AAIS COMMERCIAL LIABILITY COVERAGE FORM ANALYSIS

(December 2018)

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INTRODUCTION

The American Association of Insurance Services (AAIS) GL-200–Commercial Liability Coverage provides coverage against claims for bodily injury, property damage, personal injury and advertising injury that is caused by or results from the premises or operations exposures of the named insured's business. Coverage also applies for claims for bodily injury and property damage caused by or resulting from the products and completed work exposures presented by the named insured's business. The coverages provided apply on an occurrence basis.

The copyright of GL-200 is 1994. To remain current, over the years AAIS has added several mandatory endorsements for use with this form. To assist in understanding how the mandatory endorsements change coverage, we have editorially pasted the changes into this analysis.

The endorsements that are being editorially pasted into the form are:

CL-300–Amendatory Endorsement
GL 0163–Exclusion – War and Military Action
GL-890–Lead Liability Exclusion
GL 0950–Known Injury or Damage Amendments
GL 1020–Other Insurance Amendment
GL 1022–Information Distribution and Recording Violations Exclusion
GL 1353–Exclusion – Data Breach Liability

COVERAGE FORM INTRODUCTION

A table of contents is provided as an aid when exploring the coverage form.

Certain words or phrases have special meanings. They are listed in the Definitions section, which follows the insuring agreement, and are shown in bold type or in quotation marks throughout the coverage form.

Editorial note: The bolded words above were added by CL-300–Amendatory Endorsement.

INSURING AGREEMENT

The insurance company agrees to provide the commercial liability coverage described in the policy. However, the coverage is provided subject to terms and conditions of the policy being met. All contracts require consideration be provided and, in an insurance contract, the consideration is the insured’s payment of the required premium.

The policy terms related to cancellation, changes made to the policy, examination of books and records, surveys and inspections, and assignment or transfer of rights or duties also apply even though they are not contained in this coverage part. These are mentioned separately because they are not part of this coverage form. They are found in CL 0100–Common Policy Conditions which must be attached to every commercial lines policy.

DEFINITIONS

When any of the following terms are used in the policy, the explanation in this section applies rather than the dictionary definition of the term.

1. You and your

The entity named as the insured on the declarations. There can be more than one you or your.

2. We, us and our

The insurance company providing the insurance coverage in this form.

3. Advertising injury

An injury that arises from any or all the following offenses:

Slander or libel against a person or organization that occurs verbally or in a written publication
Verbal or written communication that degrades the goods, products or services of another
The violation of a person's right of privacy in written or verbal communication
The theft of or use of, without permission, other’s advertising ideas or the style in which that other does business
The infringing upon a copyright, title, slogan, trademark or trade name

An advertising injury does not involve bodily injury, property damage or personal injury.

4. Auto

A vehicle that is designed to be used on a public road. The vehicle can be motorized, or it may be a trailer or a semi-trailer, but it must be land-based. All machinery and equipment that is attached to the vehicle is also considered auto.

5. Basic territory

This territory is the United States of America, its territories and possessions, Canada and Puerto Rico.

6. Bodily injury

Bodily harm, sickness or disease of a person. The required care of the person and loss of services that person normally provided is also bodily injury. Death that results from the initial bodily harm, sickness or disease is bodily injury regardless of when that death occurs. Mental or emotional injury, suffering or distress is bodily injury only when it results from a physical injury.

Example: Geraldine slips on a lettuce leaf at My Favorite Buffet restaurant. Her leg sustains a compound fracture. Her family witnessed the bone pierce the flesh during the fall. All services provided to Geraldine to care for that injury are considered bodily injury. Geraldine works full time and then cares for her mother and sister in the evenings. The cost to replace these services is also bodily injury. An infection settles into Geraldine’s leg and after three years of treatment, Geraldine dies. Her death, even though three years after the injury, is bodily injury. Maggie, Geraldine’s sister, witnessed the injury and has been receiving psychiatric treatment for the trauma since the accident. This is not bodily injury because Maggie did not sustain a physical injury.

7. Coverage territory

All the following are considered the coverage territory:

The basic territory as defined above
Bodily injury, property damage, personal injury or advertising injury that occurs in international waters or airspace during travel that starts in or ends in the basic territory
The world. However, while the expansion of territory is broad the coverage it applies to is narrow. 1) Any payment obligations for liability must be determined in the basic territory or through a settlement the insurance company had agreed upon. Otherwise, there is no worldwide coverage.

2) If 1) is satisfied then liability for products made or sold in the basic territory is covered wherever in the world the occurrence happens.

3) If 1) is satisfied then the activities a person who is out of the basic territory for only a short term while on the named insured’s business are covered.

Example: Marilyn’s Must Haves sells women’s accessories through various retail outlets and the web.

Scenario 1: Hector, an employee, travels from his home in Arizona to Paris to meet with a retail client. In Paris, Hector places his bag on the floor of a café and a woman trips over the bag and breaks her leg. If a suit is brought in the basic territory for this injury, this policy will respond. If the suit is brought in Paris, this coverage will not respond.

Scenario 2: Gretel purchases Marilyn’s product and is injured by it. She sues Marilyn for the injury. Gretel purchased the product over the internet but lives in Germany. If the suit is brought in the basic territory this insurance coverage will respond. If not, no coverage applies.

8. Damages

Money that is provided to a person as compensation for an injury.

Data Records (No number assigned)

(Editorially added wording from GL 0950–Known Injury or Damage Amendments)

Stored documents, files and other information while in an electronic format. The storage must be on some sort of instrument that is used with any type of computer hardware, network, program or application. Electronically controlled equipment is considered as a type of computer hardware, network program or application.

9. Declarations

A broad term meaning the actual declarations, supplemental declarations and schedules relating to this policy.

Designated Insured (No number assigned)

(Editorially added wording from GL 0950–Known Injury or Damage Amendments)

There are five types of entities that can be considered designated insureds.

The first four designated insureds are based on the type of business entity entered on the Declarations and is similar to the definition of insured found later in the policy:

Individual: The individual and his or her spouse are designated insureds. However, they are so designated only with respect to the conduct of the business for which the named insured is the sole owner.
Partnership or Joint Venture: The named insured, its partners, members and their spouses are designated insureds. However, they are so designated only with respect to the conduct of the named insured’s business.
Limited Liability Company: The named insured, its members and its managers are designated insureds. However, each is so designated only within the scope of their particular duties.
Organization That Is Not a Partnership, Joint Venture or LLC: The named insured and all its executive officers and directors are designated insureds. However, each is so designated only within the scope of their particular duties. The named insured’s stockholders are also so designated but only for their liabilities as stockholders.
Any employee that is defined below and has been authorized to either provide or to receive an occurrence or claim notice.

Note: There is no indication as to who must provide the authorization to the employee.

10. Employee

This is not a definition but is instead an expansion of the term. The word employee expands to include leased workers. The term is not expanded to include temporary workers though.

11. Impaired property

Property must meet all four of the following to be considered impaired property:

The property is tangible
The property is neither the named insured’s product nor the named insured’s work

The property’s value is decreased because it has become dangerous or deficient either due to its including the named insured’s products or work or because the named insured failed to fulfill its contract terms
Its value can be restored either by repairing, replacing, adjusting or removing the named insured’s products or work or by the named insured fulfilling its contract terms.

12. Insured

The first group of defined insureds is based on the type of business entity entered on the Declarations:

Individual: The individual and his or her spouse are insureds. However, they are insureds only with respect to the conduct of the business for which the named insured is the sole owner.
Partnership or Joint Venture: The named insured, its partners, members and their spouses are insureds. However, they are insureds only with respect to the conduct of the named insured’s business.
Organization That Is Not a Partnership or Joint Venture: The named insured and all its executive officers and directors are insureds. However, each is an insured only within the scope of their duties for the organization. The named insured’s stockholders are also insureds but only for their liabilities as stockholders.

The next group qualifies as insureds, regardless the type of business entity:

The named insured's real estate manager. This can be a person or organization but if a person, he or she cannot be an employee of the named insured.
If the named insured is an individual and dies the business may continue, so others become insureds. The named insured’s legal representative is an insured but only while acting within the scope of duties as such.

Any person having custody of the named insured’s property at the time of the named insured’s death is an insured but only with respect to liability arising out of the maintenance or use of that property and that person stops being an insured as soon as the legal representative is appointed.

The legal representative takes on all the named insured's rights and duties under this coverage.

The following are insureds when using the named insured’s mobile equipment but only if the use is with its permission:

An employee of the named insured while using the equipment during the course of employment. If a fellow employee is injured, the employee that caused the injury is NOT an insured.
Non-employees but only if they have no insurance coverage and the liability is due to the operation of the equipment. Organizations or persons legally liable for that non-employee’s conduct are also insureds. They are not insureds for any damage they cause to their employer’s owned or rented property, to property that employer is occupying or to property for which their employer is responsible.
Insured status based on mobile equipment use described above does not apply for any loss that involves damage to the named insured’s owned or rented property, to property the named insured is occupying or to property for which it is responsible.

The named insured’s employees. This is limited to only for acts that are performed within the scope of their employment. It is further restricted with employees not being insureds for bodily injury, personal injury or advertising injury to either the named insured or a fellow employee. Also, they are not insured for property damage to property owned by, rented to or loaned to employees or to partners, members or the partners or members spouses. Executive officers are not considered employees in this section.
Any newly acquired or formed organization of the named insured. This applies only when the named insured has a majority interest in it. Newly formed or acquired joint ventures or partnerships are not insureds.

