Florida 2-20 General Lines Agent (Property, Casualty, Commercial Lines and Florida Law)Casualty InsuranceMedium
A Florida transportation company operates a fleet of specialized buses for charter tours. They have a Commercial Auto Policy (CAP). A passenger on one of their buses is severely injured when the bus driver negligently swerves to avoid an animal, causing the passenger to hit their head. The injured passenger incurs $150,000 in medical expenses and sues the company. The company's CAP has a Combined Single Limit (CSL) of $300,000. How much will the CAP pay for the injured passenger's medical expenses and related liability?
- A$150,000
- B$100,000
- CThe policy will not cover passenger injuries.
- D$300,000
Show answer & explanationAnswer & explanation
Correct answer: A. $150,000
A Combined Single Limit (CSL) policy provides a single maximum dollar amount that applies to all damages (bodily injury and property damage) arising from a single accident, regardless of the number of injured persons or amount of property damage. Since the $150,000 claim for the injured passenger is less than the $300,000 CSL, the policy will pay the full $150,000.
Why the other options are wrong
- B. This amount is arbitrary and does not reflect the CSL or the claim amount.
- C. Commercial Auto Policies explicitly cover bodily injury liability to passengers caused by the insured vehicle's operation.
- D. The policy will pay up to $300,000, but only the actual damages incurred, which are $150,000 in this case.
Commercial Auto Combined Single Limit (CSL)
A single dollar amount that represents the maximum the insurer will pay for all damages (bodily injury and property damage) resulting from any one auto accident.
- Does not differentiate between bodily injury and property damage.
- Does not have per-person or per-occurrence sub-limits within the total.
- Simplifies coverage application for complex claims.
Memory trick: CSL: One big limit for all accident harms.