NEWEST CPCU 552: Commercial Liability
Risk Management and Insurance EXAM |
ULTIMATE EXAM WITH CORRECT
ANSWERS AND RATIONALES FOR
CERTIFICATION SUCCESS
1. The Commercial General Liability (CGL) policy is
designed to cover:
A) First-party property losses
B) Third-party claims for bodily injury and property
damage caused by the insured's operations or
products
C) Employee injuries on the job
D) Auto accidents involving company vehicles
Correct answer: B
Rationale: The CGL policy provides third-party
liability coverage for claims arising from bodily injury
or property damage caused by the insured's
negligence.
2. Which of the following is NOT a standard CGL
coverage part?
,A) Coverage A – Bodily Injury and Property Damage
Liability
B) Coverage B – Personal and Advertising Injury
Liability
C) Coverage C – Medical Payments
D) Coverage D – Workers Compensation Liability
Correct answer: D
Rationale: Workers Compensation is a separate
policy, not part of the CGL. CGL coverages are A
(BI/PD), B (Personal/Advertising Injury), and C
(Medical Payments).
3. Under CGL Coverage A (Bodily Injury and Property
Damage), the insurer has the duty to:
A) Defend the insured against any suit seeking
damages covered by the policy
B) Pay all defense costs, even if the suit is groundless
or fraudulent
C) Provide a defense even if some allegations are not
covered
D) All of the above
Correct answer: D
Rationale: The CGL provides a duty to defend, which
is broader than the duty to indemnify. The insurer
,defends even if the suit is groundless or partially
covered.
4. CGL Coverage A applies to bodily injury and
property damage that occurs:
A) During the policy period, regardless of when the
claim is reported
B) Only if the claim is reported during the policy
period
C) Only if the claim is filed within 30 days of the
occurrence
D) Only if the insured notifies the insurer within 24
hours
Correct answer: A
Rationale: The CGL is an "occurrence" policy,
covering injury or damage that occurs during the
policy period, even if the claim is reported later.
5. The definition of "occurrence" in a CGL policy is:
A) An accident, including continuous or repeated
exposure to substantially the same general harmful
conditions
B) Any intentional act
C) Any criminal act
, D) A single event only
Correct answer: A
Rationale: The CGL defines occurrence as an
accident, including continuous or repeated exposure
to harmful conditions (e.g., long-term pollution or
exposure to fumes).
6. "Bodily injury" under the CGL includes:
A) Physical injury, sickness, or disease sustained by
a person
B) Emotional distress or mental anguish (even
without physical injury)
C) Punitive damages
D) Economic loss without physical injury
Correct answer: A
Rationale: Bodily injury is defined as physical injury,
sickness, or disease. Mental anguish is covered only
if it results from physical injury.
7. "Property damage" under the CGL includes:
A) Physical injury to tangible property
B) Loss of use of tangible property that is not
physically injured
Risk Management and Insurance EXAM |
ULTIMATE EXAM WITH CORRECT
ANSWERS AND RATIONALES FOR
CERTIFICATION SUCCESS
1. The Commercial General Liability (CGL) policy is
designed to cover:
A) First-party property losses
B) Third-party claims for bodily injury and property
damage caused by the insured's operations or
products
C) Employee injuries on the job
D) Auto accidents involving company vehicles
Correct answer: B
Rationale: The CGL policy provides third-party
liability coverage for claims arising from bodily injury
or property damage caused by the insured's
negligence.
2. Which of the following is NOT a standard CGL
coverage part?
,A) Coverage A – Bodily Injury and Property Damage
Liability
B) Coverage B – Personal and Advertising Injury
Liability
C) Coverage C – Medical Payments
D) Coverage D – Workers Compensation Liability
Correct answer: D
Rationale: Workers Compensation is a separate
policy, not part of the CGL. CGL coverages are A
(BI/PD), B (Personal/Advertising Injury), and C
(Medical Payments).
3. Under CGL Coverage A (Bodily Injury and Property
Damage), the insurer has the duty to:
A) Defend the insured against any suit seeking
damages covered by the policy
B) Pay all defense costs, even if the suit is groundless
or fraudulent
C) Provide a defense even if some allegations are not
covered
D) All of the above
Correct answer: D
Rationale: The CGL provides a duty to defend, which
is broader than the duty to indemnify. The insurer
,defends even if the suit is groundless or partially
covered.
4. CGL Coverage A applies to bodily injury and
property damage that occurs:
A) During the policy period, regardless of when the
claim is reported
B) Only if the claim is reported during the policy
period
C) Only if the claim is filed within 30 days of the
occurrence
D) Only if the insured notifies the insurer within 24
hours
Correct answer: A
Rationale: The CGL is an "occurrence" policy,
covering injury or damage that occurs during the
policy period, even if the claim is reported later.
5. The definition of "occurrence" in a CGL policy is:
A) An accident, including continuous or repeated
exposure to substantially the same general harmful
conditions
B) Any intentional act
C) Any criminal act
, D) A single event only
Correct answer: A
Rationale: The CGL defines occurrence as an
accident, including continuous or repeated exposure
to harmful conditions (e.g., long-term pollution or
exposure to fumes).
6. "Bodily injury" under the CGL includes:
A) Physical injury, sickness, or disease sustained by
a person
B) Emotional distress or mental anguish (even
without physical injury)
C) Punitive damages
D) Economic loss without physical injury
Correct answer: A
Rationale: Bodily injury is defined as physical injury,
sickness, or disease. Mental anguish is covered only
if it results from physical injury.
7. "Property damage" under the CGL includes:
A) Physical injury to tangible property
B) Loss of use of tangible property that is not
physically injured
