AIC AIC Workers Compensation & Liability Claims 2 — Questions and Answers
Question 1: What is 'general liability' insurance designed to cover?
- Property damage to the insured's own building
- Third-party bodily injury and property damage claims arising from the insured's business operations (Correct answer)
- Workers injured on the job
- The insured's professional errors and omissions
Correct answer: Third-party bodily injury and property damage claims arising from the insured's business operations
Commercial general liability (CGL) insurance protects businesses against third-party claims of bodily injury, property damage, personal injury, and advertising injury.
Question 2: What is 'products liability' in the context of general liability claims?
- Liability for damage to products during shipping
- Legal liability arising from injuries or damages caused by a defective product the insured manufactured, distributed, or sold (Correct answer)
- Coverage for product recalls
- Liability for a service performed incorrectly
Correct answer: Legal liability arising from injuries or damages caused by a defective product the insured manufactured, distributed, or sold
Products liability claims arise when a defective or unreasonably dangerous product causes bodily injury or property damage to a consumer or third party.
Question 3: In liability claims, what is the difference between 'negligence' and 'strict liability'?
- Negligence applies only to product claims; strict liability applies to workplace injuries
- Negligence requires proof of fault, while strict liability holds a party responsible regardless of fault or intent (Correct answer)
- Strict liability requires proof of intentional misconduct
- Negligence only applies in automobile accidents
Correct answer: Negligence requires proof of fault, while strict liability holds a party responsible regardless of fault or intent
Under strict liability, a defendant is held responsible for damages caused by their product or activity without the need to prove they acted negligently.
Question 4: What is the 'completed operations' hazard in a CGL policy?
- Liability for injuries occurring at the job site during construction
- Liability for bodily injury or property damage occurring after the insured's work is completed and released for use (Correct answer)
- Coverage for work tools and equipment
- Liability for employee injuries after their shift ends
Correct answer: Liability for bodily injury or property damage occurring after the insured's work is completed and released for use
The completed operations hazard covers claims that arise after the insured finishes a job, such as a building defect that causes injury after construction is complete.
Question 5: What is 'premises liability' in the context of liability insurance?
- Coverage for damage to the insured's own premises
- Liability for injuries or damages that occur on the insured's property due to conditions the insured controls (Correct answer)
- Coverage for tenant improvements
- Liability for fire damage caused by tenants
Correct answer: Liability for injuries or damages that occur on the insured's property due to conditions the insured controls
Premises liability holds property owners or occupiers responsible for injuries occurring on their property when they fail to maintain reasonably safe conditions.
Question 6: What is 'contributory negligence' and how does it differ from 'comparative negligence'?
- They are identical doctrines applied in different states
- Contributory negligence bars any recovery if the plaintiff is at all at fault; comparative negligence reduces recovery proportional to the plaintiff's fault (Correct answer)
- Comparative negligence applies only in workers' compensation
- Contributory negligence only applies to property damage claims
Correct answer: Contributory negligence bars any recovery if the plaintiff is at all at fault; comparative negligence reduces recovery proportional to the plaintiff's fault
Under contributory negligence, any fault by the plaintiff completely bars recovery, while comparative negligence allows recovery reduced by the plaintiff's percentage of fault.
AIC AIC Workers Compensation & Liability Claims 2
What is 'general liability' insurance designed to cover?