Property & Casualty Insurance Exam (National Portion)Types of PoliciesMedium
A general contractor is constructing a new commercial building. They are concerned about potential claims arising from bodily injury or property damage to third parties during the construction process. Which section of a Commercial General Liability (CGL) policy would primarily address these types of claims?
- ACoverage B - Personal and Advertising Injury Liability
- BSupplementary Payments
- CCoverage C - Medical Payments
- DCoverage A - Bodily Injury and Property Damage Liability
Show answer & explanationAnswer & explanation
Correct answer: D. Coverage A - Bodily Injury and Property Damage Liability
Coverage A of the CGL policy is specifically designed to cover claims for bodily injury and property damage to third parties arising from the insured's operations, premises, or products/completed operations. This directly addresses the contractor's concern during construction.
Why the other options are wrong
- A. Coverage B addresses non-physical harms like libel, slander, or copyright infringement, not bodily injury or property damage from operations.
- B. Supplementary Payments provide additional benefits (e.g., defense costs, bond premiums) related to covered claims but are not a primary coverage section itself.
- C. Coverage C covers medical expenses for injuries sustained on the insured's premises, regardless of fault, but is not the primary liability coverage.
CGL Coverage A
Coverage A of the Commercial General Liability (CGL) policy provides primary liability coverage for bodily injury and property damage to third parties caused by the insured's business operations, premises, or products/completed operations.
- Covers legal liability for bodily injury and property damage.
- Applies to occurrences on the insured's premises, from operations, or from products/completed operations.
- Subject to aggregate limits and per-occurrence limits.
- Excludes intentional acts, pollution, and professional liability, among others.
Memory trick: A is for 'Accidents' (BI/PD), B for 'Bad Words', C for 'Care' (Med Pay).