General Liability Insurance Flashcards

The aggregate limit in a CGL policy represents:

Answer: The total maximum the insurer will pay for all covered losses during the entire policy period

The aggregate limit is the ceiling on all payments made under the policy over the entire policy period, applying across all occurrences combined.

Medical payments coverage under a CGL policy:

Answer: Pays reasonable medical expenses for third-party injuries on the insured's premises without requiring proof of fault

Medical payments coverage is a no-fault benefit that pays medical expenses for injured third parties without requiring the insured to be found legally liable.

A 'claims-made' CGL policy form is triggered when:

Answer: The claim is first made against the insured during the policy period

Under a claims-made form, it is the date the claim is first made against the insured—not when the injury occurred—that determines whether coverage applies.

The retroactive date in a claims-made CGL policy:

Answer: Establishes the earliest date from which covered occurrences will be recognized

The retroactive date sets the historical boundary; occurrences taking place before that date are not covered, even if the claim is first made during the policy period.

An extended reporting period (tail coverage) endorsement on a claims-made CGL policy:

Answer: Allows the insured to report claims after the policy ends for occurrences that happened during the policy period

Tail coverage gives the insured an additional window to report claims after a claims-made policy is cancelled or non-renewed, as long as the underlying occurrence took place while the policy was in force.

The insurer's 'duty to defend' under a CGL policy means:

Answer: The insurer must defend the insured against covered claims even if the allegations are groundless or fraudulent

The duty to defend is broader than the duty to indemnify; the insurer must provide a defense for covered claims regardless of whether the allegations will ultimately succeed.

Fire damage to premises rented by the insured is handled under a standard CGL policy by:

Answer: Providing coverage subject to a specific 'damage to premises rented to you' sublimit

CGL policies include a sublimit for fire damage to rented premises, restoring coverage for this common exposure that would otherwise be excluded under the property damage exclusions.