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CPCU 552, Chapter 3 Questions and Correct
Answers
The Coverage B—Personal and Advertising Injury Liability of the
Commercial General Liability (CGL) Coverage Form parallels the
Coverage A insuring agreement, but personal and advertising
injury applies to an Ans: Bodily injury and property damage
liability is parallel to personal and advertising injury liability, but
personal and advertising injury applies to an offense arising out of
the named insured's business.
ABC Emporium is a malt shop and novelty store with a large
teenaged clientele. Fred, an employee at ABC, noticed a teenage
patron acting suspiciously. Suspecting shoplifting, Fred followed
the teen out the front door down the street. When the teen noticed
Fred following her, she bolted towards a parked car, whereupon
Fred tackled her from behind, knocking her to the pavement.
Unfortunately, the teenager that Fred tackled had not shoplifted
anything and was merely startled by Fred's bizarre antics. Her
parents, both attorneys, immediately filed a lawsuit against ABC
seeking $550,000 in damages. The lawsuit asked for $2,000 for
direct medical expenses from the emergency room visit following
the incident and another $48,000 for counseling for the teenager,
who was traumatized by the incident; and $500,000 for the pain
and suffering of the parents who were exposed to ridicule in their
© 2025 All rights reserved
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community because of the shoplifting Ans: The entire $550,000
of alleged damages would meet the definition of bodily injury that
is used in the insuring agreement for Coverage B—Personal and
Advertising Liability, and there are sufficient limits to cover all of
the damages if ABC is found liable
A company owns land that is used as a softball diamond and
recreational park for hosting employee picnics. Once a year the
company also allows a non-profit organization to hold a softball
game on these premises. During this year's softball game, the
director of the non-profit was injured when a softball hit him in
the head. He asked the company that owns the land to pay for his
trip to the emergency room. The company's unendorsed
Commercial General Liability policy Ans: Does not respond to the
director's injuries sustained because they happened during an
athletic event.
The Wier Corporation has a Commercial General Liability Coverage
Form. Which one of the following statements correctly describes
the extent, if any, to which stockholders of the corporation are
insureds for liability coverage under the policy? Ans: They are
insureds, but only with respect to their liability as stockholders.
The Supplementary Payments section of the Commercial General
Liability Coverage Form includes the cost of bail bonds required
because of accidents or traffic violations arising out of the use of
© 2025 All rights reserved
CPCU 552, Chapter 3 Questions and Correct
Answers
The Coverage B—Personal and Advertising Injury Liability of the
Commercial General Liability (CGL) Coverage Form parallels the
Coverage A insuring agreement, but personal and advertising
injury applies to an Ans: Bodily injury and property damage
liability is parallel to personal and advertising injury liability, but
personal and advertising injury applies to an offense arising out of
the named insured's business.
ABC Emporium is a malt shop and novelty store with a large
teenaged clientele. Fred, an employee at ABC, noticed a teenage
patron acting suspiciously. Suspecting shoplifting, Fred followed
the teen out the front door down the street. When the teen noticed
Fred following her, she bolted towards a parked car, whereupon
Fred tackled her from behind, knocking her to the pavement.
Unfortunately, the teenager that Fred tackled had not shoplifted
anything and was merely startled by Fred's bizarre antics. Her
parents, both attorneys, immediately filed a lawsuit against ABC
seeking $550,000 in damages. The lawsuit asked for $2,000 for
direct medical expenses from the emergency room visit following
the incident and another $48,000 for counseling for the teenager,
who was traumatized by the incident; and $500,000 for the pain
and suffering of the parents who were exposed to ridicule in their
© 2025 All rights reserved
, 2 | Page
community because of the shoplifting Ans: The entire $550,000
of alleged damages would meet the definition of bodily injury that
is used in the insuring agreement for Coverage B—Personal and
Advertising Liability, and there are sufficient limits to cover all of
the damages if ABC is found liable
A company owns land that is used as a softball diamond and
recreational park for hosting employee picnics. Once a year the
company also allows a non-profit organization to hold a softball
game on these premises. During this year's softball game, the
director of the non-profit was injured when a softball hit him in
the head. He asked the company that owns the land to pay for his
trip to the emergency room. The company's unendorsed
Commercial General Liability policy Ans: Does not respond to the
director's injuries sustained because they happened during an
athletic event.
The Wier Corporation has a Commercial General Liability Coverage
Form. Which one of the following statements correctly describes
the extent, if any, to which stockholders of the corporation are
insureds for liability coverage under the policy? Ans: They are
insureds, but only with respect to their liability as stockholders.
The Supplementary Payments section of the Commercial General
Liability Coverage Form includes the cost of bail bonds required
because of accidents or traffic violations arising out of the use of
© 2025 All rights reserved
