Unit 15

An insured has primary coverage with two companies. Company ABC has policy limits of $35,000, and Company XYZ's limits are $40,000. Both policies permit contribution by equal shares. If a $60,000 covered loss occurred, how much would company ABC pay?

$35,000

Coverage A and B supplementary (additional) payments:

(BAILED) -bail bonds up to $250 -Aid- first aid expenses -I- Interest on judgments in appeal -L- loss of earnings up to $250 per day -E- Expenses incurred by the insured to assist in the defense of a claim -D- Defense costs

Excluded under coverage C (medical payments) of the CGL (Commercial general liability) are injuries:

- to any insured or to a tenant or employee of the insured; and -payable under workers' compensation or related laws

The following supplementary payments are also available for Coverages A and B without reducing the limits of insurance:

-All expenses incurred by the insurance company -up to $250 for the cost of bail bonds -reasonable expenses incurred by the insured to assist in the investigation and defense of a claim, including up to $250 per day for loss of earnings -all court costs taxed against the insured in a suit -prejudgment and post judgment interest -Defense costs

Products-completed operations exposure. Products Claim:

-Away from premise -Exception: spoiled food

Policy Limits of Coverage- General aggregate- per policy period (1 year)-

-Coverage A (BI), B (personal injury), and C (medical) claims combined

The CGL (Commercial general liability) form provides three coverages:

-Coverage A- bodily injury and property damage liability -Coverage B- personal and advertising injury liability -Coverage C- medical payments

Who is insured? Insureds by definition (not named)

-Employees -Named insured's legal representative

Who is an insured? Named Insureds:

-Individuals (sole proprietor) and spouses -Partners and spouses -Corporations and directors/officers -Trusts

Independent Contractor Liability

-Owners and contractors protective

The 'your right to claim and occurrence information' includes:

-a list or record of each occurrence not previously reported to any other insurer of which this insurer has been notified according to policy provision; and - a summary, by policy year, of payments made and amounts reserved under any applicable general aggregate limit and products-completed operations aggregate limit. - three year claims history -Automatically provided if company cancels or nonrenews --30 days

'loading or unloading' means handling of property:

-after it is accepted for movement into or onto an aircraft, watercraft, or auto -While it is in or on an aircraft, watercraft, or auto; or -While it is being moved from an aircraft, watercraft, or auto to the place where it is finally delivered

Exclusions that apply to Coverage A (bodily injury and property damage):

-arising out of intentional injury -the insured assumes under a contract agreement (except LEASE) -for those in the alcoholic beverage business -for work-related injuries covered under workers' compensation or employer's liability laws; -for most pollution losses that result in bodily injury, property damage, or clean-up costs -resulting from the maintenance, operation, or use of aircraft autos, or watercraft, except as specified in the policy -arising out of the transpiration of mobile equipment by auto or the use of mobile equipment in any prearranged racing or related activity, -for damage to property owned, rented, or occupied by the insured or in the insured's care, custody, or control except for fire legal liability; and related to RECALL of the insured's products or work because of a known or suspected defect.

An 'auto' is a land motor vehicle, trailer, or semitrailer, including any attached machinery or equipment that is:

-designed for travel on public roads; or -subject to compulsory or financial responsibility laws or other motor vehicle laws (does not include mobile equipment)

A 'commercial general liability policy' (CGL) lists six different limits on the policy's declarations page:

-general aggregate limit -products-completed operations aggregate limit -personal and advertising injury limit -per occurrence limit -damage to premises rented to the insured limit -medical expense limit

Coverage B: liability arising out of any of the following is excluded:

-knowingly inflicting injury that violates the rights of another -oral or written publication of material that the insured knows is false, but pushes anyway -Material that was published before the effective date of the policy -Any offense committed by an insured who is involved in the business of advertising, publishing, broadcasting telecasting, or designing or determining content of websites for others -Infringement of copyright, patent trademark, trade secret, or other intellectual property rights

Risk exposures covered by liability insurance include:

-premises and operations -products and completed operations; -fire legal -independent contractors; and -contractual liability

Named insured Duties:

-prompt notice -cooperate with insurer -Don't voluntarily assume liability

Fire and Legal Liability:

-rentals are covered from fire -tenant is held liable

In order for medical payments to be covered, the expenses must be incurred and reported to the insurer within

1 year of the date of the accident

Your right to claim and occurrence information condition provides that the insured will give the first-named insured information relating to the CGL during the previous ____ years

3 years

If an insurer decides to not renew the CGL policy, how many days' notice of nonrenewal must be provided to the first named insured?

60 days

How long of an extended reporting period is available automatically and free of charge?

60 days or 5 years

The 'general aggregate limit' is the most that will be paid for the sum of Coverages

A (bodily injury) ,B (personal injury) , and C (medical) during a policy period, except for damages arising out of the products-completed operations exposure.

