ExamFx Chapter 13 Commercial General Liability
Super Value Store has a commercial general liability policy written with a general aggregate limit of $300,000 and an occurrence limit of $100,000. A customer injured on the premises was awarded $45,000 for medical expenses and loss of earnings, and $60,000 for pain and suffering. The court costs and attorney fees were $15,000. How much will the CGL policy pay?
$115,000
Which of the following is NOT found in a commercial package policy?
Certificate of authority
A liability policy that provides coverage for a claim for injury or damage if the claim is first reported or filed against the insured during the policy period is called
Claims-made form.
Employment practices liability insurance (EPLI) would NOT cover claims arising from
Deliberate law violation.
Which of the following would NOT be included in a commercial package policy?
Dwelling coverage
Which of the following statements would be an example of a product liability claim?
Faulty packaging of a cereal caused spoilage that resulted in someone getting sick.
A specialized type of insurance that guarantees the faithful performance of a trustee of employee benefit plans is called
Fiduciary liability insurance.
Which policy consists of the declarations and conditions, endorsements, and other attachments applicable to a single line of insurance?
Monoline
Erroneous Publishing copied all the material from Angels Inc.'s book. The only changes made by Erroneous were to rename the title and chapters, put a different cover on it, and distribute it as its own. Angels Inc. files a claim against Erroneous and seeks damages. Will a commercial general liability policy cover the claim?
No, because the claim results from copyright infringement and is not in an advertisement.
B&B Market was sued when an employee detained a person he believed to be a shoplifter, but the person turned out to be the meter reader. Which coverage would apply to this suit?
Personal and advertising injury liability
Under the claims-made CGL the supplemental extended reporting period
Provides an unlimited extension for making claims for losses that occurred during the policy period, but the insured must pay an additional premium.
A date stipulated in the claims-made liability form declarations section as the first date on which an incident may occur and be covered by the policy is known as the
Retroactive date.
Who is not considered an employee in a CGL?
Temporary worker
Which of the following statements is true regarding the commercial general liability policy's Coverage C - Medical Payments?
The coverage is considered "good will" because payments are made without regard to fault.
The Occurrence form trigger is based on which of the following?
The date when injury or damage occurs
Which of the following would be covered by a commercial general liability coverage part?
Accidental bodily injury to a customer on the premises
Which of the following is NOT considered an insured contract under the Commercial General Liability Policy?
An written agreement which indemnifies a person for fire damage to the premises rented to the insured
What must a retail drug store, insured under a Druggist Liability policy, that hires pharmacists as employees of the business, do in order to have protection for possible claims arising out of the acts of the hired pharmacists?
Add the employed pharmacists to the policy
The Commercial General Liability Coverage form excludes bodily injury or property damage that the insured has assumed under any contract or agreement. However, the exclusion does not apply to certain types of contracts, as long as the injury or damage occurs
After the execution of the contract.
According to the common policy conditions for a commercial package policy, if the insured dies, the policy rights and duties
Automatically transfer to a legal representative.
A provision found in most claims-made liability policy forms that provide a specified period of time following the policy expiration, during which claims arising out of occurrences during the policy period may be made against the policy at no extra cost, is called
Basic extended reporting period.
Pollution Liability coverage under a General Liability Policy provides which types of coverage?
Both A and B
Retroactive dates in claims made CGL policies apply to
Both BI and PD and PIL and Advertising Liability.
A plasterer has finished a job. What kind of liability coverage would protect him if the plaster falls and hurts someone because he did not do the job correctly?
Completed operations
Under which type of coverage does the insurer agree to pay for bodily injury or property damage liability which the insured has agreed to assume under a written contractual agreement?
Contractual liability policy
All of the following are supplemental payments found in liability policies EXCEPT
Costs the insured incurred in hiring an attorney.
A professional liability policy will provide coverage for loss in all of the following cases, except, when the insured doctor was shown to be
Criminally negligent.
The commercial property declarations page contains which of the following information?
Description of the property insured
Which of the following special liability coverages will provide protection to managers of a corporation for claims arising from a wrongful act committed by the manager while in an official capacity?
