CIC GENERAL LIABILITY TO STUDY
TEST WITH VERIFIED ANSWERS
Why person may request additional insured status - Answer-- greater safety net in risk
transfer (don't have to meet conditions for defense to be covered)
- "belt and suspenders" approach; if it's not covered here, maybe it's covered there. if
contractor does not cover, I have AI, if AI doesn't cover, I have contractural
- grants rights under NI's CGL policy defense costs outside of limits
- protects Add NI from subrogation (normally insurers don't subrogate against insureds
- may provide for higher total limits
- may reduce direct insurance costs (like for GCs).. better loss experience by using
someone's insurance
Reasons NI is willing to add others as AI - Answer-- close relationship
- contractural relationship (if you want this job, you're going to require this contract)
Problems for the Named Insured (in regards to additional NIs) - Answer-- diminution of
policy limits (smaller pieces of the pie)
- unintended coverage provided
- defense conflicts (insurer has responsibility to defend both parties)
- compliance problems
Problems for the Additional Insure - Answer-- loss of defense control
- increased probability of disputes over coverage
- limited coverage under current forms (used to different forms)
- dependence on someone else's insurance (risk mgmgt problem; what happens when
your plumbing contractor doesn't pay his insurance or agg of their insurance is
diminished?)
Liability exposures covered under Coverage A - Answer-Bodily injury and Property
damage:
- Premises
- Operations
- Products
- Completed Operations
- Contractual- Contingent
Liability exposures covered under Coverage B - Answer-Personal and advertising injury:
- Operations
- Contingent
- Personal Injury Liability
Types of Insureds - Answer-- Named Insureds
- Automatic Insureds
- Non-automatic insureds (added by endorsement; additional insureds)
, Others also included as automatic insureds - Answer-- employees, volunteers, leased
workers and temporary workers
- real estate managers
- persons with CCC of NI's property if the NI dies
- Legal representative
* while conducting the NI's business / performing duties related to NI's business
- Newly acquired or newly formed org (until 90th day or end of policy period, whichever
is earlier; does NOT include partnerships, joint ventures, LLCs)
Who is an insured? Individual: - Answer-Named Individual
Spouse
Who is an insured? Partnership or Joint Venture: - Answer-Named Partnership
Named Joint Venture
Partners
Members
Spouses
Who is an insured? LLC: - Answer-Named LLC
Members
Managers
Who is an insured? Organization: - Answer-Named Entity
Executive Officers
Directors
Stockholders
Who is an insured? Trust: - Answer-Named Trust
Trustees
Two Promises insurer makes - Answer-1) Insuring Agreement: legally obligated to pay
damages b/c of BI or PD (tangible property only) to which this insurance applies
- must be caused by occurrence in the coverage territory
- BI or PD must occur during the policy period
- known injury/damage not covered
- if previously known, any continuation not covered (covered by policy when discovered)
2) Right and duty to defend against any suit seeking damages
- but, no coverage, no defense
- no consent to settle required (insured can't ask insurer not to pay a claim)
- duty to defend ends when the limit of insurance has been exhausted by Coverage A or
B or medical expenses under Coverage C
Types of liability (3) - Answer-- directly liable (you did it, cut through a water line)
- vicariously liable (someone i control did it. one of my company's plumbers did it)
TEST WITH VERIFIED ANSWERS
Why person may request additional insured status - Answer-- greater safety net in risk
transfer (don't have to meet conditions for defense to be covered)
- "belt and suspenders" approach; if it's not covered here, maybe it's covered there. if
contractor does not cover, I have AI, if AI doesn't cover, I have contractural
- grants rights under NI's CGL policy defense costs outside of limits
- protects Add NI from subrogation (normally insurers don't subrogate against insureds
- may provide for higher total limits
- may reduce direct insurance costs (like for GCs).. better loss experience by using
someone's insurance
Reasons NI is willing to add others as AI - Answer-- close relationship
- contractural relationship (if you want this job, you're going to require this contract)
Problems for the Named Insured (in regards to additional NIs) - Answer-- diminution of
policy limits (smaller pieces of the pie)
- unintended coverage provided
- defense conflicts (insurer has responsibility to defend both parties)
- compliance problems
Problems for the Additional Insure - Answer-- loss of defense control
- increased probability of disputes over coverage
- limited coverage under current forms (used to different forms)
- dependence on someone else's insurance (risk mgmgt problem; what happens when
your plumbing contractor doesn't pay his insurance or agg of their insurance is
diminished?)
Liability exposures covered under Coverage A - Answer-Bodily injury and Property
damage:
- Premises
- Operations
- Products
- Completed Operations
- Contractual- Contingent
Liability exposures covered under Coverage B - Answer-Personal and advertising injury:
- Operations
- Contingent
- Personal Injury Liability
Types of Insureds - Answer-- Named Insureds
- Automatic Insureds
- Non-automatic insureds (added by endorsement; additional insureds)
, Others also included as automatic insureds - Answer-- employees, volunteers, leased
workers and temporary workers
- real estate managers
- persons with CCC of NI's property if the NI dies
- Legal representative
* while conducting the NI's business / performing duties related to NI's business
- Newly acquired or newly formed org (until 90th day or end of policy period, whichever
is earlier; does NOT include partnerships, joint ventures, LLCs)
Who is an insured? Individual: - Answer-Named Individual
Spouse
Who is an insured? Partnership or Joint Venture: - Answer-Named Partnership
Named Joint Venture
Partners
Members
Spouses
Who is an insured? LLC: - Answer-Named LLC
Members
Managers
Who is an insured? Organization: - Answer-Named Entity
Executive Officers
Directors
Stockholders
Who is an insured? Trust: - Answer-Named Trust
Trustees
Two Promises insurer makes - Answer-1) Insuring Agreement: legally obligated to pay
damages b/c of BI or PD (tangible property only) to which this insurance applies
- must be caused by occurrence in the coverage territory
- BI or PD must occur during the policy period
- known injury/damage not covered
- if previously known, any continuation not covered (covered by policy when discovered)
2) Right and duty to defend against any suit seeking damages
- but, no coverage, no defense
- no consent to settle required (insured can't ask insurer not to pay a claim)
- duty to defend ends when the limit of insurance has been exhausted by Coverage A or
B or medical expenses under Coverage C
Types of liability (3) - Answer-- directly liable (you did it, cut through a water line)
- vicariously liable (someone i control did it. one of my company's plumbers did it)
