Chapter 8

Question 1

List 5 distinct sections of the CGL policy

Answer 1

1. Coverages
2. Who is insured
3. Limits of insurance
4. Conditions
5. Definitions

Question 2

There are 4 distinct insuring agreements under section 1 coverages to handle typical liability exposures for businesses list them

Answer 2

A. Bodily injury and property damage liability
B personal and advertising injury liability
C medical payments
D tenants legal liability

Question 3

Compensatory damages

Answer 3

A sum of money to which a plaintiff is entitled that makes amends for an actual loss sustained and nothing more

Question 4

Define Bodily injury

Answer 4

A term used in auto and liability policies meaning physical injury, including sickness, disease, mental injury, shock, or death

Question 5

Define property damage

Answer 5

Injury to real or personal property through another’s negligence, willful destruction or by some acts of nature

Question 6

Occurrence

Answer 6

A happening or event. Liability policies are usually written on either an accident or a current basis. For coverage on an accident basis, the loss are damaged must be due to accident, wears on an occurrence basis, all that is required is the happening or the continual or repeated exposure to an unfavorable situation, neither intended or expected to cause injury or damage. In reassurance and insurance, it is the groove thing of related losses into a single loss situation

Question 7

Define occurrence policy

Answer 7

A liability policy that responds to claims for losses that took place during the policy period regardless of when claims are made. As a result, claims can be filed years after the time the policy was in effect

Question 8

Define claims made policy

Answer 8

Refers to an insurance policy that provides coverage when a claim is made against the policy, regardless of when the claim even took place. A claims made policy is the most likely to be purchased when there is a delay between when claims occur and when they are filed

Question 9

Coverage A - bodily injury and property damage liability

Answer 9

Under the bodily injury and property damage liability insurance agreement, the insurer agrees to pay those sums that are insured becomes legally obligated to pay as compensatory damages because of bodily injury or property damage to a third party. The insurer has a duty to defend the insured only if a claim falls within the terms of coverage. When the policy does not provide coverage for an occurrence, the ensure has no duty to defend. The bodily injury or property damage must occur during the policy period, must be caused by an occurrence, and must take place in the coverage territory.

Question 10

What does the phrase legally obligated to pay signify?

Answer 10

The phrase legally obligated to pay signifies there must be a legal obligation for the insured to pay a claim before coverage is triggered. Coverage is primarily intended for tort liability, but coverage can extend to some contractual and statutory liability.

Question 11

What is an example of a lapsed policy

Answer 11

I’ve been decides to retire his business. He has a claims made liability policy and he is planning to let it lapse. His broker explains that the claims made policy needs to be in effect if a claim is actually made against the policy. If a claim is made after I’ve been retires and he is no longer has a policy and effect, he will be without coverage. His broker helps him workout a plan to ensure that he has coverage against liability claims that might arise from his business after he retires.

Question 12

What countries are included under coverage territory?

Answer 12

Canada and United States and it’s territories or possessions, and international waters or airspace if the injury or damage occurs in the course of travel or transportation between these two countries.

Insurers require the actions be brought or merited in North America because Underwriters are presumably more familiar with their own legal environment and feel more confident that they can reasonably predict the outcome of such cases. Although such settlements are likely to be higher than in most other areas of the world, it is presumed that the environment is relatively more stable than elsewhere.

Question 13

Define contractual liability

Answer 13

Liability assumed through a contract either written or implied. The legal liability policies are based upon liability in tort or negligence and provide limited coverage for contractual liability. However contract reliability may be covered in many instances as an additional risk with an additional premium

Question 14

List exclusions for bodily injury and property damage specific to coverage A

Answer 14

A) the expected or intended injury exclusion prevents the insured from recovering for outcomes that are expected or intended from the standpoint of the insured. When willful or reckless actions on the part of the insured cause harm to another party, the actions will be deemed as international on the part of the insured

B) contract reliability is excluded under the GCL except for compensatory damages arising from liability the insured would have had whether there was a contractor not, as well as for compensatory damages arising from liability in an insured contract

C) obligations of the insured under workers compensation legislation, disability benefits, or unemployment or employment compensation laws or any similar laws are not covered

D) employers liability arising from bodily injury to an employee during the course of employment is not covered. Nor does the policy cover any obligation of the insurance to share compensatory damages or repay someone else who must pay them because of such an injury

E) aircraft and watercraft are excluded whether they are owned maintained used or entrusted to others. this exclusion extends to any aircraft landing area and all incidental operations.

