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15.7 Section II – Liability Coverages

Section II of the Businessowners Policy (BOP) provides liability coverages that are similar to those found in a Commercial General Liability (CGL) policy.

Definitions​

Many of the Section II definitions are the same as those found in the Commercial General Liability (CGL) policy.

Coverages​

Bodily injury means bodily injury, sickness, or disease sustained by a person, including any resulting death.

Property damage means physical injury to tangible property, including the resulting loss of use, or the loss of use of tangible property that is not physically injured. Electronic data is not considered tangible property.

Personal and advertising injury means injury arising out of:

  • False arrest, detention, or imprisonment
  • Malicious prosecution
  • Wrongful eviction, wrongful entry, or invasion of the right of private occupancy committed by a landlord
  • Oral or written publication that violates a person's right of privacy
  • Oral or written publication that slanders or libels a person or organization, or disparages their goods, products, or services
  • Use of another's advertising idea in the insured's advertisement
  • Copyright infringement in the insured's advertisement

Insured Contracts​

Like the Commercial General Liability (CGL) policy, the Businessowners Policy (BOP) defines insured contracts to include:

  • A lease of premises
  • An easement agreement
  • An agreement to indemnify a municipality
  • A sidetrack agreement
  • An elevator maintenance agreement

The Insured’s Product and Work​

Your product refers to any goods or products manufactured, sold, handled, distributed, or disposed of by the insured or by others trading under the insured's name. The definition also includes containers (other than vehicles), materials, parts, equipment, warranties, and instructions associated with those products. Vending machines are not included in this definition.

Your work refers to work or operations performed by the insured, including any materials, parts, or equipment furnished in connection with that work.

The products-completed operations hazard includes bodily injury and property damage that occur away from the insured's premises and arise out of the insured's products or completed work.

Coverages​

Business Liability​

The Business Liability coverage pays sums the insured becomes legally obligated to pay as damages for:

  • Bodily injury or property damage caused by an occurrence that takes place in the coverage territory during the policy period, including damages for loss of services.
  • Personal and advertising injury caused by an offense arising out of the insured's business that occurs in the coverage territory during the policy period.

Covered bodily injury damages include claims for care, loss of services, and death resulting from the injury. The policy also covers liability the insured assumes under an insured contract.

The insurer has a duty to defend the insured against any suit seeking damages covered by the policy. Defense costs are paid in addition to the policy's limit of liability.

The insurer may investigate any occurrence or offense and settle any claim or suit as it considers appropriate.

The insurer's duty to defend ends once the applicable limit of insurance has been exhausted through the payment of covered claims.

Coverage Extension – Supplementary Payments​

In addition to the Section II – Liability Coverages limit of insurance, the insurer will pay:

  • Investigation, settlement, and defense expenses incurred by the insurer.
  • Up to $250 for the cost of bail bonds required because of accidents or traffic violations arising from the use of a covered vehicle.
  • The cost of bonds to release attachments, up to the applicable limit of insurance.
  • Reasonable expenses incurred by the insured at the insurer's request, including up to $250 per day for lost earnings.
  • Court costs taxed against the insured in a covered suit.
  • Prejudgment interest awarded against the insured on the covered portion of a judgment.
  • Post-judgment interest that accrues on the full amount of a judgment until the insurer pays, offers to pay, or deposits its share of the judgment.

Medical Expenses​

Medical Payments coverage pays reasonable medical expenses for bodily injury to others caused by an accident that occurs on premises the insured owns or rents, or as a result of the insured's operations. The accident must occur within the coverage territory during the policy period, and the medical expenses must be incurred and reported to the insurer within 1 year of the accident.

Covered reasonable medical expenses include:

  • First aid provided at the time of the accident.
  • Necessary medical, surgical, X-ray, and dental services, including prosthetic devices.
  • Necessary ambulance, hospital, professional nursing, and funeral services.

Medical Payments coverage applies regardless of fault, meaning covered medical expenses may be paid whether or not the insured is legally liable for the injury.