Commercial Liability Insurance
Coverage B Exclusions
-Knowingly infecting injury that violates the rights of another -Oral or written publication of material that the insured knows to is false, but publishes 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 -Infengment of copyright, patent, trademark, trade secret, or other intellectual property rights -violating recording and distribution of materials laws
Two methods of Dividing polices with other insurance
-Contribution by equal shares Contribution by limits
Commercial General Liability Policy (CGL) 6 different lints on the polices declarations page?
-General Aggregate Limit -Products-Completed Aggregate Limit -Personal and Advertising Limit -Personal Occurrence Limit -Damage to Premises Rented to the Insured Limit -Medical Expense Limit
An insured has a CGL and hires a contractor to do some work on the building. What is the best way to protect the insured from having to personally pay for damages as a result of the contractors operations?
Purchase an owners and contractors protective (OCP) liability policy
In a claims-made liability policy, the specific date shown in the declarations indicating the first date events are covered by the policy is called its?
Retroactive date
Where is the Named insured listed in a CGL policy?
The declarations and this person may be an individual, partnership, joint venture, limited liability company, other type of organization, or a trust
When does the lowest limit of insurance Stop paying?
The insurer with the LOWEST limit stops paying since it has already paid its policy limit, and the other insurers share the remainder of the loss
Who else is also insured under the CGL?
The named insured's employees for acts within the scope of their employment or while performing duties related to the conduct of the insured's business If the named insured dies, the named insured's legal representative
Completed Operations
When a business _____ away from the premises it owns, rents, or controls, a _______ exposure exits. Results when a person is injured or her property is damaged after the business operations has been completed on premises away from the business premises.
Does completed operations differ from operations?
Yes, the phrase "put to its intended use" describes completed operations
When a Claims-Made Policy is terminated, what happened?
a 60 day basic ERP (Extended Reporting Period) automatically becomes available. No application needed, and no premium is charged. It gives automatic coverage for any valid claim made during the 60 days and the original policy expires AS LONG AS the incident occurred between the expiring policies retractive date and its expiration date
Contribution by equal shares
all insurers contribute equally up to the limit of the policy with the lowest limit. The insurer with the LOWEST limit stops paying since it has already paid its policy limit, and the other insurers share the remainder of the loss
How is an Occurrence defined in the CGL?
an accident, including continuous or repeated exposure to the same general harmful conditions
The Insured's Products (CGL Definitions)
any goods or products, other than real property, that are manufactured, sold, handled, distributed, or disposed of by the insured. Includes: Containers Materials Parts Equipment
Pollutants (CGL Definitions)
any irritants or contaminants or waste. Waste includes materials to be recycled conditioned, or reclaimed
Coverage A under CGL
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.
products or completed operations Definition
business can be exposed to liability by defects. EX: spoiled food served at a restaurant
What does Commercial General Liability Insurance (CGL) protect?
business owners from claims of injury, property damage, and negligence related to business activities.
The purpose of the extended reporting period in a commercial general liability policy is to provide?
coverage for claims made after the policy expires
Your Right to Claim and Occurrence Information Condition
is included in the claims-made form, but not the occurrence form. It provides that the insurer will give the first-named insured certain information relating to the current CGL claims-made form and any previous claims-made forms the insurer has issued to the insured during the previous 3 years.
Per Occurrence Limit
is the most that will be paid for any one occurrence under Coverages A and C because of all bodily injury, property damage, and medical payments arising out of any one occurrence. Subject to either the general aggregate limit or the products-completed operations aggregate limit
Occurrence From Definition
is triggered by damage or injury that occurs during the policy period, even though the claim may be made after the policy has expired EX: injury happened May 30, policy runs out June 30, person who was injured files a claim in JULY 30. Privious insurance deals with the claim because they carried this policy.
Claims -Made Form Definition
is triggered when a claim is first made against the insured, regardless fo the when the loss or injury took place. Claims are covered under the _____ form if the claim is made during the police period and the occurrence is on or after the retroactive date.
