Commercial general liability fundamentals on the Texas All-Lines exam

High-yield rules

Practice questions

Written the way the examination builds items. Answer before opening the explanation.

1. Question 1

   A storm damages a store’s roof, and separately a customer is injured by a hazard on the store’s floor. How should these be handled?

   1. ABoth under commercial general liability
   2. BThe roof under commercial property and the customer injury under commercial general liability
   3. CBoth under commercial property
   4. DThe roof under commercial general liability and the customer injury under commercial property
   Show answer and reasoning

   Correct answer: B — The roof under commercial property and the customer injury under commercial general liability

   The roof is the insured business’s own property, making it a first-party commercial property claim. The customer injury is harm to a third party arising from the premises, making it a commercial general liability claim. One event log can produce two claims analysed under entirely different frameworks.

2. Question 2

   Harm occurs in year one but the claim is not asserted until year four. Under an occurrence form, which policy period generally responds?

   1. AThe policy in force in year four, when the claim was made
   2. BThe policy in force in year one, when the harm occurred
   3. CWhichever policy has the higher limit
   4. DNo policy responds because too much time elapsed
   Show answer and reasoning

   Correct answer: B — The policy in force in year one, when the harm occurred

   An occurrence form is triggered by when the injury or damage took place, so the year one policy generally responds even though the claim arrived in year four. The year four answer describes the claims-made trigger. Limits do not determine which policy responds, and delay alone does not eliminate coverage under an occurrence form.

3. Question 3

   A customer injured by a sold product raises which exposure?

   1. AOnly cargo
   2. BProducts or completed operations
   3. COnly premises maintenance
   4. DOnly business income
   Show answer and reasoning

   Correct answer: B — Products or completed operations

   The product and post-sale facts point to products or completed operations analysis. This original, source-mapped item is provided for concept practice and is not recalled exam content.

Frequently asked

Which trigger is broader over time?

Occurrence coverage responds to harm that took place during the policy period regardless of when the claim arrives, which provides long-tail protection. Claims-made coverage responds to claims asserted during the period, subject to any retroactive date.

Does CGL cover the insured’s employees’ injuries?

Employee injury is generally the domain of workers compensation rather than general liability. Look for the employment relationship in the fact pattern as the signal to switch frameworks.

What is a products exposure?

It refers to bodily injury or property damage arising out of the insured’s product after it leaves the insured’s control, which is one of the main exposure areas CGL addresses.

Key terms on this topic

• Commercial general liabilityCommercial general liability covers a business against third-party claims for bodily injury and property damage arising from its premises, operations, and products.
• Commercial propertyCommercial property insurance covers business buildings, business personal property, and related exposures, and typically requires payment for direct physical loss to covered property.
• OccurrenceAn occurrence is an accident, including continuous or repeated exposure to substantially the same harmful conditions, that triggers liability coverage.
• LiabilityLiability is legal responsibility for harm caused to another party, and liability insurance responds to sums the insured becomes legally obligated to pay because of that responsibility.
• Bodily injuryBodily injury is physical harm to a person, including sickness or disease and, where the policy so provides, death resulting from that harm.
• Property damageProperty damage in liability terms is physical injury to tangible property, including resulting loss of use, for which the insured may be legally responsible.

Distinctions worth drilling

• Occurrence vs. Claims-MadeOccurrence and claims-made are two ways of deciding which policy period answers for a liability loss. The choice matters most when the injury and the claim happen in different years.
• First-Party vs. Third-Party ClaimsFirst-party and third-party describe who is making the claim relative to the insurance contract. The distinction changes the duties owed, the coverage analyzed, and the shape of the investigation.

More in casualty and liability

• Negligence elements and liability analysis on the Texas All-Lines examThe four elements of negligence, why the exam builds fact patterns where exactly one fails, and how to test each element in order.
• Liability damages categories on the Texas All-Lines examHow the exam sorts documented economic loss, evaluative non-economic harm, and conduct-based punitive awards into three distinct categories.
• Auto liability coverage on the Texas All-Lines examHow split limits work, how bodily injury and property damage liability differ, and why the exam separates liability from first-party auto coverages.
• Uninsured and underinsured motorist coverage on the Texas All-Lines examHow these first-party coverages respond when the at-fault driver cannot pay, and why fault still has to be established.
• Personal liability coverage on the Texas All-Lines examHow the liability section of a homeowners policy responds to third-party claims, and how medical payments to others differs from liability.
• Workers compensation fundamentals on the Texas All-Lines examWhy the no-fault structure replaces negligence analysis, and how the arising out of and in the course of employment test drives compensability.