CPCU 552 | (2025) COMPREHENSIVE (136) QUESTIONS AND VERIFIED DETAILED SOLUTIONS (
MULTIPLE CHOICES) |100% CORRECT!!
The term "you" is used throughout the Commercial General Liability Coverage Form. "You" is
defined to include:
A) The named insured shown in the declarations.
B) The named insured shown in the declarations and any employees of the named insured.
C) The named insured and any officers or directors of the named insured's organization.
D) All persons or entities who have any type of liability protection under the policy. - correct
answer A
Smart Endeavors, a retail clothing store, hired ABC Contractors to install a new air conditioning
system in one of its stores. ABC misrouted some wires during the installation process, which
caused the wires to overheat and caused a fire. The air conditioning unit had to be rewired,
which cost $1,000. Smart Endeavors' building sustained $30,000 worth of damage and $40,000
worth of inventory was damaged by smoke. Smart Endeavors was closed for two weeks and lost
$10,000 in profits during that period. ABC has liability insurance under a standard Commercial
General Liability (CGL) Coverage Form with $1,000,000 per occurrence limits. Which one of the
following statements concerning coverage for damages under Coverage A of the CGL is most
accurate?
A) ABC will pay $81,000 for all of the physical damage to the building and inventory, the air
conditioning rewiring costs, and Smart Endeavors' lost profits.
B) ABC will pay - correct answer C
EXPLANATION: ABC will pay $80,000 for the fire damage to the building and inventory as well as
the lost profits, but the CGL excludes the cost of work that was incorrectly performed, so the
$1,000 rewiring costs are excluded.
Which one of the following statements concerning the Damage to Your Product and Damage to
Your Work exclusions in Coverage A of the Commercial General Liability Coverage Form is most
correct?
A) These exclusions only apply to products or work that are in the care, custody and control of
the named insured at the premises location listed in the declarations page.
,CPCU 552 | (2025) COMPREHENSIVE (136) QUESTIONS AND VERIFIED DETAILED SOLUTIONS (
MULTIPLE CHOICES) |100% CORRECT!!
B) There are two exceptions to this exclusion which are meant to provide limited property
damage coverage for minor claims that would fall below the deductible of the named insured's
property insurance policy.
C) The exclusions only apply to work or products that were damaged by subcontractors or
outside parties who are expected to have their own insurance coverage, but the exclusions do
not apply to damage done by the named insured.
D) These exclusions only apply to damage to the work or product itself, but do not apply to any
subsequent damage or injury th - correct answer D
A plumbing contractor has a commercial general liability (CGL) policy that contains no
endorsements. Which one of the following claims would be covered by the CGL?
A) An improperly installed pipe was damaged when tested for leaks by an employee of the
plumbing contractor.
B) An employee of the plumbing contractor damaged a building while installing a waterline.
C) An employee of the plumbing contractor was injured while installing a hot water heater.
D) An employee of the plumbing contractor damaged a building with the contractor's auto -
correct answer B
For which one of these would the Damage to Your Product and Damage to Your Work exclusion
eliminate coverage?
A) A product that the insured incorrectly designed
B) Property damage caused by an insured's defectively produced product
C) Property damage caused by work performed on behalf of the insured by a subcontractor
D) Property damage caused by an insured's incorrectly designed product - correct answer A
Bodily injury was caused to customers by fumes that escaped from heating equipment
belonging to the Reynolds Corporation. Which one of the following statements describes the
reason there would or would not be liability coverage for these injuries under the corporation's
unendorsed Commercial General Liability Coverage Form?
A) Coverage would be excluded because of the pollution exclusion.
,CPCU 552 | (2025) COMPREHENSIVE (136) QUESTIONS AND VERIFIED DETAILED SOLUTIONS (
MULTIPLE CHOICES) |100% CORRECT!!
B) There would be coverage because the pollution exclusion has an exception that applies to
bodily injury caused by fumes from heating equipment.
C) Coverage would be excluded because of the impaired property exclusion.
D) There would be coverage because the impaired property exclusion has an exception that
applies to bodily injury caused by fumes from heating equipment. - correct answer B
An employee of a manufacturing plant is injured by a defective blade manufactured by the
employer. Although workers compensation is considered the exclusive remedy for an employee
injured in the course of employment, the injured worker may be able to sue the employer
under the:
A) Occupational disease benefits law.
B) Third-party-over action coverage.
C) Contractual liability coverage.
D) Dual-capacity doctrine. - correct answer D
The insuring agreement in Coverage A of the standard Commercial General Liability (CGL)
Coverage Form includes language that addresses legal expenses for claims covered by the
policy. Which one of the following statements regarding the insurer's legal defense obligations
is most accurate?
