liability D The cost of bail bonds is included up to $250
B
Which type of reporting period is provided automatically under the CGL written on a claims-made basis?
Basic Extended Reporting Period
Which type of reporting period is provided automatically under the CGL written on a claims-made basis? A Premium Extended Reporting Period B Primary Extended Reporting Period C Basic Extended Reporting Period D Supplemental Extended Reporting Period
Basic Extended Reporting Period
___________ is not covered by the CGL Coverage B - Personal and Advertising Injury.
Breach of Contract
All of the following about the CGL's products liability coverage are correct, except: A Coverage applies to bodily injury occurring away from premises the insured owns or rents B Coverage applies to property damage the product causes C Damage to the product itself is covered D Coverage applies to bodily injury the product causes
C
All of the following about the CGL's products liability coverage are correct, except: A Coverage applies to bodily injury the product causes B Coverage applies to property damage the product causes C Damage to the product itself is covered D Coverage applies to bodily injury occurring away from premises the insured owns or rents
C
All of the following are considered an insured under the Commercial General Liability Coverage Part to the Commercial Package Policy, except: A Employees other than executive officers, but only for acts within the scope of their employment B Executive officers, but only with respect to their duties as the insured's officers or directors C Members of a past partnership not shown as a Named Insured in the Declarations D Anyone named in the Declarations
C
All of the following are considered liability assumed under insured contracts, except: A Sidetrack agreements B A lease of premises C Ordinance or Law D Elevator maintenance agreements
C
All of the following are true about extended reporting periods, except: A The basic extended reporting period allows a claim to be reported after the policy period for a specified number of days B Under the supplemental tail, the insured must request coverage within 60 days after the end of the policy term C The supplemental tail requires an annual premium D The basic extended reporting period does not increase the policy limits
C
All of the following are true of Supplementary Payments under the Commercial General Liability Coverage Forms, except: A The cost of bail bonds is included up to $250 B They do not reduce the Limit of Liability C Supplementary Payments apply to all Section I coverage D Insurer's claim-related expenses are included
C
All of the following are true of medical payments under the Commercial General Liability Coverage Forms, except: A Coverage applies to expenses that are incurred and reported to the insurer within 1 year of the accident B Coverage applies to injuries that occur on the premises that the insured owns or rents C Coverage applies to the insured's injuries D Coverage applies to injuries that occur because of the insured's operations
C
All of the following are true of the Commercial General Liability Conditions (Section IV) under the Claims-Made Form, except: A The insured cannot sue the insurer until all terms of the policy have been fully complied with B The insured must maintain records necessary so the insurer may compute the premium C Insolvency of the insured relieves the insurer of any obligations under the policy D Insurance applies as if each named insured were the only named insured, and separately to each insured against whom the claim is brought
C
Choose the false statement regarding the application of coverage under the Products Exposure Liability Coverage. A Coverage applies to bodily injury the product causes B Coverage applies to bodily injury occurring away from premises the insured owns or rents C Coverage applies to damage to the product itself D Coverage applies to property damage the product causes
C
The CGL's general aggregate limit does not cover which of the following? A Advertising injury B Bodily injury C Product recall D Medical expenses
C
The CGL's general aggregate limit does not cover which of the following? A Bodily injury B Medical expenses C Product recall D Advertising injury
C
To which injury would CGL Medical Payments apply? A A child injured when he dismantled a company's product and choked on one of the pieces B A tenant of a company's warehouse who cut himself during the manufacturing process of the company's product C A volunteer worker handing out company coupons during a sale D A company executive who was injured while playing golf in the company golf league
C
Which of the following is NOT excluded under Part A of the CGL form? A Damage to insured's work B Discrimination C Operation of mobile equipment D Product recall
C
Which of the following is false about the CGL policy form? A The general aggregate limit is the most the company will pay for all damages under Coverage A, Coverage B, and medical payments under Coverage C, except for products and completed operations claims B The per occurrence limit is the most the company will pay for damages under Coverage A and Coverage C, arising out of any one occurrence C The limits of the policy stated in the Declarations are the maximum amounts payable for the life of the policy D Section III of the Commercial General Liability Coverage Forms describes the limits of insurance
C
Which of the following is not a peril covered by personal injury? A Wrongful eviction B Libel C Breach of contract D Malicious prosecution
C
Which of the following is not a provision found in Section IV of the CGL? A Other insurance B Premium audit C Inspection and surveys D Bankruptcy