Damage to Premises Rented to the Insured Limit
represents the most that will ba paid under Coverage A for liability for property damage to premises rented to the named insured for fire damage. Per occurrence limit and the general aggregate limit
Products-Completed Aggregate Limit
represents the most that will be paid under Coverage A b/c of injury and damage arising out of the products-completed operations exposure. EX: faulty installation of a fireplace, hair dryer malfunctions
Personal and Advertising Limit
represents the most that will be paid under Coverage B for the sum of all damages due to personal injury or advertising injury sustained by any one person or organization. Also subject to the overall general aggregate limit
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 polices
Premises liability protects?
the insured against injury to third parties that occurs on or arises out of the insured's premises
General Aggregate Limit Definition
the most that will be paid for the same of Coverages A, B, and C during a policy period, except for damages arising out of the products - completed operations exposure
Medical Expense Limit
the most that will be paid under Coverage C for all medical expenses because of BI sustained by any one person Subject to the per occurrence and general aggregate limits
Medical payments coverage in the CGL covers injuries to?
third parties regardless of liability
Insured Work (CGL Definitions)
work or operations performed by the insured and materials, parts, or equipment furnished in connection with such work or operations. It also includes warranties or representations made at any time with respect to the fitness, quality, durability, or performance of the insured's work and the providing of or failure to provide warnings or instructions
Supplementary payments available for Coverage A & B
-All expense 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 -prejudgment and post judgement interest -defense costs
Named Insured's Duties In the event of occurrence, claim, or suite
-Notify the insurer as soon as possible (how, when, where) -Names and addresses of any injured persons and witnesses -Nature and location of any injury or damage -send insurer copies of any demands, notices, legal papers -authorize insurer to obtain record -cooperate with insurer in the investigation -not make payment, assume obligation, or incur any expense
3 Options the insured has for retroactive date in CGL declarations
-Use the same date as the policy effective date -Use an earlier date than the policy effective date -Have no retroactive date
What information is included in the Your Right to Claim and Occurrence Information Condition?
-a list or record of each occurrence not previously reported to any other insurer of which this insurer has been notified according to policy provisions -a summary, by policy year, of payments made and amounts reserved under any applicable general aggregate limit and products-completed operations aggregate limit
Loading or Unloading (CGL Definitions)
-after it is accepted for movement into or onto an aircraft, watercraft, or auto -While it is in or on the above -While it is being moved from the above to another place where it is delivered
Exclusions to Coverage A -BI & PD liability
-intentional injury -Contractual liability except for LEASE -Liquor liability -Employee work-related injures (covered under workers comp -Pollution liability -Aircraft, autos, or watercraft liability -Transportation of mobil equipment by auto or the use of mobile equipment in any prearranged racing activity -Owned or rented property in the insured's care -Product recall
Risk Exposures covers by liability insurance would include?
-premises and operations -products and completed operations -fire legal -independent contractors -contractural liability
Excluded under Coverage C - medical payments are injures
-to any insured or to a tenant or employee of the insured -payable under workers comp or related laws
Coverage C of the CGL policy will cover reasonable medical expenses incurred within how many years of the accident?
1 year
Basic reporting period for ERP's
60 days or 5 years is available automatically and free of charge under specified conditions
Contractural Liability Definition
A business may sign a contract with another party agreeing to be liable for some action. EX: if a restaurant needs more parking and signs a contract with the movie theatre across the street. The restaurants signs a contract saying they are liable for their costumers parking across the street
Coverage B
provides personal and advertising injury liability coverage, which covers liability arising out of such offenses as liable, slander, or advertisements. The claimant may be an individual or another business
BAILED?
Bonds Aids Interest Loss Earnings Expense Defense Costs
Mobile Equipment (CGL Definitions)
Bulldozers, farm machinery, forklifts -Vehicles, self propelled or not, maintained primarily to provide mobility to permanently mounted power cranes, shovels, loaders, differs, etc.
