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Section II – General Liability Coverages

Coverage A – Bodily Injury and Property Damage Liability 

CA 00 25

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II. General Liability Coverages

A. Bodily Injury and Property Damage Liability

1. Coverage (Insuring Agreement)

2. Exclusions

Actual Policy Language

Explanation

SECTION II – GENERAL LIABILITY COVERAGES

II. General Liability

The General Liability section of the Auto Dealers Coverage Form closely tracks the Commercial General Liability Coverage Form (04 13 edition).

This section provides coverage for accidents involving premises, operations, products and completed operations (called Work You Performed”).

A $500 deductible applies to completed operations claims for damage to the auto on which the operation was performed. See the last paragraph of Limits of Insurance – General Liability Coverages. Endorsement CA 03 03 (500 Dollar Deductible for Work You Performed Does Not Apply) removes the $500 deductible. 

Endorsement CA 25 55 (Exclusion - Products and Work You Performed) deletes products and completed operations liability coverage.

Endorsement CA 25 56 (Exclusion - Designated Work You Performed) deletes completed operations liability with respect to specific work designated in the endorsement.

A. Bodily Injury And Property Damage Liability

A. Bodily Injury and Property Damage Liability

1. Coverage

a. We will pay all sums an "insured" legally must pay as damages because of "bodily injury" or "property damage" to which this insurance applies caused by an "accident", and resulting from your "auto dealer operations" other than the ownership, maintenance or use of "autos".

We have the right and duty to defend any "insured" against a "suit" asking for these damages. However, we have no duty to defend any "insured" against a "suit" seeking damages for "bodily injury" or "property damage" to which this insurance does not apply. We may investigate and settle any claim or "suit" as we consider appropriate. But:

(1) The amount we will pay for damages is limited as described in Paragraph F. Limits Of Insurance – General Liability Coverages; and

(2) Our duty to defend or settle ends when the applicable limit of insurance has been exhausted by payment of judgments or settlements under Paragraph A. Bodily Injury And Property Damage Liability or B. Personal And Advertising Injury Liability or medical expenses under Paragraph C. Locations And Operations Medical Payments.

No other obligation or liability to pay sums or perform acts or services is covered unless explicitly provided for under Supplementary Payments.

1. Coverage

The broad insuring agreement of Coverage A promises to provide protection to all insureds, not just named insureds. However, the agreement also limits coverage in several ways.

Coverage A responds only to claims resulting from an accident that involves an allegation of "bodily injury" or "property damage" against an insured, when the accident results from auto dealer operations and does not involve the ownership, maintenance or use of any type of land motor vehicle or trailer.

Even though the auto dealers form uses an “accident” rather than an “occurrence” to trigger coverage, “accident” is defined in a manner that equals the definition of “occurrence” in the CGL form.

The limitation of coverage to accidents arising from “auto dealer operations” restricts coverage significantly compared to the CGL form. See the definition of “auto dealer operations” for commentary on these restrictions.

Claims must be for monetary damages. There is no coverage for "specific performance", nor for "wrongful acts" that do not result in BI or PD as defined.

The company is obligated to defend the insured only in "suits" alleging damages covered by the policy. In other words, no coverage means no defense. Notice also, that the company has the right, as well as the duty, to defend the insured.

The company controls the defense and decides which claims will be paid and which will be defended.

The duty to defend may be greater than the duty to pay, depending on the jurisdiction and court decisions.

The amount the company will pay for damages is limited, although there is no limit on the amounts for which the insured may be liable.

The company's obligation to defend the insured ends when the limit has been used up in the payment of judgments or settlements. A judgment is a court decision regarding damages and a settlement is a final agreement between the parties. The company cannot tender policy limits and abandon the insured in court. However, once limits are exhausted in a settlement or judgment, subsequent claims for damages arising out of the same occurrence would not be covered or defended.

b. This insurance applies to "bodily injury" and "property damage" only if:

(1) The "accident" occurs in the coverage territory;

(2) The "bodily injury" or "property damage" occurs during the policy period; and

The damages must be caused by an "accident" as defined and must occur within the "coverage territory", as defined. Accidents outside the coverage territory are not covered or defended.

