Chapter 15 - Commercial General Liability Insurance

1. Which of the following is a personal and advertising injury?

Broken leg

Death

Calling a client a cheat and a fraud

Dog bite

The other answer choices are examples of bodily injury.

Explanation

The other answer choices are examples of bodily injury.

2. A woman is injured when she breaks a tooth on a rock that mysteriously found its way into a box of cereal. This is an example of which of the following?

Premises and operations exposure

Products-completed operations exposure

Contingent liability exposure

Contractual liability exposure

The products-completed operations hazard includes all BI and PD occurring away from the premises owned or rented by the insured, and arising out of the insured's product or work, other than products that are still in the insured's physical possession and work that has not yet been completed or abandoned.

Explanation

The products-completed operations hazard includes all BI and PD occurring away from the premises owned or rented by the insured, and arising out of the insured's product or work, other than products that are still in the insured's physical possession and work that has not yet been completed or abandoned.

3. If an insurer decides to not renew the CGL policy, how many days notice of nonrenewal must be provided to the first named insured?

10 days

7 days

20 days

30 days

The nonrenewal condition states that if the insurer decides to not renew the CGL policy, it must mail or deliver written notice of nonrenewal to the first named insured at least 30 days before the expiration date of the policy.

Explanation

The nonrenewal condition states that if the insurer decides to not renew the CGL policy, it must mail or deliver written notice of nonrenewal to the first named insured at least 30 days before the expiration date of the policy.

4. Which of the following are excluded under Coverage A of the CGL?

Damage the insured causes intentionally

Pollution losses caused by the insured

Liquor liability for those in the business of serving liquor

All of the above

All of the options listed are excluded under Coverage A of the CGL. Coverage A provides protection for bodily injury and property damage liability claims that the insured becomes legally obligated to pay. However, intentional damage caused by the insured, pollution losses caused by the insured, and liquor liability for those in the business of serving liquor are not covered under this policy. Therefore, the correct answer is "All of the above."

Explanation

All of the options listed are excluded under Coverage A of the CGL. Coverage A provides protection for bodily injury and property damage liability claims that the insured becomes legally obligated to pay. However, intentional damage caused by the insured, pollution losses caused by the insured, and liquor liability for those in the business of serving liquor are not covered under this policy. Therefore, the correct answer is "All of the above."

5. What is the purpose of a retroactive date in the claims-made form?

Extends the period of time in which a claim can be covered under the policy

Extends the policy period

Stipulates a date after which any loss that occurs will not be covered

The retroactive date provides some protection against losses that occurred before the claims-made form was written.

Explanation

The retroactive date provides some protection against losses that occurred before the claims-made form was written.

6. Which one of the following is not required in a CGL coverage part?

CGL declarations

One or more CGL coverage forms

Causes of Loss form

Common Policy Conditions

Causes of Loss forms are not used with the CGL coverage part.

Explanation

Causes of Loss forms are not used with the CGL coverage part.

7. All of the following reduce the CGL's General Aggregate Limit except which of the following?

Medical Payments sublimit

Personal and Advertising Injury limit

Fire Damage limit

Products-Completed Operations limit

There is a separate Products-Completed Operations Aggregate limit that is not subject to the General Aggregate limit.

Explanation

There is a separate Products-Completed Operations Aggregate limit that is not subject to the General Aggregate limit.

8. Which of the following business liability exposures are either excluded altogether from the CGL or covered only in certain circumstances? Select all that apply.

Premises and operations

Indirect/contingent liability

Pollution

Work-related injuries to employees

Businesses face a number of liability exposures, including work-related injuries to employees; pollution; contractual agreements in which the insured assumes liability; and ownership, maintenance, or use of autos, watercraft, and aircraft. However, because of the unique nature of these liability exposures, they are either excluded outright from the CGL policy or may be covered only in certain circumstances or for limited amounts. More complete protection for these liability exposures is available under contracts specifically designed to cover them.

Explanation

Businesses face a number of liability exposures, including work-related injuries to employees; pollution; contractual agreements in which the insured assumes liability; and ownership, maintenance, or use of autos, watercraft, and aircraft. However, because of the unique nature of these liability exposures, they are either excluded outright from the CGL policy or may be covered only in certain circumstances or for limited amounts. More complete protection for these liability exposures is available under contracts specifically designed to cover them.

Submit

9. Which of the following would be considered mobile equipment under the Commercial General Liability coverage form? Select all that apply.

Truck used to transport personnel to construction sites

Road construction grader

Bulldozer

Self-propelled vehicles designed for snow removal

Both of these items are specifically listed in the policy's definition of mobile equipment. An auto is a land motor vehicle, trailer, or semitrailer designed for travel on public roads, including any attached machinery or equipment.

Explanation

Both of these items are specifically listed in the policy's definition of mobile equipment. An auto is a land motor vehicle, trailer, or semitrailer designed for travel on public roads, including any attached machinery or equipment.

Submit

10. Which of the following are true about the 60-day basic extended reporting period? Select all that apply.

It becomes effective automatically if needed when a claims-made policy expires.

The insured must request it in writing within 60 days after the policy expires.

It does not require an additional premium.

No separate endorsement is required to provide this extended reporting period.

When a claims-made policy is terminated, a 60-day basic ERP automatically becomes available. The insured does not have to apply for it, and no premium is charged. It provides automatic coverage for any valid claim made during the 60 days after the policy expires, as long as the incident occurred between the expiring policy's retroactive date and its expiration date.

Explanation

When a claims-made policy is terminated, a 60-day basic ERP automatically becomes available. The insured does not have to apply for it, and no premium is charged. It provides automatic coverage for any valid claim made during the 60 days after the policy expires, as long as the incident occurred between the expiring policy's retroactive date and its expiration date.

Submit

11. Which of the following are usually excluded under Coverage A of the Commercial General Liability policy? Select all that apply.

Property damage to property owned by the insured

Property damage to property in the care, custody, or control of the insured

Bodily injury sustained by an insured while using the insured's product

Bodily injury to a customer who is injured in an accident on the insured's premises

Coverage A excludes property damage to property owned by the insured and property damage to property in the care, custody, or control of the insured. Because Coverage A provides third-party liability coverage, injury to an insured is not covered.

Explanation

Coverage A excludes property damage to property owned by the insured and property damage to property in the care, custody, or control of the insured. Because Coverage A provides third-party liability coverage, injury to an insured is not covered.

Submit

12. Which of the following would be excluded under Coverage C of the CGL? Select all that apply.

A shopper is injured in the insured's retail store when a box falls on him from an overhead shelf.

The insured sponsors a foot race on the land surrounding his retail store. A participant is injured during the race.

An individual hired by the insured to paint her business office falls off a ladder and is injured.

One of the insured's employees is injured while on the job.

Coverage C excludes injuries to the insured's employees and injuries that occur while participating in athletics.

Explanation

Coverage C excludes injuries to the insured's employees and injuries that occur while participating in athletics.

Submit