Property & Casualty Insurance Exam (National Portion)Types of PoliciesMedium
Which of the following is a common exclusion found in a standard Commercial General Liability (CGL) policy?
- AProperty damage to a third party's vehicle caused by the insured's negligent operation of a forklift.
- BProperty damage to a customer's product while being repaired by the insured.
- CBodily injury to a customer caused by a slip and fall on the insured's premises.
- DBodily injury to an employee occurring during the course of employment.
Show answer & explanationAnswer & explanation
Correct answer: D. Bodily injury to an employee occurring during the course of employment.
Commercial General Liability (CGL) policies are designed to cover liability to third parties. Bodily injury to an employee occurring during the course of employment is specifically excluded from a CGL policy because this exposure is covered by Workers' Compensation insurance.
Why the other options are wrong
- A. This falls under 'operations' or 'completed operations' coverage for property damage to a third party, typically covered by a CGL policy.
- B. This is typically covered under 'damage to property of others' or 'care, custody, or control' provisions, often with specific limitations but not a general exclusion from the CGL's scope of coverage.
- C. This is a classic example of premises liability, which is covered by a CGL policy.
CGL Exclusions
Specific perils or types of liability that are not covered by a Commercial General Liability policy, often because they are covered by other specialized insurance policies or are uninsurable.
- Exclusions prevent overlapping coverage and manage risk.
- Common exclusions: Workers' Compensation, Auto, Aircraft/Watercraft, Professional Liability.
- Other exclusions: Pollution, Expected/Intended Injury, Contractual Liability (with exceptions).
Memory trick: CGL says 'no' to employee injury, vehicles, pro errors, and pollution – others handle those risks.