C
Which of the following is true regarding the Supplemental Extended Reporting Period? A The charge for the Supplemental Extended Reporting Period may not exceed the annual premium of the expiring policy B It covers occurrences that take place after the policy term, during the Supplemental Extended Reporting Period C The premium is a one-time charge D Cancellation by the insurer requires 90 days notice of cancellation
C
Which of the following scenarios would be covered under Personal Injury coverage? A An employee trips walking down the stairs at the office B An insured deeply cuts her hand opening a package with a box-cutter C A storeowner falsely detains a young child believing the child egged the store D A customer at a grocery store is injured when a canned food display falls
C
Which of the following statements regarding Supplementary Payments under the CGL is false? A The cost of bail bonds is included up to $250 B Insurer claim related expenses are included C Supplementary payments will reduce the limits of the policy D Coverage only applies to losses under Coverages A and B
C
Which of the following would be an insured under the CGL policy? A Spouse of an LLC member B Spouse of volunteer worker C Spouse of a partner D Trustee's spouse
C
Which of the following would be considered an insured's product? A Goods shipped out to a retail location for sale B Merchandise held by the insured as inventory C Goods sold by the insured at a trade show D A remodeled building
C
Which statement is correct regarding the Supplemental Extended Reporting Period? A The charge for the Supplemental Extended Reporting Period shall not exceed the premium of the expiring policy B It covers claims that take place after the policy term, during the Supplemental Extended Reporting Period C The premium is a one-time charge and fully earned at issuance D Cancellation by the insurer requires 90 days notice of cancellation
C
Other Insurance
Coverage may be written as primary or as excess. When written on a primary basis and other collectible primary insurance is also available, the loss is shared either on a contribution basis or by limit of liability
All of the following are true about extended reporting periods, except: A Under the supplemental tail, the insured must request coverage within 60 days after the end of the policy term B The basic extended reporting period does not increase the policy limits C The basic extended reporting period allows a claim to be reported after the policy period for a specified number of days D The supplemental tail requires an annual premium
D
All of the following are true of Supplementary Payments under the CGL, except: A They pay defense costs incurred by the insurer B They include the cost of bail bonds up to $250 C They apply to bodily injury and property damage liability D They reduce the limits of insurance
D
DWhich of the following is not included in the definition of an insured contract? A Sidetrack agreement B Contract for lease of premises C Easement agreement D Tenant agreement
D
Personal Injury Liability Insurance covers all of the following, except: A Libel and Slander B False Arrest C Malicious prosecution D Bodily Injury
D
Personal injury liability insurance does not cover which of the following? A Malicious prosecution B False Arrest C Libel and Slander D Bodily Injury
D
Which of the following is NOT an exclusion in the CGL policy? A Insured's Work B Impaired Products C Insured's Product D Host Liquor Liability for those with incidental exposure
D
Which of the following is NOT excluded under Part A of the CGL form? A Damage to insured's work B Product recall C Discrimination D Operation of mobile equipment
D
Which of the following is not considered a type of advertising injury? A Violation of copyright B Infringement of copyright C Misappropriation of advertising ideas D Extortion
D
Which of the following would not be covered under Coverage A of the CGL? A While working at a trade show, an insured's employee started a small fire B An insured's client was injured when she slipped on a loose rug on the insured's premises C An insured was visiting a client in Canada, who was injured after he tripped over the insured's briefcase D An insured's employee is injured when a bookcase in the office falls on her
D
Which of the following would not be excluded under Coverage A of the CGL? A Discrimination B Damage to insured's work C Product recall D Operation of mobile equipment
D
Which statement is correct regarding the Supplemental Extended Reporting Period? A It covers claims that take place after the policy term, during the Supplemental Extended Reporting Period B Cancellation by the insurer requires 90 days notice of cancellation C The charge for the Supplemental Extended Reporting Period shall not exceed the premium of the expiring policy D The premium is a one-time charge and fully earned at issuance
D
Which statement is false regarding the completed operations exposure? A It begins after the insured's operations are completed and the insured leaves the job site B It includes risks of defective installation, construction or repair C The exposure must occur away from the insured's premises D Coverage includes replacement of the work that caused the loss
D
Products
Due to faulty design, a chair was manufactured with uneven legs, causing a customer who purchased the chair to sustain an injury after falling out of the chair
When the Insured does not Renew
If the insurer decides not to renew, the First Named Insured is to be notified, in writing, 30 days before the expiration date
What does LEASE+ stand for?
