Commercial General Liability

Section II - Who is an Insured

1. Anyone named in the Declarations, including an individual, partnership, joint venture, limited liability company, corporation or trust, and their executive officers, directors, stockholders, and trustees. 2. Volunteer workers, and employees, other than executive officers or managers, for acts within the scope of their service or employment of or by the insured. 3. Operators of mobile equipment, registered in the insured's name under any motor vehicle registration law. 4. Any person or organization while acting as the insured's real estate manager. 5. The insured's legal representative if the insured dies. 6. Any organization that the insured newly organizes or forms, other than a partnership, joint venture, or limited liability company, is covered automatically for 90 days, or to the expiration of the policy, whichever is earlier. No person or organization is an insured with respect to the conduct on any current or past partnership, joint venture, or limited liability company that is not shown as a Named Insured in the Declarations.

Commercial General Liability Coverage Forms

1. Occurrence Form. 2. Claims-Made Form. The 2 forms of the policy are identical in all respects, except the point at which coverage is activated. This main difference is called the coverage trigger. The coverage trigger for an Occurrence Form is the date of the claim, whereas the coverage trigger for a Claims-Made Form is the date the claim is made or submitted.

Contingent Liability Exposure (a.k.a. Independent Contractors Liability)

1. Persons contracting with contractors or subcontractors to make repairs, construct, or alter have possible contingent exposure because of the negligent acts of the contractor or subcontractor. 2. A Certificate of Insurance is used by the insurer to provide evidence of coverage to such person that the contractor is covered. 3. When this coverage is purchased as a stand-alone policy, it is called an Owners and Contractors Protective Liability policy. Example: A building owner may become vicariously liable for the actions of a painting contractor or subcontractor they have hired because they did not give adequate instructions and the contractor painted the wrong building or property.

Completed Operations Exposure

1. Persons or firms doing installation work, construction, servicing, or repair have a potential legal liability from their completed operations. Injury or damage must occur away from the premises the insured owns or rents. 2. This coverage will pay for bodily injury and/or property damage caused by negligent or faulty work by an insured, but will not pay for the cost of replacing the work that caused the loss. Example: A walk ramp the insured has built and completed at a customer's business later collapses, causing injury. If the walk ramp had collapsed while being built, Operations (discussed earlier) would apply, but since it collapsed after completion, Completed Operations applies. Note: Products and Completed Operations may be combined together, and simply be called "Products and Completed Operations".

Contractual Liability Exposure

1. Persons or firms sometimes assume liability for the negligent acts of another through an oral or written contract. Effectively, one party agrees to hold the other harmless for claims arising from a lease, easement, or the performance of his/her work. 2. These contracts are sometimes called "Hold Harmless Agreements". Example: A contractor agrees to assume the liability of a landowner while a building is being constructed.

Section III - Limits of Insurance

1. The Limits of Insurance (shown in the Declarations) are the most the insurer will pay regardless of: 2. The General Aggregate Limit is the most the insurer will pay, during the policy period, for: 3. The Products and Completed Operations Aggregate Limit is the most the insurer will pay, during the policy period, for losses payable under Coverage A included in the Product and Completed Operations Hazard. 4. Subject to the General Aggregate Limit, the Personal and Advertising Injury Limit is the most the insurer will pay under Coverage B for the sum of all damages due to all personal and advertising injury sustained by any one person or organization. 5. Subject to the General Aggregate or the Products and Completed Operations Aggregate Limits, whichever applies, the Each Occurrence Limit is the most the insurer will pay for: a. Damages under Coverage A. b. Medical expenses under Coverage C due to bodily injury or property damage arising out of any one occurrence. 6. Subject to the Each Occurrence Limit, the Fire Damage Limit is the most the insurer will pay under Coverage A for damages due to property damage to any one premises while rented to the insured, or temporarily occupied by the insured with the permission of the owner. 7. Subject to the Each Occurrence Limit, the Medical Expense Limit is the most the insurer will pay under Coverage C for all medical expenses due to bodily injury sustained by any one person. The Limits of Insurance of this Coverage Part apply separately to each consecutive annual period and to any remaining period of less than 12 months, starting with the beginning of the policy period shown in the Declarations. Note: Review the information contained in Chapter 10 under "Limits of Liability" in conjunction with this section.

