Insurance Policies & Coverage Analysis Flashcards

An insured drives a borrowed (nonowned) car that is insured under the owner's personal auto policy and causes an accident. How does the driver's own PAP usually respond?

Answer: As excess over the owner's insurance

For a vehicle the insured doesn't own, the PAP is excess over any other collectible insurance, because coverage generally follows the car.

Under the ISO CGL, the contractual liability exclusion does NOT apply to liability assumed under which of the following?

Answer: An 'insured contract'

Liability assumed under an 'insured contract', such as a tort liability assumed in a business contract, is excepted from the exclusion.

A roofing contractor's subcontractor installs flashing incorrectly, and the completed roof is damaged as a result. Under the CGL 'your work' exclusion, what is the likely outcome for property damage to the completed roof?

Answer: Covered because of the subcontractor exception

The 'your work' exclusion does not apply when the damaged work or the work that caused the damage was done by a subcontractor.

The CGL 'expected or intended injury' exclusion contains an exception for bodily injury resulting from what?

Answer: Use of reasonable force to protect persons or property

The exclusion doesn't apply to bodily injury resulting from the use of reasonable force to protect persons or property.

A long-tail asbestos claim causes injury that spans many policy years. Which trigger theory would activate every policy in force from first exposure through manifestation?

Answer: Continuous (triple) trigger theory

The continuous trigger theory treats injury as ongoing from exposure through manifestation, so every policy in that span is triggered.

An ambiguous term in an insurance policy is usually interpreted in the insured's favor. Which legal principle is this?

Answer: Contra proferentem

Under contra proferentem, ambiguous wording is construed against the insurer that drafted the contract.

Under the ISO CGL, how are defense costs and other supplementary payments generally treated?

Answer: They are paid in addition to the limits of insurance

Supplementary payments, including defense costs, are paid on top of the limits and do not reduce them.