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Comm. Gen. Liability

Ga P & C Insurance Exam - Commercial General Liability

QuestionAnswer
What is a tort? Who has jurisdiction over torts? Example? legal wrong that involves no crime; civil courts; med malpractice
What is a tortfeasor? person who commits wrongful act/ tort
What is vicarious liability? Example? holds one entity liable for the actions of another; ex> co liable for employee wrecking co car at work and injuring someone
What are four types of damages in a liability loss? 1. Specific 2. General 3. Compensatory 4. Punitive
Define specific damages w/ respect to legal liability losses and give an example. tangible damages with known value (ex> BI, Prop damage)
Define general damages w/ respect to legal liability losses and give an example. intangible damages where value of loss depends upon the victim (ex> pain/ suffering, mental anguish)
Define compensatory damages w/ respect to legal liability losses and give an example. damages with a combination of tangible and intangible losses (ex> BI resulting in pain/ suffering)
Define punitive damages w/ respect to legal liability losses and give an example. damages for which tortfeasor is punished financially in order to dissuade others from repeating
List 7 examples of potential insured for a Commercial General (CGL) Liability Policy. 1. manufacterer 2. contractor 3. business owner 4. owner of buildings 5. tenants of buildings 6. non-profits 7. churches
What is the format/ structure of a CGL policy? 1. Decl Page 2. CGL Forms (w/ sublines of coverage)
What are the two types of CGL forms possible for a CGL Policy (only use 1)? 1. Occurrence Form 2. Claims-made form
What are the two types of subline coverages (on both CGL forms)? 1. Premises and Operations Liability 2. Products and Completed Operations Liability
With regard to the subline cov of Premises and Operations Liab, who would carry Premises Liability? Those who: 1. own 2. rent 3. occupy 4. control
With regard to the subline cov of Premises and Operations Liab, who would carry Operations Liability? contractors
In a CGL subline cov of Products and Completed Operations Liability, what does Products Liab cover? accidents resulting from defects in products
With regard to the subline cov of Products and Completed Operations Liab, who would carry Products Liability? 1. manufacturer 2. distributor 3. sales 4. installations
In a CGL subline cov of Products and Completed Operations Liability, what does Completed Operations Liab cover? accidents resulting from defects in work/service
Define inherent defect tendency of property to self-destruct
What is the main difference between an Occurrence Form and a Claims- Made Form on a CGL? different ways for processing/ validating claims
Describe the claims processing methods for a CGL with an Occurrence Form. occurrence forms pays claims according to the policy in effect on the accident date (i.e. "go back"),
Describe the claims processing methods for a CGL with a Claims- Made Form. claims-made forms process claims according to the policy in effect on the date the acc. was reported as long as the acc. occurred on or after the policy's retroactive date (i.e. "move forward")
What is a retroactive date on a CGL and what is its main purpose? defines when coverage begins; creates clear division between prior occurrence coverage and current claims-made coverage
Which is stronger an effective date or a retroactive date of a policy? retroactive date is stronger
Would the first year of a policy have the same or different effective date and retroactive date? Subsequent years for the same policy? 1st yr they're the same, but subsequently the effective date changes annually while the retroactive date stays the same
Could an expired CGL policy ever pay a claim filed after the expiration date? Yes- if CGL has Occurrence Form and accident occurred before the exp date of the policy
Why should a retroactive date on a CGL's Claims-Made Form never be changed? it would eliminate coverage on the policy for accidents that occurred before the new retroactive date, regardless of when it was reported
Despite the risk of changing a retroactive date, why would an insured be tempted to do so? What is required to do so? Claims-made premiums start low on new policies get higher each year; requires insured's written request
What is Basic Tail coverage in a CGL policy? automatic part of a Claims-Made Form that extends reporting period for claims to be made after a policy is canceled, non-renewed or replaced by a CGL with an Occurrence Form (i.e. allows insured to "go back" to claim against now cancelled, etc policy)
What are the two components of Basic Tail Coverage? 1. Mini Tail 2. Midi Tail
What does the Mini Tail portion of Basic Tail cov state? loss must be reported < 60 days from cancellation date (critical phase)
What does the Midi Tail portion of Basic Tail cov state? claim must be filed within 5 yrs of accident (accident still must be reprted in 60 days per Mini Tail)
Can the 60 day acc. reporting deadline or 5 yr claims filing deadline of Basic Tail Coverage be extended? Yes- with Supplemental Tail Coverage (Maxi Tail/ Full Tail)
When is supplemental tail cov available to purchase? up to 60 days after cancellation of claims-made form
What is the premium and expiration date on supplemental tail cov? premium is high- up to 200% of CGL premium; no expiration date (premium due up front)
What does basic tail cov. Prior Acts Provision state? If changing from a claims-made form in one co to claims-made form with a different co, retroactive date stays the same
Who needs supplemental tail coverage? retiring professional (i.e. Physician)
Why was the claims-made form created? to prevent possibility of stacking of limits with subsequent occurrence coverages having overlapping policy terms
What types of policies/ coverages need claims-made forms on a CGL? med malpractice, errors & omissions, directors and officers (D&O), employee practices liability (EPL), environmental liability, pharmaceutical manuf, airplane manuf.
