5 Categories CGL insurance offers coverage for exposures - answer✔1. Premises and Operations
2. Product Liability
3. Complete Operations Liability
4. Contractual Liability
5. Contingent Liability
CGL covers damages arise out of - answer✔1. Bodily Injury & Property Damage
2. Personal Injury & Advertising Injury
3. Medical Expenses
Professional Liability Insurance - answer✔provides coverage to professional for liability claims arising
out of (or failure to provide) negligent acts in performance of professional services
*includes E&O
* covers economic damages
Errors & Omissions (E&O) - answer✔covers professional & organizations for financial losses resulting
from alleged, wrongful acts (errors, omissions or negligent acts) arising from professional activities
Wrongful Acts - answer✔Error, omission or negligent act that a professional commits during the
provision of professional services
CGL vs. PLI - answer✔PLI - covers economic damages arising out of negligent acts
CGL - covers BI & PD arising out of negligence related to operating a business
1st Standard General Liability Policy - answer✔First set of standard poicy provision developed in 1940
What influences led to the development of the 1st Standard General Liability Policy - answer✔Policy
Issues
* Forms independently written by insurers
* Inconsistent, complex & confusing
* Ambiguous/complex legal language
* Difficult for courts to interpret
What influences led to the development of the Comprehensive General Liability Form - answer✔Legal
Environment
* Legal interpretations of language (multiple)
Policy Issues
* Language and provisions not applicable to insured
* Difficult to understand - complex language
Comprehensive General Liability Form (1966) - answer✔Predecessor of current CGL form
Format & Language Changes:
* Improved policy format & simplified language
* Clarified ambiguities
* Consolidated several types of coverage into a single policy
* Policy jacket added with specific policies applicable to insured
Changed basis on which coverage was written
* Occurrence - injurious exposure to condition resulting in BI or PD
* Occurrence Policy
Comprehensive General Liability Form 1973 Revision - answer✔* Adapted & clarified coverage issues
regarding the effect of regulatory issues on pollution liability
* Definition of occurrence revised to include continuous or repeated exposure to conditions
* Changes broadened general liability coverage
Broad Form Comprehensive General Liability (BFGL) Endorsement (1976) - answer✔Combined many
endorsements into one single, standard endorsement
*Allowed significant cost savings for insured resulting from the increased efficiency of one consolidated
endorsement
Forces that led to liability crisis in 1985 - answer✔* Increased # of medical malpractice lawsuits
* BI & PD claims arising out of asbestos crisis
* Liability for environmental damage, resulting in complex claims due to # of at-fault parties +
uncertainty about the trigger of coverage for pollution
* Other forms of liability - Agent Orange & DES
Liability Crisis (1985) - answer✔Judicial rulings created the potential for long-tail losses arising from
asbestos, pollution & other latent exposures
Industry challenged by adverse court rulings & coverage interpretations
Key issues addressed since 1986 in CGL form: - answer✔1988: inclusion of arbitration proceedings
1993: inclusion of leased workers under insured status provision (changes in employment law)
1996: clarification of duty to defend a 3rd Party for whom insured is contractually responsible
1999: clarification of known loss rule
2001: clarification of AI in areas of Internet liability & intellectual property
2007: clarification of supplementary payment + addition of exclusion for Do Not Call laws
2013 ISO GCL Policy - answer✔* Additional endorsements + adjustment of coverage to protect insurers
* Revised 'Additional Insured' + Professional Services' endorsements
* Added 6 new endt's
* Modifications to policy exclusions:
How has the industry responded to the identification of new exposures excluded by CGL? - answer✔by
providing customized coverage via new, standalone policies i.e. EPLI
Employment Practices Liability Insurance (EPLI) - answer✔protects businesses against damages & legal
expenses resulting from wrongful acts from this employment practices - discrimination, sexual
harassment, wrongful termination etc.
What is the purpose of CGL and how does it differ from PLI? - answer✔CGL provides protection for
liability involving premises, operations, contractual liability, products & completed operations typically
associated with commercial business. Coverage is provided for liability due to BI, PD & medical
payments
PLI provides protection for liability that arises from the rendering of professional services. Covers
economic damage for liability arising from E&O or negligence a professional commits
What is the significance of the 1966 Comprehensive Genera Liability form? - answer✔* Written in
simplified language + customized to insured's needs
* Included common provisions to which specific policy provisions could be added
* Changed basis on which CGL was written + defined occurrence
* Improved ease of use + reliability because reduced ambiguity and confusion
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