EXAMFX Commercial General Liability 2 — Questions and Answers
Question 1: Under a CGL policy, which coverage part pays for damage to a third party's property caused by the insured's operations?
- Coverage A – Bodily Injury and Property Damage Liability (Correct answer)
- Coverage B – Personal and Advertising Injury Liability
- Coverage C – Medical Payments
- Coverage D – Premises and Operations
Correct answer: Coverage A – Bodily Injury and Property Damage Liability
Coverage A of the CGL covers third-party property damage arising from the insured's operations or premises.
Question 2: A customer trips over a display in a retail store and breaks her wrist. Which CGL insuring agreement would cover her medical bills without requiring a lawsuit?
- Coverage B – Personal and Advertising Injury
- Coverage A – Bodily Injury Liability
- Coverage C – Medical Payments (Correct answer)
- Supplementary Payments
Correct answer: Coverage C – Medical Payments
Coverage C – Medical Payments covers reasonable medical expenses for third parties injured on the premises, regardless of fault, without litigation.
Question 3: The CGL 'occurrence' trigger requires that bodily injury or property damage occur during the policy period. Which scenario would NOT trigger coverage under an occurrence-based CGL?
- Injury on the premises during the policy period
- Property damage discovered after expiration that began during the policy period
- A lawsuit filed during the policy period for an injury that occurred before the policy (Correct answer)
- Continuous damage that began and ended within the policy period
Correct answer: A lawsuit filed during the policy period for an injury that occurred before the policy
An occurrence CGL triggers on when the injury or damage occurs, not when the lawsuit is filed; an injury that occurred before the policy period is not covered.
Question 4: Which exclusion in a standard CGL policy eliminates coverage for damage to property the insured is currently working on?
- Products-Completed Operations exclusion
- Your Work exclusion (Correct answer)
- Contractual Liability exclusion
- Care, Custody, or Control exclusion
Correct answer: Your Work exclusion
The 'Your Work' exclusion bars coverage for property damage to the specific work the insured is performing at the time of the loss.
Question 5: A general contractor assumes the tort liability of a subcontractor in a written contract. The subcontractor causes property damage. Under the CGL, this liability is covered under which provision?
- Contractual Liability coverage (Correct answer)
- Products-Completed Operations coverage
- Supplementary Payments
- Additional Insured endorsement
Correct answer: Contractual Liability coverage
Contractual Liability coverage allows the CGL to respond when the insured has assumed another party's tort liability in an 'insured contract.'
Question 6: Under a CGL policy, 'personal and advertising injury' coverage (Coverage B) covers which of the following?
- Physical injury to a person caused by advertising activities
- Property damage arising from published content
- False arrest, libel, slander, and copyright infringement in advertisements (Correct answer)
- Medical payments for employees injured while working on advertisements
Correct answer: False arrest, libel, slander, and copyright infringement in advertisements
Coverage B specifically lists offenses such as false arrest, malicious prosecution, libel, slander, and copyright infringement in advertisements.
Question 7: The CGL policy defines 'bodily injury' to include sickness, disease, and death resulting therefrom. Which of the following would be considered bodily injury under the standard CGL definition?
- Emotional distress with no accompanying physical harm
- A customer's broken arm caused by a falling shelf (Correct answer)
- Reputational harm from a false advertisement
- Loss of use of property
Correct answer: A customer's broken arm caused by a falling shelf
A broken arm is a physical injury, which falls squarely within the CGL's definition of bodily injury.
EXAMFX Commercial General Liability 2
Under a CGL policy, which coverage part pays for damage to a third party's property caused by the insured's operations?