The covered damages (bodily injury or property damage) must take place during the policy period, regardless of when the original cause of the injury. Thus, the policy may respond to claims which are based on faulty products sold or faulty repair jobs completed many years before the actual BI or PD occurs. See the CGL technical report Discontinued Products/Completed Operations Liability.

In addition, a covered claim can be presented years after a policy expires, based on BI or PD that occurred while the policy was in force.

Coverage (and defense) is triggered only when bodily injury or property damage occurs.

In many instances, such as the distribution of faulty products, the insured and others may know of the existence of potential bodily injury or property damage, but the policy will not respond until damages covered under the policy occur. Sometimes, conditions that cause bodily injury or property damage may occur continuously over a period of time during the terms of more than one policy

(3) Prior to the policy period, no "insured" listed under Paragraphs D.1. through D.4. of the Who Is An Insured provision and no "employee" authorized by you to give or receive notice of an "accident" or claim, knew that the "bodily injury" or "property damage" had occurred, in whole or in part. If such a listed "insured" or authorized "employee" knew, prior to the policy period, that the "bodily injury" or "property damage" occurred, then any continuation, change or resumption of such "bodily injury" or "property damage" during or after the policy period will be deemed to have been known prior to the policy period.

c. "Bodily injury" or "property damage" which occurs during the policy period and was not, prior to the policy period, known to have occurred by any "insured" listed under Paragraphs D.1. through D.4. of the Who Is An Insured provision or any "employee" authorized by you to give or receive notice of an "accident" or claim, includes any continuation, change or resumption of that "bodily injury" or "property damage" after the end of the policy period.

d. "Bodily injury" or "property damage" will be deemed to have been known to have occurred at the earliest time when any "insured" listed under Paragraphs D.1. through D.4. of the Who Is An Insured provision or any "employee" authorized by you to give or receive notice of an "accident" or claim:

(1) Reports all, or any part, of the "bodily injury" or "property damage" to us or any other insurer;

(2) Receives a written or verbal demand or claim for damages because of the "bodily injury" or "property damage"; or

(3) Becomes aware by any other means that "bodily injury" or "property damage" has occurred or has begun to occur.

This condition prevents the "stacking" of coverage under more than one policy when bodily injury or property damages occurs during the term of more than one policy, if the named insured or responsible officials of the named insured knew about the occurrence of injury or damage before a policy went into effect.

In other words, coverage is limited to only the policy that was in effect when the insured first knew about the injury or damage, even if the injury or damage continues into successive policy periods. The provision also provides that the policy in effect at the time of first knowledge continues to pay for injury or damage that occurs even after the policy expires, subject to the limit of liability on that policy.

See the CGL technical report Prior Knowledge Condition.

2. Exclusions

This insurance does not apply to any of the following: 

2. Exclusions

These exclusions apply only to the General Liability section for bodily injury and property damage claims. The Covered Autos section contains its own set of exclusions, as does the Personal and Advertising Injury Liability section of the Auto Dealers Coverage Form.

a. Expected Or Intended Injury

"Bodily injury" or "property damage" expected or intended from the standpoint of the "insured". This exclusion does not apply to "bodily injury" resulting from the use of reasonable force to protect persons or property. 

a. Expected or Intended Injury

Most courts have treated this exclusion narrowly, so that not only must the action which causes the damage be intentional (striking a difficult customer), but the damages must be reasonably expected (broken jaw vs. paralysis). The exclusion applies to "the insured" who intentionally causes the damage, and not to all insureds who may be sued as a result of the damages. Thus, the named insured business would be protected in a suit for damages by a customer who was intentionally injured by an employee of the insured.

The exception to the exclusion applies to bodily injury only, and permits the use of "reasonable force" by the insured to protect persons or property, as when a store owner grabs a customer suspected of shoplifting, and the customer later claims to have suffered injuries as a result.

See CGL technical reports Intentional Acts, Concealed Weapons, and Liability and Intentional Acts Exclusion Requires Intentional Damage.

b. Contractual

Liability assumed under any contract or agreement. But this exclusion does not apply to liability for damages:

(1) Assumed in a contract or agreement that is an "insured contract", provided the "bodily injury" or "property damage" occurs subsequent to the execution of the contract or agreement; or

(2) That the "insured" would have in the absence of the contract or agreement.

b. Contractual Liability

This exclusion begins by eliminating all liability assumed by contract.

