Los Angeles Claims Adjuster Property and Causality Practice Exam

What does the CGL policy assume liability for in relation to products?

1. Legal disputes with suppliers

2. Injuries caused by products made or sold

3. Environmental regulations

4. Market failures

The correct answer is: Injuries caused by products made or sold

The Commercial General Liability (CGL) policy specifically covers injuries or damages that occur due to products that are made, sold, or distributed by the insured. This means that if a product causes bodily injury or property damage to a third party, the CGL policy will typically respond to those claims, assuming various conditions of coverage are met. This aspect of coverage serves to protect businesses from legal financial consequences that could arise if their products fail to perform as intended and result in injury or damage. The liability assumes responsibility for the repercussions linked to the product's inherent risks. Other aspects such as market failures, legal disputes with suppliers, and environmental regulations fall outside the primary intent of a CGL policy's coverage. While these issues can be significant for businesses and may require separate consideration or coverage, they do not fall under the standard liability assumptions regarding products in a CGL policy. The focus is squarely on the consequences of the products themselves and their impact on consumers and the public.