OCP Owners and contractors protective liability policiy?
Direct coverage for the owner's liability incurred as a result of the ______
What is NOT required in a CGL coverage part?
Causes of loss form
CGL - Commercial General Liability 3 forms
Coverage A = bodily injury and property damage liability Coverage B = Personal and advertising injury liability Coverage C = medical payments
Which limits 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
Under the CGL policy, a patron of a bar gets injured when the bartender throws him out of the premises. The patron sues both the tavern, owner, and bartender. The CGL policy would?
Have no duty to defend b/c damages are not covered
Fire Legal Liability Definition
If a renter causes fire damage, the renter can be held liable. This coverage in the CGL pays for this damage, but only to the part of the building actually occupied by the insured
Independent Contractor Liability Definition
If an injury or damage occurs, the insured could be held liable. EX: if the HVAC company does not install the heating system correctly and a fire occurs after 90 days, the business and the HVAC company could be held liable -This coverage may be bought as a separate policy called Owners and Contractors Protective
LEASE
Lease of a premises Easement agreement for the use of shared property Agreement to indemnify a municipality Sidetrack agreement with a railroad Elevator maintenance agreement
Pete owns a business that sells alcoholic beverages. A person Pete sold alcohol to injures a third part. Pete is sued by this third party and needs what kind of protection?
Liquor liability/dram shop liability
Coverage C
Medical payments. Pays for medical expenses incurred for bodily injury caused by an accident on the premises the insured owns or rents, or arising from the insured's operations. To be covered, the expenses must be incurred and reported to the insurer within ONE year of the date of the accident. Medical payments are made WITHOUT REGARD TO FAULT, unlike other coverages under the CGL forms
Is Operation of autos an exposure in a CGL?
No, it only covers majors risk exposure; premises and operations, and products and completed operations
Is medical payments a supplementary payment provided in the CGL Policy?
No, supplementary payments are provided under insurance policies independent of the policies liability limits.
Commercial General liability Policy - an auto repair shop catches on fire over night. Would the the work done on the autos and the autos be covered?
No, the CGL contains 2 exclusions that would eliminate coverage for the damage to the customers autos and for the value of work already performed on them. 1) exclusions applies to property of others in the owners care 2_ exclusion applies to damage to the insured's product, in this case, the work performed on the autos
Two "Trigger" forms used to provide liability protection?
Occurrence Form Claims Made Form
Which limits of insurance is the MOST that will be paid out for any one occurrence under Coverage A and C because of bodily injury?
Per occurrence limit
When a product leaves the store and is relinquished to the costumer, what goes into effect?
Product liability coverage
What is the difference between Occurrence and Claims Made form?
There isn't a 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 arising out of the injury or damage
Coverage Territory (CGL Definitions)
US, including its territories and possessions, Puerto Rico, and Canada. NO Coverage extends to Mexico
Contribution by Limits
each company pays a proportion of the loss equal to the proportion its policy limits bear to the total amount of insurance available
How long does contribution by equal shares continue?
either until the loss is paid in full or each company has paid its limit
Occurrence liability policies cover?
events that happen after the policy is in effect, but before it expires
A claims-made policy covers claims that are?
first reported during the policy period, provided the vent occurred after the retroactive date (if any) stated in the policy
Auto (CGL Definitions)
land motor vehicle, trailer, semi -designed for travel or public roads
Premises and Operations Exposure Definition
liability arising out of the business location or the actives of the business EX: costumer slips on newly waxed flooring. This claim can occur both on and off the premises.
Extended Reporting Periods (ERPs) Definition
provide coverage for claims made after a claims-made policy expiration date
Supplemental Extended Reporting Period Endorsement
provides an unlimited extension of the reporting period, although the event causing the claim must still occur between the retroactive date and the policy expiration date. This ERP takes effect at the end of either the 60 day or five year ERP, whichever applies. Insured must request this endorsement and pay and additional premium
