Illinois Casualty Insurance State Practice Exam

Which type of liability is covered under Coverage A of a CGL Policy?

1. Personal and advertising injury

2. Bodily injury and property damage

3. Medical payments

4. Professional errors and omissions

The correct answer is: Bodily injury and property damage

Coverage A of a Commercial General Liability (CGL) policy is specifically designed to cover two essential types of liability: bodily injury and property damage. This coverage protects the insured against claims arising from injuries to third parties or damage they may cause to someone else's property during the course of their business operations. Bodily injury refers to physical harm that occurs to an individual, which may also include related medical expenses and loss of income. Property damage encompasses any harm or destruction to tangible property, as well as loss of use of that property. This coverage is fundamental in protecting businesses from significant financial loss due to lawsuits that arise from incidents occurring on their premises or as a result of their operations, making it a crucial component of risk management for any business. In contrast, the other choices pertain to different aspects of liability coverage. Personal and advertising injury falls under Coverage B, which protects against offenses like defamation and copyright infringement. Medical payments, typically included under Coverage C, provide prompt medical expense coverage regardless of fault but do not extend to bodily injury or property damage claims. Professional errors and omissions are generally covered under professional liability insurance, not a CGL policy. Thus, the correct answer encompasses the primary risks that Coverage A is established to cover.