F) the ownership, maintenance, use, or entrustment to others of any automobile, and loading or unloading of any automobile owned or operated by or on behalf of the insured is excluded

G) property that is owned, rented, or occupied by the insured, including any cost for repairs, replacement, enhancement, risks restoration, or maintenance, are not covered. This excludes any expenses incurred by an insured to prevent or correct a dangerous condition caused by for example, debris removal or pollution releases

Property damage to premises that are sold, given away, or banded by the insured is excluded

Property that is loaned to the insured is excluded

Personal property that is the insureds care, custody, or control is excluded

The particular part of any real property on which the insured or any contractor or subcontractor is working is excluded whether the insured or the contractor on the insurance behalf is working on the property

The particular part of any property that must be restored, repaired, replaced because of the insurance work was incorrectly performed on it is excluded

H) property damage to the insurance product arising out of it or any part of it is excluded

I) property damage the insurance work it included within the completed operations hazard is not covered

J) property damage to impaired property or property that has not been physically injured or rising out of a defect or deficiency in the product or work or delay or failure to perform a contract or agreement in accordance with its terms is not covered

K) product recall is the cost of recalling the insurance product or work or any product or work of which the insurance product or work performs apart and it is not covered

L) compensatory damages arising out of the loss of loss of use of damage to corruption of inability to access or inability to manipulate electronic data is excluded

M) bodily injury arising out of personal and advertising injury is not covered

N) liability rising on a professional services is excluded except for incidental medical malpractice injury

O) claims arising from abuse committed or alleged to have been committed by it an insured is excluded including the transmission of disease

Question 15

Define product recall insurance

Answer 15

Insurance that indemnifies the insured for the cost of recalling products known or suspected to be defective

Question 16

Define trade dress

Answer 16

The total image and overall appearance of a company or product that may include features such as size, shape, color or color combinations, texture, graphics, or even particular sale techniques

Question 17

Define coverage B - personal and advertising injury liability

Answer 17

The personal and advertising injury ensuring agreement covers the following circumstances:
A) false arrest, detention, or imprisonment
B) malicious prosecution
C) wrongful eviction from, wrongful entry into, or invasion of the right of private occupancy of a room, dwelling, or premises that a person occupies committed by or on behalf of its owner, landlord, or lessor
D) oral or written publication, in any manner, of material that slanders oral or liables written a person or organization or disparishes a person’s or organizations goods, products, or services
E) oral or written publication, in any manner, of material that violates a person’s right of privacy
F) use of another’s advertising idea in the insureds advertisement
G) infringing upon another’s copyright, trade dress, or slogan in the insurance advertisement

Question 18

Under coverage B- list personal and advertising injury exclusions

Answer 18

A) knowing violation of rights of another, the insured must be aware that the action violated a third party’s rights and that the action would inflict injury in order to be excluded
B) material published with knowledge of its validity if done by or at the direction of the insured
C) material published prior to the policy period
D criminal acts committed by or at the direction of the insured
E) contractual liability as assumed in a contract or agreement, except the liability of compensatory damages that the insured would have had in any case
F) breach of contract accept an implied contract to use another advertising idea
G) quality or performance of goods when the insurance work fails to conform to its advertising statements, the insurance work is excluded, not the resulting damage.
H) wrong description of price used in the insurance advertisement
I) infringement of copyright, patent, trademark or trade secret, or other intellectual property rights
J) Insurance in media and web related business except for false arrests, malicious protection, and wrongful eviction
K) electronic chat rooms or bulletin boards, which the insured hosts, owns, or exercises control over the type of operation that creates a high exposure for personal injury losses
L) unauthorized use of another’s name or product in the insurance email or other media to mislead another’s personal customer

Question 19

Define medical payments insurance

Answer 19

A special clause in an insurance policy that covers medical payments of others, irrespective of the insurance legal liability

Question 20

Define coverage C - medical payments

Answer 20

Medical payments insurance covers reasonable medical expenses incurred by a third party regardless of fault. There is no need to prove negligence or establish any other legal obligation on the part of the insured. The bodily injury must occur accidentally on premises the insured owns or rents on the way next to the premises, or as a result of the insurance operations. The accident must take place within the coverage territory and during the policy period. The expenses must be incurred and reported to the insured within one year of the date of the accident. The insured party must submit to any reasonable medical examinations by a doctor chosen by the insurer.

Question 21

What are reasonable expenses payable under coverage c- medical payments?

