Property & Casualty Insurance Exam (National Portion)Property and Casualty Insurance BasicsHard
A client is concerned about potential lawsuits arising from defects in products they manufacture. They want to ensure their insurance covers the costs of defending against such claims and paying any resulting judgments or settlements. Which type of coverage should they specifically look for?
- ACommercial Property coverage
- BProducts-Completed Operations coverage
- CWorkers' Compensation coverage
- DBusiness Income coverage
Show answer & explanationAnswer & explanation
Correct answer: B. Products-Completed Operations coverage
Products-Completed Operations coverage is a type of liability insurance that protects businesses from claims of bodily injury or property damage arising out of their products or completed work, after the product has been sold or the work completed.
Why the other options are wrong
- A. Commercial Property covers damage to the business's own property.
- C. Workers' Compensation covers employee injuries, not third-party product liability.
- D. Business Income covers loss of income due to business interruption.
Products-Completed Operations Coverage
A form of liability insurance that protects businesses from claims of bodily injury or property damage caused by their products or completed work, after the product has been sold or the work has been finished and put to its intended use.
- Covers product liability
- Covers completed work liability
- Claims arise after product/work is out of insured's control
- Standard part of CGL policies
Memory trick: GENERAL liability covers daily slips, PRODUCTS & COMPLETED work cover what you MAKE and FINISH.