Exam 2: General Liability (CGL) Part B Flashcards
CGL Policy
- Most commonly used to cover business liability exposures
- Usually written on an occurrence basis
3 Parts CGL Policy
A) Bodily Injury and Property Damage
B) Personal and Advertising Injury
C) Medical Payments
CGL Coverage A
- Insuring Agreement
- Insurer pays damages on behalf of insured
- Insurer defends insured under claims or lawsuits seeking damages covered under policy
Insurer’s Duty To Pay Damages Conditions
1) Legally obligated to pay damages
2) Bodily Injury (BI)/Property Damages
3) Injury or Damage to which condition applies
4) Caused by Occurrence
5) Coverage Territory
6) Occurs During Policy Period
Legally obligated to pay damages
- Settled by court through insurance company investigation
- Can’t dictate to insurance company who to pay claims to -why?
- Insurer will usually attempt out of court settlement
Bodily Injury (BI)/Property Damages
- BI is injury, sickness, disease, sustained by a person - includes death
- Damages for care, loss of services (consortium), pain and suffering, and death benefits
- PD - physical injury to tangible property
- Loss of use of tangible property
Injury or Damage to which condition applies
Insurer does not pay if it is excluded or not covered for a specific reason
Caused By Occurrence
- Accident - includes conditions or repeated exposure to the same general harmful condition
- Unintended results of intentional acts are usually considered accidents
Coverage Territory
- Must occur in the area defined in the policy
- Usually U.S., Puerto Rico and Canada
When will Coverage Territory include the world?
- Goods or products made by named insured in a covered territory
- Activities of a person whose home is in a covered territory but is away for a short time pursuing named insured’s business interests
Occurs During Policy Period
- Occurrence Coverage Trigger
- Policy that applies to claim is one in effect the time claim occurs; not when actually filed
- Others triggers exist- claims made, continuous injury, etc
Insurer’s Duty To Defend
- In the event of lawsuit - insurer defends in court
- As long as it is reasonable that coverage might apply to claim
- Or could conceivably be covered
- Does not matter if claim ends up groundless, fraudulent, etc
Coverage A Exclusions
1) Expected or Intended Injury
- intentional harm
- does not apply to reasonable force to defend property
- excessive force won’t be covered
2) Contractual Liability
- If it wouldn’t exist without contract (hold harmless agreement)
- Is covered if it is something that could be imposed by tort law
3) Liquor Liabilities
- Those specifically in the alcohol business
- Does not apply to the casual or occasional distribution of alcohol
4) WC and ER Liability
- On the job injuries excluded
- Includes regular and leased workers
- Seasonal Workers are not excluded
5) Pollution
- Except for injury from smoke, fumes and vapor from heating equipment or hostile fire
6) Aircraft, Auto, Watercraft; liability from operating, loading, unloading
7) War: Rare but insured could have some business that could result in some war related liabilities (War Crimes)
8) Damage to Specific Property
- Owned, rented, or occupied by the name insured
- Property loaned to the named insured
- Personal property in the care or custody of the named insured
9) Personal or Advertising Injury; can be purchased in Coverage B
Coverage B Exclusions: Personal Advertising Injury
- False arrest, detention, imprisonment
- Malicious Prosecution
- Wrongful eviction, wrongful entry into, violation of privacy by landlord or owner
- Oral or written publication that slanders, libels, or disparages a person or organizations good products or services
- Or or written publication that violates a person’s right to privacy
Coverage B Exclusions: Personal and Advertising Injury
1) Mistakenly using of another’s advertising idea in your advertisement; infringing upon another’s
2) Breach of contract: abundant supply/guaranteed in stock, failure of product to live up to its statement of quality
- Purposefully stealing another’s slogan
- Knowingly making a false statement
- Result of a criminal act
- Wrong description of price
- Electronic chatroom or bulletin board that the insured hosts, owns, or controls
- Email or domain name purposefully designed to confuse you with a competitor and competitor sues