Texas General Lines — Property and CasualtyCommercial LinesMedium
A company manufactures specialized electronic components. Due to a defect in one of their products, a customer's industrial machine malfunctions, causing significant property damage. The customer sues the manufacturer. Which part of the Commercial General Liability (CGL) policy would respond to this claim?
- ACoverage B - Personal and Advertising Injury
- BSupplementary Payments
- CCoverage A - Bodily Injury and Property Damage
- DCoverage C - Medical Payments
Show answer & explanationAnswer & explanation
Correct answer: C. Coverage A - Bodily Injury and Property Damage
Coverage A of the CGL policy covers 'bodily injury' and 'property damage' that arises from an 'occurrence'. In this case, the malfunction caused 'property damage' to the customer's industrial machine, which falls under Coverage A, specifically the 'products-completed operations' hazard.
Why the other options are wrong
- A. Coverage B addresses non-physical harms like libel, slander, copyright infringement, not physical property damage from a product.
- B. Supplementary Payments cover expenses like defense costs, bail bonds, and loss of earnings, in addition to the limits of liability, but they are not the primary coverage for the claim itself.
- D. Coverage C covers medical expenses for injuries to others on the insured's premises or due to operations, not property damage.
CGL Coverage A - Property Damage
Coverage A of the Commercial General Liability (CGL) policy provides coverage for 'property damage' for which the insured is legally liable, arising from an 'occurrence'. This includes damage caused by the insured's products or completed operations.
- Covers legal liability for physical damage to property of others.
- Triggered by an 'occurrence' (accident).
- Includes 'products-completed operations' hazard.
Memory trick: CGL Covers Claims: A for Accidents, B for Bad-Mouth, C for Care.