CPCU 552 FREQUENTLY TESTED
QUESTIONS WITH DETAILED VERIFIED
CORRECT ANSWERS
One of the exclusions in Part A of the Commercial General Liability Coverage Form is for
expected or intended injury. However, there is one exception to this exclusion that applies
to bodily injury arising from which one of the following?
A) An action of an employee
B) The use of reasonable force to protect persons or property
C) Self-inflicted injuries by a dissatisfied customer who is mentally ill
D) A person testing a new product as long as the person is not paid to conduct the test
B
Which one of the following statements concerning the exclusions commonly found in
Coverage A of the ISO Commercial General Liability (CGL) Coverage Form is most accurate?
A. The Contractual Liability exclusion for assumed liability only applies to liability assumed
by the named insured, but does not apply to any of the named insured's employees.
B. The Expected or Intended Injury exclusion only applies if the intended injury occurs on the
premises of the named insured.
C. The Liquor Liability exclusion only applies if the insured is in the business of
manufacturing, distributing, selling, serving, or furnishing alcoholic beverages.
D. Although there is a Pollution Exclusion in the basic CGL policy, the pollution exclusion
only applies to the intentional release of pollutants, so there would be coverage for an
accidental discharge by the insured.
C
,The claims-made version of the Commercial General Liability Coverage Form is used only
in cases in which:
A) The possibility of long-tail claims is a major underwriting concern.
B) The occurrence version is not available due to loss experience.
C) The insured is purchasing for the first time.
D) Claims are expected to be fully developed within two years.
A
The Grey Corporation was founded three years ago and purchased an occurrence version of
the Commercial General Liability Coverage Form. Each year, the corporation has changed
insurers but has purchased the same type of form without any gaps in coverage. During
year 1, the company completed work that resulted in an injury to a customer in year 2.
However, the customer did not make a claim for damages until year 3. Which of Grey's
forms will respond to this loss?
A) The form in force in year 1 when the work was completed
B) The form in force in year 2 when the injury occurred
C) The form in force in year 3 when the claim was made.
D) The forms in force in years 1 and 2 in proportion to their coverage limits
B
EXPLANATION: If a form is written on an occurrence basis, it will respond to claims made
for damages that occurred during the policy period. Therefore, the form that will respond is
the one that was in force during year 2.
Argot Industries carries an unendorsed Commercial General Liability (CGL) policy with a
$1,000,000 per occurrence limit. As part of an employee reward program, Argot rents a 25
foot fishing boat, with captain and crew, to take its five top sales people on an employer
sponsored fishing trip. While the boat navigates away from the marina, it accidentally collides
,with a 75 foot yacht that is moored. The owner of the damaged yacht sues the fishing boat
company and Argot for damages. Is any coverage for this incident afforded under Argot's CGL
policy?
A) No, boating activities are outside of Argot's standard business operations and
thus excluded from the CGL.
B) Yes, non-owned watercraft liability is included as part of the unendorsed CGL as long as
the insured is not in the marine business.
C) Yes, the fishing boat is less than 26 feet long and is not used by Argot to carry property
or people for a charge.
D) No, the damaged boat was moored and watercraft liability only applies to vessels in
movement.
C
As part of Coverage A of the Commercial General Liability Coverage Form an insurer agrees
to defend the insured against suits seeking damages covered under the policy. Which one of
the following statements about this obligation of an insurer is true?
A) A suit is defined to include formal lawsuits only.
B) The insurer must receive the insured's permission to settle a suit.
C) The cost to defend suits is payable even if the payment of damages may be
excluded elsewhere in the policy.
D) The wrong that lead to the suit may have been committed by another person for
whose conduct the insured is vicariously liable.
D
Which one of these pollution exposures would be covered under the Commercial
General Liability coverage form?
A) A tanker truck carrying a toxic chemical overturns, and the chemical contaminates the
, town's drinking water.
B) A chemical manufacturer spills twenty gallons of its product into an adjacent river.
C) A pipe carrying chlorine from one building to another within a chemical plant
ruptures, releasing a chlorine gas cloud.
D) A gas fired boiler in a high-rise office building malfunctions, and a release of carbon
monoxide throughout the building follows the malfunction.
D
Which one of the following statements about Coverage A of the Commercial General
Liability (CGL) Coverage Form is true?
A) Coverage for bodily injury liability excludes damages for claims arising from sickness
and disease unless such coverage is added by endorsement.
B) Coverage for property damage includes the loss of use of tangible property that is not
physically injured.
C) The insurer may be required to pay certain bodily injury or property damage claims even
if one or more exclusions applies to the claim.
D) Bodily injury or property damage arising from any intentional act is excluded.
B
Which one of these is an exclusion for an exposure that is customarily insured by a
separate policy?
