CRIS Exam #2
Circumstances develop under which a completed operations claim against Perry Masonry is covered by two CGL policies. The applicable coverage limit under Policy A is $100,000, and the applicable limit under Policy B is $300,000. The court awards the claimant $240,000 in damages. How much will be paid by the insurer that issued Policy B?
$140,000
Sitcon's CGL policy has the following limits of insurance: $2 million general aggregate limit; $1 million per occurrence limit; $2 million products and completed operations limit. During the policy period, Sitcon has two losses: a $1.5 million bodily injury sustained by a visitor to a construction job site, and a $1.3 million bodily injury claim arising out of a structural failure in a building the contractor completed the previous year. What is Sitcon's total insured loss for this policy period?
$2 million
Sawyer Construction Company stores lumber and other building supplies in a rented warehouse building where Sawyer, the owner, also maintains a small office. One weekend, Sawyer failed to turn off a space heater under his desk, and it ignited papers in his wastebasket. The fire spread quickly and burned down the entire rented warehouse building, which is valued at $150,000. Sawyer's CGL has a $250,000 personal and advertising injury limit, $500,000 each occurrence limit, a $1 million general aggregate limit, and a $1 million products-completed operations aggregate. Other limits are typical of those found in a CGL for this type of operation. How much will Sawyer's CGL insurer pay for the warehouse owner's claim against Sawyer?
$50,000
Andy Painter's scaffolding collapsed suddenly and seriously injured seven commuters who were walking on the sidewalk under the scaffold on their way to work, after ignoring signs warning that the sidewalk was closed on that side of the street. The declarations of Andy's CGL policy list a Medical Expense limit of $10,000 and a Damage to Premises Rented to You limit of $50,000. Each of the commuters incurred medical expenses in excess of $10,000. What is the total amount that Andy's insurer will pay for their medical expenses under his policy's Coverage C, Medical Payments?
$70,000
Wes slipped on a loose carpet in Connie Contractor's office and broke an ankle. For the medical payments coverage of Connie's CGL to apply, Connie must report this injury to its insurer within:
1 year.
Don Driller enters into an agreement to provide drilling services to Bob Builder. The contract requires Don to provide Bob with additional insured status under Don's CGL policy. Don tells Bob that by virtue of his signing the contract, Bob is automatically an additional insured under Don's policy. Don's CGL policy contains:
A blanket additional insured endorsement.
Jetson Industries is soliciting construction bids for a new office park and manufacturing facility. Jetson wants to provide some of the basic insurance coverages for all project participants, rather than have each contractor provide its own insurance. This type of arrangement is commonly known as:
A consolidated insurance program.
Colossal Contractor recently completed the construction of a new bank building. Colossal Contractor's CGL policy includes medical payments coverage with a $10,000 limit. For which of the following would the injured party be entitled to recover under Coverage C of Colossal's CGL?
A spectator observing Colossal's operations was struck by construction debris.
Heartbreak Hotel hires Magic Shingles Company to install a new roof on its property. In the contract, Magic Shingles agrees to indemnify Heartbreak Hotel for third-party liabilities arising out of Magic's operations. One of Magic's employees is injured when he falls from the roof and lands on a sharp fence post. The employee collects workers compensation benefits from Magic's insurer, then files suit against Heartbreak alleging negligence in failing to protect against a known hazard. Heartbreak tenders the claim back to Magic under the indemnity agreement. What type of claim does Magic now face?
A third-party-over action
Which of the following is one of the criteria used to establish an operation as "complete" for purposes of determining the application of the "products and completed operations hazard"?
All operations called for in the construction contract have been completed.
American Dream Homebuilders advertises that it builds quality custom homes for a fraction of the cost of most other builders. Based on that claim, John and Mary hire American Dream to build their new home. When half their home has been constructed, American Dream informs John and Mary that it cannot complete the home for the agreed upon price. John and Mary file a suit against American Dream for the increased construction costs on the grounds of breach of contract and false advertising. Which of the following describes how American Dream's CGL applies to this claim?
American Dream will have no coverage for this claim.
