Question

John Smith owns a bookstore that is covered under an unendorsed Commercial General Liability (CGL) Coverage Form. A customer falls in the store resulting in a covered lawsuit against Smith. Smith is asked to testify in court by the defense attorney; Smith incurs $500 in lost earnings for the one day trial. The supplementary payments section of Smith's CGL policy will ___________.

Answer 1

Answer:

cover $250 of John's lost earnings.

Explanation:

Commercial general liability (CGL) coverage refers to an insurance policy that covers a business from personal injuries and property damage caused by normal business operations, the products sold, or that happen within the business's facility, store, office, etc.

The supplementary payments provision of the CGL policy covers up to 50% of any losses incurred by the insured for assisting a legal investigation or legal case related to an incident covered by the CGL policy.

Since John incurred in $500 in lost earnings for going to the trial, the supplementary payments provision will cover $500 x 50% = $250 of his losses.