Los Angeles Claims Adjuster Property and Causality Practice Exam

Which of the following is considered an "insured contract" under CGL policies?

1. Lease Agreement

2. Easement

3. Elevator Maintenance Agreement

4. Sidetrack Agreement

The correct answer is: Lease Agreement

The term "insured contract" under Commercial General Liability (CGL) policies includes specific types of agreements that shift liability from one party to another. An insured contract typically provides coverage for liabilities undertaken through contracts that would otherwise result in coverage gaps in standard liability policies. The lease agreement is classified as an insured contract because it often requires the lessor to assume liability for injuries or damages that may occur on the leased premises. This assumption of liability means that the lessor can potentially face claims for incidents arising during the lease term, making it subject to coverage under CGL policies. Thus, the lease agreement is included because the liability it carries aligns closely with the intent of typical insurance coverage to protect against risks associated with property use. Easements, elevator maintenance agreements, and sidetrack agreements are typically not categorized as insured contracts in the same way. While they may involve some degree of liability, they do not always contain the same clause for indemnification against bodily injury or property damage claims that a lease agreement does. Therefore, the lease agreement stands out as the correct choice for being classified as an insured contract under CGL policies.