A) An insurer's duty to defend ends when the combined cost of legal expenses and damages
reaches the applicable policy limits.
B) An insurer's obligation to defend ends when the applicable limits of insurance have been
exhausted.
C) Legal expenses paid to outside, independent counsel end when the limits of insurance are
exhausted, but the insurer's obligation to defend using in-house counsel continues without
limit.
D) There is a separate limit established for legal expenses, and once that limit is reached the
insurer's duty to defend ends, even if no damages have yet been awarded. - correct answer B
Which one of these is an insured contract within the meaning of the definition of "insured
contract" in the CGL coverage form?
A) A warranty contract for product performance
, CPCU 552 | (2025) COMPREHENSIVE (136) QUESTIONS AND VERIFIED DETAILED SOLUTIONS (
MULTIPLE CHOICES) |100% CORRECT!!
B) An indemnification contract with an architect for injury or damage arising out of his or her
professional services
C) A builders contract covering the building of a single-family residence
D) An indemnity agreement with a municipality covering the use and maintenance of a sign -
correct answer D
A robber comes into a bank and threatens to hurt one of the bank's customers if he does not
give him cash. One of the bank's employees pushes the customer out of the way and restrains
the robber. In doing so, the employee injures the robber. Under the bank's unendorsed
Commercial General Liability policy, the robber's injury is:
A) Covered because the employee was using reasonable force to protect the customer.
B) Not covered because the injury was expected or intended.
C) Not covered because the injury was caused by an employee.
D) Covered because the employee has a duty to prevent illegal activity. - correct answer A
A sporting goods manufacturer recently issued a recall for defective basketballs. The total cost
of the recall exceeded $250,000, prompting the manufacturer to submit a claim to its insurer
for the recall expense. The manufacturer has an unendorsed Commercial General Liability (CGL)
policy. Which one of the following statements best represents the insurability of this loss
exposure on the manufacturer's CGL?
A) There is no coverage due to the exclusion for the Recall of Products, Work, or Impaired
Property.
B) Coverage is available at the discretion of the insurer. The cost of the recall must be less than
the anticipated cost of claims arising from the product defect.
C) The policy will only respond to claims for the recall of Products, Work, or Impaired Property
on an indemnity basis.
D) The policy provides a $100,000 sub-limit for the recall of Products, Work, or Impaired
Property. - correct answer A
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?
MULTIPLE CHOICES) |100% CORRECT!!
The term "you" is used throughout the Commercial General Liability Coverage Form. "You" is
defined to include:
A) The named insured shown in the declarations.
B) The named insured shown in the declarations and any employees of the named insured.
C) The named insured and any officers or directors of the named insured's organization.
D) All persons or entities who have any type of liability protection under the policy. - correct
answer A
Smart Endeavors, a retail clothing store, hired ABC Contractors to install a new air conditioning
system in one of its stores. ABC misrouted some wires during the installation process, which
caused the wires to overheat and caused a fire. The air conditioning unit had to be rewired,
which cost $1,000. Smart Endeavors' building sustained $30,000 worth of damage and $40,000
worth of inventory was damaged by smoke. Smart Endeavors was closed for two weeks and lost
$10,000 in profits during that period. ABC has liability insurance under a standard Commercial
General Liability (CGL) Coverage Form with $1,000,000 per occurrence limits. Which one of the
following statements concerning coverage for damages under Coverage A of the CGL is most
accurate?
A) ABC will pay $81,000 for all of the physical damage to the building and inventory, the air
conditioning rewiring costs, and Smart Endeavors' lost profits.
B) ABC will pay - correct answer C
EXPLANATION: ABC will pay $80,000 for the fire damage to the building and inventory as well as
the lost profits, but the CGL excludes the cost of work that was incorrectly performed, so the
$1,000 rewiring costs are excluded.
Which one of the following statements concerning the Damage to Your Product and Damage to
Your Work exclusions in Coverage A of the Commercial General Liability Coverage Form is most
correct?
A) These exclusions only apply to products or work that are in the care, custody and control of
the named insured at the premises location listed in the declarations page.
,CPCU 552 | (2025) COMPREHENSIVE (136) QUESTIONS AND VERIFIED DETAILED SOLUTIONS (
MULTIPLE CHOICES) |100% CORRECT!!
B) There are two exceptions to this exclusion which are meant to provide limited property
damage coverage for minor claims that would fall below the deductible of the named insured's
property insurance policy.
C) The exclusions only apply to work or products that were damaged by subcontractors or
outside parties who are expected to have their own insurance coverage, but the exclusions do
not apply to damage done by the named insured.
