Comprehensive Liability Insurance
Definition
Comprehensive Liability Insurance is a policy providing businesses with coverage for negligence-based civil liability in several key areas:
- Bodily Injury and Property Damage Liability: On an occurrence basis, this covers claims resulting from the ownership, use, or maintenance of the premises, completed operations, and products.
- Bodily Injury and Property Damage Liability for Elevator Operations: Specific coverage for claims arising from the operation of an elevator.
- Medical Expenses: Coverage for medical expenses resulting from bodily injury incurred by a member of the general public through the use of the premises or involvement in the operations. Notably, medical expense reimbursement is provided without regard to the fault or liability of the business.
Examples
- Premises Liability: If a customer slips and falls in your store, Comprehensive Liability Insurance covers the medical and legal costs associated with the injury.
- Product Liability: If a product you manufacture causes injury or damage due to a defect, this policy covers the associated legal and medical costs.
- Elevator Liability: If someone is injured due to an elevator malfunction in your building, this insurance will cover the injury-related costs.
- Completed Operations: After the completion of a service, if a defect in the workmanship results in damage or injury, the coverage handles any resulting claims.
Frequently Asked Questions (FAQs)
Q1: What does “on an occurrence basis” mean?
A1: “On an occurrence basis” means that the policy covers claims that occur during the policy period, regardless of when the claim is actually filed.
Q2: Does Comprehensive Liability Insurance cover intentional acts?
A2: No, this type of insurance typically covers negligence-based claims but does not cover intentional acts.
Q3: Is there a limit to the medical expenses covered under this insurance?
A3: Yes, most policies will have specific limits on the amount covered for medical expenses. It is important to review your policy for these details.
Q4: Can I customize my Comprehensive Liability Insurance policy?
A4: Yes, many insurers offer customizable options to cater to the specific needs of your business.
Q5: Is property damage to my own business covered under this insurance?
A5: No, Comprehensive Liability Insurance typically covers third-party bodily injury and property damage, not damage to your business property.
General Liability Insurance: Insurance that provides coverage to a business for bodily injury, personal injury, and property damage caused by the business’s operations, products, or injury that occurs on the business’s premises.
Professional Liability Insurance: Also known as Errors & Omissions Insurance, it covers professionals for negligence and errors or omissions that injure their clients.
Product Liability Insurance: Coverage for businesses against claims resulting from products that cause injury or damage.
Online Resources
Suggested Books for Further Studies
- “General Liability Insurance Coverage: Key Issues in Every State” by Randy J. Maniloff & Jeffrey W. Stempel
- “The Insurance Professional’s Practical Guide to Workers’ Compensation” by Chris Boggs
- “Insurance Operations, Markets, and Regulation” by Keith J. Crocker & Scott E. Harrington
Fundamentals of Comprehensive Liability Insurance: Insurance Basics Quiz
### What type of expenses does Comprehensive Liability Insurance cover without regard to fault?
- [x] Medical expenses
- [ ] Legal fees
- [ ] Business property repairs
- [ ] Personal injury
> **Explanation:** Comprehensive Liability Insurance covers medical expenses resulting from bodily injury incurred by a member of the general public through the use of the premises or involvement in the operations, without regard to fault.
### What type of liability does Comprehensive Liability Insurance NOT typically cover?
- [ ] Bodily injury liability
- [ ] Property damage liability
- [ ] Elevator operation liability
- [x] Intentional acts
> **Explanation:** Comprehensive Liability Insurance does not typically cover intentional acts; it is designed to cover negligence-based claims.
### Can Comprehensive Liability Insurance cover injuries resulting from a defective product?
- [x] Yes
- [ ] No
- [ ] Only if the defect is minor
- [ ] Only if the product is recalled
> **Explanation:** If a product you manufacture causes injury or damage due to a defect, Comprehensive Liability Insurance covers the associated legal and medical costs.
### For which type of liability is the coverage on an occurrence basis?
- [x] Bodily injury and property damage liability
- [ ] Intentional harm liability
- [ ] Warranties
- [ ] Future expected liabilities
> **Explanation:** The coverage is on an occurrence basis for bodily injury and property damage liability, meaning it covers claims that occur during the policy period, regardless of when the claim is actually filed.
### What is the typical use of Professional Liability Insurance in comparison to Comprehensive Liability Insurance?
- [ ] It is used to cover medical expenses without regard to fault.
- [ ] It covers unintentional damages to property.
- [x] It covers negligence and errors or omissions that injure clients.
- [ ] It covers bodily injury and property damage liability from premises.
> **Explanation:** Professional Liability Insurance is used to cover professionals for negligence and errors or omissions that injure their clients, whereas Comprehensive Liability Insurance often deals with broader business-related liabilities.
### What type of injury is specifically covered by Comprehensive Liability Insurance in relation to elevator operations?
- [x] Bodily injury and property damage liability
- [ ] Only property damage
- [ ] Legal fees only
- [ ] Personal injury of the business owner
> **Explanation:** Comprehensive Liability Insurance specifically covers bodily injury and property damage liability arising from the operation of an elevator.
### If someone falls in your store, what coverage would handle the costs?
- [x] Premises liability within Comprehensive Liability Insurance
- [ ] Product Liability
- [ ] Auto Liability
- [ ] Professional Liability
> **Explanation:** If a customer slips and falls in your store, Premises Liability within Comprehensive Liability Insurance covers the medical and legal costs associated with the injury.
### What does the term "Completed Operations" refer to in Comprehensive Liability Insurance?
- [x] Coverage for claims arising from work performed once completed
- [ ] Coverage only while work is ongoing
- [ ] Coverage for intentional misconduct
- [ ] Coverage for internal theft
> **Explanation:** "Completed Operations" refers to insurance coverage for claims resulting from work that has already been completed but later causes injury or damage due to defects.
### Does Comprehensive Liability Insurance cover legal fees for third-party claims?
- [x] Yes, it covers legal fees for defending third-party claims
- [ ] No, it only covers medical expenses
- [ ] Yes, but only for intentional acts
- [ ] No, it is only for direct damages
> **Explanation:** Comprehensive Liability Insurance typically covers legal fees for defending third-party claims related to bodily injury or property damage.
### What important aspect differentiates Professional Liability Insurance from Comprehensive Liability Insurance?
- [ ] Comprehensive Liability Insurance covers solely medical expenses.
- [ ] Professional Liability deals solely with bodily injury.
- [ ] Professional Liability is used specifically by individuals.
- [x] Professional Liability covers client-specific negligence and errors.
> **Explanation:** Professional Liability Insurance covers client-specific negligence and errors or omissions, while Comprehensive Liability Insurance provides broader business-related coverage including bodily injury, property damage, and operational liabilities.
Thank you for exploring the intricate aspects of Comprehensive Liability Insurance through our detailed guide and engaging quiz. Continue building your expertise in the world of insurance!