The newly acquired or formed organization is not an insured for any of the following:

When it carries or has in some way other comparable coverage available to it
After the policy period in which it was formed or acquired ends or 90 days after its formation or acquisition, whichever comes first
For any bodily injury or property damage occurring before the date of acquisition or formation
For any personal injury or advertising injury offense committed before the date of acquisition or formation.

Unless a partnership or joint venture is listed as a named insured on the declarations no person or organization is an insured in relation to the partnership or joint venture’s conduct either past or present.

13. Leased worker

A worker who is leased by the named insured from a labor leasing entity using a contract or an agreement. The contract must provide for the person to perform duties relating to the conduct of the named insured's business. Temporary workers are not considered leased workers.

14. Limit

The amount of coverage being provided by this policy.

15. Loading or unloading

The movement of property that begins with the property’s removal from the point where it is accepted for transit by a vehicle. Loading or unloading continues while it is in or on the vehicle and ends when the property is removed from the vehicle at the destination. The movement by any mechanical device attached to the vehicle and movement by a hand truck is considered loading and unloading but movement by any other type of mechanical device is not loading or unloading.

Example:

Step 1: Millie moves the television from its storage location and moves it to the loading dock.

Step 2: Jason picks up the television with the intention of placing it in his box truck.

Step 3: Jason places the television in the truck

Step 4: Jason drives his truck to his customer

Step 5: Jason removes the television from his truck and places it on the customer’s loading dock.

Step 6: Frank moves the television from the loading dock and into another part of the building.

Steps 2, 3, 4 and 5 are considered loading and unloading.

16. Occurrence

An accident. It is not limited to a single event but includes repeated exposure to conditions that are the same or similar.

17. Personal injury

An injury that is not bodily injury, property damage and advertising. It must arise from any or all the following offenses:

Slander or libel against a person or organization that is expressed verbally or in a written publication
Providing verbal or written communication that speaks poorly of or in a degrading manner about the goods, products or services of another.
The violation of a person's right of privacy that is expressed either verbally or in written communication

Arrest, detention or imprisonment for false reasons

Example: Millie asks a customer to remain in the store. The customer refuses so Millie grasps her arm and walks her to the back of the store. She is convinced the customer was shoplifting. Millie calls the police. The customer, after proving that no store item was taken, is released. Later the customer sues the store for false arrest and detention.

Prosecution with malice
Tenant-related offenses committed by or on behalf of the owner, landlord or lessor of a room, dwelling or premises. The offenses are wrongful entry in or eviction from, or invasion of the right of private occupancy of a room, dwelling or premises.

Example: Paul, the property manager at Golden Acres, regularly uses his master key to enter tenants’ apartments while they are away. Pauline sues Golden Acres and Paul for invasion of privacy when she discovers Paul in her apartment.

18. Products/completed work hazard:

The product hazard is bodily injury or property damage that meets two requirements. The damage or injury must occur away from locations owned or rented by the insured and it must arise out of products which have been physically released or handed over to others.
The completed work hazard is bodily injury or property damage that meets two requirements. The damage or injury must occur away from locations owned or rented by the named insured and must arise from the named insured’s work.

The named insured’s work does not include work that is still in process or that has been abandoned. Work is defined as completed on the earliest date of the following:

When all contract work for which the named insured is responsible is completed
When multiple jobs are part of a single contract, the work at a specific jobsite is complete when named insured’s work at that jobsite is done
When the named insured's work at a job site is put to its intended use by any person or organization. The only exception is when a subcontractor or contractor working the same job and site are the ones using the work.

Work is deemed completed even if it needs further service, maintenance, correction, repair or replacement because of a defect or deficiency.

The products hazard and the completed work hazard do not include bodily injury or property damage that arises from any of the following:

Transportation of property. However, when injury or damage is due to a condition in or on the vehicle which was created by loading or unloading there is coverage.

Example: Glen tied down the property in the back of the box truck to prevent it from moving. The tie down was not secure, and the property broke loose. The damage caused by the loose property is considered products hazard because it occurred during the loading of the box.

Tools, uninstalled equipment or abandoned or unused materials being present
Any products or work when a classification is shown on the declarations to include Products/Completed Work.

Note: This product and work would be covered as premises type losses not products/completed work and a part of the General Aggregate, not the products/completed work Aggregate.

paper weight

Example: Kelly’s Consulting designed and produced small, liquid center, paperweights for a promotional event. One of the paperweights leaked and damaged a customer’s mahogany desk. The property damage claim is considered premises coverage because the Consulting classification included Products/completed operations within the premises code.

19. Products

Goods or merchandise that the named insured manufactures, sells, handles, disposes of or distributes. This term also refers to such goods and merchandise of others that trade using the named insured's name to manufacture, sell, handle, dispose of or distribute. Such goods and merchandise of persons or organizations acquired by the named insured to manufacture, sell, handle, dispose of or distribute are also products.

Real property is never considered products. Vending machines or other property that is rented to or placed for the use of others, but not sold to them are also not products.

Products are also all the following:

Fitness, quality, durability or performance warranties or representations of the products whenever those warranties or representations are made
Containers, materials, parts or equipment furnished with the products. Vehicles are not considered containers.
Instructions and warnings that are provided or should have been provided.

Example: Peter sells ready-to-assemble furniture. The furniture is considered products. The instruction book on how to assemble the furniture is also product. The warnings that accompany the furniture is also considered product. The box in which the ready-to-be-assembled furniture is shipped is also considered product.

20. Property damage

Physical injury to or destruction of tangible property. The term is also the loss of use of tangible property. The tangible property is not required to be damaged for there to be loss of use property damage. Loss of use is simultaneous with the occurrence that caused it.

Example: Piper Broadcasting’s antenna fell onto the sidewalk of Peggy’s Fine Furniture, blocking its entrance. Customers are unable to enter Peggy’s store for two days as Piper worked with contractors to have it moved. Peggy’s two-day loss of use is considered property damage even though Piper’s antenna did not physically damage Peggy’s furniture or store.

21. Temporary worker

A temporary substitute for a regular employee who is a natural person and is furnished to the named insured.

22. Terms

Any and all provisions, limitations, exclusions, conditions and definitions that apply to this coverage.

23. Your work

Any or all of the following:

Work or operations that are either done by the named insured or on its behalf
Materials, parts or equipment that are provided for the work or operations
Quality, fitness, durability or performance warranties or representations. These must pertain to the work or operations, must be in writing and can be made at any time.

Example: Peter is really disgusted. In October he hired Justin’s Fire Safety to prepare the extinguishing system for winter. Justin told Peter that the system would be able to withstand cold to -30 degrees. Temperatures drop but at no time do they go below –15 degrees. When temperatures return to above freezing the sprinkler system begins to leak. Peter sues Justin’s for the damage caused by the leaking. Justin’s insurance company denies the claim because the warranty was verbal – not written.

Instructions and warnings that are provided or should have been provided

PRINCIPAL COVERAGES

The insurance company provides insurance coverage on the following but only when a specific limit or premium charge is shown for it on the declarations.

Coverage L–Bodily Injury Liability and Property Damage Liability

The sums an insured is legally obligated to pay as damages due to bodily injury and property damage covered by this insurance will be paid by the insurance carrier. The injury or damage must be caused by an occurrence. The occurrence must take place in the coverage territory. The bodily injury or property damage must happen during the policy period.

(Editorially added wording from GL 0950–Known Injury or Damage Amendments)

Insurance for Coverage L is only available to:

Bodily injury or property damage that is separate and distinct from bodily injury or property damage of which a designated insured was aware before this policy’s effective date. This means that the current bodily injury or property damage cannot be a resumption, change or continuation of that prior bodily injury or property damage.

It is important to realize that continuation, resumption, and change in such prior bodily injury or property damage is considered to be known in that prior policy period.

Example: Paula falls at Porgy’s Place. She had a head injury and made it home before collapsing. She never came out of the coma. One year later she dies of those injuries.

Scenario 1: Paula’s estate traced her actions prior to her accident and discovered that Paula fell at Porgy’s. The family hired an investigator and was able to present a claim against Porgy’s Place. This is covered under the current policy because the injury had never been known by anyone at Porgy’s.

Scenario 2: Justin, a partner at Porgy’s, witnessed the fall. He was concerned and asked Paula if she wanted an ambulance. She declined but asked for a cab. Justin is a designated insured so because he had knowledge of the bodily injury, the current policy does not respond but the prior one might.

Any resumption, change or continuation of a bodily injury or property that is first known in the current policy period is covered under the current policy.

Example: Mavis runs her golf mobile into her neighbor’s carport. The damage appears minor and her insurance carrier pays for the cosmetic improvements. Six months later heavy snow on the carport causes it to collapse. An investigation by the neighbor’s insurance adjuster reveals that Mavis’s accident had weakened the support beam which contributed to the collapse. Mavis’s policy that paid for the cosmetic improvement will also respond to the carport collapse claim even though it happened in a different policy term.

Coverage M–Medical Payments

Certain medical expenses are paid when bodily injury results from an accident. These are paid without regard to negligence. The accident must happen on the named insured’s owned or rented premises or on ways (streets, alleys, sidewalks) that are adjacent or next to the named insured’s owned or rented premises. Medical expenses that occur off premises but arise from the named insured's operations are also covered.

The accident from which the expenses arise must occur during the policy period and in the coverage territory. The only expenses paid are those that are both incurred and reported to the insurance company within one year of the date of the accident.