Sisters of Mercy contract with Samurai Construction to build a new hospital building adjoining their current structure. The construction contract requires Samurai to name both Sisters of Mercy and its architect, Archie, as additional insureds under Samurai's CGL policy. Archie is added to the policy using the "additional insured-architects, engineers, or surveyors not engaged by the named insured" endorsement. Which of the following accurately describes the scope of Archie's coverage under Samurai's CGL policy?
Archie has coverage for his nonprofessional liability arising out of the Sisters of Mercy project, but this policy provides him with no professional liability coverage.
Bogle Construction Company, which employs fewer than 100 people, has a general liability policy in which only Bogle Construction Company is listed as the named insured. Bogle's foreman asks the firm's insurance broker whether this policy provides any coverage for his employees. The broker correctly tells him that the employees:
Are insureds only to the extent their liability arises out of their work for Bogle Construction.
Juan, a garage door installation contractor, was surprised to discover an EIFS endorsement was added to his CGL policy when it renewed. Why did the insurer add this endorsement?
Because many claims have resulted from the faulty installation of synthetic stucco.
In order to bid on a construction project larger than either of them could handle alone, Ben and Jack formed a joint venture and were awarded the bid. The best way for Ben and Jack to cover the joint venture while preserving the integrity of their individual insurance programs is:
Buy a separate policy listing the joint venture as the named insured, and endorse each participant's policy to apply as excess.
Because Carlson Contractors' umbrella policy is written on an "indemnify" basis, its insurer:
Can wait for an award of damages and then reimburse the insured for covered defense and indemnity costs.
Bugoff Pest Control employees sometimes empty their trucks' pesticide tanks, at the end of the day, on a vacant lot near Bugoff's garage, before returning their vehicles to the garage. When the property owner discovers this, she sues Bugoff for trespassing onto her property and dumping a pollutant. Which of the following accurately describes how Coverage B of Bugoff's CGL policy will respond to the trespass claim?
Coverage B will not respond to the claim due to a broad pollution exclusion.
Marvelous Mansions, a luxury home builder, is insured under a commercial general liability policy. As a result, Marvelous has coverage for:
Damages awarded to a third party because of injury or damage for which Marvelous Mansions is legally responsible, as well as defense costs associated with the suit.
Employees' status as insureds under the standard CGL is subject to all of the following restrictions except:
Employees have no coverage for injury or damage they cause in the course of their employment.
Betsy is a registered nurse who has been hired to staff a first aid station at Flounder Construction's job site. Under the terms of Flounder Construction's CGL policy,
Flounder is covered for its liability arising out of Betsy's provision of medical treatment.
Gerry's General Contracting has been hired to construct a minor league baseball stadium. Gerry intends to use various trade subcontractors to perform some of the work. The construction contract requires Gerry's General Contracting to "indemnify and hold harmless" the stadium owner. This means that:
Gerry will bear responsibility for the owner's liability for injury or damage to third parties in connection with the work performed under the contract.
Frank is a commercial painter whose spraying equipment is permanently mounted on the back of his truck. Whether his auto or CGL policy responds to a given liability claim will be determined by:
How the vehicle or equipment was being used at the time of loss.
CGL exclusions are designed to remove coverage for particular types of exposures. Which of the following is not a category of excluded loss?
Losses that could have been avoided with proper care and attention.
Bali High Construction has a commercial umbrella policy that, like most commercial umbrella liability policies, provides excess coverage over all Bali's underlying policies, except for its:
National Flood Insurance Policy.
Armadillo Tanks changes its CGL policy from First Insurance, which provided coverage from February 1, 2009 to February 1, 2010, to Second Insurance, which provides coverage from February 1, 2010 to February 1, 2011. On October 15, 2009, Armadillo receives notice of a claim for an injury that occurred on November 22, 2008. The claim is ultimately settled on April 15, 2010. If both CGL policies have an occurrence trigger, which policy is triggered for this claim?
Neither policy is triggered by this claim.
Barnes Builders has a CGL policy that covers injury or damage only if it occurs during the policy period. What type of coverage trigger does the policy have?
Occurrence.