Supplementary Payments - Coverages A and B

Supplementary Payments apply only to Coverages A and B, are paid in addition to any applicable limit of liability, and primarily include: 1. All claim-related expenses incurred by the insurance company. 2. The cost of bail bonds, up to $250. 3. All reasonable expenses incurred by the insured, at the insurer's request, including actual loss of earnings up to $250 per day to the insured for time off from work.

Pollution Liability Coverage

The Pollution Exclusion incorporated in the policy excludes bodily injury or property damage arising out of the actual, alleged, or threatened discharge, dispersal, seepage, migration, release or escape of pollutants. Insurers have 3 options available that they may use at their discretion, on an individual account basis, to provide "Buy Back" coverage to insureds: 1. Pollution Liability Coverage Form (Designated Sites) - 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. 2. Limited Pollution Liability Coverage Form (Designated Sites) - This form is identical to the Pollution Liability Coverage Form, except that it does not include clean up. 3. Pollution Extension Endorsement - This endorsement deletes the Pollution Exclusion for bodily injury and property damage liability, but continues to exclude cleanup costs.

Section I - Coverages

Coverage A - Bodily Injury and Property Damage Liability The insurer will pay those sums the insured becomes legally obligated to pay as damages because of bodily injury and/or property damage to which coverage applies, provided the occurrence took place during the policy period and in the coverage territory.

Section I - Coverages

Coverage B - Personal and Advertising Injury The policy provides protection for liability arising out of certain offenses, such as libel and slander, committed in the coverage territory and during the policy period. In addition to libel and slander, Personal Injury, as distinguished from Bodily Injury, includes: false arrest, detention, or imprisonment; malicious prosecution; wrongful entry, eviction, or invasion of privacy. Advertising Injury includes: misappropriation of advertising ideas or style of doing business; infringement of another's copyright, title, or slogan in the insured's advertisement; violation of privacy; and libel or slander.

Section I - Coverages

The insurer will pay for medical expenses, due to the bodily injury of customers, caused by an accident on the insured's premises or because of the insured's operations. The accident must take place in the coverage territory and during the policy period. Expenses include first aid administered at the time of the accident and expenses that have been incurred and reported within 1 year of the date of the accident. These payments are made regardless of fault.

Retroactive Date

a. A date specified in the Declarations, after which an occurrence can take place and be covered under the Claims-Made Form, even though the claim is made during the policy period. b. Any claim arising from an occurrence taking place before such specified date will not be covered by the current policy. c. If the insurer does not agree to a retroactive date, coverage begins on the effective date shown in the Declarations. Example: An insured owns a Claims-Made Form with a policy period of 7/1/04 through 7/1/05. The policy has a retroactive date of 4/1/04. If a claim is made on 1/1/05 for an injury that occurred after 4/1/04, the insurer is responsible. If the claim would have occurred prior to 4/1/04, the insurer is not responsible.

Supplemental Extended Reporting Period

a. Is an optional reporting period of unlimited duration that may be purchased by endorsement if requested within 60 days of the end of the policy term. b. Covers claims arising from occurrences that took place after the retroactive date and before the end of the policy term, regardless of when the claim is made. c. Is subject to the policy aggregate limit for the entire term. d. Has a one-time charge for this optional reporting period that may not exceed 200 percent of the original premium for the expiring policy. e. The premium for this optional coverage is a one-time charge and is fully earned at inception. f. This optional coverage may not be cancelled.

Occurrence Form

This form provides for the defense and payment of claims, for which the insured is legally liable, that occur during the policy period, regardless of when a claim is made, even if the claim is made after the policy has expired.