Medical expenses must be both reasonable and necessary. The specified expenses that will be paid are medical, surgical, x-ray and dental services, including prosthetic devices and eyeglasses. In addition, the cost of ambulance, hospital, professional nursing and funeral services are paid. A particularly important covered expense is the first aid rendered at the time of the accident.

Example: Marcy is jogging past a new construction site. Milton, an employee of Brickmasters, Inc., is working on a building wall. Milton loses his grip, dropping a heavy trowel that knocks Marcy down. Milton immediately calls 911 and insists that Marcy be transported to a hospital. All of the medical expenses associated with the 911 transport and the hospital stay are covered by Brickmasters, Inc.’s coverage, subject to the medical payments limit of insurance.

Coverage N–Products/Completed Work

The sums which an insured is legally obligated to pay as damages due to bodily injury and property damage arising out of the products/completed work hazard covered by this insurance will be paid by the insurance carrier. The injury or damage must be caused by an occurrence. The occurrence must take place in the coverage territory. The bodily injury or property damage must happen during the policy period.

Example: Jelly Spot makes candy that is sold worldwide. On 8/1/2018, while in Paris, Kelly bites into a Jelly Spot and breaks a tooth as he encounters a piece of metal in the Jelly Spot. Kelly sues Jelly Spot. An investigation reveals that an incident occurred at the Jelly Spot Pennsylvania location on 10/1/2017 that caused metal to enter some candy. The plant thought they had caught all the problem boxes, but this one made it through. The policy in effect on 8/1/2018 would cover this loss because the policy in effect at the time of the bodily injury is the one that applies – not the one as of the date of the occurrence.

candybox

(Editorially added wording from GL 0950–Known Injury or Damage Amendments)

Insurance for Coverage N is only available to:

It is important to realize that continuation, resumption, and change in such prior bodily injury or property damage is considered to be known in that prior policy period.

Any resumption, change or continuation of a bodily injury or property that is first known in the current policy period is covered under the current policy.

Coverage O–Fire Legal Liability

The sums that the named insured is legally liable for property damage by fire it caused to buildings, or parts of buildings rented or loaned to the named insured is paid by the insurance carrier. Buildings include any permanently attached fixtures.

None of the property damage exclusions apply to this coverage.

In an unusual type of policy construction, the exclusions that apply to this coverage are stated within the coverage description.

Coverage O- Fire Legal Liability Exclusions

The following are not covered:

Liability when it is due to any contract or agreement in which the insured agrees to indemnify any person or organization for damage by fire to the premises.

Note: A misunderstanding could arise if the insured signed such a contract and a loss occurred. If the only reason for the obligation is the contract, the exclusion would apply. However, if the insured is legally liable in addition to the contractual obligation the exclusion should not apply.

Liability when the insured expected, directed or intended the property damage.
Liability when the property damage was the result of acts of the insured that were both intentional and malicious.

Coverage P–Personal Injury Liability and Advertising Injury Liability

The sums which an insured is legally obligated to pay as damages because of personal injury or advertising injury that is covered by this insurance, the insurance carrier will pay.

Personal injury is covered when an offense is committed in the course of the named insured’s business. However, advertising, publishing, broadcasting or telecasting offenses committed by or on behalf of the named insured are not covered.

Advertising injury is covered when an offense is committed when the named insured’s goods, products or services are being advertised.

An offense must be committed during the policy period and in the coverage territory.

SUPPLEMENTAL COVERAGES

The insurance company provides three supplemental coverages. They are subject to all terms of the Principal Coverages. These do not increase the limits for the Principal Coverages.

Contractual Liability

Bodily injury and property damage liability assumed under the following contracts or agreements is covered:

Premises leases
Agreements for easements or licenses. Agreements related to construction or demolition operations within 50 feet of a railroad are not covered.
Municipal indemnification agreements but only when required by ordinance. Agreements that are made in conjunction with work done for the municipality are not covered.
Sidetrack agreements. These are agreements between a party with a sidetrack on its premises and the railroad providing the track.
Agreements for the maintenance of elevators
Any assumption of tort liability for damages due to bodily injury or property damage that is part of a contract or agreement related to the named insured’s business. (Indemnification agreements with a municipality in conjunction with work done for that municipality is included.)

Tort liability is defined in this item to be liability that is imposed by law when there is no contract or agreement.

The insurance provided by this supplemental coverage does not apply to any part of the following types of contract or agreements:

Indemnification of any person or organization for bodily injury or property damage arising out of any operations within 50 feet of any railroad property. This restriction applies only when those operations have any type of effect on railroad bridges, trestles, tracks, road-beds, tunnels, underpasses or crossings.
Indemnification of an architect, engineer or surveyor for injury or damage but only when it arises from any of the following:

The preparation, approval or failure to prepare or approve maps, drawings, opinions, reports, surveys, changes, orders, designs or specifications
The providing of directions or instructions, or failure to do so. This applies only when the providing or failure to provide such directions or instructions is the primary cause of the injury or damage.
Assumption of liability for injury or damage arising out of the rendering or failure to render any professional services. This applies only when the insured is an architect, engineer or surveyor. The excluded services include supervisory, inspection or engineering services and the preparation, approval or failure to prepare or approve maps, drawings, opinions, reports, surveys, changes, orders, designs or specifications.

Indemnification of any party for damage by fire to the named insured’s rented or loaned premises.

Incidental Medical Malpractice Injury

Bodily injury that is the result of the rendering or the failure to render the following medical-related services is covered:

Medical, surgical, dental, x-ray, nursing services or treatment. When food or beverages is furnished in conjunction with these treatments, bodily injury due to those items is also covered.
Drugs or medical, dental or surgical supplies or appliances that are furnished or are dispensed.

Example: Jessica is shopping in Simply Chic when she begins to feel faint and says she is about to pass out. Patty, a nursing student working part time at Simply Chic, believes Jessica is diabetic so provides some orange juice. Jessica is allergic to orange juice. This coverage will pay when Jessica sues Simply Chic.

The insurance provided by this supplemental coverage does not apply to any of the following:

First aid to others expenses incurred by the insured at the time of an accident
An insured or an employee whose occupation or business is the providing of any of the services listed in this supplement coverage
Injury caused by an indemnitee when that indemnitee’s occupation or business involves providing any of the services listed in this supplemental coverage.

Mobile Equipment

Sums for which an insured is legally liable to pay because of bodily injury or property damage that result from mobile equipment or from any machinery and equipment attached to the mobile equipment are paid by the insurance company.

To be eligible for coverage the mobile equipment must be a land motor vehicle. In addition, it must meet at least one of the following requirements:

Used only at the named insured’s owned or rented locations or their adjoining ways
Designed for use primarily off public roads

Note: It could be used on public roads. The key is that it must be designed primarily for off road use.

Travel on crawler treads

Self-propelled and designed for the sole purpose of providing mobility to power cranes, shovels, loaders, diggers or drills; concrete mixers other than mix-in-transit; or graders, scrapers, rollers and other road construction or road repair equipment. The equipment must be a permanent part of the vehicle.
Not self-propelled and used primarily to provide mobility to air compressors, pumps and generators, including spraying, welding and building cleaning equipment; geophysical exploration, lighting and well servicing equipment; and equipment used to raise or lower workers such as cherry pickers. The equipment must be permanently installed on the vehicle.

The insurance provided by this supplemental coverage does not apply to self-propelled vehicles if any of the following machinery and equipment is permanently attached:

Snow removal, street cleaning and road maintenance equipment, other than road construction or resurfacing
*Equipment used to raise or lower workers such as a cherry picker
*Air compressors, pumps and generators, including spraying, welding and building cleaning equipment
*Geophysical exploration, lighting and well servicing equipment.

*The insurance company will cover any bodily injury or property damage arising from the operation of any of this equipment but NOT for the operation of the vehicle.

The insurance company also provides any liability, uninsured motorists, no-fault or other coverage required by any motor vehicle insurance law, in addition to providing the required limits for the coverage as prescribed by that law.

Note: The providing of uninsured motorist, no-fault or other mandatory coverage could be expensive because nothing in this item provides a limit of liability relating to those coverages. The insurance carrier may be thinking state minimums while the insured is thinking about CGL occurrence limits.

DEFENSE COVERAGE

The payments under this coverage are in addition to the limits for Commercial Liability Coverage.

The insurance company has both the right and the duty to defend any suit seeking damages that may be covered by this insurance. The insurance company has the right to make any investigations and to settle any claims or suits.

Note: The decision on settlement rests solely with the insurance company.

The term suits is expanded to include arbitration or other alternative dispute resolution proceedings that involve bodily injury, property damage, personal injury or advertising injury to which the named insured is required to submit or to which the named insured is granted permission to submit by the insurance carrier.

After the limit of insurance has been paid out due to a judgement or written settlement, this defense coverage is no longer provided.

Example: Piedmont Fireworks has Commercial Liability Coverage with a $1,000,000 General Aggregate Limit. Fireworks on the premises explode causing property damage to nearby buildings and bodily injuries to several pedestrians. Each injured person and property owner files separate claims for their losses as a result of the explosion. The insurance company begins to make settlements with the injured persons. Once they pay out $1,000,000, the limit is exhausted, and the insurance company has no further obligation to provide legal defense or coverage for the remaining lawsuits. Piedmont must defend and pay all remaining actions on its own.

(Editorially added wording from GL 0950–Known Injury or Damage Amendments)

There is no duty to defend suits or claims for damages when the bodily injury or property damage was known by a designated insured prior to the policy term.