Pillar Construction Inc. is building a manufacturing facility for Atlas Corp. Atlas has arranged an owner controlled insurance program (OCIP) for the construction project. Which of the following actions is appropriate for Pillar to take to eliminate duplication in coverage between the OCIP and its own CGL insurance?
Pillar can endorse its own policies to be excess over the coverage provided by the OCIP.
Fred's Fine Floors uses solvents to strip old finish off wood floors. Fred could benefit from having which of the following endorsements added to his policy?
Pollution exclusion-limited exception for designated pollutant(s) endorsement
Ritchie Rickson is the owner of Rickson Contractors and is listed as the named insured on Rickson's CGL policy. Big Business is the owner of the construction project on which Rickson is working, and is an additional insured under Rickson's CGL policy. When an accident injures several people on Big Business's construction site, who is responsible for notifying Rickson's CGL insurer of the occurrence?
Ritchie Rickson
When an insurer pursues recovery against a responsible third party for amounts paid under a policy, this action is known as:
Subrogation.
Which of the following is not a requirement for meeting the CGL policy definition of "impaired property"?
Sudden and accidental physical damage.
The expenses the insurer will pay in connection with the investigation, settlement, or defense of a covered claim are itemized in what section of the CGL policy?
Supplementary Payments
Don Developer frequently hires Bigg Contractor to construct apartment complexes. Developer requires Bigg Contractors to carry CGL coverage, and Developer also purchases builders risk insurance to cover whatever property is currently under construction. Which policy provides coverage for a claim that is covered by both the builders risk policy and Bigg Contractor's CGL policy?
The builders risk policy will be primary, and the CGL policy will apply as excess coverage.
Walter Entertainment Co. hires Genie Contractors to build an amusement park. In the construction contract, Genie agrees to be responsible for Walter's liability to third parties arising out of the construction operations. In this arrangement,
The indemnitor is Genie Contractors.
Sally is an employee of the Times Company, which creates custom-designed signs for businesses. She is on a ladder installing a Greek Restaurant sign when the ladder slides out from under her. Times owns the ladder, which landed on a bystander. Both Sally and the bystander were injured. Times has not signed a hold harmless agreement with Greek Restaurant, which owns the sign. Which of the following would be covered under Times' CGL policy?
The injured bystander files a claim against Times.
A suit is filed against the owner of a new home by an employee of Happy Homebuilder who was injured while working on the new home. Although Happy is not named in the suit, he is contractually obligated to defend and indemnify his client (indemnitee) for this claim. Which of the following accurately portrays Happy's CGL insurer's obligation in regards to the client's defense?
The insurer does not have to provide a defense for the client, but defense costs are covered "contractual liabilities" payable within the limits of insurance.
Ichabod Construction Company had partly completed a high-rise construction project when its crane collapsed and damaged an adjacent building. Ichabod's crane operator, who subsequently failed a field sobriety test, was cited and arrested. Ichabod is insured under a CGL. What are the insurer's obligations regarding the employee's release from jail?
The insurer must pay up to $250 in premium for a bail bond.
During a business meeting in Japan, Bob Blue, who lives in Honolulu and is employed as the marketing vice president of the Hawaii-based Blue Pipeline Company, accidentally trips Joan, another company's representative. Joan is a resident of Anchorage, Alaska. Joan sues Blue Pipeline for her medical expenses and disability income loss. Blue Pipeline refers the claim to its CGL insurer. What is the impact of the coverage territory provisions on coverage for this claim?
The insurer will respond to the claim because Bob is a U.S. resident who was only out of the United States for a short time on business.
Ameritech Contractors contracts with Better Made Manufacturing to design and build a high-tech manufacturing facility. Ameritech performs all of the design work but subcontracts the construction work to various subcontractors. Ameritech is sued by Better Made for "property damage" arising out of a design flaw. Which of the following standard professional liability exclusion endorsements would preserve coverage for this claim?
The limited professional liability exclusion (CG 22 80) endorsement, which contains an exception for professional services provided in connection with a project the named insured is also responsible for constructing.