Which of the following is NOT an exclusion under Coverage A-bodily injury and property damage liability? A) Liability relating to the recall of the insured's products or work because of a known or suspected defect B) Liability arising from continuous or repeated exposure to the same general harmful conditions C) Liability for those in the alcoholic beverage business D) liability arising out of intentional injury

B) Liability arising from continuous or repeated exposure to the same general harmful conditions

Which of the following is excluded under Coverage A of the CGL? A) liquor liability for those in the business of serving liquor B) all of these C) pollution losses caused by the insured D) Damage the insured causes intentionally

B) all of these -is excluded under coverage A of CGL

Which of the following territories is typically NOT a part of the definition of coverage territory? A) Puerto Rice B) US C) Mexico D) Canada

C) Mexico

Which of the following is NOT a duty of the insured in the event of an occurrence, offense, claim, or suit? A) Cooperate with the insurer during the investigation B) Record the specifics of the claim and notify the insurer as soon as it is practical C) Voluntarily make a payment for incurred expenses D) Immediately send the insurer any copies of any demands, notices, or legal papers received in connection with the claim

C) Voluntarily make a payment for incurred expenses

Which of the following would NOT be considered mobile equipment under the CGL form? A) forklifts B) Farm machinery C) Cherry pickers D) Bulldozers

C) cherry pickers Forklifts, Farm machinery, and bulldozers are considered mobile equipment under the CGL form

CGL stands for

Commercial general liability insurance

There is a separate 'products-completed operations aggregate limit' that represents the most that will be paid under

Coverage A because of injury and damage arising out of the products-completed operations exposure.

What coverage covers liability arising out of libel, slander, or advertisements?

Coverage B (personal and advertising injury liability coverage)

Which coverage would apply if one of the insured's competitors sues that insured for slander on social media?

Coverage B (personal and advertising injury liability coverage)

Which of the following would NOT be excluded under Coverage C of the CGL A) an individual hired by the insured to paint her business office falls off a ladder and is injured B) the insured sponsors a foot race on the land surrounding his retail store. A participant is injured during the race C) One of the insured's employees is injured while on the job D) A shopper is injured in the insured's retail store when box falls on him from an overhead shelf.

D) A shopper is injured in the insured's retail store when box falls on him from an overhead shelf. -- this would be covered under Coverage C on the CGL (Commercial general liability insurance)

Who of the following is NOT considered an insured of an organization other than a partnership, joint venture, or limited liability company? A) Named insured B) Stockholders C) Executive officers and directors D) Named insured's spouse

D) Named insured's spouse (is NOT considered an insured of an organization other than a partnership, joint venture, or limited liability company)

Which of the following statements about to 60-day basic extended reporting period it NOT correct? A) it becomes effective automatically if needed when a claims-made policy expires B) It does not require additional premium C) No separate endorsement is required to provide this extended reporting period D) The insured must request it in writing within 60 days after the policy expires.

D) The insured must request it in writing within 60 days after the policy expires. (is not correct)

Which of the following is NOT required in a CGL coverage part? A) common policy conditions B) One or more CGL coverage forms C) CGL declarations D) causes of loss form

D) causes of loss form ( is not required in a CGL coverage part)

The general aggregate limit is the limit that will be paid for the sum of all of the following coverages EXCEPT: A) coverage b B) coverage c C) coverage a D) products-completed operations exposure

D) products-completed operations exposure

Which limit of insurance is the most that will be paid for the sum of Coverages A, B, and C, during the policy period?

General aggregate limit The 'general aggregate limit' is the most that will be paid for the sum of Coverages A (bodily injury) ,B (personal injury) , and C (medical) during a policy period, except for damages arising out of the products-completed operations exposure.

Which term includes warranties and representations of the insured's work?

Insured's work

Contractual Liability is normally excluded from the CGL with the exception of the following contracts:

LEASE: -lease of a premises -easement (peace) agreement for the use of shared property -Agreement to indemnify a municipality -Sidetrack agreement with a railroad -Elevator maintenance agreement

Which form is triggered by damage or injury that occurs during the policy period, even though a claim may be made after the policy has expired?

Occurrence form

Which limit of insurance is the most that will be paid out for any one occurrence under Coverages A and C because of bodily injury

Per occurrence limit (coverage A-bodily injury/property damage- per occurrence)

What type of risk exposure covers liability arising out of the business location or the activities of the business?

Premises and operations exposure

Coverage under the 'claims-made form' is triggered when a

a claim is first made against the insured, regardless of when the loss or injury took place. -occurrence is on or after the retroactive date

Coverage under the 'claims-made form' is triggered when

a claim is made against the insured, regardless of when the loss or injury took place. claims are covered under the claims-made form if the claim is made DURING the policy period and the occurrence is on or after the retroactive date

Extended reporting periods (ERPs) provide coverage for claims made

after a claims-made policy expiration date.

A retroactive (taking effect from a date in the past) date may provide coverage even if

an occurrence took prior to the effective date of the policy.

