Chapter 9- Commercial General Liability Coverage

Which of the following is not an example of personal injury? A A broken leg B Misappropriation of a title or slogan C Infringement of copyright D False arrest

A broken leg is an example of bodily injury, not personal injury.

Product liability would cover: A Contractual liability B A vending machine that injured a customer's hand C A restaurant customer who contracts food poisoning D Product recall

A restaurant customer who contracts food poisoning Product liability applies to bodily injury the product causes away from the insured's premises. A customer contracting food poisoning is a perfect example of product liability.

Which of the following is not a type of personal and advertising Injury under the CGL? A Infringement of copyright B Malicious prosecution C Slander D Breach of contract

Breach of contract is excluded from the definition of personal and advertising injury.

Which form responds to losses that occur while the policy is in force, regardless of when the claim is made? A Premises and Operations B Products C Claims-Made D Occurrence

Occurence An occurrence form provides coverage for losses that take place during the policy period. It doesn't matter when the loss is reported; what matters is when the loss occurred. The key in this form is the date the loss actually happened and if it happened when the policy was in effect.

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 Coverage only applies to Coverages A and B D Claim related expenses are included

Payments made under this section reduce the limits of the policy Payments for Supplementary Payments do not reduce the limits of the policy.

An insured contract includes all of the following, except: A An elevator maintenance agreement B A lease of premises C Pollution liability D A side track agreement

Pollution liability

Choose the false statement about the CGL policy. A The General Aggregate Limit will be reduced by a medical payment B Changes to a CGL policy may be made only by endorsement issued by the insurer C A Products and Completed Operations Liability claim will reduce the General Aggregate Limit D A bodily injury claim must be caused by an occurrence and it must have taken place in covered territory

A Products and Completed Operations Liability claim will reduce the General Aggregate Limit Products & Completed Operations claims have their own aggregate limit and these claims do not reduce the General Aggregate.

All of the following are true of the Claims-Made Form, except: A For coverage to apply, the injury or damage must have occurred between the retroactive date and the policy termination B A claim occurring 60 days prior to the retroactive date would be covered C Supplemental payments are automatically included D The mini tail provides 60 days after the end of the policy period for reporting a claim

A claim occurring 60 days prior to the retroactive date would be covered A claim arising from an occurrence taking place before the retroactive date would not be covered by the policy.

Product liability would cover: A Product recall B A vending machine that injured a customer's hand C Contractual liability D A restaurant customer who contracts food poisoning

A restaurant customer who contracts food poisoning Product liability applies to bodily injury the product causes away from the insured's premises. A customer contracting food poisoning is a perfect example of product liability.

Which of the following is not one of the liability exposures of the CGL? A Advertising injury B Products C Completed operations D Premises and operations

Advertising The primary exposures covered by the CGL are premises and operations liability, product liability, completed operations liability, and contingent liability.

Which of the following is not an insured contract under CGL? A An advertising contract B Elevator maintenance agreement C Lease for a new store location D Sidetrack agreement

An advertising contract

Which of the following injuries would not be covered under CGL Medical Payments? A A customer is injured by a flying lug nut while a mechanic is changing her flat tire B A retail customer slips and falls from a leaking pipe in the store's restroom C A carpet installer accidentally staples a customer's hand while installing carpet D A child accidentally overdoses on cough medication he drank from his parent's medicine cabinet

An overdose of a product is not covered under medical payments as it did not result on the insured's premises and was not caused by the insured's operations.

Under the CGL policy, the earned premium used in a premium audit to compute the final premium is determined at what point in time? A At the beginning of the policy period B Monthly C At the time the premium deposit is made D At the end of the policy period

At the end of the policy The earned premium is based on an audit at the end of the policy period. An additional premium is required if the earned premium is greater than the premium deposit.

Which of the following is excluded under both the Limited Pollution Liability coverage form and Pollution Extension endorsement? A Escape of pollutants B Waste disposal leaks C Clean up costs D Threatened discharge of pollutants

Clean up costs Government imposed clean up costs incurred from environmental damage caused by a pollution incident are covered under the Pollution Liability coverage form, but not the Limited Pollution Liability coverage form or Pollution Extension endorsement.

ABC Industries contracts with municipal governments to build bridges, viaducts, and similar engineering projects. If a bridge completed in the prior year by ABC Industries were to collapse, which kind of liability exposure would this be an example of? A Completed operations B Contingent liability C Products D Premises and operations

Completed operations When a business performs services or work, such as installation, construction, or repair, it's vulnerable to lawsuits and claims resulting from improper or defective workmanship. This exposure typically begins after the insured's operations have been completed and the insured leaves the job site. Injury or damage must occur away from the premises the insured owns or rents.

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 the insured's injuries C Coverage applies to injuries that occur on the premises that the insured owns or rents D Coverage applies to injuries that occur because of the insured's operations

Coverage applies to the insured's injuries Medical Payments coverage is not available for any insured.

Which of the following would be found in Section I of a CGL? A List of insureds under the policy B The policy definitions C Coverage for bodily injury and property damage D The Commercial General Liability conditions

Coverage for bodily injury and property damage Coverage A provides coverage for bodily injury and property damage liability. The conditions are found in Section IV, the definitions are found in Section V, and Who Is An Insured is found in Section II.

