CCP Insurance Policy Interpretation & Coverage Analysis 3 — Questions and Answers
Question 1: Under ISO Commercial General Liability (CGL) form, 'bodily injury' coverage applies to which of the following?
- Property damage caused to a third party
- Sickness, disease, or death resulting from a covered occurrence (Correct answer)
- Economic losses arising from physical injury only
- Mental anguish unaccompanied by physical injury
Correct answer: Sickness, disease, or death resulting from a covered occurrence
Under the ISO CGL form, bodily injury is defined to include sickness, disease, or death resulting from physical harm caused by a covered occurrence.
Question 2: A pollution exclusion in a CGL policy that uses 'absolute' language would most likely exclude coverage for:
- Carbon monoxide poisoning from a malfunctioning HVAC unit (Correct answer)
- Bodily injury caused by a slip-and-fall on business premises
- Property damage from a burst water pipe
- Theft of chemicals from a storage facility
Correct answer: Carbon monoxide poisoning from a malfunctioning HVAC unit
Absolute pollution exclusions have been broadly applied by many courts to exclude coverage for carbon monoxide and other irritants that qualify as 'pollutants' under the policy definition.
Question 3: The 'trigger of coverage' analysis in long-tail claims is used to determine:
- Which policy year's limits apply when injury spans multiple years (Correct answer)
- Whether the insured has paid premiums on time
- Whether the statute of limitations has expired
- The amount of damages the claimant may recover
Correct answer: Which policy year's limits apply when injury spans multiple years
Trigger of coverage analysis determines which policy period(s) are implicated when a continuous injury or disease develops over multiple years, affecting which insurer(s) must respond.
Question 4: A homeowner's 'open perils' (all-risk) policy covers losses that are:
- Only specifically listed in the policy
- Caused by any peril not specifically excluded (Correct answer)
- Limited to fire, theft, and wind only
- Subject to a separate deductible for each peril
Correct answer: Caused by any peril not specifically excluded
An open perils or all-risk policy covers any cause of loss unless it is specifically excluded, placing the burden on the insurer to prove an exclusion applies.
Question 5: Which of the following best describes the 'concurrent causation' theory that benefits policyholders?
- Coverage applies only when a single excluded cause produces the loss
- Coverage applies when both a covered and excluded cause combine to produce the loss (Correct answer)
- Coverage is denied whenever any excluded peril is present
- Coverage is allocated proportionally between covered and excluded perils
Correct answer: Coverage applies when both a covered and excluded cause combine to produce the loss
The majority rule on concurrent causation favors policyholders by providing coverage when a covered peril and an excluded peril combine to cause a loss, unless an anti-concurrent causation clause applies.
Question 6: A professional liability policy's 'prior acts' exclusion eliminates coverage for:
- Claims filed before the policy inception date
- Acts or omissions that occurred before a specified retroactive date (Correct answer)
- Claims that have already been settled
- Professionals who have had prior insurance claims
Correct answer: Acts or omissions that occurred before a specified retroactive date
A prior acts exclusion in a claims-made policy bars coverage for acts or omissions that occurred before the policy's retroactive date, even if the claim is made during the policy period.
Question 7: When analyzing whether a liability policy's 'expected or intended' exclusion applies, the adjuster should consider:
- Whether the insured expected or intended the act, not necessarily the resulting injury (Correct answer)
- Whether the claimant expected the injury
- Whether a reasonable person would have expected the injury
- Whether the insured had prior claims for similar conduct
Correct answer: Whether the insured expected or intended the act, not necessarily the resulting injury
The expected or intended exclusion typically applies based on whether the insured subjectively intended the act that caused harm, though some policies require intent to cause the specific resulting injury.
CCP Insurance Policy Interpretation & Coverage Analysis 3
Under ISO Commercial General Liability (CGL) form, 'bodily injury' coverage applies to which of the following?