A supplemental extended reporting period endorsement is also available. It provides

an unlimited extension of the reporting period, although the event causing the claim must still occur between the retroactive date and policy expiration date.

The insured's product means

any goods or products, other than real property, that are manufactured, sold, handled, distributed, or disposed of by the insured. -containers -materials -parts -equipment

'Pollutants' are

any irritants or contaminants or waste. Waste includes material to be recycled, reconditioned, or reclaimed

The 'Per occurrence limit' is the most that will be paid for

any one occurrence under Coverages A (bodily injury) and C (medical) because of all bodily injury, property damage, and medical payments arising out of any one occurrence.

A basic 'extended reporting period' of either 60 days or five years is available

automatically and free of charge under specified conditions.

Policy Limits of Coverage (under CGL)- A:

bodily injury/property damage- per occurrence

Commercial general liability insurance (CGL) protects

business owners from claims of injury, property damage, and negligence related to business activities

The 'your right to claim and occurrence information' condition is included in the

claims-made form, but not the occurrence form.

Under 'contribution by equal shares', all insurers

contribute equally up to the limit of the policy with the lowest limit.

Contribution by equal shares applies when all policies involved specify this method od handling other insurance. If they don't, _____________ applies

contribution by limits.

Coverage under the occurrence form is triggered by

damage or injury that occurs during the policy period, even though a claim may be made after the policy has expired.

Coverage under the 'occurrence form' is triggered by

damage or injury that occurs during the policy period, even though the claim may be made after the policy has expired.

when contribution by limits applies,

each company pays a proportion of the loss equal to the proportion its policy limits bear to the total amount of insurance available.

The most common among the many business risk exposures of a business is the 'premises and operations exposure'- that is,

liability arising out of the business location or the activities of the business

Policy Limits of Coverage (CGL)- C:

medical (no fault)- per person

Coverage C of the CGL coverage forms is

medical payments -without regard to fault -Must be reported within on year of accident

To be covered by coverage A (bodily injury and property damage), the BI or PD must be caused be an

occurrence; which is defined in the CGL as an accident including continuous or repeated exposure to the same general harmful conditions.

Coverage B provides

personal and advertising injury liability coverage, which covers liability arising out of such offenses as libel, slander, or advertisements. The claimant may be an individual or another business

Policy Limits of Coverage (CGL)- B:

personal injury and advertising injury- per person or organization

One of the two coverage "trigger" forms is used to provide liability protection:

the "occurrence" form or the "claims made" form. There is no difference in the breadth of coverage provided by the forms. the difference lies in what "triggers" the policy to respond- the occurrence of injury or damage, or a claim (as defined by the policy) arising out of the injury or damage

In both versions of the CGL forms, there are definitions that help clarify the coverages and conditions. This section is known as

the definitions section

'Coverage territory' usually means

the described territory of the USA, including its territories and possessions, Puerto Rico, and Canada. No coverage extends to Mexico

an occurrence form policy expires on June 30, and the business owner (insured) obtains a new policy with a different carrier. a customer was injured in the insured's store on May 30, while the previous policy was in force. The insured files a claim on July7 30 because the customer's injury that happened in May has gotten progressively worse. Because the business carried an 'occurrence policy',

the insurer covering the business on May 30 will cover this claim.

In the 'your right to claim and occurrence information', if the insurer does not renew the policy,

the insurer must send a written notice of nonrenewal to the first-named insured within 60 days after the end of the policy period. -information will be provided within 45 days of the request

The damage to premises rented to the insured limit represents

the most that will be paid under Coverage A (bodily injury) for liability for property damage to premises rented to the named insured for fire damage.

The 'personal and advertising injury limit' represents

the most that will be paid under Coverage B (personal injury) for the sum of all damages due to personal injury or advertising injury sustained by any one person or organization. This limit is also subject to the overall general aggregate limit.

A woman chips a tooth on a rock that somehow got into a box of cereal. This is an example of

the products-completed operations exposure. --injury and damage arising out of the products-completed operations exposure.

Coverage A-bodily injury (BI) and property damage (PD) liability pays

the sums that the insured becomes legally obligated to pay as damages because of bodily injury or property damage to which the insurance applies.

the 'medical expense limit' is the most that will be paid

under coverage C for all medical expenses because of bodily injury sustained by any one person.

'Mobile equipment'-

vehicles designed principally for use off public roads

the 'other insurance' condition states that

when the insured's CGL is primary and other primary insurance applies to the same loss, the loss will be divided between the policies by one of two methods: -Contribution by equal shares; and -contribution by limits

In a CGL policy, how the named insured is listed in the Declarations determines

who is an insured. -The named insured may be an individual, partnership, joint venture, limited liability company, other type of organization, or a trust.

The 'insured's work' means

work or operations performed by or on behalf of the insured and materials, parts, or equipment furnished in connection with such work or operations.