R.M. Ch 13

Question 1

General liability

Answer 1

refers to legal liability arising out of business operations other than auto or aviation accidents and employee injuries

Question 2

Premises and operations liability

Answer 2

arising out of the ownership and maintenance of the premises where the firm does business

Question 3

Products liability

Answer 3

arising out of the manufacturing and sale of products

Question 4

Completed operations liability

Answer 4

arising out of faulty work performed away from the premises after the work or operation is completed

Question 5

contractual liabiliy

Answer 5

arising out of the assumption of legal liability through a written or oral contract

Question 6

Contingent liability

Answer 6

arising out of work done by independent contractors

Question 7

Commercial general liability (CGL) policy

Answer 7

used by firms to cover their general liability loss exposures

Question 8

CGL Section I

Answer 8

• Coverage A: Bodily Injury and Property Damage Liability
• Coverage B: Personal and Advertising Injury
• Coverage C: Medical Payments
  Supplementary Payments: Coverages A and B

Question 9

Coverage A: Bodily Injury and Property Damage Liability

Answer 9

The insurer agrees to pay on behalf of the insured all sums up to the policy limits that the insured is legally obligated to pay because of bodily injury or property damage

• Coverage includes defense costs
• Insurer has the right to investigate a claim or suit and settle it at its discretion

Question 10

Coverage B: Personal and Advertising Injury Liability

Answer 10

The insurer agrees to pay those sums that the insured is legally liable to pay as damages because of personal and advertising injury

Personal and advertising injury includes:
false arrest/imprisonment
malicious prosecution
wrongful eviction or entry by a landlord

Question 11

Employment-related practices liability insurance (EPLI) coverage:

Answer 11

the insurer agrees to pay damages resulting from:

• Demotion or failure to promote
• Wrongful termination
• Negligent hiring or supervision
• Retaliatory action against employees
• Coercing an employee to commit an unlawful act
• Work related harassment
• Other work-related verbal, physical, mental, or emotional abuse, such as gender discrimination

Question 12

Defense Provisions (contrast with CGL)

Answer 12

Defense costs are included as part of the policy limit

A claim cannot be settled without the insured’s consent