Answer 21

Reasonable expenses are payable for immediate first aid, necessary medical, surgical, x-ray, and dental services, including prosthetic devices, and necessary ambulance, hospital, professional nursing, or funeral services

Question 22

Medical payments exclusions

Answer 22

A) any insured under the policy except volunteers
B) any person hired to do work for or on behalf of any insured or a tenant of any insured, such as a person brought on the premises to do casual labor. Whether or not the insured or tenant of the insured invites such persons, there’s no coverage available under the section
C) any person injured on the premises normally occupied by the injured party. The tenant of an apartment complex will not be excluded from the coverage if the injury takes place outside of the occupied apartment.
D) anyone who is entitled, at the time of injury, to compensation from a provincial workers compensation plan
E) persons taking part in athletics, including practicing, instructing, or participating
F) products- completed operations hazard
G) exclusions undercoverage A

Question 23

Define coverage d - tenants legal liability

Answer 23

Tenants have a significant liability exposure regarding property they rent. Property owned, rented, or occupied by the insured is excluded under the property damage section of coverage A. If the insurance runs a retail store from rented premises in a shopping mall, tenants legal liability coverage protects the insured against liability incurred for damages from all perils to the rented premises. Damage that occurs beyond the space rented falls under coverage a bodily injury and property damage. Damage to the insurance office contents will be covered under his or her property policy.

Tenants legal liability coverage pays for property rented to or occupied by the insured. The property damage must be caused by an occurrence, takes place in the coverage territory, and occur during the policy period

Question 24

List the tenant legal liability exclusions

Answer 24

Property damage expected or intended from the standpoint of the insured

Contractual liability except that which the insured would have had in the absence of the contract and is assumed in the insured contract

Question 25

Section 2 - who is insured?

Answer 25

The policy automatically extends to cover other persons not named in a particular policy under certain conditions. The policy wording must be examined to ensure that only the entities the underwriter intends to cover are included.

The wording extends to cover the spouse adventured with respect to the conduct of the business when the insured is an individual, A partnership, or joint venture. When the insured is a limited liability company coverage extends to company members, executive officers, directors, and shareholders with respect to their liability pertaining to their business duties.

Volunteer workers or employees are covered while performing duties related to the conduct of the insurance business. But coverage does not extend to injury to co employees, to persons who are entitled to workers compensation, or persons providing or failing to provide professional health Care services

Question 26

Define general aggregate limit

Answer 26

The maximum amount of an insurer will pay for covered losses during a policy period

Question 27

Define each occurrence limit

Answer 27

The maximum the policy will pay in the event of any one claim or occurrence

Question 28

Section 3 - limits of insurance

Answer 28

The declarations page specifies the limits of insurance for the various coverage purchased. The policy describes how the limits of insurance are applied. The amount inserted under each heading is the maximum amount payable regardless of the number of insurance, claims made or actions brought, or persons or organizations making claims or bringing actions.

Question 29

Define deductible

Answer 29

And agreed specified amount that the insured must pay on a claim before the insurance company will cover the rest of the claim. This amount is agreed upon by both the insurer and the insured. An insurance obligation to pay a deductible is not based on whether the insured is at fault

Question 30

Section 5 - conditions

List six conditions under section 5

Answer 30

1. The insurer is obligated to perform duties described under the policy even if the insured or insured the state becomes bankrupt or insolvent
2. All premiums, payments, deductibles, and limits of insurance are expressed in Canadian currency
3. The first named insured is authorized to make changes in the terms of the policy with the insurance consent. Changes can only be made by issuing a policy endorsement.
4. The claims condition outlines the duties of the insured in the event of an occurrence, claim, or lawsuit.
5. The insurer has the right to examine the insurance financial books and records as they relate to the policy. This can be done anytime during the policy period and in the succeeding 3-year period.
6. The insurer has a right to determine the physical characteristics of the risk. And insurer May issue a report based on such an inspection detailing recommendations or coincidentally identifying health and safety risks. Although this condition is designed to allow the insurer to examine the risk, the process serves the best interests of both the insurer and the insured, as risk exposures intend to be identified and that’s attempts to eliminate or to reduce their severity

