Chapter 8 - Standard CGL Policy Flashcards
In what two years were the large overhauls of CGL wordings?
1986 and 2005
In what two years were large CGL revisions made?
1992 and 1998
What are the five sections of CGL wordings?
Coverages Who is an Insured Limits of Insurance Conditions Definitions
What is used to define specific terms within a CGL?
Quotation marks
What are the four distinct agreements under Section I - Coverages?
A) Bodily Injury & Property Damage Liability
B) Personal & Advertising Injury Liability
C) Medical Payments
D) Tenants’ Legal Liability
What is covered under Section I-A?
Bodily Injury & Property Damage Liability
The sums that the insured becomes legally obligated to pay as compensatory damages because of bodily injury or property damage to a third party.
What are the three conditions of a claim under Section I-A?
- Must occur during the policy period
- Must be caused by an occurence
- Must take place in the coverage territory
What is meant by legally obligated to pay?
- Must meet the agreement of the contract
- Primarily intended for tort liability
- May extend to contractual or statutory liability
- Just because an insured is sued, insurer is not obligated
What are compensatory damages?
Compensate the third party for injuries sustained
What are the three things the policy will not extend to?
- Any penalty sum
- The cost of complying with a mandatory injunction
- The cost to prevent future losses
Define bodily injury
Bodily injury, sickness or disease sustained by a person including death resulting from any of these at any time.
Define property damage
Physical injury to tangible property including all resulting loss of use of that property.
Define occurrence
An accident including any continuous event or exposure to substantially the same general harmful conditions.
Why was the term accident restrictive?
It suggested that an incident must be sudden or definite.
What is a claims-made policy?
It triggers when the third party first makes the claim.
The timing of the event that caused the damage does not wholly determine coverage.
Define coverage territory
Includes Canada, the United States, its territories or possessions, international waters, or airspace if the injury or damage occurs in the course of travel or transportation between these two countries
Coverage anywhere in the world for the travelling sales person who is away for a short time on business.
Goods or products made or sold by the insured in Canada, United States, its territories or possessions are also covered anywhere in the world.
Why is it a requirement that action be brought in North America?
They are more familiar with their own legal environment and feel more confident they can reasonably predict the outcome of cases.
What is the limitation time of occurrence coverage?
One policy term
What was the relevance of Alie et al v. Bertrand et al?
Coverage was triggered on successive policies even though damages stemmed from one occurrence. Limits under successive CGL policies were tapped to pay for the same occurrence.
List the exclusions
- Expected or intended injury
- Contractual liability
EXCEPT for compensatory damages arising from liability the insured would have had whether there was a contract or not - Workers Compensation Legislation obligations
- Employers liability arising from bodily injury to an employee during course of employment
EXCEPT for employees who were denied coverage or benefits through workers comp even though contributions were required - Aircraft and watercraft
EXCEPT watercraft on shore at premises, non owned watercrafts less than 8m long and not being used to carry for a fee, contingent employers liability when workers comp payments are made but coverage denied) - Automobiles
EXCEPT bodily injury to employee and contributions are made under workers comp, BI or PD arising out of a defective condition owned by the insured while leased to others for a period of 30+ days provided lessee is obligated to insure it, ownership use or operation of machinery, apparatus or equipment mounted on or attached to any vehicle while at the site of the use or operation of such equipment UNLESS it is being used for unloading - Owned, rented or occupied by the insured
- Property damage to premises that are sold, given away or abandoned
- Property that is loaned to the insured
- Personal property in the insured’s care, custody or control
- The particular part of real property in which the insured or any contractor or subcontractor is working OR must be restored, repaired or replaced because the insured’s work was incorrectly performed
- Property damage to the insured’s product
- Property damage to the insured’s work
EXCEPT if the damaged work or the work out of which the damage arises was performed by the insured’s subcontractor - Property damage to impaired property or property that has not been physically injured, arising out of a defect or deficiency in the product or work OR a delay or failure to perform a contract or agreement in accordance with its terms
- Product recall
- Electronic data (as not tangible)
- Personal and advertising injury
- Professional services
EXCEPT for incidental medical malpractice injury. See the CGL definitions section for more details on professional services - Abuse
Which endorsement might be used if a cherry picker were to be insured?
Standard Endorsement Form No. 30 Excluding Attached Machinery
What was the damage to property exclusion formerly known as?
Care custody or control exclusion
The term “alienated premises” has been updated to what?
Premises that are sold, given away or abandoned
Is product recall covered?