When the insurance company defends a suit, it pays the following:

Costs that the courts tax to the insured
Expenses the insurance company incurs
Up to $100 per day for the loss of earnings the insured incurs because of time away from work. Payment is made only if the insurance company requests that the insured takes the time away.
When the insurance company requests the insured to incur expenses, it will pay for them. However, if the insured incurs expenses without such a request, compensation should not be anticipated.
The amount of pre-judgment interest awarded against the insured but only on the portion of the judgment the insurance company pays. Once the insurance company offers to pay the policy limit, it is no longer responsibility for pre-judgment interest incurred following that offer.
Interest that accumulates following the entry of a judgment and ending when the insurance company tenders, deposits in the court or pays up to its coverage limit. This is not limited to only the amount of the judgment for which the insurance company is responsible.
Costs of appeal bonds or bonds for the release of attachments but only the cost of the amount of the bond up to the coverage limit. The insurance company is not required to apply for or furnish such bonds.
Costs of bail bonds required of the insured because of an accident or traffic violation due to the use of a vehicle to which Coverage L–Bodily Injury/Property Damage applies. The cost is limited to $500. The insurance company pays the cost only. The insured is responsible for applying for and obtaining the bonds.

EXCLUSIONS

The insurance company does not pay for a loss if one or more of the excluded events listed below apply to it. This is regardless of other causes or events that contribute to or aggravate the loss, whether such causes or events act to produce the loss before, at the same time as, or after the excluded event.

Exclusions That Apply To Bodily Injury, Property Damage, Personal Injury and/or Advertising Injury

1. Contractual

Coverage does not apply for bodily injury, property damage, personal injury or advertising injury liability that is assumed by the insured under a contract or agreement. There are two exceptions. If the liability would have existed without a contract being in place the coverage applies even though there is a contract requiring it.

Example: Preston Furs, LLC owns the building occupied by the retail fur shop and fur storage facility. It leases the extra space in the building to Kevin’s Stamp and Coin Shop. Kevin requires that the written lease of premises guarantee that the premises are safe and meet all life or public safety regulations and requirements. Because Preston Furs, LLC. holds this obligation, regardless that it is ALSO contained in the lease, coverage applies.

This exclusion also does not apply to bodily injury or property damage covered under the Contractual Liability Supplemental Coverages. However, to be covered, the injury or damage must occur after the effective date of the covered contract or agreement.

2. Professional

There is no coverage for bodily injury, property damage, personal injury or advertising injury arising out of the providing of or failure to provide any professional service. There is some limited coverage provided under the Incidental Medical Malpractice Injury Supplemental Coverage.

3. Racing

The insurance company does not pay for bodily injury, property damage, personal injury or advertising injury that result from mobile equipment being used in various racing, stunt or other types of contests. This exclusion applies not only during the actual event but also during practice, preparation and that event.

4. Mobile Equipment Transport

Coverage does not apply for bodily injury, property damage, personal injury or advertising injury that are related to the transportation of mobile equipment by an auto owned or operated by, or rented or loaned to, any insured.

Example: Merle works for Juniper Construction. He uses one of Juniper’s trucks to haul a trailer with a skid steer to a job site. The trailer hitch snaps, causing the trailer to overturn and throw the skid steer into the path of several vehicles. There is no coverage for Juniper Construction under this coverage form for any of the property damage or bodily injury. However, the automobile liability policy covering the towing vehicle should respond.

5. Auto, Aircraft, Watercraft, Mobile Equipment

This is a wide-ranging endorsement. It excludes coverage for bodily injury, property damage, personal injury and advertising injury arising out of not only the ownership of auto, aircraft, watercraft or mobile equipment but also their operation, occupancy, renting, loaning, supervision, maintenance, use, entrusting, loading or unloading. The coverage for the auto, aircraft, watercraft or mobile equipment is excluded if owned or operated by, or rented or loaned to, any insured.

Example: Michael and Michelle own a boat and loaned it to Peter and Jane. When the boat sinks and Jane is injured, Michael and Michelle’s CGL policy does not provide coverage for Jane’s injuries.

There are five exceptions in this exclusion.

There is coverage if bodily injury or property damage arises out of autos or mobile equipment that are covered under the Mobile Equipment Supplemental Coverage

Example: A modified pickup truck with permanently installed well drilling equipment accidentally strikes the side of a building while maneuvering into place over a well and damages the building. The damage to the building is covered.

There is coverage when non-owned autos are being parked at locations owned or controlled by, or rented to, the insured and on ways immediately adjoining the location.

Example: Gerald is announcing the opening of his newest location by hosting a large catered party. He asks Janet and Max, two of his employees, to provide valet parking for the guests. Janet places the car she is parking in reverse by mistake and pins one of the guests between it and another car. Coverage applies in this situation.

When liability is assumed for the ownership, maintenance or use of an aircraft or watercraft under a contract covered under Contractual Liability Supplemental Coverages, there is coverage.

Example: Pete charters an emergency flight to meet an important client and the charter company requires a hold-harmless agreement.

Watercraft while on shore at a location owned or controlled by, or rented to, the named insured is covered.

Example: A pontoon boat is stored on the insured's premises in the winter. The children in the neighborhood think it is fun to slide off the ice-covered watercraft. When one is seriously injured, and the insured is sued, there is coverage.

pontoon

Watercraft not owned by the named insured is covered if it is less than 26 feet long and is not used to carry either persons or property for a fee.

Example: Power Dynamics rents a pontoon boat for an afternoon sales presentation and uses a small grill to cook appetizers. The grill causes a fire. When the guests move away from the fire, the boat shifts, and several the guests are thrown overboard into the water. Several are injured. Because the pontoon is less than 26 feet and is non-owned, coverage for the injuries applies.

6. Liquor

This is an unusual exclusion because it only applies to a subset of named insureds. If the named insured is in the business of manufacturing, distributing, selling or servicing alcoholic beverages this exclusion applies. All other businesses can ignore this exclusion.

The insurance company does not pay for bodily injury, property damage, personal injury or advertising injury for which any insured may be held liable by reason of any of the following:

Causing or contributing to a person’s intoxication
Providing alcoholic beverages to persons who are under the influence of alcohol
Providing alcoholic beverages to persons who are under the legal drinking age
Laws or regulations affecting the sale, gift, distribution or use of alcoholic beverages.

Examples:

Scenario 1: The named insured is a medical supplies distributor and holds a company Christmas party where alcoholic beverages are served at no charge.

Scenario 2: The owner of a printing operation takes a client to lunch and pays for a bottle of wine to go with the meal.

Both scenarios are covered liquor liability situations if an alcohol-related loss or injury occurs to the clients or guests.

On the other hand, consider this:

Example: Backinthewoods Liquor Manufacturing, Inc. sponsors a fundraiser by holding a "Casino Night." The event includes betting and gambling opportunities and the food and alcoholic beverages are provided for a charge. Backinthewoods does not obtain the proper permits and licenses required for the function. A patron served alcoholic beverages is injured on the trip home from the event. Because this situation is subject to several state and local statutes and ordinances and the insured is in the alcoholic beverage business, coverage does not apply.

Another method of handling an insured's liquor liability exposure is through a separate Liquor Liability Policy.

Related Court Cases:

Liquor Liability Exclusion Held Applicable to Nonprofit VFW

Liquor Liability Suit Based on Failure to Restrain Patron Did Not Circumvent Exclusion

7. War

(Editorially changed wording from GL 0163–Exclusion – War and Military Action)

The wording of the GL-200 is deleted and replaced with new wording.

The analysis of the GL-200 wording is as follows:

Coverage does not apply for bodily injury, property damage, personal injury and advertising injury arising out of war. The word war is expansive, including civil war, undeclared war, insurrection, revolution and rebellion, or an act or condition of war.

The replacement wording from GL 0163–Exclusion – War and Military Action is analyzed as follows:

There is no coverage for any bodily injury, property damage, personal injury or advertising that is caused directly or indirectly by any act of war.

Loss or damage from any of the following activities is specifically listed as excluded:

a. War and this includes civil war and undeclared war

b. Warlike action when such action is from any military force. Action that is taken to stop or hinder the actual or expected warlike action is also excluded. The military force must be part of a governmental, sovereign, or other authority that is using the military personnel or agents.

This last sentence is very important because without it coverage for riot and civil commotion could be excluded.

Example: A group of cat lovers petitioned and received approval to hold a rally in the local park to protest a new law requiring license tags for cats. Some dog owners were very upset because they thought the law was equitable since dog owners already paid the license fee. They petitioned for a counter demonstration. Things quickly got out of hand and Millie’s Dog Parlor, located right next to the park, became caught in the middle of the action. A fight in the parking lot between a large Persian and a Chihuahua ended up with damage to several bystanders who tried to break up the fight. The injured bystanders sued Millie. Because of the requirement that a sovereign military force had to be involved for this war and military action exclusion to apply, Millie had coverage for the suits.

c. Insurrection, rebellion, revolution, usurped power, or action a governmental authority takes to hinder or defend against these

Note: This exclusion does not have any exceptions. All loss or damage is excluded.

8. Intentional

There is no coverage for bodily injury or property damage when the insured expected, directed or intended the injury or damage. There is also no coverage if the injury or damage is the result of an act of the insured that is both intentional and malicious.

This exclusion protects the insurance company from responding to intentional damages or injuries caused by an insured. It acts in the public interest and guarantees that an insured is not using the insurance contract for personal gain, such as theft, to injure competitors, as an instrument of revenge, or for some other selfish or self-serving purpose.

There is an exception that applies only to bodily injury. If the insured intentionally causes bodily injury while protecting persons or property coverage apply but only if the force used is considered reasonable.

