CGL Concepts & Coverage

Question 1

What are Endorsements?

Answer 1

Used to modify the CGL Coverage Form. May be AMENDATORY or to meet CONTRACTUAL OBLIGATIONS. May also be used to BROADEN, or to LIMIT and/or EXCLUDE coverage.

Question 2

What are the five sections of the CGL coverage form?

Answer 2

Section I – coverages:
- Coverage A – BI & PD
- Coverage B – Personal and
Advertising Injury
- Coverage C - Medical Payments
Section II – Who is an Insured
Section III – Limits of Insurance
Section IV – Conditions
Section V – Definitions

Question 3

What are the liability exposures covered under a CGL policy?

Answer 3

Coverage A - BI/PD
- Premises
- Operations
- Products
- Completed Opps
- Contractual
- Contingent

Coverage B – Personal and advertising injury
- Operations
- Contingent

Coverage C – medical payments
- Premises
- Operations

Question 4

What is…?
Coverage A - BI/PD
PREMISES Liability

Answer 4

Applies to OWNERS, LANDLORDS, TENANTS

Arises of of OWNERSHIP, MAINTENANCE, USE of named insured’s premises

Question 5

What is…?
Coverage A - BI/PD
Business OPERATIONS liability

Answer 5

Arises from ACTIVITIES involved in the OPERATION of a business including SERVICE & REPAIR activities usually done on the premises of others, sophomoreWHILE THE ACTIVITY IS BEING CONDUCTED.

Examples.
They named insured contractor accidentally cut utility lines while digging a trench.
Named insured contractor accidentally starts a fire while doing some welding.

Question 6

What is…?
Coverage A- BI/PD
PRODUCTS liability

Answer 6

Arises out of the SALE, DISTRIBUTION, or MANUFACTURE of the name insurance product.

Generally, everyone in stream of commerce can be sued.

Examples
A name insured parentheses store or distributor parentheses can be held liable for consumer is injured by a food item, a pharmaceutical item, or some other product sold by the name insured.
They named insured manufacturer can be held liable if a defective product causes bodily injury or property damage to others.

Question 7

What is…?
Coverage A - BI/PD
COMPLETED OPERATIONS liability

Answer 7

Liability arises from activities, involved in the operation of an organization, including service and repair activities. Usually done on the premises of others, AFTER the activity has been CONCLUDED.

Ongoing vs. completed, exclusions can apply differently.

Examples:
A named insured install a new water heater. After installation, the water heater leaks, causing damage to the homeowners flooring.
They named insured contractor, repairs, some stairs, and balconies at an apartment complex. A week after completion, one of the balconies collapses, causing injury to a tenant.

Question 8

What is…?
Coverage A - BI/PD
CONTRACTUAL liability

Answer 8

Arises from one party, ASSUMING RESPONSIBILITY of another party

Examples: lease, agreements, construction contracts, etc.

Question 9

What is…?
Coverage A - BI/PD
CONTINGENT liability

Answer 9

Arises out of WORK PERFORMED for the named insured by SOMEONE ELSE

Example: can protect the name, insured from acts of others, other than insured’s, such as independent contractors i.e. sub-contractor

Question 10

What is…?
Coverage B - Personal & Advert Injury
PERSONAL INJURY liability

Answer 10

Liability arising from INTENTIONAL TORTS, such as libel/slander/wrongful eviction….defamation

Question 11

What is…?
Coverage B - Personal & Advert Injruy
ADVERTISING liability

Answer 11

Liability caused by harm from such things as MISAPPROPRIATION of ADVERTISING IDEAS, STYLE  of doing business, or INFRINGEMENT of COPYRIGHT

Question 12

Who qualifies as an insured?

Answer 12

Named insureds:
Listed on declarations or schedule

Automatic insureds:
Those who qualify as insured under section 2-who is an insured through their relationship with the type of name insured on the Dec’s

Non-automatic insureds:
Those added by endorsement

Question 13

Automatic insureds definition

Answer 13

An INDIVIDUAL, you and your spouse are insured’s BUT only with respect to the conduct of business of which you are the sole owner.

A PARTNERSHIP or JV, your MEMBERS, PARTNERS, and their SPOUSES

And LLC, your MEMBERS, MANAGERS

And ORGANIZATION other than above, your “EXECUTIVE OFFICERS” & DIRECTORS. STOCKHOLDERS, but we’re only with respect to their liability as stockholders.

A TRUST, your TRUSTEES are also insureds.

ITS ALWAYS WITH RESPECT TO YOUR DUTIES

Question 14

Define “ executive officer” with respect to being an insured

Answer 14

A person holding any of the officer positions, created by your charter, constitution, bylaws, or any other similar governing document.

Question 15

Who are the OTHERS described as also automatic insureds under Section II - Who is an Insured?