Directors and officers liability
Directors and officers liability insurance defends actions against a corporation or its officers and directors alleging wrongful acts. With regard to the coverage provided, wrongful acts include any of the following, EXCEPT
Embezzlement.
In a commercial package policy, who may cancel the policy in writing and make changes to the policy with the consent of the insurer?
First named insured
In liability insurance policies, supplementary payments are made
In addition to the limit of liability.
CGL Coverage B (Personal Injury and Advertising Injury) will cover
Inadvertent injury to others caused in the course of advertising the insured's product.
Which of the following lines of insurance is NOT included in the commercial package policy?
Ocean marine
If an insured bakery is sued because its marketing states that the products of another bakery may not be safe, which coverage of a commercial general liability will defend the suit?
Personal and advertising injury liability
When ABC Appliance's marketing stated that its mowing machine was the only safe mower available for purchase in town, ABC was sued by XYZ Lawn and Garden. ABC's coverage would come from which part of its general liability coverage?
Personal and advertising injury liability
Crunchy Flakes Cereal Company shipped some of its product in faulty containers that caused spoilage. This resulted in some consumers becoming ill. If the company is sued for this event, it would be an example of a
Product liability claim.
Under the coverage of which of the following liability policies may an insured require the insurer to defend a claim?
Professional liability
Which of the following liability policies is usually written on a "claims-made" form?
Professional liability insurance
A date stipulated on the declaration page of a claims-made liability form as the first date on which an incident may occur and be covered by the policy is called
Retroactive date.
In the event of a claim under a commercial general liability policy, the insured has all the following duties to the insurer EXCEPT
Submitting to a medical exam when requested.
When an employee benefit plan pays the premium for a fiduciary liability policy, what provision must be included in that policy?
Subrogation
An insured that plans to cancel his/her claim-made insurance policy can protect themselves against potential claims that may arise from an occurrence that happened during the policy period, but is reported after the cancellation by purchasing
Supplemental Extended Reporting Period.
The Claims-Made Trigger is based on which of the following?
The date the claim is first made in writing against an insured for injury or damage that occurred on or after the policy's retroactive date
The common policy condition is a modular part combined with other parts to create the contract. The "common policy condition" section contains provisions that are applicable to all lines of coverage that may be included in the policy. Which of the following provisions would be found in the common policy conditions section of the policy?
The first named insured may cancel the policy at any time by giving written notice to the insurer.
All of the following conditions must exist for injury or damage to be included in the products and completed operations hazard of a commercial general liability policy EXCEPT
The injury or damage must occur within 90 days after the insured's work is completed.
Druggist Liability insurance automatically provides professional liability coverage for a pharmacist when the pharmacist is
The owner of the business.
All of the following statements concerning liability coverage are true EXCEPT
The policyholder can sue the insurer whether or not all conditions and provisions of the policy have been met.
A specific coverage part is listed on the commercial package policy declarations page, but there is no premium shown. What does that mean?
There is no coverage.
All of the following are true statements regarding the supplementary payments of a Commercial General Liability policy EXCEPT
They pay defense costs even after the aggregate limit has been reached.
Supplementary payments on a CGL provide all the following EXCEPT
Up to $500 a day for lost earnings and $2,000 for the cost of bail bonds.
All of the following are essential elements of a commercial package policy (CPP) EXCEPT
Valuations and/or settlement provisions
When does a business need to purchase a liquor liability policy?
When it is in the business of manufacturing, distributing, serving, or furnishing alcoholic beverages
A claim is considered to have been "made"
When notice is received and recorded by any insured or the insurer, whichever comes first.
The insured with a claims-made CGL may request in writing claim and occurrence information from the insurer at any time up to 60 days after the policy period ends. The insurer must provide the information
Within 45 days.
A commercial package policy (CPP) allows the insured to select the coverage needed and customize the policy to meet the needs of the insured's business. In a CPP, the business owner may select from all of the following types of coverage EXCEPT
Workers compensation coverage