Rating CGL Coverage

Question 1

CGL Coverage Formula

Answer 1

Rate X Rate Exposure = Premium

Question 2

What does the rate depend on?

Answer 2

The nature of the insured organization and odds suffering liability losses

Question 3

Class Codes

Answer 3

Numerical Code representing the rating that best fits an organization

Question 4

What does the rate exposure reflect?

Answer 4

The size of the business

Question 5

How is the rate exposure measured

Answer 5

Premium Base: such as gross sales or payroll

Question 6

Premium Base

Answer 6

• Retail Business - Gross sales
• Contracting Business - Payroll
• Apartment/Hotel - Area, gross sales, # of units

Question 7

Special Events

Answer 7

of admissions sold (Concerts, sporting events, etc)

Question 8

What is a Claims Made Form

Answer 8

Occurrence Based policies were the norm for policies pose problem for insurers with long tail exposures

Question 9

What kind of problems do claims made forms pose for insurers

Answer 9

Long Tail Problems: asbestos, pollution

Question 10

When does the the statute of limitations begin for a claims made form

Answer 10

When discovered, not when first occurred

Question 11

What is hard to predict for a claims made form for insurers?

Answer 11

Cost for insurers

Question 12

Claims Made Trigger

Answer 12

• Triggers coverage

Question 13

When must claims be filed for the Claims made trigger?

Answer 13

Claims must be filed during the policy period

Question 14

Claims Made Notification

Answer 14

Notification - not settlement

Question 15

Retroactive Date

Answer 15

Date after which a claim must occur to be covered

Question 16

What if a policy does not have a retro date?

Answer 16

If not retro date then it is the inception date of the policy

Question 17

What if the date is before the retro date?

Answer 17

Might have to pay extra

Question 18

What does the retroactive date help with?

Answer 18

When you switch to claim biased and might need a claim filed during the policy but occurred before the policy inception

Question 19

When does the retroactive date not cover?

Answer 19

Pollution and Asbestos

Question 20

Extended Reporting Period

Answer 20

Extends period in which a claim can be filed

Question 21

What does the Extended Reporting Period not extend?

Answer 21

Coverage; only extends time to notify insurers

Question 22

What must the occurrence be after and before for Extended Reporting Period?

Answer 22

After the retroactive date and before policy expiration

Question 23

When must the occurrence be reported be for Extended Reporting Period?

Answer 23

60 days of occurrence

Question 24

What is the basic CGL extension for a claim to be paid for no additional period?

Answer 24

5 years

Question 25

Extended Reporting Period Extension requirements

Answer 25

• must occur after retroactive date and before policy expiration
• Must be reported by insured within 60 days of occurrence