Chapter 15 - Commercial General Liability Insurance
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For those unaware, liability insurance exists to protect those who purchase it from the risks of liabilities – or legal responsibilities - imposed by lawsuits and similar cases. What do you know about commercial general liability insurance? Take the following quiz and we’ll find out together!
- 1.
Which of the following are true about the 60-day basic extended reporting period? Select all that apply.
- A.
It becomes effective automatically if needed when a claims-made policy expires.
- B.
The insured must request it in writing within 60 days after the policy expires.
- C.
It does not require an additional premium.
- D.
No separate endorsement is required to provide this extended reporting period.
Correct Answer(s)
A. It becomes effective automatically if needed when a claims-made policy expires.
C. It does not require an additional premium.
D. No separate endorsement is required to provide this extended reporting period.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.Rate this question:
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- 2.
What is the purpose of a retroactive date in the claims-made form?
- A.
Extends the period of time in which a claim can be covered under the policy
- B.
Stipulates a date as the first date on which an event can occur and be covered by the policy if a claim is filed
- C.
Extends the policy period
- D.
Stipulates a date after which any loss that occurs will not be covered
Correct Answer
B. Stipulates a date as the first date on which an event can occur and be covered by the policy if a claim is filedExplanation
The retroactive date provides some protection against losses that occurred before the claims-made form was written.Rate this question:
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- 3.
Which of the following is a personal and advertising injury?
- A.
Broken leg
- B.
Death
- C.
Calling a client a cheat and a fraud
- D.
Dog bite
Correct Answer
C. Calling a client a cheat and a fraudExplanation
The other answer choices are examples of bodily injury.Rate this question:
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- 4.
Which of the following are usually excluded under Coverage A of the Commercial General Liability policy? Select all that apply.
- A.
Property damage to property owned by the insured
- B.
Property damage to property in the care, custody, or control of the insured
- C.
Bodily injury sustained by an insured while using the insured's product
- D.
Bodily injury to a customer who is injured in an accident on the insured's premises
Correct Answer(s)
A. Property damage to property owned by the insured
B. Property damage to property in the care, custody, or control of the insuredExplanation
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.Rate this question:
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- 5.
All of the following reduce the CGL's General Aggregate Limit except which of the following?
- A.
Medical Payments sublimit
- B.
Personal and Advertising Injury limit
- C.
Fire Damage limit
- D.
Products-Completed Operations limit
Correct Answer
D. Products-Completed Operations limitExplanation
There is a separate Products-Completed Operations Aggregate limit that is not subject to the General Aggregate limit.Rate this question:
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- 6.
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?
- A.
Premises and operations exposure
- B.
Products-completed operations exposure
- C.
Contingent liability exposure
- D.
Contractual liability exposure
Correct Answer
B. Products-completed operations exposureExplanation
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.Rate this question:
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- 7.
Which of the following business liability exposures are either excluded altogether from the CGL or covered only in certain circumstances? Select all that apply.
- A.
Premises and operations
- B.
Indirect/contingent liability
- C.
Pollution
- D.
Work-related injuries to employees
Correct Answer(s)
C. Pollution
D. Work-related injuries to employeesExplanation
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.Rate this question:
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- 8.
Which one of the following is not required in a CGL coverage part?
- A.
CGL declarations
- B.
One or more CGL coverage forms
- C.
Causes of Loss form
- D.
Common Policy Conditions
Correct Answer
C. Causes of Loss formExplanation
Causes of Loss forms are not used with the CGL coverage part.Rate this question:
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- 9.
Which of the following would be considered mobile equipment under the Commercial General Liability coverage form? Select all that apply.
- A.
Truck used to transport personnel to construction sites
- B.
Road construction grader
- C.
Bulldozer
- D.
Self-propelled vehicles designed for snow removal
Correct Answer(s)
B. Road construction grader
C. BulldozerExplanation
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.Rate this question:
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- 10.
Which of the following are excluded under Coverage A of the CGL?
- A.
Damage the insured causes intentionally
- B.
Pollution losses caused by the insured
- C.
Liquor liability for those in the business of serving liquor
- D.
All of the above
Correct Answer
D. All of the aboveExplanation
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."Rate this question:
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- 11.
Which of the following would be excluded under Coverage C of the CGL? Select all that apply.
- A.
A shopper is injured in the insured's retail store when a box falls on him from an overhead shelf.
- B.
The insured sponsors a foot race on the land surrounding his retail store. A participant is injured during the race.
- C.
An individual hired by the insured to paint her business office falls off a ladder and is injured.
- D.
One of the insured's employees is injured while on the job.
Correct Answer(s)
A. A shopper is injured in the insured's retail store when a box falls on him from an overhead shelf.
C. An individual hired by the insured to paint her business office falls off a ladder and is injured.
D. One of the insured's employees is injured while on the job.Explanation
Coverage C excludes injuries to the insured's employees and injuries that occur while participating in athletics.Rate this question:
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- 12.
If an insurer decides to not renew the CGL policy, how many days notice of nonrenewal must be provided to the first named insured?
- A.
10 days
- B.
7 days
- C.
20 days
- D.
30 days
Correct Answer
D. 30 daysExplanation
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.Rate this question:
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Current Version
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Mar 21, 2023Quiz Edited by
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Feb 25, 2009Quiz Created by
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