Example: Oscar hears a sound outside of his store and goes out the back door to investigate.

Scenario 1: He sees three young men attempting to jimmy open his basement window. He fires a shot over their heads as a warning before calling 911. That single shot strikes a nearby pedestrian. While the shot was intentional, it was not malicious and was fired to protect the premises, so it is covered.

Scenario 2: He sees three young men walking past his basement window and fires a shot into their midst, injuring one. Because there was no reason to protect the premises, this intentional act would not be covered when the injured young man sues.

9. Products/completed Work Hazard

Coverage does not apply to bodily injury or property damage that is part of the products/completed work hazard except for the coverage provided under Coverage N.

This prevents duplicate coverage under Coverage L and Coverage N.

10. Pollution

The insurance company does not pay for bodily injury or property damage arising out of the actual, alleged or threatened pollutants discharge, dispersal, seepage, migration, release or escape. This absolute statement is followed by an explanation as to when and where it applies. This exclusion applies:

When the event is at or emanates from any premises, site or location now or ever owned, occupied by, rented or loaned to the insured. There is an exception. If the injury or damage is due to the heat, smoke or fumes of a fire there is coverage but only if the fire becomes uncontrollable or it breaks out of the receptacle in which it was intended to be confined. This type of fire is commonly called a hostile fire. This means that pollution from a friendly fire would continue to be excluded.

Example: The Jones family is a tenant in an apartment building. A fire breaks out in an adjoining unit. The family becomes ill from the smoke and vapors from that fire and develops serious, long-term health problems. They sue their landlord. The landlord’s commercial liability coverage covers the bodily injury sustained by the family because it is the result of a hostile fire at the apartment building. The family also claims that the smoke caused the deaths of their pet dog and cat. Those deaths could be covered because pet loss would be covered as property damage.

When the event is at or emanates from any waste-related premises, site, or location. Waste-related means that is was used by anyone and at any time to handle, store, dispose of, process or treat waste.

Note: The hostile fire exception does not apply.

When pollutants are considered waste and are being or were transported, handled, stored, treated, disposed of or processed as such. Coverage is excluded if the processes are being conducted by or for any insured or are being conducted by any other entity when the insured is legally responsible for that entity’s activities.

Note: There is no exception to this section.

When the event is at or emanates from any premises, site or location where work is taking place. The work can be conducted by any insured or by any contractor or subcontractor that is under the control of the insured.

This part of the exclusion applies only under the following circumstances:

The pollutants are brought on or to the premises, site or location in conjunction with such work by such insured. There is an exception. If the injury or damage is due to the heat, smoke or fumes of a fire, there is coverage but only if the fire becomes uncontrollable or it breaks out of the receptacle in which it was intended to be confined. This type of fire is commonly called a hostile fire. This means that pollution from a friendly fire would continue to be excluded.

Note: This also means that if the pollutants were brought onto the premises by someone other than the insured, this part of the exclusion does not apply.

The work is the testing for, monitoring of, clean up, removal, containment, treatment, detoxification, neutralization or in any way responding to or evaluating the effects of pollutants.

Note: This paragraph is written in the present tense which means it excludes only pollutants related to current operations, not completed operations.

The insurance company does not pay any loss, cost or expense caused by, resulting from or arising out of any either of the following:

Any manner of response to or evaluation of the effects of pollutants
Any governmental authority lawsuit or claim regarding any manner of responding to or evaluating the effects of pollutants.

Pollutants are defined in this exclusion to be any solid, liquid, gaseous, thermal or radioactive irritant or contaminant. Acids, alkalis, chemicals, fumes, smoke, soot, vapor and waste are also considered pollutants. Waste is not limited to only items that are to be disposed but also includes items to be recycled, reclaimed or reconditioned. Electrical or magnetic emissions, whether visible or not, and sound emissions are also considered pollutants.

Related Court Cases:

11. Employee

There is no coverage for bodily injury or personal injury to an employee of the insured if the injury occurs during that employment by the insured. In addition, coverage does not apply to consequential injury to a spouse, child, parent, brother or sister that is related to the injury of an employee.

This exclusion applies whether the insured is liable because it is an employer or because of any other relationship. If an action occurs whereby a third party pays and then comes back against the insured for injury to the insured’s employee, there is still no coverage. The only exception is if the insured assumed liability under a contract that is covered in Contractual Liability Supplemental Coverage.

Note: The intent of this exclusion is to eliminate duplicate coverage for injury that should be insured by employers liability coverage. The exclusion of work-related injuries applies regardless of the reason the insured may be held liable. It makes no difference if the liability is due to direct or indirect employment or by contract. All bodily injury and personal injury related to an insured’s work is excluded. This is particularly important to understand because of the widespread use of contractors, subcontractors, independent contractors or leased employees and because of the uncertainty of who is responsible for such workers.

Be careful of situations in monopolistic states where workers compensation is provided or required, but coverage for employer’s liability is not similarly necessary, required or available. This inconsistency can leave a major gap in coverage for the insured. Many insurance companies in such states offer their own endorsements to add employer’s liability coverage to the commercial liability coverage.

Example: Lizzie works at Greater Cake Emporium. She is taking a break and admiring one of the latest multi-tiered creations when the bottom holder suddenly breaks, and the cake comes smashing down on her wrist, severely injuring her. Lizzie knows that the injury is due to Greater Cake choosing the cheapest holders possible! She sues Greater Cake in their capacity of a retailer and not as her employer. There is no coverage for the suit because of the employee exclusion.

12. Workers Compensation and Other Benefits

The insurance company does not pay for bodily injury or personal injury when the insured either does or should provide benefits under laws such as workers compensation, disability benefits, occupational disease, and unemployment compensation. The intent of this exclusion is to eliminate duplicate coverage for injury that should be insured under workers compensation coverage and other mandatory types of insurance coverage.

Example: John’s Roofing does not have any direct employees. Instead it uses ‘independent contractors’ who work only for John’s Roofing, dress in John’s Roofing required clothing, use John’s Roofing tools and follow the schedule John’s Roofing supplies to them. When one of the ‘independent contractors’ falls and injuries himself he submits a benefit claim to the workers compensation board. The board rules that all of John’s ‘independent contractors’ are actually employees and that John must compensate the injured employee and must pay a fine for not carrying workers compensation coverage. The commercial general liability policy will not respond because of this exclusion.

13. Employment-related Practices

Coverage does not apply to bodily injury or personal injury arising out of any employment-related practices activity. Examples of such practices are refusal to employ, termination of employment, coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination and sexual misconduct. The activities can be the policies, actions, omissions or consequential actions that result from them. This exclusion applies however the insured may be involved in such action. This means it is not limited to only its being an employer.

(Editorially added wording from GL 1353–Exclusion – Data Breach Liability)

Data Breach Liability

No coverage is provided for any bodily injury, property damage, personal injury or advertising injury when it is due to or arises out of information that is private or confidential being either disclosed or accessed. The information can belong to any person or organization.

· There is no coverage for loss, cost, expense, or damages due to data records being corrupted, damaged, changed, or manipulated. It also does not cover if they cannot be accessed or used.

Any expenses resulting from of the following that are related to either of the above are also excluded:

Credit monitoring
Notification
Forensic investigation
Legal Research
Similar type expenses

(Editorially added wording from GL 1022–Information Distribution and Recording Violations Exclusion)

Information, Distribution, and Recording Violations

Coverage does not apply to property damage, bodily injury, personal injury, or advertising injury that is due to actual or alleged direct or indirect violations of any of the following:

The Telephone Consumer Protection Act of 1991 (TCPA)
The Can-Spam Act of 2003
The Fair Credit Reporting Act (FCRA)
Similar local, state, or federal ordinances, statutes, laws, or regulations that pertain to, prohibits, or restricts any of the following as they relate to information or material:

o Recording

o Collecting

o Transmitting

o Communicating

o Sending

o Disposing of

o Distributing material

Amendments to any of the specific acts above and any similar federal, state, or local laws or regulations are also excluded.

(Editorially added wording from GL 890–Lead Liability Exclusion)

Lead Liability Exclusion

No payment will be made for any of the following:
Bodily injury that is in any way caused by lead of any form being ingested, inhaled or absorbed.
Property damage, personal injury or advertising injury related in any way to any form of lead.
Any loss, cost or expense caused by, resulting from or arising out of any either of the following:

· Any manner of response to or evaluation of the effects of lead

· Any governmental authority lawsuit or claim regarding any manner of responding to or evaluating the effects of lead.

ADDITIONAL EXCLUSIONS THAT APPLY ONLY TO PERSONAL INJURY AND/OR ADVERTISING INJURY

1. Violation of Law

There is no coverage for personal injury or advertising injury when the insured willfully violates an ordinance, law, regulation or statute. It also doesn’t cover when someone else performs the action but does so with the insured’s consent.

Example: Joiner, Inc. has obtained a restraining order preventing John Smith, a persistent salesman, from entering its premises. John Smith’s bosses want John to continue to approach the employees at Joiner. When John is caught on premises and Joiner, Inc. sues John’s employers, there is no coverage for either John or his employers because they were operating in violation of a court order.

2. False Material and Publication Prior to Policy Period

The insurance company does not pay for personal injury or advertising injury when known false material is published (oral or written) by or at the direction of the insured. There is also no coverage when the offense is based on any material that had been published by any party prior to the policy period.

3. Breach of Contract

Coverage does not apply when an advertising injury is due to a breach of contract. The one exception is when an advertising idea is misappropriated through an implied contract.