A) Workers Compensation exclusion
B) Expected or Intended Injury exclusion
C) War exclusion
D) Damage to Impaired Property or Property Not Physically Injured exclusion
A
QUESTIONS WITH DETAILED VERIFIED
CORRECT ANSWERS
One of the exclusions in Part A of the Commercial General Liability Coverage Form is for
expected or intended injury. However, there is one exception to this exclusion that applies
to bodily injury arising from which one of the following?
A) An action of an employee
B) The use of reasonable force to protect persons or property
C) Self-inflicted injuries by a dissatisfied customer who is mentally ill
D) A person testing a new product as long as the person is not paid to conduct the test
B
Which one of the following statements concerning the exclusions commonly found in
Coverage A of the ISO Commercial General Liability (CGL) Coverage Form is most accurate?
A. The Contractual Liability exclusion for assumed liability only applies to liability assumed
by the named insured, but does not apply to any of the named insured's employees.
B. The Expected or Intended Injury exclusion only applies if the intended injury occurs on the
premises of the named insured.
C. The Liquor Liability exclusion only applies if the insured is in the business of
manufacturing, distributing, selling, serving, or furnishing alcoholic beverages.
D. Although there is a Pollution Exclusion in the basic CGL policy, the pollution exclusion
only applies to the intentional release of pollutants, so there would be coverage for an
accidental discharge by the insured.
C
,The claims-made version of the Commercial General Liability Coverage Form is used only
in cases in which:
A) The possibility of long-tail claims is a major underwriting concern.
B) The occurrence version is not available due to loss experience.
C) The insured is purchasing for the first time.
D) Claims are expected to be fully developed within two years.
A
The Grey Corporation was founded three years ago and purchased an occurrence version of
the Commercial General Liability Coverage Form. Each year, the corporation has changed
insurers but has purchased the same type of form without any gaps in coverage. During
year 1, the company completed work that resulted in an injury to a customer in year 2.
However, the customer did not make a claim for damages until year 3. Which of Grey's
forms will respond to this loss?
A) The form in force in year 1 when the work was completed
B) The form in force in year 2 when the injury occurred
C) The form in force in year 3 when the claim was made.
D) The forms in force in years 1 and 2 in proportion to their coverage limits
B
EXPLANATION: If a form is written on an occurrence basis, it will respond to claims made
for damages that occurred during the policy period. Therefore, the form that will respond is
the one that was in force during year 2.
Argot Industries carries an unendorsed Commercial General Liability (CGL) policy with a
$1,000,000 per occurrence limit. As part of an employee reward program, Argot rents a 25
foot fishing boat, with captain and crew, to take its five top sales people on an employer
sponsored fishing trip. While the boat navigates away from the marina, it accidentally collides
,with a 75 foot yacht that is moored. The owner of the damaged yacht sues the fishing boat
company and Argot for damages. Is any coverage for this incident afforded under Argot's CGL
policy?
A) No, boating activities are outside of Argot's standard business operations and
thus excluded from the CGL.
B) Yes, non-owned watercraft liability is included as part of the unendorsed CGL as long as
the insured is not in the marine business.
C) Yes, the fishing boat is less than 26 feet long and is not used by Argot to carry property
or people for a charge.
D) No, the damaged boat was moored and watercraft liability only applies to vessels in
movement.
C
As part of Coverage A of the Commercial General Liability Coverage Form an insurer agrees
to defend the insured against suits seeking damages covered under the policy. Which one of
the following statements about this obligation of an insurer is true?
A) A suit is defined to include formal lawsuits only.
B) The insurer must receive the insured's permission to settle a suit.
C) The cost to defend suits is payable even if the payment of damages may be
excluded elsewhere in the policy.
D) The wrong that lead to the suit may have been committed by another person for
whose conduct the insured is vicariously liable.
D
Which one of these pollution exposures would be covered under the Commercial
General Liability coverage form?
A) A tanker truck carrying a toxic chemical overturns, and the chemical contaminates the
, town's drinking water.
B) A chemical manufacturer spills twenty gallons of its product into an adjacent river.
C) A pipe carrying chlorine from one building to another within a chemical plant
ruptures, releasing a chlorine gas cloud.
D) A gas fired boiler in a high-rise office building malfunctions, and a release of carbon
monoxide throughout the building follows the malfunction.
D
Which one of the following statements about Coverage A of the Commercial General
Liability (CGL) Coverage Form is true?
A) Coverage for bodily injury liability excludes damages for claims arising from sickness
and disease unless such coverage is added by endorsement.
B) Coverage for property damage includes the loss of use of tangible property that is not
physically injured.
C) The insurer may be required to pay certain bodily injury or property damage claims even
if one or more exclusions applies to the claim.
D) Bodily injury or property damage arising from any intentional act is excluded.
B
Which one of these is an exclusion for an exposure that is customarily insured by a
separate policy?
A) Workers Compensation exclusion
B) Expected or Intended Injury exclusion
C) War exclusion
D) Damage to Impaired Property or Property Not Physically Injured exclusion
A