Question 31

List 9 more conditions under section 4

Answer 31

7. The no action clause outlines the circumstances under which the insurer can be sued for coverage.
8. The other insurance clause also known as contribution clause. It acknowledges this insurance to be primary unless there is in effect property insurance for the insurance work or for the insurance rented premises or watercraft coverage for loss rising out of maintenance or use of the watercraft
9. Premium shown on the declarations as an advanced premium is a deposit premium only.
10. The first named Richard is responsible for payment of all premiums and is the payee for any return premiums owned by the insurer
11. The insured must guarantee the accuracy of statements made to obtain an insurance. This condition is further supported by the common law principles of utmost good faith and materiality
12. Wear more than one insured is named on the policy, the policy will respond as if each named insured has a separate policy. This is known as cross liability clause. This allows one insured to bring action against another
13. Certain procedures must be followed in order to cancel the policy. the insurer has the right to cancel the policy for non-payment of premium within 15 days notice or 30 days notice of any other reason. And quebec, cancellation takes effect 15 days after receipt of the notice at the last known address of the named insured.
14. If the insured has subrogation rights to cover all or part of any payment made by the insurer, those rights are transferred to the insurer
15. And insured cannot transfer its rights or duties to another without the written consent of the insurer. If a named entered dies, rights and duties will be transferred to the legal representative but only while acting as such. Until the legal representative is appointed, anyone having proper temporary custody of the insurance property will have the insurance rights and duties relative to that property

Question 32

Define pollution exclusion

Answer 32

Standard general liability policies include an exclusion for loss arising I would have pollution. For certain exposures, this exclusion may be modified, for example, sudden and accidental pollution arising from fire

Question 33

Wording for common exclusions of the cgl policy

Answer 33

1. Any claim caused by asbestos
2. Fungiers spores are excluded as well as anything related to its spread, reproduction, and clean up cost, and supervision, instructions, and giving advice
3. Excluded our bodily injury and property damage resulting from the hazardous properties of nuclear material arising from the ownership, maintenance, operation, or use by or on behalf of the insured of a nuclear facility, transportation, consumption, disposal, and dispersal radioactive material and furnishing by an insured of services, materials, parts, or equipment in the connection with the planning, construction, maintenance, operation, or use of any nuclear facility
4. Part 1 Pollution exclusion removes coverage for bodily injury property damage or personal and advertising injury arising out of an actual, alleged, or threatened spill, discharge, emission, dispersal, seepage, leakage, migration, release, or escape of pollutants

B at or from anyways disposal or treatment site used by any insured
C which were at any time transported, handles, stored, treated, disposed of, processed as waste by the insured or anyone for whom the insurance is legally responsible
D add or from any premises from a site, or location on which any insured or their contractors or subcontractors are performing operations if the pollutants are brought on or to the premises, site, or location by such insured, contractor, or subcontractor
E well the insured, it’s contractor commerce subcontractor engage in pollution cleanup

Part 2 - of the pollution exclusion is concerned with legislation and government authority comp. Any loss, cost, or expense arising out of any
A request, demand, order, or statutory irregulatory requirements that are insured or others test for, monitor, cleanup, remove, contain, treat, detoxify, neutralized, or in any other respond to or assess the effects of pollutants are not covered
B claim or suit by or on behalf of a governmental authority for damages because of testing for, monitoring, cleanup, moving, containing, treating, detoxifying, neutralizing, or in any way responding to or assessing the effects of pollutants are not covered

5 the property damage, bodily injury, and personal and advertising injury arising directly or indirectly out of terrorism

6 bodily injury are property damage due to war common invasion, act of foreign enemy, hostilities, civil war, rebellion, Revolution or military power is excluded

Question 34

Define terrorism

Answer 34

An ideologically motivated unlawful act or acts, including but not limited to the use of violence or force or the threat of violence or force, committed by or on behalf of any groups, organizations, or governments for the purpose of influencing any government and or instilling fear in the public or a section of the public.

Question 35

Define supplementary payments

Answer 35

Various expenses the insurer agrees to pay under a liability insurance policy in addition to the liability limits. Supplementary payments are normally defined to include such items as first aid expenses, premiums for appeal and bail bonds, pre and post judgment interest, and reasonable travel expenses incurred by the insured at the insurers request when assisting in the defense of a claim

Question 36

List five supplementary payments under coverage a coverage B and coverage d

Answer 36

A) expenses incurred by the insurer
B) cost of a bond to release seized property for bond amounts within the limit of insurance the insurance is not required to issue the bond.
C) reasonable expenses incurred by the insured at the insurers request, including loss of earnings up to $250 per day
D) all costs assessed against the insured.
E) interest occurring after entry of judgment will be paid by the insurer. Only that part of the judgment that falls within the limit of insurance will be considered