No - unless they purchase product recall insurance
What are the seven insuring agreements under Coverage B: Personal and Advertising Injury Liability?
1) False arrest, detention or imprisonment
2) Malicious Prosecution
3) 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
4) Oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services
5) Oral or written publication, in any matter of material that violates a person’s right of privacy
6) Use of another’s advertising idea in the insured’s “advertisement”
7) Infringing upon another’s copyright, trade dress or slogan in the insured’s “advertisement”
What are the exclusions under Personal and Advertising Injury?
a) Knowing violation of rights of another
b) Material published with knowledge of its falsity
c) Material published prior to the policy period
d) Criminal acts
e) Contractual liability
f) Breach of contract
g) Quality or performance of goods
h) Wrong description of price
i) Infringement of copyright, patent, trademark or trade secret, or other intellectual property rights
EXCEPT infringement in the insure’d advertisement of copyright, trade dress of slogan
j) Insureds in media and internet type businesses
EXCEPT for false arrest, malicious prosecution and wrongful eviction
k) Electronic chatrooms or bulletin boards which the insured hosts, owns or has control over
l) Unauthorized use of another’s name or product
Define trade dress
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 sales techniques
What are the three locations in which bodily injury must occur in order for Medical Payments coverage to respond?
- On premises the insured owns or rents
- On a way next to such premises
- As a result of the insured’s operations
Within which timeline must expenses be reported to the insurer?
Within one year
What types of medical expenses are covered?
Immediate first aid, necessary medical, surgical, x-ray & dental services: including prosthetic devices and necessary ambulance, hospital, professional nursing or funeral services
What are the medical payments exclusions?
a) Any insured under the policy except volunteers
b) A person hired to do work for or on behalf of any insured or a tenant of any insured
c) Any person injured on premises normally occupied by the injured party
EXCEPT the tenant of an apartment if the injury takes places outside the occupied apartment
d) Anyone who is entitled at the time of the injury to compensation from a provincial workers compensation plan
e) Persons taking part in athletics which includes practicing, instructing or participating
f) Products-completed operations hazard
g) Exclusions under Coverage A
What is covered under tenants legal liability?
Protects the insured against liability from all perils (unless excluded) to the rented (real property) premises.
Often a retail owner renting a store in a shopping mall.
What did prior versions of a tenants legal liability policy cover?
Fire, explosion, smoke or leakage from fire protective equipment
What is excluded under a tenants legal liability policy?
a) Property damage expected or intended from the standpoint of the insured
b) Contractual liability
EXCEPT which the insured would have had in the absence of a contract or is assumed in an insured contract
What are the six common exclusions of all CGL policies?
- Asbestos
- Fungi or spore
- Nuclear energy liability
- Pollution
- Terrorism
- War risks
Where may insurance for nuclear risks be obtained?
NIAC (Nuclear Insurance Association of Canada)
What is NIAC?
Nuclear Insurance Association of Canada
What are the exceptions to the pollution exclusion?
a) BI-PD resulting from smoke, fumes, vapour or soot from the building’s heating, cooling or dehumidifying equipment
b) From premises of an additional insured named in a contractors liability policy
c) Claims arising out of heat, smoke or fumes from a hostile fire
d) BIPD due to accidental escape of operational fluids that form part of a storage component to hold fluids
e) BIPD caused by release of gases, fumes or vapours from materials brought into a building in connection with the insured’s operation
f) Smokes and fumes from a hostile fire at premises from a hostile fire where an insured performs operations
What is part two of the pollution exclusion?
Relates to legislation and government authority
Which coverage can a supplementary payment be applied to?
- A: Bodily Injury & Property Damage
- B: Personal & Advertising Injury
- D: Tenants Legal Liability
What five types of payments does an insurer agree to pay under supplementary payments?
- Expenses incurred by the insurer
- Cost of a bond to release seized property
- Reasonable expenses of the insured
- All costs assessed against the insured
- Interest after judgment
How much is covered under the loss of earnings supplementary payment?
Up to $250 per day
What is the limit of defence costs for qualified indemnitees?
Certain policies include it within the policy limits, in Quebec; it is in addition beyond the policy limits.
What is the restriction of the spouse in section II?
Spouse is confirmed with respect to conduct of the business if insured is an individual, partnership or joint venture
Who does coverage extend to when the insured is a limited liability company?
Company members, executive officers, directors and shareholders with respect to their liability pertaining to their business duties
Volunteer workers or employees are covered, but who does it not extend to?
Injury to co-employees, persons entitled to workers compensation or to persons providing or failing to provide professional health care services
