INS 300 Ch. 14
Terms
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- TYPES OF GENERAL LIABILITY LOSS EXPOSURES
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1) Premises and operations
2) Products liability
3) Completed operations
4) Contractual liability
5) Contingent liability -
General Liability Loss Exposures:
PREMISES AND OPERATIONS -
legal liability can arise out of ownership and maintenance of premises
invitees require highest degree of care
- must be warned and protected -
General Liability Loss Exposures:
PRODUCTS LIABILITY -
legal liability of manufacturers, wholesalers, retailers to persons who are injured or incur property damage from defective products
can be sued based on negligence, breach of warranty, strict liability -
General Liability Loss Exposures:
COMPLETED OPERATIONS - liability arising out of faulty work performed away from premises after work or operation completed
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General Liability Loss Exposures:
PRODUCTS-COMPLETED OPERATIONS HAZARD - covers both products liability and completed operations loss
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General Liability Loss Exposures:
CONTRACTUAL LIABILITY - business firm agrees by a written or oral contract to assume legal liability of another party
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General Liability Loss Exposures:
CONTINGENT LIABILITY -
liability arising out of work done by independent contractors
general rule: firms not legally liable for work done by independent contractors
exceptions: 1)activity is illegal 2)situation does not permit delegation of authority 3)work done is inherently dangerous -
General Liability Loss Exposures:
OTHER GENERAL LIABILITY LOSS EXPOSURES -
environmental pollution
fire legal liability
liquor liability
directors and officers liability
personal and advertising injury
property in insured's care or control
sexual harassment
employment practices -
General Liability Loss Exposures:
LIQUOR LIABILITY LAW/DRAMSHOP LAW - liquor selling establishments can be legally liable for injuries caused by intoxicated customers
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General Liability Loss Exposures:
PERSONAL AND ADVERTISING INJURY -
false arrest, malicious prosecution, unlawful entry, libel, violation of privacy, using others' ideas, infringement of trade slogan in ads
ex: detaining innocent customer for shoplifting - COMMERCIAL GENERAL LIABILITY POLICY (CGL), two coverage forms
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1) occurrence form
2) claimsmade form -
CGL Occurence Policy:
5 major sections -
Section 1: Coverages
Section 2: Who is an insured?
Section 3: Limits of insurance
Section 4: CGL conditions
Section 5: Definitions -
CGL Occurence Policy:
Section 1:
OCCURRENCE - an accident, including continuous exposure to the same general harmful conditions
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CGL Occurence Policy:
Section 1:
COVERAGE A -
Bodily injury and peroperty damage liability
must be caused by an occurrence during policy period -
CGL Occurence Policy:
Section 1:
Defense costs -
duty to defend ends when limits paid
defense costs are in addition to policy limits -
CGL Occurence Policy:
Section 1:
EXCLUSIONS (part 1) -
Expected or intended injury
Contractual liability
Liquor liability
Workers compensation
Employers liability
Pollution exclusion
Aircraft, auto, and watercraft exculsion -
CGL Occurence Policy:
Section 1:
EXCLUSIONS (part 2) -
Mobile equipment when being transported by insured auto or used for stunt
War
Damage to property
Property damage to insured's product resulting from a defect of product
Property damage to the insured's work included in products completed operations hazard
Property damage to impaired property
Recall of products
Personal and advertising injury -
CGL Occurrence Policy:
Section 1:
COVERAGE B - Personal and Advertising Injury Liability
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CGL Occurrence Policy:
Section 1:
COVERAGE C -
Medical Payments
expenses must be incurred w/in one year of accident and are paid w/o regard to legal liability -
CGL Occurrence Policy:
Section 1:
SUPPLEMENTARY PAYMENTS: COVERAGES A AND B -
in addition to policy limits
All expenses incurred by insurer
Up to $250 for cost of bail bond
cost of bonds to release attachments
Actual loss of earnings by insured up to $250 a day
Court costs to insured
Prejudgment interest
Interest that accrues after entry of judgment -
CGL Occurrence Policy:
Section 2:
WHO IS AN INSURED? (part 1) -
* Owner and spouse if sole proprietorship
* Partners, members, and spouses if partnershiop
* Members and mgrs if LLC
* Officers, directors, s/h if corp
* Trust and trustees -
CGL Occurrence Policy:
Section 2:
WHO IS AN INSURED? (part 2) -
* Volunteer workers
* Employees acting within scope of employment
* Person or org acting as real estage mgr
* Legal rep should insured die
* Drivers of mobile equipment owned by named insured
* Any newly acquired or formed org other than partnership, joint venture, or LLC -
CGL Occurrence Policy:
Section 3 Limits of Insurance:
GENERAL AGGREGRATE LIMIT -
max amount insurer will pay for sum of
