AU 62 - Ch 2 Exam 2025 Questions
and Answers
Premises and operations liability exposure - ✔✔Premises and operations liability
exposure is the possibility that an organization will be held liable because of bodily
injury or property damage caused by an accident that either occurs on the
organization's premises or arises out of the organization's ongoing (as opposed to
completed) operations on or off those premises. It could be caused by an accident
arising out of the products manufactured, sold, or distributed by the organization and
occurring after the products are no longer on the organizations's premises or int he
organization's physical possession or by an accident arising out of the organization's
completed work, including defective parts or materials furnished with the work.
Accidents that could lead to claims - ✔✔A consumer dies because of impurities in a
medicine sold by a pharmaceutical firm.
The tenants of an apartment building are injured by smoke inhalation, and their
personal property is destroyed by a fire that resulted from faulty electrical work
completed by a contractor several hours earlier.
Personal and Advertising Injury Liability - ✔✔CGL form defines this to mean any kind
of injury (such as loss of reputation, humiliation, economic loss, or even consequential
bodily injury) arising out of any of several listed offenses. Examples of the listed
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,offenses are false arrest, wrongful eviction, libel, slander and infringing upon another's
copyright in the insured's advertisement. It is now such a common exposure that is is an
integral part of the CGL form, but it can be omitted if the insured does not want to buy
it. This is Coverage B on the CGL form.
Medical Payments - ✔✔CGL form includes Coverage C - Medical Payments, which
pays medical expenses of others in certain circumstances. Coverage C, Medical
Payments does not require the insured to be legally liable and, therefore, is not
technically liability insurance. Underwriters do not individually underwrite this loss
exposure but do consider the medical payments loss exposure as part of the premises or
operations loss exposures.
Bodily Injury and Property Damage Liablity - ✔✔On CGL form, this is Coverage A -
Bodily Injury and Property Damage Liability.
Requirements for Medical Payments Coverage - ✔✔To be covered, the medical
expenses (as defined in the form) must result from bodily injury because of an accident
occurring on the insured's premises or arising out of the insured's operations (other
than completed operations) anywhere in the coverage territory.
Limits of Medical Payments Insurance - ✔✔Medical payments coverage has a much
lower limit of insurance than either Coverage A or Coverage B. Its role is to pay small
bodily injury claims without having to establish liability, perhaps reducing the
likelihood that an accident victim will sue the insured.
Other General Liability Exposures - ✔✔While ISO general liability coverage forms are
available for covering either specific situation or specific loss exposure that are not
adequately covered by the CGL form, successful underwriting of these types of loss
exposures requires a thorough understanding of the policy provision to properly
evaluate the general liability loss exposures and to determine whether the insured's loss
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 2
, exposure is on that is covered under the CGL policy or would be more appropriately
covered under a different coverage form.
The underwriter should also not ignore possible gaps, omissions, or overlaps in
coverage by automatically providing only the coverage requested by the producer.
Whenever necessary, underwriters should explain to the producer alternative methods
of treating any observed gap, omission or overlap. This elimination of gaps in coverage
aids all parties concerned, including the insurer, by avoiding misunderstandings about
coverage that might arise after a loss occurs.
Components of a General Liability Coverage Part - ✔✔One or more general liability
declaration forms
One or more general liability coverage forms
Any applicable endorsements
Under ISO procedures, a general liability coverage part can be included in a CPP or
issued in a monoline policy that provides general liability coverage only.
General Liability Declarations - ✔✔ISO has developed separate declarations forms for
use with each of its general liability coverage forms. Some of the declarations forms also
contain spaces for showing additional information relevant to the associated coverage
form.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 3
and Answers
Premises and operations liability exposure - ✔✔Premises and operations liability
exposure is the possibility that an organization will be held liable because of bodily
injury or property damage caused by an accident that either occurs on the
organization's premises or arises out of the organization's ongoing (as opposed to
completed) operations on or off those premises. It could be caused by an accident
arising out of the products manufactured, sold, or distributed by the organization and
occurring after the products are no longer on the organizations's premises or int he
organization's physical possession or by an accident arising out of the organization's
completed work, including defective parts or materials furnished with the work.
Accidents that could lead to claims - ✔✔A consumer dies because of impurities in a
medicine sold by a pharmaceutical firm.
The tenants of an apartment building are injured by smoke inhalation, and their
personal property is destroyed by a fire that resulted from faulty electrical work
completed by a contractor several hours earlier.
Personal and Advertising Injury Liability - ✔✔CGL form defines this to mean any kind
of injury (such as loss of reputation, humiliation, economic loss, or even consequential
bodily injury) arising out of any of several listed offenses. Examples of the listed
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 1
,offenses are false arrest, wrongful eviction, libel, slander and infringing upon another's
copyright in the insured's advertisement. It is now such a common exposure that is is an
integral part of the CGL form, but it can be omitted if the insured does not want to buy
it. This is Coverage B on the CGL form.
Medical Payments - ✔✔CGL form includes Coverage C - Medical Payments, which
pays medical expenses of others in certain circumstances. Coverage C, Medical
Payments does not require the insured to be legally liable and, therefore, is not
technically liability insurance. Underwriters do not individually underwrite this loss
exposure but do consider the medical payments loss exposure as part of the premises or
operations loss exposures.
Bodily Injury and Property Damage Liablity - ✔✔On CGL form, this is Coverage A -
Bodily Injury and Property Damage Liability.
Requirements for Medical Payments Coverage - ✔✔To be covered, the medical
expenses (as defined in the form) must result from bodily injury because of an accident
occurring on the insured's premises or arising out of the insured's operations (other
than completed operations) anywhere in the coverage territory.
Limits of Medical Payments Insurance - ✔✔Medical payments coverage has a much
lower limit of insurance than either Coverage A or Coverage B. Its role is to pay small
bodily injury claims without having to establish liability, perhaps reducing the
likelihood that an accident victim will sue the insured.
Other General Liability Exposures - ✔✔While ISO general liability coverage forms are
available for covering either specific situation or specific loss exposure that are not
adequately covered by the CGL form, successful underwriting of these types of loss
exposures requires a thorough understanding of the policy provision to properly
evaluate the general liability loss exposures and to determine whether the insured's loss
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 2
, exposure is on that is covered under the CGL policy or would be more appropriately
covered under a different coverage form.
The underwriter should also not ignore possible gaps, omissions, or overlaps in
coverage by automatically providing only the coverage requested by the producer.
Whenever necessary, underwriters should explain to the producer alternative methods
of treating any observed gap, omission or overlap. This elimination of gaps in coverage
aids all parties concerned, including the insurer, by avoiding misunderstandings about
coverage that might arise after a loss occurs.
Components of a General Liability Coverage Part - ✔✔One or more general liability
declaration forms
One or more general liability coverage forms
Any applicable endorsements
Under ISO procedures, a general liability coverage part can be included in a CPP or
issued in a monoline policy that provides general liability coverage only.
General Liability Declarations - ✔✔ISO has developed separate declarations forms for
use with each of its general liability coverage forms. Some of the declarations forms also
contain spaces for showing additional information relevant to the associated coverage
form.
COPYRIGHT © 2025 BY OLIVIA WEST, ALL RIGHTS RESERVED 3
