Property & Casualty Insurance Exam (National Portion)Casualty InsuranceEasy
A client's business operates a small retail store. A customer slips on a wet floor near the entrance, sustaining a fractured arm requiring medical attention. The client has a Commercial General Liability (CGL) policy with a Medical Payments (Coverage C) limit of $10,000. The customer's medical bills total $12,000. How much will the CGL policy pay under Medical Payments (Coverage C)?
- A$12,000
- B$2,000
- C$10,000
- D$0
Show answer & explanationAnswer & explanation
Correct answer: C. $10,000
Medical Payments (Coverage C) in a CGL policy will pay for reasonable medical expenses incurred by a person due to an accident on the insured's premises, regardless of fault, up to the policy's stated limit. The limit is $10,000, so the policy will pay $10,000.
Why the other options are wrong
- A. The policy will not pay more than its stated limit, even if expenses are higher.
- B. This amount does not reflect the policy limit or the total expenses.
- D. Medical Payments coverage is designed to pay for such expenses.
CGL Medical Payments (Coverage C)
Commercial General Liability (CGL) Coverage C provides for reasonable medical expenses for bodily injury caused by an accident on the insured's premises or due to the insured's operations, regardless of legal liability, up to the policy limit.
- No fault required for payment.
- Covers medical expenses, ambulance, first aid.
- Payouts are subject to a specified policy limit.
Memory trick: CGL's Med Pay is a 'no-fault first aid kit' for guests, capped at its limit.