Chapter 2

Question 1

The coverage A Insuring Agreement insures against Bodily Injury or Property Damage for which the insured is legally liable.
- outline 3 component parts of Bodily Injury
- what are 2 types of intangible property that would not be covered by this section?

Answer 1

Physical injury to the body, sickness and disease and death as a result from injuries, sickness or disease

Patents, copyrights and licenses

Question 2

Is it covered?
Losses arising from an automobile owned by the business.

Answer 2

Not covered

Question 3

Is it covered?
Loss arising from tow truck used by the business to tow customers automobile to a service station.

Answer 3

Driving risk automobile exposure.
Using equipment in functional capacity is an CGL exposure.

Question 4

Is it covered?
Loss arising from an unlicensed van used exclusively on the insured’s premises.

Answer 4

Covered

Question 5

Is it covered?
Loss resulting from snowmobiles.

Answer 5

Not covered

Question 6

Is it covered?
Damage to customers vehicle when the insureds forklifts collides with in the parking lot.

Answer 6

Covered

Question 7

Is it covered?
Loss by a front end loader owned by the insured when being operated at a work site.

Answer 7

Covered
Make sure full disclosure all activities to underwriter

Question 8

Is it covered?
Loss to 3rd party utility lines below ground when drill rig attached to the insureds truck strikes it during drilling operations.

Answer 8

Covered

Question 9

Is it covered?
The insured company is a general contractor. They have hired subtrades to complete the electrical, HVAC and plumbing systems in a new build. Due to faulty electrical work done by the subtrades, a fire ensues and damages 75% of the new build. The general contractor is now being sued for damages.

Answer 9

Covered

Question 10

Is it covered?
The insured manufacturers water bottles. An action is brought forward against them that their bottles have lead to long term health concerns. Which of the following are covered? Defense costs, damages to 3rd parties, advertising costs for safety concerns,

Answer 10

Defense costs
Damages to 3rd parties

Question 11

Is it covered?
Our insured is a welder, and while at the job site, they were installing support brackets. During installation, the welder started a fire. Which is covered?
Damage to customers building, contents destroyed by fire retardant sprayed by firefighters and sprinkler systems, damage to support brackets

Answer 11

Damage to building, contents destroyed by fire protection

Question 12

Product liability claims may be insured when they occur outside the coverage territory. In order for coverage to pay, what 2 conditions must be met?

Answer 12

Product must be manufactured and sold within the coverage territory. The suit for damages must be brought within the coverage territory

Question 13

The insurer has the right to defend any civil suit brought against the insured. Why do insurers have the right to defend?

Answer 13

If the suit would be payable by the policy should a judgment be rendered, insurer must ensure all facts are presented to the court
Proper defense is set up
Proper judgment is rendered

Question 14

Section A of CGL will provide contractual liability coverage for 5 specific circumstances. What are these insurable contractual liabilities?

Answer 14

Lease agreements for property
Easement agreements
Sidetrack agreements
Elevator maintenance
Municipal ordinance

Question 15

Identify 3 expenses not insured by a CGL which a business may incur when they become aware of deficiencies in their product.

Answer 15

Recall costs, withdrawing product
Inspections
Advertising costs
Repair costs

Question 16

With respect to defamation, identify two torts included as part of defamation and how they differ.

Answer 16

Libel is written and Slander is spoken

Question 17

With respect to rented premises, how may tenants be found responsible for damage to rented premises? Which is covered by a CGL?

Answer 17

Tort liability- where the tenant’s negligence causes damage is covered

Contractual liability- where tenant assumes additional responsibility under contract is excluded

Question 18

Policy exclusions

Answer 18

Asbestos
Fungi or spores
Nuclear or radioactive
Pollution
Terrorism
War risks

Question 19

General liability conditions
Canadian currency clause

Answer 19

Premiums and claims are paid in Canadian funds.

Question 20

Claims condition

Answer 20

Insured to give prompt notice of anything that may give rise to a claim
To give full of circumstances of loss.
If claim is brought against them, prompt written notice.
Not to voluntarily assume responsibility or pay expenses without authorization.

Question 21

Explain the importance of being first named insured on a CGL

Answer 21

Refund check to first name insured

Only first name insured can request cancelation

Notice of termination is only sent to first named insured

Question 22

Describe two key features of the claims made policies

Answer 22

Coverage is triggered by when the loss was reported, not the occurrence date.

The policy in effect when the claim is reported is the policy that will respond.

Retroactive dates ‘- the occurrence must not occur prior to the retroactive date in order to have cover, typically the date first written with the insurer.

Question 23

Under Section 1 of the CGL, what are the 4 sections of coverage?

Answer 23

Coverage A - Bodily Injury & Property Damage
Coverage B - Personal Injury Liability
Coverage C - Medical Payments
Coverage D - Tenants Legal Liability

Question 24

The CGL Coverage A will only cover certain types of losses. What 2 types of losses are insured by this insuring agreement?

Answer 24

Bodily Injury and Property Damage

Question 25

Outline the 3 component parts of Bodily Injury

Answer 25

• physical injury to the body
• sickness and disease
• death resulting from injuries, or disease

Question 26

Under Bodily Injury, provide 3 examples of injuries that are not covered

Answer 26

• mental anguish
• nausea
• hysteria