Example: Jerry sent a suggestion to Make My Day Enterprises for an ad campaign. They sent a reply thanking him for his suggestion. Three years later Jerry noticed that the Make My Day ad campaign looked just like what he had suggested. Because of the letter he had received he felt he had an agreement, so he sued them for breach of contract. Because the contract was only implied, there is coverage.

4. Quality or Performance of Goods

There is no coverage for advertising injury when the goods or services do not meet the level of quality or performance advertised.

5. Insureds in Media Business

If the insured is in the business of publishing, advertising, telecasting or broadcasting there is no coverage for any advertising injury offenses.

6. Wrong Description of Prices

When the wrong description of the prices of the insured's goods, products or services in an advertisement is the cause of advertising injury, there is no coverage.

7. Pollution

This is an absolute pollution exclusion.

There is no coverage for personal injury or advertising injury arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of pollutants at any time.

The insurance company does not pay any loss, cost or expense caused by, resulting from or arising out of any either of the following:

Any manner of response to or evaluation of the effects of pollutants
Any governmental authority lawsuit or claim regarding any manner of responding to or evaluating the effects of pollutants.

Because of certain coverage wording in previous editions of personal injury and advertising injury liability coverage forms, attempts have been made to force coverage for various types of pollution losses into it by referring to it as trespass, wrongful entry or invasion of the right of private occupancy. The personal or advertising injury coverage was never intended to pay for pollution damages or cleanup costs. This exclusion clarifies that no coverage exists for any pollution exposure that may arise out of the personal and advertising injury wording in the policy.

ADDITIONAL EXCLUSIONS THAT APPLY ONLY TO PROPERTY DAMAGE

1. Fire Legal Liability

The only property damage coverage for property owned or occupied by, or rented to, the named insured is that which is provided by Coverage O–Fire Legal Liability.

2. Sold or Abandoned

Coverage does not apply to property damage to premises sold, given away or abandoned by the named insured, if the property damage arises out of any part of those premises. The exception to this exclusion is premises that were the named insured's work and were never occupied, rented or held for rent by the named insured.

Note: This is particularly important to a homebuilder. Before this exception was added, homebuilders had no coverage on buildings that they had built and sold. However, it is important for such builders to realize that once they put a building into use, such as a model home with an office inside, or as a rental, the exception no longer applies.

3. Used By or Loaned To

Property that is used by or loaned to the named insured is not covered for property damage. The exception to this exclusion is any liability assumed under a sidetrack agreement.

A sidetrack agreement is one between a property owner and a railroad company, with respect to a railroad sidetrack on the premises of the insured. A sidetrack is a transfer or access track. The railroad company allows use of the sidetrack by the property owner if the property owner guarantees access to the sidetrack by the railroad company and agrees to certain conditions of property maintenance. A mutual hold-harmless agreement between the railroad company and the property owner may also be required.

4. Care, Custody or Control

There is no coverage for property damage to any type of personal property while that property is in the insured's care, custody or control. The exception to this exclusion is any liability assumed under a sidetrack agreement.

Note: Although the commercial liability coverage form does not have an endorsement that provides coverage for property in the insured's care, custody, or control, many insurance companies have developed their own forms or endorsements to do so. In addition, Inland Marine Bailees insurance is available that covers the property of customers or clients in the care, custody or control of the insured. There are various forms of this coverage available through the American Association of Insurance Services (AAIS), the Insurance Services Office (ISO), or individually developed and filed specific company endorsement forms, depending on the nature of the insured’s operations.

AAIS Bailee Customers Floater Coverage–Dry Cleaners And Laundry Form Coverage Analysis

ISO Bailees Customers Coverage Form Analysis

Property of Others

Care, Custody or Control

5. Specific Part of Real Property

Property damage to the specific part of real property that is being worked on is not covered if the property damage arises out of that work being performed. This applies if the work is being performed by the named insured or by a contractor or subcontractor working directly or indirectly on behalf of the named insured. Once again, this exclusion does not apply with respect to liability assumed under a railroad sidetrack agreement.

Example: Freda has been hired by Roger to install a skylight in his roof. When she cuts the opening for the skylight, she inadvertently nicks a water line. She completes the task and collects her money. Freda is very surprised to receive a suit claiming that she had caused a major leak in the piping that resulted in water and mold damage to the roof, insulation, ceiling and walls. There would have been no coverage for the damage to the roof or to the skylight but because the only item damaged by Freda was the piping and that was not the part of the real property she was working on, coverage would apply for all the damage.

6. Specific Part of Property

Property damage to that specific part of any property that must be restored, replaced or repaired because mistakes in the named insured's work are not covered. There are two exceptions to this exclusion. If the property damage is considered products/completed work hazard there is coverage. Also, liability assumed under a sidetrack agreement is covered.

Example: Freda nicked the piping in the above example and it must be repaired because of Freda’s mistake. Therefore, the piping repair and replacement is not covered because of this exclusion.

7. Named Insured’s Products

Property damage to the named insured’s products is not covered when the damage is a result of the products themselves or their parts.

Example: Green Furnace and Design manufactures gas furnaces. An installed furnace malfunctions and catches fire. There is no coverage for the furnace. However, there would be coverage for the damage caused by the furnace.

8. Named Insured’s Work

Property damage to the named insured's work is not covered if the property damage arises out of the named insured's work and the work is considered a products/completed work hazard. There is an exception. If the property damage arises from work done by a subcontractor working on behalf of the named insured there is coverage.

Example: Gene’s Builders repairs the electrical wiring in a building. When the wiring overheats and must be replaced, there is no coverage. However, if the wiring repair was done by a subcontractor on behalf of Gene’s Builders, coverage applies for the benefit of Gene’s Builders but not for the subcontractor.

Related Court Cases:

Work Product Exclusion in Contractor's Liability Insurance Held Applicable To Claim for Negligent Location of House

Work Project Exclusion Held Applicable To Control of Project by Construction Manager, in Court Cases

9. Impaired Property

Note: The definition of property damage includes loss of use of property. The loss of use coverage can apply even if there is no tangible damage to property. This exclusion applies to such situations.

There are two circumstances where loss of use property damage occurs and is not covered under this policy.

When the named insured, or someone acting for the named insured, delays or fails to perform a contract.
When the named insured’s product is defective, deficient, inadequate or unsafe.

Property damage due to loss of use to other property because of sudden physical injury to or destruction of the named insured’s product or work is covered.

Example: Jerry was hired to install an entry system at Sally’s store.
Scenario 1: Jerry installed the locking mechanism but did not give Sally the combination before he left for his vacation. Sally was unable to access her store for one week. This loss of use property damage is not covered because it occurred because Jerry did not perform his contract.
Scenario 2: Jerry installed the locking mechanism and gave Sally the combination to the lock. She successfully used the lock but, the second time, it short circuited and was unusable. Jerry had to order new parts to fix the problems, so Sally was unable to access her store for a week. This loss is covered because it was sudden and accidental and occurred after the work had been completed.

Product recall and withdrawal expenses are also not covered. Such expenses include loss of use, disposal, withdrawal, recall, inspection, repair, replacing, adjusting or removal of the named insured's work, products or impaired property. They are not covered even when done because of a known or suspected defect, deficiency or unsafe condition.

Example: Continuing with the above example. Because of the problem with Sally’s entry system, Jerry believes he must notify his other customers using that device. He schedules visits to all to replace the problem mechanism. His insurance company will not compensate him for his work, but his customers are very pleased with his proactive approach to their security.

ADDITIONAL EXCLUSIONS THAT APPLY ONLY TO MEDICAL PAYMENTS

These exclusions are not the only medical payments exclusion. All of the bodily injury exclusions also apply.

1. Any insured

Coverage does not apply to medical expenses to an insured.

Example: Jim Maxwell, of Maxwell and Maxwell, slips and falls on ice on the front steps of the owned building premises and needs x-rays to determine the extent of his injuries. The x-ray expense is not covered by Maxwell and Maxwell’s policy.

2. Hired Person

There is no coverage for medical expenses for bodily injury to a person who was hired by or on behalf of any insured to do work for either an insured or a tenant of an insured.

Example: A painter hired by the insured to paint the building falls from a ladder and breaks his wrist. This is not a covered medical payments loss.

3. Injury on Normally Occupied Premises

Medical expenses for bodily injury to a person injured on that part of the named insured’s premises which that person normally occupies are not covered.

Example: A tenant in the insured's building falls down the stairs in his own apartment and is injured. Coverage does not apply to his injuries or medical expenses. However, if that same tenant falls in a neighboring apartment building, there would be coverage.

4. Athletic Activities

Medical expenses for bodily injury to a person injured while taking part in athletic activities are not covered.

Example: The insured allows a little league team to practice on its premises and a girl breaks her leg sliding into third base. Medical payments coverage does not apply to her medical expenses.

5. Products/Completed Operations Hazard

When bodily injury is included in the products/completed work hazard there is no medical payments coverage.

Example: An appliance manufactured by the insured ignites due to faulty wiring and burns the purchaser's fingers at his home. Medical payments coverage does not apply to his injuries or expenses.

6. Club Members

When the named insured is a club, there is no coverage for medical expenses for bodily injury to the named insured's members.

7. Guests

When the named insured owns or operates a hotel, motel or tourist court, there is no coverage for medical expenses for bodily injury to guests of the facility.

8. Workers Compensation or Similar Benefit

If a person is eligible and should receive benefits under any workers compensation, non-occupational disability, occupational disease or similar laws, there is no medical payments coverage. Please note that an insured is not required to be the one who should be supplying the benefits.

