DC General Liability Insurance 1 — Questions and Answers
Question 1: What does a Commercial General Liability (CGL) policy primarily cover?
- Property damage to the insured's own building and contents
- Bodily injury and property damage liability to third parties (Correct answer)
- Employee injuries sustained while working on the job
- Vehicle accidents involving company-owned automobiles
Correct answer: Bodily injury and property damage liability to third parties
A CGL policy covers bodily injury and property damage for which the insured becomes legally liable to third parties, not the insured's own losses.
Question 2: Under an occurrence-based CGL policy, coverage is triggered when:
- The claim is filed against the insured during the policy period
- The lawsuit is filed in court during the policy period
- The bodily injury or property damage actually occurs during the policy period (Correct answer)
- The final judgment is rendered during the policy period
Correct answer: The bodily injury or property damage actually occurs during the policy period
Under an occurrence form, coverage is triggered when the bodily injury or property damage occurs during the policy period, regardless of when the claim is later filed.
Question 3: Products-completed operations coverage under a CGL policy applies to:
- Products stored in a warehouse before they are sold
- Raw materials purchased during the manufacturing process
- Work still being actively performed on the job site
- Products or completed work after they have left the insured's control (Correct answer)
Correct answer: Products or completed work after they have left the insured's control
Products-completed operations coverage applies to bodily injury or property damage arising from the insured's products or finished work after they have been sold, delivered, or the job has been completed.
Question 4: The 'per occurrence' limit in a CGL policy is best described as:
- The total limit available for all claims during the entire policy period
- The maximum the insurer will pay for any single occurrence regardless of the number of claimants (Correct answer)
- The maximum amount paid per individual injured person
- The maximum amount paid per covered business location
Correct answer: The maximum the insurer will pay for any single occurrence regardless of the number of claimants
The per occurrence limit caps the insurer's payment for all claims arising from one single occurrence, no matter how many claimants are involved.
Question 5: Personal and advertising injury coverage under a CGL policy protects against:
- Physical injuries sustained during advertising events or trade shows
- Property damage caused by outdoor advertising structures
- Bodily injury caused by defective promotional merchandise
- Offenses such as libel, slander, copyright infringement, and false advertising (Correct answer)
Correct answer: Offenses such as libel, slander, copyright infringement, and false advertising
Personal and advertising injury coverage addresses non-physical harms like libel, slander, malicious prosecution, copyright infringement, and false advertising claims.
Question 6: Which of the following is typically EXCLUDED from a standard CGL policy?
- Slip-and-fall accidents occurring on the insured's business premises
- Customer injuries resulting from defective products after delivery
- Bodily injury to employees that is covered under workers' compensation (Correct answer)
- Property damage caused to third parties by business operations
Correct answer: Bodily injury to employees that is covered under workers' compensation
Employee bodily injuries are excluded from CGL policies because they are intended to be covered under workers' compensation insurance, not liability insurance.
Question 7: In a CGL policy, 'occurrence' is defined as:
- Any single accident that takes place in one instant in time
- Any lawsuit or claim filed against the insured
- An accident, including continuous or repeated exposure to substantially the same harmful conditions, resulting in bodily injury or property damage (Correct answer)
- Any event the insured reports to the insurer during the policy period
Correct answer: An accident, including continuous or repeated exposure to substantially the same harmful conditions, resulting in bodily injury or property damage
The CGL definition of 'occurrence' encompasses not only sudden accidents but also ongoing or repeated exposures to the same harmful conditions that ultimately result in injury or damage.
DC General Liability Insurance 1
What does a Commercial General Liability (CGL) policy primarily cover?