Premises and Operations Exposure

1. A building owner or tenant may be held legally liable in the event of bodily injury and/or property damage arising out of conditions on or away from the premises, including a job site or vacant land. 2. The General Liability Coverage Part to the Commercial Package Policy, which provides premises and operations coverage, automatically covers liability assumed under insured contracts which include: lease of premises, sidetrack agreements, elevator maintenance agreements, and easements agreements.

Products Exposure

1. A manufacturer, wholesaler, or retailer has potential legal liability that may arise based on negligence, breach of warranty, or strict liability associated with a product. Common Law declares that the seller of a product makes an implied warranty that the product is safe. 2. Medical Expense Coverage, which will be discussed later, is not included in Products Coverage because the coverage does not commence until care, custody, and control of the product has been relinquished to the purchaser. 3. Coverage applies to bodily injury or property damage the product causes, but not to loss to the product itself, and the injury or damages must occur away from the premises the insured owns or rents.

Section V - Definitions

1. Advertisement - A notice broadcast or published to the general public or specific market segments about the insured's goods, products, or services to attract customers or supporters. 2. Employee - Employee includes a leased worker, but not a temporary worker. 3. Impaired Property - 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. 4. Leased Worker - A person leased to the insured by a labor-leasing firm to perform duties related to the insured's business, but does not include a temporary worker. 5. Pollutant - Any solid, liquid, gaseous, or thermal irritant or contaminant, including smoke, vapor, soot, fumes, acids, alkalis, chemicals, and waste. Waste includes materials to be recycled, reconditioned, or reclaimed. 6. Temporary Worker - A person whose services are furnished to the insured to substitute for a permanent employee on leave or to meet seasonal or short-term workload conditions. 7. Volunteer Worker - A person who is not an employee of the insured, and who donates his/her work and acts at the direction of the insured, but is not paid a fee, salary, or other compensation by the insured for his/her work performed for the insured. Note: Section V of the Claims-Made Form is entitled "Extended Reporting Periods" and contains an explanation of the Basic and Supplemental Reporting Periods discussed earlier in this chapter. The definitions discussed above, and others, become a Section VI under the Claims-Made Form.

Claims-Made Form

This form provides for the defense and payment of claims, for which the insured is legally liable, that occur after the retroactive date and before the end of the policy period, and that are likewise made during the policy period or during an extended reporting period provided. The Claims-Made Form offers essentially the same coverage as an Occurrence Form, but is of particular significance to risks that have the potential to generate claims years after an occurrence that caused injury or damage.

Section IV - Commercial General Liability Conditions

These conditions apply in addition to the Common Policy Conditions. 1. Bankruptcy - Neither bankruptcy nor insolvency of the insured or of the insured's estate will relieve the insurer from its obligations. 2. 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 which 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. 3. 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. 4. 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. 5. 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. 6. Representations - The 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. 7. Separations of Insureds (Severability) - The 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. 8. Transfer of Rights of Recovery Against Others to the Insurer (Subrogation) - The insured agrees to transfer to the insurer any rights to recover any payment the insurer has made in behalf of the insured. 9. When the Insurer 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. 10. The Insured's Right to Claim Information (Claims Made Form only) - The insurer will provide, upon cancellation, nonrenewal, 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.

Basic Extended Reporting Period

This period is provided automatically, without charge, and consists of the following 2 parts: a. Mini Tail - This tail provides a 60-day period for the reporting of claims that result from occurrences that took place after the retroactive date and before the end of the policy period, but that have not been reported to the insurer. b. Midi Tail - This tail provides a 5-year period for a claim arising from an occurrence that took place after the retroactive date and before the end of the policy period, provided the insurer was notified of that occurrence either during the policy period or within 60 days after the policy ended. Any unknown or unreported occurrence, not reported to the insurer during the policy period or during the 60-day mini tail, would not be covered.