EXAMFX Commercial General Liability 5

Question 1

A CGL policy with a claims-made trigger requires that a claim be made during the policy period. What additional feature extends coverage for incidents reported after the policy expires?

Accepted Answer

Extended Reporting Period (tail coverage)

Answer

An Extended Reporting Period (ERP), or 'tail,' allows the insured to report claims after a claims-made policy expires for occurrences that happened before expiration.

Question 2

Under the CGL, which condition allows the insurer to recover payments it made on behalf of the insured from a negligent third party?

Accepted Answer

Transfer of Rights of Recovery (Subrogation)

Answer

The Transfer of Rights of Recovery condition (subrogation) lets the insurer step into the insured's shoes and pursue a negligent third party after paying a covered claim.

Question 3

An insured operates a swimming pool at their business premises. A visitor drowns. The Medical Payments limit is $5,000 and the Coverage A per-occurrence limit is $1,000,000. The family sues for $500,000. How does the CGL respond?

Accepted Answer

Pays $5,000 under Medical Payments and defends and potentially pays up to $1,000,000 under Coverage A

Answer

Medical Payments pays first-party medical expenses without regard to fault, while Coverage A responds if the insured is found legally liable, up to the per-occurrence limit.

Question 4

Which statement best describes the 'other insurance' condition in a CGL policy when two CGL policies cover the same loss?

Accepted Answer

Policies share the loss on a pro-rata or excess basis as specified

Answer

The other insurance condition dictates that when multiple policies cover the same claim, they share on a pro-rata basis or one is excess over the other, depending on policy language.

Question 5

A real estate developer is sued for discrimination in the rental of units. The claimant alleges the developer violated fair housing laws. Under Coverage B of the CGL, is this covered?

Accepted Answer

No, because discrimination is not among the enumerated offenses in Coverage B

Answer

Coverage B covers only specifically listed offenses (e.g., libel, slander, false arrest), and housing discrimination is not an enumerated offense in the standard ISO CGL form.

(EXAMFX) Exam FX Insurance Practice Test

(EXAMFX) Exam FX Insurance Practice Test

EXAMFX Commercial General Liability 5