CGL Concepts & Coverage Flashcards
What are Endorsements?
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.
What are the five sections of the CGL coverage form?
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
What are the liability exposures covered under a CGL policy?
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
What is…?
Coverage A - BI/PD
PREMISES Liability
Applies to OWNERS, LANDLORDS, TENANTS
Arises of of OWNERSHIP, MAINTENANCE, USE of named insured’s premises
What is…?
Coverage A - BI/PD
Business OPERATIONS liability
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.
What is…?
Coverage A- BI/PD
PRODUCTS liability
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.
What is…?
Coverage A - BI/PD
COMPLETED OPERATIONS liability
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.
What is…?
Coverage A - BI/PD
CONTRACTUAL liability
Arises from one party, ASSUMING RESPONSIBILITY of another party
Examples: lease, agreements, construction contracts, etc.
What is…?
Coverage A - BI/PD
CONTINGENT liability
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
What is…?
Coverage B - Personal & Advert Injury
PERSONAL INJURY liability
Liability arising from INTENTIONAL TORTS, such as libel/slander/wrongful eviction….defamation
What is…?
Coverage B - Personal & Advert Injruy
ADVERTISING liability
Liability caused by harm from such things as MISAPPROPRIATION of ADVERTISING IDEAS, STYLE  of doing business, or INFRINGEMENT of COPYRIGHT
Who qualifies as an insured?
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
Automatic insureds definition
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
Define “ executive officer” with respect to being an insured
A person holding any of the officer positions, created by your charter, constitution, bylaws, or any other similar governing document.
Who are the OTHERS described as also automatic insureds under Section II - Who is an Insured?
- 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!!!!!
Define “ employee”
Employee INCLUDES, a LEASED worker.
Employee does NOT include a TEMPORARY worker
Who is an insured?
3 paragraphs:
1- The Named Insured “you”
2- Others
3- Newly Acquired/Formed
4- Who’s NOT an insured q
Coverage A - BI/PD
Insuring agreement 2 promises
Pay/indemnify
Defense
“Bodily Injury”
Bodily injury, sickness or disease, sustained by a person, including death, resulting from any of these at any time.
“ Property Damage”
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
Coverage A - BI/PD
“Suit”
Civil proceeding
Includes all ARBITRATION,  proceedings for ALTERNATIVE DISPUTE, RESOLUTIONS
“Occurrence”
Accident, including continuous, or repeated exposure
What is contractual Liability?
Arises from one party assuming responsibility of another party.
Eg.
Tenant – Landlord
Subcontractor – General Contractor
Lessee – Lessor
“Insured Contract”
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
“Auto”
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
“Mobile Equipment”
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
“Your Product”
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
- 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.
“Impaired Property”
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.
Subrogation definition
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.
What is a waiver of subrogation
 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.
Noncontributory insurance
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.
