Section 2: Lesson 5 "General Liability Insurance"

Question 1

A trigger of coverage defined as an accident , including continuous and repeated exposure to the same generally harmful conditions is known as:

Answer 1

an occurence

Question 2

The basic premise of General liability insuring agreement states that:

Answer 2

the policy will respond if a insured person or entity is legally liable for BI or PD that occurs within the policy period and is not otherwise excluded from coverage.

Question 3

A trigger of coverage identified by the date when the claim is made by a third party is known as:

Answer 3

a claims-made trigger

Question 4

A basic definition of occurrence is almost the same as :

Answer 4

an accident

Question 5

You are a claims adjuster for a large national carrier the issues large building supply and hardware chains. One day while a customer was talking down the aisle, a box fell from the top shelf onto the customer, injuring the costumer’s shoulder. A claim fo injury was presented to your insured and , in turn, it was sent to your office and assigned to you. What type of claim would this be?

Answer 5

A presides liability claim covered under the insureds commercial general liability policy

Question 6

Roofing contractor is putting new flat roof on a building and one of insured employees accidentally tip a bucket of tar of the roof . It falls 30 ft onto a parked car, what kind of claim is it and what kind of policy will respond?

Answer 6

An operations claim to be addressed by the insured General liability

Question 7

Three days after the company. installs an air conditioner in the attic of a customer’s residence, the air conditioner falls through the laundry room ceiling and damages the ceiling, washer and dryer, cabinets and flooring. Damages are appraised at $26,500. When the claim for PD arrives, what kind of claim is it and what kind of policy will respond?

Answer 7

A completed operations claim filed under the general liability policy.

Question 8

Jason purchases a fire extinguisher m he decides to test it out, the valve of the canister explodes upwards striking Jason in the mouth a fracturing several teeth. Jason also gets chemicals in his mouth, nose and eyes. What overage would the hardware store need to properly respond to his exposure?

Answer 8

Products liability

Question 9

One Arthur delivery boys from his resutrant makes a delivery to an elderly customer. While riding Richie accidentally hits a 4 yr old , breaking the Childs leg. the Childs mother calls Arthur and demands that he pay all expenses and the some. What general Liability exposure will make Arthur legally responsible for the accident?

Answer 9

contingent ( Indirect or Vicarious) liability

Question 10

The per occurrence limit of a commercial general liability policy is a max amount that a policy will pay for:

Answer 10

all bodily injury and/or losses arise from each individual

Question 11

The aggregate limit of commercial general liability policy is the max amount that a policy will pay for:

Answer 11

all bodily injury and/or losses that occur within the policy period

Question 12

XYC construction has a CGL policy with a $1m per occurrence and $2m aggregate limit. During the year XYC became legally liable for $1,875,000 to a man injured by a brick thrown by one of its employees. It also sustained $254,000 in losses from various smaller claims and a $120,500 PD loss. How much would the company ‘s policy pay for these losses?

Answer 12

$1,374,500

Question 13

The ABC Liquor store opens for business with a CGL policy that has a $500,000 per occurrence limit and a $1m aggregate limit. During the stores first year, the store suffers a jury verdict of $450,275 and three other smaller losses of $25,000,$56,000 and $74,000. Defense costs for all litigation and expenses total $84,500. How much will be paid by ABC’s CGL policy?

Answer 13

$689,775

Question 14

Jack donut shop has a general liability policy with a $300,000 combined single limit and a $600,000 aggregate limit. Its been a rough year for jack. First he got sued and the case cost $220,000 plus $20,000 in defense costs. A second claim was staled for $78,000. Jack is concerned that if he gets sued again, he may run out of insurance. If he did become responsible for someone’s damages or injuries , what is the maximum of coverage that Jack has available to pay for an individual claim?

Answer 14

$300,000

Question 15

Employee of construction company became angry at a pedestrian and threw a brick and hit the pedestrian in the head, causing injuries.The pedestrian sued. Another adjuster told you she thought the claim was excluded , what is your opinion?