Example: Mike is carrying a supply of beer into Luke’s liquor store when he slips on ice outside the door. Because Mike should receive workers compensation coverage from his employer, Luke’s medical payments do not apply.

9. Student, Camper, Patient or Inmate

Coverage does not apply for medical expenses for bodily injury to:

A student or camper who is enrolled in a program run by or on behalf of the named insured
A patient or inmate treated or detained at a facility owned or operated by or on behalf of the named insured.

WHAT MUST BE DONE IN CASE OF LOSS

1. Notice

If an occurrence or claim that might be covered takes place and an insured is aware of it, the named insured must promptly notify its insurance agent or the insurance company or arrange for someone else to contact them. Notice to the agent is treated the same as notice to the insurance company.
Certain minimum information must be provided. The name of the insured and the policy number along with the time, place and circumstances of the loss event or the situation suggesting that a claim may be imminent must also be provided. In addition, the names and addresses of all potential claimants and witnesses known to the insured must also be provided.

2. Cooperation.

Any insured involved with an occurrence or offense must cooperate with the insurance company and do everything required as explained in this coverage form.

3. Volunteer payments

Volunteer payments and obligations can be made by an insured but only at its own expense. An important exception is that expenses to provide first aid to others at the time of an injury will be paid by the insurance company.

4. Other duties.

If a claim is made or legal action is brought, copies of all legal papers, demands and notices must be sent promptly to the insurance company by the insured. When requested to do so by the insurance company, the insured must also assist it in settlements and in the conduct of lawsuits even when it includes attending trials or hearings. The insured must enforce its rights against all parties that may be liable to the insured for the injury or damage. In addition, the insured must assist the insurance company in securing and giving evidence and in obtaining the attendance of all witnesses.

Note: Remember assistance to the insurance company is only required when requested. It is not the responsibility of the insured to act independently and such actions might hinder the insurance company.

If a medical payments loss occurs, the injured person or the person acting on behalf of the injured person must give the insurance company written proof of the claim as soon as possible. A statement under oath may be required and the insurance company will need permission to obtain copies of medical records. In addition, the injured person must agree to medical examinations by a doctor chosen by the insurance company. There may be one or more examinations, but the number and the type of examination must be reasonable. These obligations may be difficult to enforce because the injured party is not part of this contract. However, if the injured party does not meet these obligations, coverage may be denied under medical payments coverage.

HOW MUCH WE PAY

1. The limits of insurance shown on the declarations are the most the insurance company pays, regardless of the number of insureds, persons or organizations sustaining injury or damage, claims made, or suits brought.

Any claim payment under medical payments coverage is not an acknowledgment or admission of liability under any other coverage.

2. The general aggregate limit is the most the insurance company pays for the total of all damages under bodily injury and property damage, all medical expenses under medical payments, all damages under fire legal liability and all damages under personal injury and advertising injury liability coverages during the policy period. This does not include damages due to bodily injury or property damage under the products/completed operations hazard.

Example: Growing Strong, Inc. carries a commercial liability policy with a $2,000,000 general aggregate limit. During a single policy period there was one covered premises loss for $1,000,000 and two covered personal injury and advertising injury losses of $1,000,000 each, for total losses of $3,000,000. The most the insurance company pays is the $2,000,000 general aggregate limit.

3. The aggregate limit for the products/completed work hazard is the most the insurance company pays for damages due to bodily injury or property damage covered under products/completed work liability.

Example: Microfilament, LLC carries a commercial liability policy with a $3,000,000 products/completed work aggregate limit. Eight separate covered products claims occur during one policy period. The total of all eight payments is $4,000,000. The $3,000,000 aggregate limit for products/completed work is the most the insurance company pays.

4. The limit for each occurrence is the most the insurance company pays in a single occurrence for the total of damages under bodily injury and property damage, products/completed work, fire legal liability and medical expenses under medical payments coverage. This is subject to the general aggregate limit and the products/completed work hazard aggregate limit.

Example: Marmy Associates is a manufacturer with a commercial liability policy with an occurrence limit of $1,000,000. While a tour group is on the premises, an explosion occurs that injures 25 visitors and their claims total nearly $5,000,000. Since the explosion is a single occurrence, the policy will pay no more than $1,000,000. Marmy Associates is responsible for the remaining $4,000,000 in claims from its own financial resources.

5. The limit for personal injury and advertising injury liability is the most the insurance company pays for personal injury or advertising injury sustained by a single person or organization and is subject to the policy general aggregate limit.

Example: Melatine Wholesale carries a commercial liability coverage form with a $1,000,000 limit for personal injury and advertising injury. Melatine tells a trade publication that it has proof that a competitor is scraping off Made in China stickers from some of its products and substituting the Made in the USA branding. The competitor sues Melatine, its president and its vice president and receives a personal injury settlement of $2,000,000. Even though three persons were named in the lawsuit, only $1,000,000 personal injury and advertising injury limit is paid by the insurance company.

6. The limit for fire legal liability is $50,000 for each occurrence but that limit can be increased on the declarations. This limit is subject to the each occurrence limit and the general aggregate limit.

7. The limit for medical payments coverage is the most the insurance company pays for all covered medical expenses sustained by a single individual. This limit is subject to the each occurrence limit and the general aggregate limit.

Example: Piddlewink, Inc. has a commercial liability policy with a $5,000 per person medical expense limit. A snow storm dumps 5 inches of snow and ice on Piddlewink’s parking lot and sidewalks. The next day, 15 separate people suffer injuries while falling on the slippery walk and lot. Because the medical expense limit applies on a per person basis, each injured customer has up to $5,000 to pay for his or her medical expenses.

8. Each aggregate limit applies separately to each consecutive 12-month period shown on the declarations. These limits also apply to any remaining policy period of less than 12 months unless the commercial liability coverage is extended on a date after the coverage inception date. In that case, the additional period is considered part of the latest preceding period when determining limits.

Example: Bottia Limited’s policy was issued with January 1 to January 1 effective dates. At its renewal, Bottia wants to change the policy expiration date to bring its insurance in line with its accounting period.

Scenario 1: Bottia requests that the policy expiration date be extended to July 1. The policy aggregates apply to the first annual 12-month policy period of January 1 to January 1. A renewal aggregate time period begins January 1 and extends for 18 months to July 1.

Scenario 2: Bottia requests that a short-term policy be issued from January 1 to July 1 and then an annual policy be issued from July 1 to July. She will have an aggregate for the initial policy period, a second aggregate for the January to July short term policy and then another aggregate for the July to July policy.

CONDITIONS

1. Bankruptcy

If an insured becomes bankrupt or insolvent, the insurance company must continue to meet all commitments under this coverage form. It is not relieved of any of its duties, responsibilities or obligations.

2. Insurance under More Than One Policy

(Editorially added wording from GL 1020–Other Insurance Amendment)

This condition applies to all coverages except medical payments.

This commercial liability coverage is primary except as provided below or unless stated otherwise. The insurance company's liability is not reduced if there is other insurance unless that insurance is also considered primary.
If the other insurance is also considered primary, losses are shared. If the other insurance provides for contribution by equal shares, this insurance pays equal amounts with the other insurance. Once the primary carrier with the lowest limit exhausts its limit and the loss has not been fully paid, the payment amounts are readjusted to equal amounts among the remaining primary insurers. This readjustment continues until the full amount is paid or this policy’s limit is exhausted.

Example: Originality Inc. carries three primary commercial liability policies. Policy A has a $50,000 limit for each occurrence, Policy B has a $150,000 limit for each occurrence and Policy C has a $1,000,000 limit for each occurrence. The total amount of the judgment for which the insured is liable is $500,000.

In equal shares, each of the three policies contributes $50,000 for a total contribution of $150,000 of the $500,000. Once Policy A limits are exhausted, it drops out. Policy B and C each contribute an additional $100,000 for total contribution, now $300,000, and the coverage provided by Policy B is exhausted. The remaining $200,000 must then be paid Policy C to make the total of $500,000. Policy A paid $50,000, Policy B paid $150,000 and Policy C paid $300,000.

However, if the other insurance does not require contribution by equal shares, the insurance company pays proportionally. This means that each primary insurer pays the proportion of the loss that matches the proportion its limit bears to the total amount of primary limits carried.

Example: Instead of equal shares, Originality Inc.’s policies are proportional. The total of the limits of all policies available to pay claims is $1,150,000. Company A has 50,000/1,200,000 of the obligation. Company B has 150,000/1,200,000 of the obligation. The remaining belongs to Company C with 1,000,000/1,200,000. The total amount for which the insured is liable is $500,000. Company A pays $20,833, Company B pays$ 62,500 and Company C pays $416,667.

The coverage in this policy is not always primary. When the named insured’s work would be covered by a fire, extended coverage, builders risk or similar type coverage, this coverage is excess. It also responds on an excess basis if there is fire insurance for premises the named insured rents. When a loss arising out of the maintenance or use of any aircraft, auto or watercraft occurs, and this coverage applies, it is excess over any other insurance. It is also excess when the named insured has been added as an additional insured to other primary insurance that is available to the named insured for premises operations, completed work or products.

Example: T&R Contracting has a commercial liability policy on their contracting business. It is building a home for Pam and John who purchase a builders risk policy for the home. The anticipated value of the building when the project began was $500,000. However, due to several modifications requested by the client, the estimated completed value of the still unfinished building is now $750,000, but the builders risk policy has not been adjusted upward. T&R keep a salamander heater burning overnight and it causes an explosion, destroying the building. The destroyed building value is $650,000 at the time of loss. The builders risk policy is primary and pays $500,000. The commercial liability policy then pays $150,000.