Covg A (excluding property and bodily injury included in products-completed operations hazard)
Covg B
Covg C -
CGL Occurrence Policy:
Section 3 Limits of Insurance:
PRODUCTS-COMPLETED OPERATIONS AGGREGATE LIMIT - bodily injury and property damage incljuded in "products-completed operations hazard" in Covg A
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CGL Occurrence Policy:
Section 3 Limits of Insurance:
PERSONAL AND ADVERTISING INJURY LIMIT - Covg B limit
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CGL Occurrence Policy:
Section 3 Limits of Insurance:
EACH OCCURRENCE LIMIT - sum of all damages under Covg A and Covg C arising out of any one occurrence
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CGL Occurrence Policy:
Section 3 Limits of Insurance:
DAMAGE TO RENTED PREMISES - max paid under Covg A for property damage to rented premises from a single fire
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CGL Occurrence Policy:
Section 3 Limits of Insurance:
MEDICAL EXPENSES LIMIT - max paid under medical expenses because of a bodily injury sustained by any one person
- CLAIMS-MADE POLICY
- covers only claims that are first reported during the policy period, provided the event occurred after the retroactive date (if any)
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CGL Claims-Made Policy:
LONG-TAIL CLAIMS - small number of claims reported years after poilcy first written
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CGL Claims-Made Policy:
RETROACTIVE DATE - a date before inception of policy since which occurrence must occur.
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CGL Claims-Made Policy:
EXTENDED REPORTING PERIOD - date after policy expires until which claim can be made. occurrence must still be between retroactive date and policy expiration
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CGL Claims-Made Policy:
BASIC EXTENDED REPORTING PERIOD -
automatically provided when:
* policy canceled not renewed
* insurer replaces policy w/retroactive date later than original policy
* claims made policy replaced w/occurrence
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5 year tail (occurrence reported w/in policy period)
60 day tail (occurrence not reported w/in policy period) -
Employment-Related Practices Liability Insurance:
INJURY -
* refusal to emply, termination, demotion, negative evaluation, humiliation
* coercing to commit an unlawful act
* sexual harassment
* verbal, physical, emotional abuse, discrimination -
Employment-Related Practices Liability Insurance:
CO-PAYMENT - requires insured to pay part of the damages and legal defense costs up to some limit
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Employment-Related Practices Liability Insurance:
LEGAL DEFENSE COSTS - included in policy limit
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Employment-Related Practices Liability Insurance:
EXCLUSIONS -
* criminal acts
* contractual liability
* workers comp
* failure to comply with disability act
* violation of employment laws
* strikes
* insured committing sexual harassment
* restructuring
* intentional discrimination
* retaliatory actions - WORKERS COMPENSATION INSURANCE
- provides medical care, cash benefits, survivor benefits, rehab services to workers who are injured or die from job related accidents or disease
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Workers Compensation Insurance:
LIABILITY W/O FAULT - employer held absolutely liable for work related accidents and disease regardless of fault
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Workers Compensation Insurance:
WORKERS COMP AND EMPLOYERS LIABILITY POLICY, 3 PARTS -
Part 1: Workers Comp Insurance
Part 2: Employer's liability insurance
Part 3: Other-States Insurance -
Workers Compensation and Employers Liability Insurance Policy:
PART ONE: WORKERS COMP INSURANCE - no limits; insurer pays all benefits required by workers comp law the state
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Workers Compensation and Employers Liability Insurance Policy:
PART TWO: EMPLOYERS LIABILITY INSURANCE - any injury not covered under workers comp law
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Workers Compensation and Employers Liability Insurance Policy:
PART TWO: EMPLOYERS LIABILITY INSURANCE:
3RD PARTY OVER CASES - injured eE sues 3rd party, who in turn sues eR for contributory negligence
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Workers Compensation and Employers Liability Insurance Policy:
PART TWO: EMPLOYERS LIABILITY INSURANCE:
EXCULSIONS (part 1) -
* Liability assumed contract
* Punitive damages
* Bodily injury to an illegal employee
* Obligations imposed on employer b/c of law
* Intentional injury caused by employer
* Bodily injury outside US or Canada -
Workers Compensation and Employers Liability Insurance Policy:
PART TWO: EMPLOYERS LIABILITY INSURANCE
EXCLUSIONS (part 2) -
* Bodily injury to any person subject to Longshore and Harbor Workers Comp Act
* Bodily injury to any person subject to Federal employers Liability Act
* Bodily injury to master or crew member of any vessel
* Fines or penalties b/c of violation of law