Answer 15

• VOLUNTEERS workers
• EMPLOYEES
  …but other than your “executive officers” or “managers”
• REAL ESTATE MANAGER while acting as such for named insured
• Those with TEMPORARY CUSTODY of NI’s property if DEAD arising from… maintenance AND until legal rep appointed
• Your LEGAL REP if you die

STUDY PAGE 13 FOR FURTHER DETAILS!!!!!

Question 16

Define “ employee”

Answer 16

Employee INCLUDES, a LEASED worker.
Employee does NOT include a TEMPORARY worker

Question 17

Who is an insured?

Answer 17

3 paragraphs:
1- The Named Insured “you”
2- Others
3- Newly Acquired/Formed
4- Who’s NOT an insured q

Question 18

Coverage A - BI/PD
Insuring agreement 2 promises

Answer 18

Pay/indemnify

Defense

Question 19

“Bodily Injury”

Answer 19

Bodily injury, sickness or disease, sustained by a person, including death, resulting from any of these at any time.

Question 20

“ Property Damage”

Answer 20

a. Physical injury to TANGIBLE property, including all resulting in LOSS OF USE of that property.

b. LOS OF USE of tangible property that is NOT physically injured.

*ELECTRONIC DATA IS NOT TANGIBLE PROPERTY

Question 21

Coverage A - BI/PD
“Suit”

Answer 21

Civil proceeding

Includes all ARBITRATION,  proceedings for ALTERNATIVE DISPUTE, RESOLUTIONS

Question 22

“Occurrence”

Answer 22

Accident, including continuous, or repeated exposure

Question 23

What is contractual Liability?

Answer 23

Arises from one party assuming responsibility of another party.

Eg.
Tenant – Landlord
Subcontractor – General Contractor
Lessee – Lessor

Question 24

“Insured Contract”

Answer 24

Acronym:
L
E
A
S
E
PLUS

Lease ofpremises, except…
Easement or license agreement, except…
An obligation to identify a municipality as required by ordinance, except…
Sidetrack agreement
Elevator maintenance agreement
All capitals plus any other contract in which the name insured assumes and tort liability of another party to pay for BI or PD to a third person

Question 25

“Auto”

Answer 25

a. A land, motor vehicle, trailer, or semi trailer designed for travel on public roads, including any attached, machinery, or equipment
b. Any other land vehicle that is subject to a COMPULSORY/FINANCIAL RESPONSIBILITY LAW or motor vehicle insurance law where it is licensed or principally garaged.

DOES NOT INCLUDE MONILE EQUIPMENT

Question 26

“Mobile Equipment”

Answer 26

Land vehicle’s, including any attached, machinery/equipment:
a. Bulldozers, farm machinery, forklifts, and other vehicles designed for use principally off public roads.
b. Maintained for use solely on or next to premises you own or rent
c. Travels on crawler treads
d. Maintained primarily to provide mobility to permanently mounted equipment as defined.
e. Not self-propelled, and or maintain primarily to provide mobility to permanently attached equipment of the types to find above.
f. Maintain primarily for purposes, other than the transportation of persons are cargo

Question 27

“Your Product”

Answer 27

a. Means
1. Any goods/products (other than real property) manufactured, and sold, handled, distributed, or disposed of by
a. You
b. Others trading under your name
c. person/organization, whose
business/assets you acquired

2. Containers (other than vehicles), materials/parts/equipment, furnished in connection with such goods/products

b. Includes:
1. Warrant/representations with respect fitness/quality/durability/performance.
2. Providing/failure to provide warnings/instructions.

c. Does not include vending machines or other property rented for use of others.

Question 28

“Impaired Property”

Answer 28

Means tangible property that cannot be used or is less useful because:

a. Incorporates NI’s product/work that is known or thought to be defective.

b. NI failed to fulfill the terms of a contract/agreement

A QUALIFYING REQUIREMENT of impaired prop is that it can be restored to use.

Question 29

Subrogation definition

Answer 29

After payment of a loss, the terms of the policy will assign to insurer the insured’s right to recover the amount loss from the one legally liable for it.

Question 30

What is a waiver of subrogation

Answer 30

 An agreement between two parties, in which one party agrees to waive subrogation rights against another in the event of a loss.

Generally, insurance policies, do not bar coverage if an insured waves subrogation against the third party before a loss.

Question 31

Noncontributory insurance

Answer 31

Insurance issued on the basis that it will NOT seek CONTRIBUTION from other insurance policies that apply to a covered loss on the same basis
(e.g. primary).

Requests for ADDITIONAL INSURED status, sometimes specify that it be PROVIDED on a NONCONTRIBUTING or NONCONTRIBUTORY basis.

The Additional Insured in such cases is seeking assurance that its own policy will not be asked to contribute to a covered loss.