The general aggregate limit of the CGL policy is defined as:
The most the insurer will pay as damages under Coverages A, B, and C during the policy period, not including claims that fall within the products-completed operations hazard.
The general aggregate limit of a CGL policy is:
The most the insurer will pay for all claims, other than losses that fall under the "products-completed operations hazard," for the entire policy period.
Which of the following is not an element of a covered "personal and advertising injury"?
The offense was the result of an accident.
April Showers is the sole proprietor of April's Custom Bathrooms. April's business is covered by a CGL policy that lists "April Showers" as the named insured. Which of the following also has insured status under April's CGL policy?
Thor Showers, April's husband.
The CGL definition of "personal and advertising injury" includes all of the following except:
Unauthorized use of copyrighted design documents.
Monolith Construction forms a joint venture with Stein Stadium Design Company to construct a new major league baseball park. Monolith will perform all of the construction work and Stein will perform all of the design work. Monolith's legal responsibility for liabilities arising out of Stein's design work on this project is:
Unlimited.
Gencon purchases a CGL policy and is almost immediately sued by a pedestrian who was injured when a load of bricks fell on him as he walked past a construction site. Under the Coverage A insuring agreement, the answer to the which of the following questions influences whether the policy is triggered for this claim?
When did the injury occur?
If an underlying policy does not apply or its limits have been exhausted, a typical commercial umbrella policy issued to Carly Contractor would cover all the following claims, except:
While working on a riverside project, Carly's crane falls into the river and is destroyed, and Carly's contractors equipment insurance covers only half the crane's value.
Under Coverage C, medical costs incurred as a result of an injury to a third party while on the insured's premises are covered:
Without regard to the insured's legal liability for the injury.
Bill is about to begin construction on a hotel and casino for Highroller Industries. As the general contractor, Bill has persuaded Highroller to allow him to implement a contractor controlled insurance program (CCIP) for the project. Which of the following coverages is appropriate for inclusion in the CCIP?
Workers compensation insurance
The CGL definition of "bodily injury" includes all of the following except:
Wrongful imprisonment.
Kent Stopp and Wanda Goh formed a legal partnership doing business as the Stopp and Goh Signal Company (S&G). S&G, which installs traffic signals for highway construction contractors, carries a CGL policy on which the company is the named insured. With respect to their involvement in S&G's business activities, all of the following are also insureds under S&G's CGL except:
X-Cavator, a subcontractor.
The CGL policy covering the Many Mansions project includes "cross liability" coverage. Under the terms of this provision,
a party that is insured under the policy is permitted to sue another insured party.
As a result of his own carelessness, a potential client sustained minor injuries when he visited a job site to observe Shovel Contractor's operations. Shovel was not negligent in causing these injuries. The client's modest and reasonable medical bills would:
be covered by Coverage C of Shovel's CGL.
. Section I of Ollie's commercial general liability policy includes three coverage parts. Which one of the following is not one of these three parts?
comprehensive and collision
A contractor limitation endorsement attached to a commercial umbrella policy:
eliminates some of the umbrella policy's coverage with respect to certain loss exposures that are common to the construction industry.
Colossal Contractor's umbrella policy will not cover any claims that are not also covered by one of Colossal's underlying policies. The umbrella therefore is said to provide:
follow form coverage.
The CGL's medical expense coverage is provided on a no-fault basis because:
injured parties may be less inclined to sue for damages if their expenses are covered.
When Ralph Roofer renews his CGL policy, the new policy contains the "amendment of insured contract definition" endorsement. This endorsement:
removes coverage for Ralph's contractual assumption of liability for an indemnitee's sole negligence.
Billy is installing a pressurized hydraulic oil tank in a new factory building. In testing his work, Billy accidentally over-pressurizes the entire system and blows out all the pipes, valves, and hoses connected to it before the tank itself finally cracks under the pressure. Billy's CGL policy covers:
the damage to the pipes, valves, and hoses.
Lenny Plumbing Company tells customers that its competitor, Peter Piper, uses inferior plumbing fixtures that are made in China. Peter sues Lenny for slander. Coverage B of Lenny's CGL:
would apply to this claim unless the insured made these statements knowing them to be false.