Lease of Premises Easement Agreement Agreement to Indemnify the Municipality Sidetrack Agreement (Hold Harmless Agreement) Elevator Maintenance Agreement In Addition
This form is identical to the Pollution Liability Coverage Form; except that it does not include clean up.
Limited Pollution Liability Coverage Form (designated sites)
Which country is not included in the CGL coverage territory?
Mexico
This endorsement deletes the Pollution Exclusion for bodily injury and property damage liability, but continues to exclude clean up costs.
Pollution Extension Endorsement
This form provides coverage on a claims-made basis with its own limit of liability. Coverage includes a leak from a waste disposal facility located on the premises. The form provides coverage for clean up imposed by governmental direction if the cost is incurred because of environmental damage caused by a pollution incident.
Pollution Liability Coverage Form (designated sites)
Personal and Advertising Injury Coverage
Provides protection for liability arising from false arrest, malicious prosecution, wrongful eviction, invasion of privacy, libel or slander, use of another's ideas in an advertisement, infringement of copyright or slogan in the insured's advertisement
Premium Audit
The advance premium is only a premium deposit, and the earned premium will be based on an audit at the end of the policy period. The insured must maintain records necessary for the insurer to compute the premium, as premiums are based on sales, receipts, payroll, or some combination thereof. An additional premium is required if the earned premium is greater than the premium deposit
Legal Action against the insurer
The insured cannot sue the insurer until all terms have been fully complied with, such as notice of occurrence, etc
Duties in the Event of Occurrence, Claim, or Suit
The insured must see that the insurer is notified as soon as practicable, in writing, of an occurrence or an offense that may result in a claim. The notice should include when and where the occurrence or offense took place, the names and addresses of injured persons and witnesses, and the nature of any injury or damage
Medical Payments Coverage
The insurer will pay for medical expenses due to bodily injury caused by an accident on the insured's premises or due to the insured's operations regardless of fault
Bodily Injury and Property Damage Coverage
The insurer will pay losses the insured becomes legally obligated to pay because of bodily injury or property damage provided the occurrence took place during the policy period and in the United States, any of its territories/possessions, Puerto Rico, or Canada
Operations
The owner of a discount tire store was demonstrating how to rotate tires to a small crowd of people attending an outdoor vendor fair when a tire iron slipped and smashed the window of a nearby parked car
Completed Operations
Two days after a company installed new kitchen cabinets in a customer's home, the cabinets fell and caused damage to the walls, counter top, and kitchen sink
What are the territorial limits of the Commercial General Liability Coverage Part of the Commercial Package Policy?