Answer 15

You disagree. The employees act was intentional, but there was no intent from the stand point of XTC Construction; thus, the claim would be covered.

Question 16

An insured employee is injured when he falls off a ladder. A claim for his injuries is submitted to the insured’s General Liability carrier. How should they respond?

Answer 16

There is no coverage. Injuries to employees are excluded under the GL and covered under the employer’s Workers comp policy

Question 17

One of your insured’s 18 wheelers is hauling a tank of gasoline and overturns, spilling its contents over the road and into the storm drains. The costs of emergency response and clean up are submitted by the EPA to your insured and your insured turns the claim in under its CGL policy. How would the policy respond?

Answer 17

The loss arose out of the auto risk, and is thus excluded by the GL policy.

Question 18

Borders Bookstore had a Christmas party. Attendance was voluntary. One of the employees became intoxicated and was involved in an accident. The occupants of other vehicle sued Boarders for allowing their employee to become intoxicated and drive. Boarders filed a clam under its GL policy. Is the claim covered?

Answer 18

yes, The CGL policy only excludes liquor liability if the insured is in business of serving alcohol , and Borders is not.

Question 19

What is the definition of libel?

Answer 19

Defamation of character in the form of the written word

Question 20

What is an exposure not covered by the CGL policy?

Answer 20

An employee of the insured is injured while performing work duties.

Question 21

What is the definition slander?

Answer 21

Defamation of character in the form spoken or verbal word

Question 22

The insured operates a sports bar. One Sunday, a customer came in and had a couple of beers and shot. After about 3hrs the customer leaves and was involved in a head on collision. The other vehicle sustains damages and driver was injured. The driver of other vehicle sues the bar for continuing to serve customer while he was intoxicated and allowing him to leave the establishment. unescorted. Would this be covered under the insured GL policy?

Answer 22

No. The CGL excludes the exposure. It can , however , be added back to the policy with a Liquor Liability Endorsement

Question 23

The following excluded exposure can not be added back to a General Liability policy through endorsement:

Answer 23

Coverage for Intentional Acts

Question 24

John has a personal liability policy that provides him with $1m of extra protection above the limits of his homeowners and personal auto policies. This one type of coverage provides liability protection for any and all exposures covered b his two underlying policies, subject to the limits of those polices. What kind of policy is this?

Answer 24

An umbrella policy

Question 25

ABC liquor store has a Comprehensive General liability policy with a $1m per occupancy and a $2m aggregate limit. On top of theist has a commercial policy of $5m on top of the underlying $1m in coverage per occurrence. What kind of policy is the 2nd policy?

Answer 25

An excess Insurance policy

Question 26

If an excess of umbrella policy provides primary protection for a specific risk or exposure not covered by the underlying policy, it will usually be subject to a form of deductible known as what?

Answer 26

A self-insured retention

Question 27

An excess insurance policy provides?

Answer 27

additional protection for the same kind of coverage as the first underlying policy

Question 28

Professional liability coverage is also known as what kind of insurance?

Answer 28

Malpractice or Errors & Omissions

Question 29

Professional Liability Insure is reserved for all of the following types of professions except:

Answer 29

Long-haul truck drivers

Question 30

The most common trigger of coverage for a professional liability policy is:

Answer 30

Claims-made (ie. the policy in effect when the claims made)

Question 31

How does a professional liability policy differs from a general liability policy in its treatment of defense costs and expenses?

Answer 31

Defense costs are part of , and included within , the policy limit.

Question 32

A physician was sued for malpractice and sent the lawsuit to his E&O carrier for handling. He refused to authorize settlement. After five years of litigation and defense costs and expenses of $210,000, the jury gave a verdict of $550,000 to the plaintiff. The physician was shocked when he learned that all that was available from his $500,000 policy to pay toward the verdict was:

Answer 32

$290,000> $500,000-$210,000