Property & Casualty Insurance Exam (National Portion)Types of PoliciesEasy
A general contractor is constructing a new commercial building. They are concerned about potential claims for bodily injury or property damage to third parties arising from their operations at the construction site. Which Commercial General Liability (CGL) coverage part would primarily address these types of claims?
- ACoverage B - Personal and Advertising Injury Liability
- BCoverage A - Bodily Injury and Property Damage Liability
- CCoverage D - Damage to Rented Premises
- DCoverage C - Medical Payments
Show answer & explanationAnswer & explanation
Correct answer: B. Coverage A - Bodily Injury and Property Damage Liability
Coverage A of the Commercial General Liability (CGL) policy is the core liability coverage, specifically designed to protect the insured against claims for bodily injury and property damage to third parties arising out of their business operations.
Why the other options are wrong
- A. Coverage B covers claims arising from personal and advertising injury, such as libel, slander, copyright infringement, or false arrest, not physical injury or damage.
- C. Damage to Rented Premises is a specific sub-limit within Coverage A that applies to fire damage to premises rented by the insured or damage to premises rented for a short term, not general bodily injury or property damage from operations.
- D. Coverage C provides medical payments for injuries sustained by a third party on the insured's premises or due to the insured's operations, regardless of fault, but it's a no-fault payment, not the primary liability coverage.
CGL Coverage A
The primary insuring agreement of a Commercial General Liability policy, covering sums the insured is legally obligated to pay for bodily injury and property damage to third parties.
- Covers bodily injury (physical harm, sickness, disease, death).
- Covers property damage (physical injury to or destruction of tangible property).
- Must arise from an 'occurrence' and happen within the coverage territory and period.
Memory trick: A is for Accidents, B is for Bad Words, C is for Care.