This is the final unit in this lesson. Once you have uploaded the assignment you will be forwarded to the next lesson – Introduction to Commercial Property.
Consider the following Scenarios relevant to Commercial General Liability and submit your answers on a word document. Please zip the document and upload it using the Upload Assignment section at the foot of the page.
Covered under a CGL or not? Please consider whether the following situations would be covered by CGL, and your detail your justification.
You manufacture a forklift. During operation, the brakes fail causing it to collide with a delivery truck. The forklift itself is damaged, as well as the delivery truck.
You are an electrical contractor who has installed the wiring in a new building for a contract price of $50,000. The building suffers extensive damage as a result of your completed work.
You are the manufacturer of a part used in X-ray machines at medical clinics. You install your part in two X-ray machines at two different clinics. After the parts are installed, one machine is damaged because of your product. The clinic then checks the other location and discovers the part you installed could very likely damage the other machine.
You manufacture a backhoe. A rental company derives significant revenues from the rental of your backhoe. You have to recall this product because of a dangerous condition.
The insured is a landscaper and was excavating a residential back yard to install a pond and fountain for a customer. A gas line was inadvertently severed. The gas company had to be called. Emergency personnel were called to stand by in case they were needed. Neighbours evacuated for five hours. The gas company and neighbours have made claims for damages. Will the landscaper’s CGL respond for these losses? Explain.
Blacktop Paving Inc. is a major construction company that specializes in building and improving roads. It has a standard CGL policy with a $2,000,000 limit of liability. The insured needed to level some rock for a new road that was being built. He hired a demolitions expert to dynamite the rock. Something went wrong and the debris from the blast scattered over a much larger area, doing serious crop damage to nearby farmers’ fields. In addition, many head of cattle were injured and had to be destroyed. Can the insured be held responsible for this loss? Explain.
Your insured is a building contractor specializing in home renovations. He gutted a home and hired a subcontractor to replace the plumbing. The new pipes and fixtures were installed, the insured replaced the walls and woodwork, and the homeowner arranged to have an interior designer redecorate the home at great cost. When the new wallpaper began to peel, a leak was discovered behind the walls. A number of rooms must be gutted again so that the leak can be repaired and the damaged drywall replaced. The homeowner has presented a claim for the redecorating and your insured wants to know if he can recover the costs for replacing the dry wall. The plumber does not have his own insurance. Will the Commercial General Liability policy issued for the building contractor cover any or all of this loss? Explain.
Your insured is a sub-contractor who contracted to erect the steel frame of a new convention centre in your city. During the construction process, a large steel truss that formed a major portion of the building’s support system was anchored into the base of the building. The threaded steel bolts that were used for the anchoring process were manufactured by a fastener supply company but ordered by the project’s general contractor. The truss collapsed during installation resulting in the death of one construction worker and injury to several others. The collapse caused significant damage to other portions of the construction project. Investigation into the cause of the collapse revealed that the steel bolts used in the anchoring of the truss were too small and not consistent with the plans and specifications of the building’s design engineer. Discuss the potential liability of your insured as a result of this occurrence.