USA and its territories, Puerto Rico, and Canada
Premise
While shopping at a discount tire store, a customer suffered a head injury when a large tire display crashed into the aisle
Under a CGL, at what point in time is the earned premium determined by the premium audit?
at the end of the policy period
Which of the following insurance forms is designed for the person who has the potential for a liability exposure caused by negligent acts of the contractor or subcontractor he hires to make repairs, construction, or alterations?
contingent liability insurance
The coverage territory of the CGL is the United States, its territories and possessions, Puerto Rico, and Canada. International waters and airspace are included in the coverage territory, but only if injury or damage occurs in the course of travel or transportation between any places included in the coverage territory
coverage territory
The most the insurer will pay during the policy period for medical expenses under Coverages A, B, and C is which of the following limits of liability?
general aggregate limit
Tangible property, other than an insured's product or work, which cannot be used because it is thought or known to be defective, inadequate, deficient, or dangerous
impaired property
What is the term for tangible property, that cannot be used because it is defective, inadequate, deficient, or dangerous?
impaired property
Transfer of Right of Recovery Against Others to the Insurer (Subrogation)
insured agrees to transfer any rights to recover any payment the insurer has made on behalf of the insured
Insured's Right to Claim Information (claims made form only)
insurer will provide, upon cancellation, non-renewal, or written request of the First Named Insured, a summary of paid claims, claims for which the insurer has established reserves, and notices received by the insurer of occurrences that could give rise to claims
Per Occurrence Limit
most the insurer will pay for damages under Coverage A and medical expenses under Coverage C because of bodily injury or property damage arising out of any one occurrence
Personal and Advertising Injury Limit
most the insurer will pay under Coverage B for the sum of all damages because of all personal and advertising injury sustained by any one person or organization
Medical Expense Limit
most the insurer will pay under Coverage C for all medical expenses because of bodily injury sustained by any one person
Products-Completed Operations Aggregate Limit
most the insurer will pay, during the policy period, for losses payable under Coverage A included in the Product and Completed Operations Hazard
General Aggregate Limit
most the insurer will pay, during the policy period, for medical expenses under Coverage C, damages under Coverage A (except damages that are included in the Product and Completed Operations Hazard), and damages under Coverage B
Representations
named insured agrees that all statements made in the application are accurate and complete, that the statements are based on representations made by the named insured to the insurer, and that the insurer has issued the policy based upon such representations
Which form responds to losses that occur while the policy is in force, regardless of when the claim is made?
occurrence
Which form provides coverage for a loss that takes place during the policy period and is not required to be reported within a certain time frame?
occurrence form
A CGL policy provides coverage for
operations liability
ABC Industries contracts with municipal governments to build bridges, viaducts, and similar engineering projects. If workers from ABC Industries cause damage to a taxicab while pouring the foundation for a new overpass, which kind of liability exposure would this be an example of?
premises and operations
An insured who goes to client's offices and homes for appointments would need coverage for which liability exposure?
premises and operations
Damages from what would apply to the per occurrence limit under a Commercial General Liability policy?
professional malpractice
Physical injury to tangible property, including all loss of use of the damaged property. "Property damage" is also loss of use of tangible property that is not physically injured. (Electronic data is not tangible property.)
property damage
What is the date after which an occurrence can take place and be covered under the claims-made form?
retroactive date
The Condition that states that the insurance applies separately to each insured is called __________________.
severability
Separations of Insureds (severability)
term insured is used severally and not collectively in the policy, and it is to be applied as meaning the insured against whom claim is made or suit is brought. The insurance afforded applies separately to each insured. Multiple suits against multiple insureds do not increase the amount of insurance for that occurrence or policy period
What is the difference between the Commercial General Liability Occurrence and Claims-Made forms?
the coverage trigger point
A person who is not an employee of the insured, but who donates his/her work and acts at the direction of the insured. A volunteer worker is not paid a fee, salary, or other compensation by the insured for work performed for the insured
volunteer worker
Any goods or products (other than real property) that are manufactured, sold, handled, distributed, or disposed of by the named insured, others trading under the named insured's name, or a person or organization whose business the named insured has acquired
your product
Work or operations performed by the named insured or on the named insured's behalf
your work