In cases where this insurance is excess over any other insurance that applies to a loss, the insurance company is not obligated to defend any claim or legal proceedings that another insurer is obligated to defend. However, if no other insurer defends, this insurance company may do so, subject to receiving the insured's rights against that other insurer. The insurance company pays its share of any amount of loss that exceeds the total of the amount that all other such insurance pays for the loss without this insurance and the total of all deductibles and self-insured amounts required by that other insurance. The insurance company shares the remaining loss with any other insurance which is not considered primary and that was not purchased to apply specifically excess of the limits for the coverage shown on the declarations.

3. Misrepresentation, Concealment or Fraud

All insurance provided by this coverage is voided to ALL insureds if ANY insured intentionally conceals or misrepresents a material fact or situation relating to this insurance or to the subject of the insurance. It is also void when the interest of an insured is misrepresented or concealed. False swearing or fraud by any insured also voids coverage if the fraud or false swearing relates to the insurance or to the subject of the insurance.

Note: This condition clarifies that when the named insured accepts the policy issued by the insurance company, it agrees that the information shown on the declarations is both accurate and complete. The named insured also affirms that the information in the policy is based on the representations it made to the insurance company in the application and that the company relied on that information when it issued the policy. However, it is important to realize that it is not only the named insured’s fraud but also fraud by other insureds that can void the policy.

Related Court Cases:

Contractor Paints Itself Into A Corner

Split Decision On False Statements In Application

4. Motor Vehicle Financial Responsibility Certification

When this coverage is used as proof of financial responsibility under any motor vehicle law, this insurance, with respect to bodily injury liability and property damage liability, will comply with the provisions of the law as related to both the coverage and the limits required by that law.

Note: Using a CGL to provide motor vehicle coverage can be very challenging. It is better to provide such coverage under an automobile policy that spells out the coverage being provided and the limits. Misunderstandings regarding coverage and limits can be very expensive.

Example: Jerry, the named insured, is driving his snowmobile on his property when it is struck. He is later found by an employee who did not see the accident. Jerry submits a claim to his CGL carrier for uninsured motorist coverage because while it was obvious by tire tracks that he was struck by a vehicle, it was a hit and run by persons unknown. Jerry’s injuries are serious so is asking for the full CGL occurrence limits. The CGL carrier is offering only minimum limits.

5. Premium

When the premium shown on the declarations is considered a deposit premium, the insurance company anticipates a change in the premium. The final earned premium is calculated at the end of the audit period shown on the declarations. When the earned premium is more than the deposit premium, the insurance company bills the named insured for the difference; when the earned premium is less than the deposit premium, the insurance company refunds the excess to the named insured. The named insured has a responsibility to keep records of the information necessary to calculate the premium and to send it to the insurance company at the end of the audit period or when requested by them.

6. Separate Insureds

The coverage provided applies separately to each insured against whom a claim is made, or a lawsuit brought. However, this does not affect the limits stated under the How Much We Pay section of the form. In other words, other than the limits, coverage applies to each insured as if it was the only insured and separately to each insured against whom a claim or suit is brought.

7. Subrogation

If the insurance company pays under this coverage, the insurer may require that the insured relinquish all rights to recover from another party to it. This right is limited to only such rights that are connected to the loss that was paid. If the insured impairs or otherwise affects the insurance company’s ability to exercise such rights, there is no obligation on the part of the insurance company to make any payments for the loss. An important exception is that the insured may waive its rights of recovery against a third party in writing before a loss or occurrence takes place.

Note: The subrogation transfer right is automatic upon payment. If the insured does not desire to relinquish its right or doesn’t want the insurance company to utilize that right, it should not accept payment. The insured will be expected to assist in bringing a suit, transferring those rights or assisting in enforcing them which may not be what the insured might want to do.

Example: The side door to McDuff’s was propped open. Because it was open a person entered, attacked a customer and left, unseen. The customer sues McDuff’s because of her trauma and Friendly Insurance Company pays the claim. During the investigation it is discovered that Nancy, a family friend, had propped it open while making a delivery and forgot to remove the prop. Friendly sues Nancy for her negligence in leaving the door propped open. McDuff’s says that it will not assist in the suit. Friendly explains that if McDuff does not assist, it will be required to reimburse Friendly for its cost in investigating and settling the claim.

8. Suit Against Us

The insurance company can be sued but not until certain requirements are met. First, all terms and conditions of the coverage form must be met. Second, the amount of the liability must have been established either by a final judgment against the insured in a trial or by a written agreement between the insured, the party bringing the claim for damages and the insurance company.

No party has any right to name the insurance company as a party to any action brought to determine the liability of any insured.

Note: While the insurance company may be sued to recover an agreed settlement or final judgment against an insured, it is not liable for damages if the insured has not satisfied the condition and terms of the policy.

(Editorially added wording from GL 0950–Known Injury or Damage Amendments)

Knowledge or Bodily Injury or Property Damage

It is important to know exactly when an insured is considered to be aware of bodily injury and property damage because the timing of such knowledge determines the policy that responds to a loss. Coverage under this policy does not apply to any bodily injury or property damage loss that occurred and was known to have occurred before the policy period. A loss is considered known at the earliest of the following:

When any designated insured receives suit papers, a claim, or a damage demand related to an alleged bodily injury or property damage
When any insurance company receives a report from any designated insured about bodily injury or property damage
When any designated insured first becomes aware of or learns about anything that suggests that bodily injury or property damage either has occurred or is actively occurring

Note: The first two items above are relatively simple but the last may be more difficult. It is difficult to define what “aware” means. Must the designated insured develop a cause-and-effect understanding that the event witnessed will naturally lead to bodily injury or property damage?

NUCLEAR ENERGY LIABILITY EXCLUSION

This exclusion has two parts. The first is the actual exclusion. The second is eight definitions used with only this exclusion.

1. Exclusion

a. There is no coverage for the following bodily injury or property damage:

If an insured is also an insured under a Nuclear Energy Liability policy issued by Nuclear Energy Liability Insurance Association, Mutual Insurance Association, Mutual Atomic Energy Liability Underwriters, Nuclear Insurance Association of Canada, or any of their successors. This applies if there would be coverage under any such policy except for it being terminated because its limits are exhausted.
That results from the hazardous properties of nuclear material with respect to any person or organization required to maintain financial protection as explained in the Atomic Energy Act of 1954.
That results from the hazardous property of nuclear material and that the insured would, without this policy existing, be entitled to indemnity from the United States of America because of agreements between the United States of America and any person or organization.

b. Coverage M–Medical Payments does not apply to bodily injury that results from the hazardous properties of nuclear material and that arises from any person or organization operating a nuclear facility.

c. There is no coverage for bodily injury or property damage that results from the hazardous properties of nuclear material if:

The nuclear material is at a nuclear facility an insured owns or operates, or that others operate on its behalf, if the material was discharged or dispensed from such a facility
The nuclear material is contained in spent fuel or waste and an insured, or others on its behalf, possessed, handled, used, stored, processed, transported, or disposed of it at any time
The bodily injury or property damage results because an insured furnishes services, materials, parts, or equipment as part of planning, constructing, maintaining, operating, or using any nuclear facility. If the facility is located within the United States of America, its territories or possessions, or Canada, this exclusion applies only to property damage to the specific nuclear facility and any property at that facility.

2. Definitions

The following eight definitions apply to only this Nuclear Energy Liability Exclusion:

a. Hazardous Properties

This includes radioactive, toxic, or explosive properties but is not limited to them

b. Nuclear Material

This is source material, special nuclear material, or by-product material. These are all defined terms within the Atomic Energy Act of 1954.

c. Source Material, Special Nuclear Material, and By-product Material

These terms have the meanings that the Atomic Energy Act of 1954 gives them.

d. Spent Fuel

This is any solid or liquid fuel element or component that has been used or has been exposed to radiation in a nuclear reactor.

e. Waste

This is waste material that contains by-product material. By-product material does not include tailings or wastes produced by extracting or concentrating uranium or thorium from any ore processed primarily for its source material content. Waste also includes any waste material that results when any person or organization operates any nuclear facility included in the first sentence of the definition of nuclear facility below.

f. Nuclear Facility

This is a nuclear reactor and equipment designed or used to separate uranium or plutonium isotopes or for spent fuel processing, utilization, or waste handling, or processing or packaging. It also includes equipment or devices used in special nuclear material processing, fabricating, or alloying. This is subject to the total amount of such material at any time consisting of (or containing not more than) 25 grams of plutonium or uranium-233 (or any combination thereof) or more than 250 grams of uranium-235. It also includes any structure, basin, excavation, premises, or place prepared or used to store or dispose of waste. This includes sites where all such operations are conducted, and all premises used for such operations.

g. Nuclear Reactor

This is any apparatus designed or used to sustain nuclear fission in a self-supporting chain reaction. It is also used to contain a critical mass of fissionable material.

h. Property Damage

This is all forms of radioactive contamination of property.

Note: The Nuclear Energy Liability Exclusion is an elaborate and extensive exclusion of incidents and materials related to nuclear energy of every kind and description. It contains its own set of related definitions. The intent is to exclude any bodily injury or property damage covered by any nuclear liability insurance policy and to exclude coverage for companies required to maintain financial protection by any of a number of federal laws and acts related to nuclear energy. It excludes all medical payments of any kind and excludes nuclear discharge, leaks, waste, or the work performed at any nuclear facility.