Which statement is false regarding the completed operations exposure? A Coverage includes replacement of the work that caused the loss B The exposure must occur away from the insured's premises C It includes risks of defective installation, construction or repair D It begins after the insured's operations are completed and the insured leaves the job site

Coverage includes replacement of the work that caused the loss Coverage will pay for bodily injury and property damage caused by negligent or faulty workmanship by an insured, but will not pay for the cost to replace the work that caused the loss.

Which of the following is false about the CGL's two coverage forms? A Coverage under the occurrence form is based on when the loss is reported B The claims-made form covers losses that occur after the retroactive date and before the policy expiration date C Coverage is triggered when an occurrence takes place during the policy period D The retroactive date is unique to the Claims-Made form

Coverage under the occurrence form is based on when the loss is reported With the Occurrence form it doesn't matter when the loss is reported, but the date the loss occurred must be during the policy period.

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 Negligence D Strict liability

Expected or intended injury Liability arising out of expected or intended injury is not covered by the CGL policy.

Medical payments coverage under the Commercial General Liability Coverage Forms includes reasonable medical expenses if they are incurred and reported within how many years following an accident? 2 3 1 5

Expenses that have been incurred and reported within one year of the date of the accident are covered under this section.

Which of the following is considered an insured's product? A Goods sold by the insured at a trade show B Goods shipped to a retailer to be sold C Remodeled building D Merchandise held by the insured as inventory

Goods sold by the insured at a trade show A covered product is one manufactured and sold by the insured and transferred to the possession of a buyer.

All of the following are true of the Commercial General Liability Conditions (Section IV) under the Claims-Made Form, except: A Insurance applies as if each named insured were the only named insured, and separately to each insured against whom the claim is brought B Insolvency of the insured relieves the insurer of any obligations under the policy 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

Insolvency of the insured relieves the insurer of any obligations under the policy Neither bankruptcy nor insolvency of the insured or of the insured's estate relieves the insurer from its obligations.

Which country is not included in the CGL coverage territory? A United States B Canada C Puerto Rico D Mexico

Mexico

An insured who goes to client's offices and homes for appointments would need coverage for which liability exposure? A Completed Operations B Products C Premises and Operations D Contingent Liability

Premises and operations exposure includes the insured's legal liability for bodily injury or property damage arising out of his/her business premises or operations (away from the premises).

Which of the following is not a contingent liability exposure? A Owners and Contractors Protective liability exposure B Liability exposure of insured's sub-contractors C Contractual liability exposure D Premises liability exposure

Premises liability exposure Contingent liability exposures exist when the insured is held liable for the actions or failure of actions of others.

Which of the following would be an insured under the CGL policy? A Spouse of an LLC member B Spouse of a partner C Trustee's spouse D Spouse of volunteer worker

Spouce of a partner The spouse of an individual or partner is also an insured. Spouses of shareholders, LLC members, employees, volunteers, trustees, directors, and officers are not insured under the policy.

All of the following are true of Supplementary Payments under the Commercial General Liability Coverage Forms, except: A Insurer's claim-related expenses are included B Supplementary Payments apply to all Section I coverage C They do not reduce the Limit of Liability D The cost of bail bonds is included up to $250

Supplementary Payments apply to all Section I coverage Supplementary Payments only apply to Coverages A and B; not C.

All of the following are true of the supplemental extended reporting period, except: A It is an optional extended reporting period of unlimited duration B The insurer may cancel it after the premium has been paid by the insured C It must be purchased within 60 days after the end of the policy D The one time premium may not exceed 200% of the annual premium for the coverage part

The insurer may cancel it after the premium has been paid by the insured Once the premium has been paid, the Supplemental Extended Reporting Period Endorsement cannot be cancelled.

Which of the following is NOT excluded under Part A of the CGL form? A Discrimination B Damage to insured's work C Product recall D Operation of mobile equipment

The mobile equipment exclusion applies to the transportation of mobile equipment by the insured. However operation of mobile equipment is not excluded unless for racing or stunting.

All of the following are true about extended reporting periods, except: A The supplemental tail requires an annual premium B Under the supplemental tail, the insured must request coverage within 60 days after the end of the policy term C The basic extended reporting period does not increase the policy limits D The basic extended reporting period allows a claim to be reported after the policy period for a specified number of days

The supplemental tail requires an annual premium The supplemental extended reporting period has a one-time premium.

All of the following are true of Supplementary Payments under the CGL, except: A They reduce the limits of insurance B They apply to bodily injury and property damage liability as well as personal injury and advertising injury liability C They pay defense costs incurred by the insurer D They include the cost of bail bonds up to $250

They reduce the limits of insurance Supplementary Payments do not reduce the limits of insurance.

Why is bodily injury to an employee excluded in Commercial General Liability Insurance? A It falls under the doctrine of assumption of risk B The employee is considered an insured C It falls under the doctrine of contributory negligence D Coverage is provided under Workers' Compensation

Workers comp General Liability policies exclude injuries to employees because they are covered by Workers' Compensation.