What is the Laser Beam Endorsement on a CGL? allows in co. to exclude coverage for certain products or certain locations that are deemed too risky to insure
What are the major coverages of a CGL policy? A. BI and Property Liability B. Advertising & Personal Injury C. Medical Payments
List 5 exclusions to Cov A BI and Property Liability on a CGL 1. Liquor-related accidents 2. Workplace acc. involving employees 3. Mobile Equip in transit 4. Property owned, rented, in control of insured 5. Product Recalls
What can be added to a CGL's Cov A to cover employees' liability when driving their own car for work purposes? Non-owned Auto Endorsement
Is an insured dry cleaners covered by a CGL's Cov A for damage to customer's property? No; needs Bailee Coverage
What are 3 examples of biz that might carry Bailee Coverage with a CGL Cov A. 1. Dry Cleaners 2. Compute Repair shops 3. TV repair shops
What type of Bailee coverage does an auto repair shop need to carry? What other type of business needs it? Garage Keepers Coverage; valet service
What is Cov B on a CGL form and what are its main two components? Cov B = Advertising Liability; 1. Advertising Injury and 2. Personal Injury
What are the two major types of losses covered by Cov B Advertising Liab? 1. copyright infringement 2. misappropriation of advertising ideas
What does the Personal Injury portion of a CGL's Cov B Advertising Liab cover and what are 3 examples? liable or slander against a victim's character (i.e. wrongful accusation, invasion of privacy or wrongful eviction)
What does a CGL's Cov C Medical Payments Cover? How Long? necessary medical expenses incurred within one year of accident
Is the insured required to be negligent in order for a loss to be paid from Cov C Med Payments? No
Why would an ins co likely be willing to pay claims under Cov C Med Payments? To avoid potentially large settlement under Cov A BI
Can an ins agent negotiate directly with a victim in attempt to settle under Cov C Med Payments? Yes up until victim hires lawyer and then only negotiate with lawyer
Is a personal injury the same as bodily injury? No
What is the main purpose of Supplementary Payments Coverage under a CGL? to cover defense costs in fighting/ settling a claim
If a co is insured by a CGL and purchases another co / org, is the new co / org automatically covered under same CGL policy? Yes- for up to 90 days
Who would be included as insured in addition to named insured with the following entities with a CGL policy? 1. Sole proprietorship 2. Partnership 3. LLC 1. spouse 2. partners and spouses 3. managers and members
What is the cancellation policy for a CGL? 10 days for no-payment and 45 days for non-renewal or other reasons
Is a CGL's coverage territory worldwide? No- only USA, USA terr. and CA
List the limits paid on each of the following of a CGL: 1. General aggregate limit 2. Products & completed Operations aggregate limit 3. BI and Pers Prop Liability 4. Advertising injury & personal Injury 5. Med Payments 6. Fire damages 1. $2 mil 2. $2 mil 3. $1 mil 4. $1 mil 5. $10k 6. $500k
List 4 specialized comm liab coverages available in addition to a CGL 1. Umbrella policy 2. Professional Liab 3. Liquor Liab 4. Pollution Liab
What are the two general types of Professional Liab coverages? 1. malpractice policies 2. errors & omissions policies
List three examples of Professional Liab policies. 1. Directors & Officers Liab 2. Employment Practices Liab 3. Fiduciary Liab
What are two examples of claims paid by an Employment Practices Liab policy? 1. Sexual harassment 2. wrongful termination
What are two major benefits to adding a commercial umbrella policy to a CGL or Commercial Auto Policy? extends cov terr to worldwide and raises limits to payments
What is self-insured retention? What is the min amt of self insured retention? $ amt an insured must contribute to pay a claim out of umbrella policy ONLY when the insured's primary CGL limit has already been exhausted; $10k
Created by: jkbick