D) These exclusions only apply to damage to the work or product itself, but do not apply to any
subsequent damage or injury th - correct answer D
A plumbing contractor has a commercial general liability (CGL) policy that contains no
endorsements. Which one of the following claims would be covered by the CGL?
A) An improperly installed pipe was damaged when tested for leaks by an employee of the
plumbing contractor.
B) An employee of the plumbing contractor damaged a building while installing a waterline.
C) An employee of the plumbing contractor was injured while installing a hot water heater.
D) An employee of the plumbing contractor damaged a building with the contractor's auto -
correct answer B
For which one of these would the Damage to Your Product and Damage to Your Work exclusion
eliminate coverage?
A) A product that the insured incorrectly designed
B) Property damage caused by an insured's defectively produced product
C) Property damage caused by work performed on behalf of the insured by a subcontractor
D) Property damage caused by an insured's incorrectly designed product - correct answer A
Bodily injury was caused to customers by fumes that escaped from heating equipment
belonging to the Reynolds Corporation. Which one of the following statements describes the
reason there would or would not be liability coverage for these injuries under the corporation's
unendorsed Commercial General Liability Coverage Form?
A) Coverage would be excluded because of the pollution exclusion.
,CPCU 552 | (2025) COMPREHENSIVE (136) QUESTIONS AND VERIFIED DETAILED SOLUTIONS (
MULTIPLE CHOICES) |100% CORRECT!!
B) There would be coverage because the pollution exclusion has an exception that applies to
bodily injury caused by fumes from heating equipment.
C) Coverage would be excluded because of the impaired property exclusion.
D) There would be coverage because the impaired property exclusion has an exception that
applies to bodily injury caused by fumes from heating equipment. - correct answer B
An employee of a manufacturing plant is injured by a defective blade manufactured by the
employer. Although workers compensation is considered the exclusive remedy for an employee
injured in the course of employment, the injured worker may be able to sue the employer
under the:
A) Occupational disease benefits law.
B) Third-party-over action coverage.
C) Contractual liability coverage.
D) Dual-capacity doctrine. - correct answer D
The insuring agreement in Coverage A of the standard Commercial General Liability (CGL)
Coverage Form includes language that addresses legal expenses for claims covered by the
policy. Which one of the following statements regarding the insurer's legal defense obligations
is most accurate?
A) An insurer's duty to defend ends when the combined cost of legal expenses and damages
reaches the applicable policy limits.
B) An insurer's obligation to defend ends when the applicable limits of insurance have been
exhausted.
C) Legal expenses paid to outside, independent counsel end when the limits of insurance are
exhausted, but the insurer's obligation to defend using in-house counsel continues without
limit.
D) There is a separate limit established for legal expenses, and once that limit is reached the
insurer's duty to defend ends, even if no damages have yet been awarded. - correct answer B
Which one of these is an insured contract within the meaning of the definition of "insured
contract" in the CGL coverage form?
A) A warranty contract for product performance
, CPCU 552 | (2025) COMPREHENSIVE (136) QUESTIONS AND VERIFIED DETAILED SOLUTIONS (
MULTIPLE CHOICES) |100% CORRECT!!
B) An indemnification contract with an architect for injury or damage arising out of his or her
professional services
C) A builders contract covering the building of a single-family residence
D) An indemnity agreement with a municipality covering the use and maintenance of a sign -
correct answer D
A robber comes into a bank and threatens to hurt one of the bank's customers if he does not
give him cash. One of the bank's employees pushes the customer out of the way and restrains
the robber. In doing so, the employee injures the robber. Under the bank's unendorsed
Commercial General Liability policy, the robber's injury is:
A) Covered because the employee was using reasonable force to protect the customer.
B) Not covered because the injury was expected or intended.
C) Not covered because the injury was caused by an employee.
D) Covered because the employee has a duty to prevent illegal activity. - correct answer A
A sporting goods manufacturer recently issued a recall for defective basketballs. The total cost
of the recall exceeded $250,000, prompting the manufacturer to submit a claim to its insurer
for the recall expense. The manufacturer has an unendorsed Commercial General Liability (CGL)
policy. Which one of the following statements best represents the insurability of this loss
exposure on the manufacturer's CGL?
A) There is no coverage due to the exclusion for the Recall of Products, Work, or Impaired
Property.
B) Coverage is available at the discretion of the insurer. The cost of the recall must be less than
the anticipated cost of claims arising from the product defect.
C) The policy will only respond to claims for the recall of Products, Work, or Impaired Property
on an indemnity basis.
D) The policy provides a $100,000 sub-limit for the recall of Products, Work, or Impaired
Property. - correct answer A
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?
