Chapter 7 - Commercial Package Flashcards
Commercial Package Policy common policy declarations
Describes the covered property, designates primary and optional coverages, and indicates limits, perils, mortgagee, and deductible information.
What is the commercial package policy?
Most common way of insuring commercial properties and liabilities.
Is comprised of any combination of stand-alone policies and covers both property and liability.
What are some common policy conditions for Commercial Package Policy?
- Cancellation/ non-renewal - 10 days new business/ 10 days non-payment / 60 days non-renewal
- Changes in coverage - all changes in coverage must be done by endorsement
- Audits & Inspections - gives the insurer the right to gather information necessary to underwrite the policy
- Premium - the first named insured is responsible for the payment of the premium
- Assignment - Insurance is not transferable
What are the coverages of Commercial General Liability (CGL)?
A - Bodily Injury and Property Damage
B - Personal and Advertising Injury
C - Medical Payments
What are the liability exposures for Commercial General Liability (CGL)?
Premises & Operations
Products & Completed Operations
What is Coverage A of Commercial General Liability?
Bodily Injury & Property Damage (BI & PD)
Bodily damage is bodily injury, sickness, disease, or death
Property Damage is physical damage to tangible property, including loss of use
What is Coverage B of the Commercial General Liability policy?
Personal & Advertising Injury
Personal injury can be libel, slander, false arrest, detention, malicious prosecution, wrongful eviction, wrongful entry, and publication violating privacy
Advertising injury can arise from oral or written publication caused by libel, slander, publicist ion violating privacy, misappropriation of ideas, and copyright or trademark infringement
What is Coverage C of Commercial General Liability (CGL)?
Medical Payments
First aid
Must incur and be reported within 1 year by individuals injured in the premises of insured or as a result of the insured’s operations.
Limit is $5,000
Is paid without regard to fault or negligence.
What are supplemental payments for Commercial General Liability (CGL)?
Primary used to defend a liability claim
All expenses that the insurer occurs
All cost taxed against the insured
Loss of earnings up to $100 per day for court appearances
Cost of court bonds
$250 bail bonds for traffic violations involving BI
Pre-judgment interest on court bonds
Post-judgment interest on court bonds
Who are the names insured on Commercial General Liability?
- Sole Ownership - Insured and spouse
- Partnership - Insured, all members, partners and spouses
- Corporation - Insured, officers, directors, stockholders
Who are the other insured’s on Commercial General Liability (CGL) policies?
- Employees
- Real estate manager
- Temporary custodian due to death of insured
- Any person driving mobile equipment
If an employee injures another employee, they both are not insured
What are the 6 separate limits of liability on Commercial General Liability (CGL)?
- Occurrence - max payable for all claims for one occurrence for premises and operations or products and completed operations
- General aggregate - max payable for policy period for all claims from occurrences under premises and operations
- Products and completed operations aggregate - max payable for policy period for products and competed operations
- Personal and advertising injury - max payable under Coverage B for one occurrence
- Fire damage legal liability
- Medical expense limit - max payable under Coverage C for any one person
Duties of insured
Promptly report occurrence, cooperate in the investigation, forward any paperwork about claim to the insurer
Subrogation
Transfer rights of recovery
Premium audit
Allows insurer to investigate conditions on premises to ensure they are getting the correct rate for the risk.
Can adjust premium at any time of conditions warrant
Mobile Equipment
Vehicles used primary off road, on crawler treads, or for providing mobility to equipment
Bulldozers, power cranes, etc
What are the exclusions for Coverage A (BI & PD) and Coverage C (Med Pay) for Commercial General Liability?
- Expected or intentional injury
- Contractual liability (exception for insured contracts)
- Alcoholic beverage business (a one time happening is ok)
- Worker compensation claims
- Employee injury
- Pollution
- Aircraft, watercraft, auto
- Transportation of mobile equipment
- War
- Nuclear or radioactive
- Property of Insured
- Insured’s product or work
- Impaired products (food poisoning is excluded, however getting sick from eating is covered)
- Recalled products
What are the exceptions to CGL Coverage B (personal or advertising injury)?
- Knowingly publishing false material
- Claim occurring prior to policy effective date
- Liability assumed under contract
- Willful violation
What are the exclusions to CGL Coverage B for advertising injuries only?
- Failure of goods, products or services to meet advertised quality
- Wrongful description of price
What are the exclusions to CGL Coverage C (med pay only)
Any insured, employees or tenants
Contractor hired by insured
“Claims made” policy forms vs “occurrence”
An occurrence form will respond to injuries or damages incurred during the policy period and is not dependent of when a claim is made
A “claims made” form will only respond to bodily injures or property damages if a claim is initially made at some time during the policy period or coverage/extended reporting period.
What is a retroactive date?
The first date a loss can occur and still be covers
Extended reporting period
Extends the time you have to report a claim
Pollution Liability Coverage Form
Also know as Standard Pollution Policy
Is the only way to cover the cost of cleanup
What are the 7 Coverage Forms for a Commercial Property policy?
- Building & Personal
- Business Income
- Extra Expense
- Builder’s Risk
- Legal Liability
- Condo Association
- Condo Commercial Unit - Owners
What is the deductible for Commercial Property Policy?
$250
What are the two components of Commercial Property Policy?
Coverage form
Cause of loss form
What does the coverage form do on a Commercial Property Policy?
Describes the object being insured