Commercial General Liability (CGL) Quiz

What does Commercial General Liability (CGL) insurance primarily protect businesses against?

• Loss of business revenue

• Claims of bodily injury, property damage, and personal injury

• Natural disasters

• Employee theft

Answer explanation

Commercial General Liability (CGL) insurance primarily protects businesses against claims of bodily injury, property damage, and personal injury, making it essential for managing legal risks.

Which of the following is an example of a professional liability policy?

• An accountant buys E&O coverage to protect against client lawsuits for financial errors

• A contractor provides a performance bond to ensure completion of a project

• A business purchases flood insurance

• A store owner buys theft insurance

Answer explanation

The correct choice is the accountant buying E&O coverage, which is a professional liability policy that protects against claims of negligence or errors in professional services.

Which of the following is NOT typically included in other commercial liability policies?

• Natural disaster insurance

• Professional liability

• Employment practices liability

• Cyber liability

Answer explanation

Natural disaster insurance is not typically included in commercial liability policies, which usually cover professional, employment practices, and cyber liabilities.

Which coverage pays for medical expenses for injuries on premises, regardless of fault?

• Coverage B

• Coverage D

• Coverage A

• Coverage C

Answer explanation

Coverage C pays for medical expenses for injuries occurring on the premises, regardless of who is at fault. This coverage ensures that injured parties receive prompt medical attention without the need to establish liability.

What is a key requirement under Section IV — Conditions of a CGL policy?

• The insured must notify the insurer promptly and cooperate with investigations

• The insured must pay all claims out of pocket

• The insured must renew the policy annually

• The insured must provide free services to claimants

Answer explanation

A key requirement under Section IV of a CGL policy is that the insured must notify the insurer promptly and cooperate with investigations. This ensures proper handling of claims and protects both parties.

Which coverage under CGL deals with liability for physical harm or damage to others' property?

• Coverage C

• Coverage D

• Coverage B

• Coverage A

Answer explanation

Coverage A under a Commercial General Liability (CGL) policy addresses liability for bodily injury and property damage to others. It specifically covers physical harm or damage caused by the insured's operations.

Which scenario is covered under Coverage B of a CGL policy?

• A business is sued for using a competitor’s slogan in its ads

• A contractor damages a client’s flooring

• A visitor trips on a rug and breaks an arm

• A customer slips in a store and sues

Answer explanation

Coverage B of a CGL policy addresses advertising injuries, such as when a business is sued for using a competitor’s slogan in its ads. The other scenarios relate to bodily injury or property damage, which are covered under different sections.

What is a characteristic of a claims-made policy?

• Covers claims made and reported during the policy period

• Automatically renews every year

• Covers any claim regardless of when it is reported

• Does not require a retroactive date

Answer explanation

A claims-made policy specifically covers claims that are made and reported during the policy period, making this the correct characteristic. Other options do not accurately describe claims-made policies.

What is an example of a situation where Coverage C would apply?

• A visitor trips on a rug and breaks an arm

• A business is sued for libel

• A contractor damages a client’s flooring

• An employee is injured while delivering goods

Answer explanation

Coverage C applies to personal liability situations, such as when a visitor trips on a rug and gets injured. This scenario involves a claim for bodily injury on the property, making it the correct choice.

Who is automatically covered under Section II of a CGL policy?

• Suppliers and vendors

• Customers and clients

• Only the business owner

• Named insured, partners, employees, and volunteers

Answer explanation

Section II of a CGL policy automatically covers the named insured, their partners, employees, and volunteers, ensuring they are protected under the policy for liability claims.