The first exception to the contractual liability exclusion provides coverage for an assumption of some other party's liability, as evidenced by what is defined as an "insured contract". The policy will respond on behalf of the insured when an insured contract requires the insured to indemnify another party for damages assessed against the other party for a covered loss.

The second exception to the exclusion provides coverage for the insured's own negligence, regardless of any contractual obligation requiring the insured to indemnify a party that may be financially harmed by the costs associated with allegations of an insured's negligence.

In addition, the policy will pay attorney fees and litigation expenses for the other party when such expenses are expressly assumed in the insured contract. Whether these expenses are covered inside or outside the limit of liability is determined by provisions found in Section E Supplementary Payments in the General Liability section of the policy.

c. Workers' Compensation

Any obligation for which the "insured" or the "insured's" insurer may be held liable under any workers' compensation, disability benefits or unemployment compensation law or any similar law. 

c. Workers' Compensation and Similar Laws

This exclusion prevents payment of workers' compensation benefits under the CGL policy. (See CGL technical report Work Comp or CGL?)

d. Employee Indemnification And Employer's Liability

"Bodily injury" to:

(1) An "employee" of the "insured" arising out of and in the course of:

(a) Employment by the "insured"; or

(b) Performing the duties related to the conduct of the "insured's" business;

(2) The spouse, child, parent, brother or sister of that "employee" as a consequence of Paragraph (1) above.

(3) A person arising out of any:

(a) Refusal to employ that person;

(b) Termination of that person's employment; or

(c) Employment-related practices, policies, acts or omissions, such as coercion, demotion, evaluation, reassignment, discipline, defamation, harassment, humiliation, discrimination or malicious prosecution directed at that person; or

(4) The spouse, child, parent, brother or sister of that person as a consequence of "bodily injury" to that person at whom any of the employment-related practices described in Paragraph (3)(a), (b) or (c) above are directed.

This exclusion applies:

(a) Whether the injury-causing event described in Paragraph (3)(a), (b) or (c) above occurs before employment, during employment or after employment of that person;

(b) Whether the "insured" may be liable as an employer or in any other capacity; and

(c) To any obligation to share damages with or repay someone else who must pay damages because of the injury.

Paragraphs (1) and (2) of this exclusion do not apply to liability assumed by the "insured" under an "insured contract". 

d. Employers' Liability

The exposures excluded here are generally covered by Employers' Liability insurance in Part II of the Workers' Compensation Policy.

The exclusion applies even if the employer is sued by an injured employee in some other capacity than as an employer. For example, an employee, in the course of employment, injured by a product sold by his employer may sue the employer as a seller of a faulty product - known as "dual capacity". Such products liability suits are covered under Employers' Liability of the Workers' Compensation policy, not this policy.

Litigation regarding this exclusion sometimes focuses on whether the injured person is an employee or independent contractor. If the person is an employee, the claim is not covered; if the person is an independent contractor, the claim is covered. A worker's status as an employee or independent contractor depends on whether the employer has the right to control the progress, details, and methods of operations of the work. "Control" means control over the details of the work itself and the worker's physical conduct, not simply the end result. The employer must control not merely the end sought, but also the means and details of its accomplishment. Examples include when and where to begin and stop work, the regularity of hours, the amount of time spent on particular aspects of the work, the tools and appliances used to perform the work, and the physical method or manner of accomplishing the end result. Texas courts generally consider five factors when analyzing whether an employer has a right to control a person's work: (1) the independent nature of the worker's business; (2) the worker's obligation to furnish the necessary tools, supplies, and materials to perform the job; (3) the worker's right to control the progress of the work except about final results; (4) the time for which the worker is employed; and (5) the method of payment, whether the worker is paid by unit of time or by the job. It is not necessary that each of these factors be present to find that the worker is an independent contractor. An employer may give direction as to the specifications of a job and still maintain an independent contractor relationship.

Some suits arising out of bodily injury to an employee may not come directly from the employee, but through a third party who is sued by the employee. For example, an employee injured on a piece of equipment may sue the equipment manufacturer who in turn enjoins the employer in the suit - a "third party over" action. The employer's liability coverage - Part II of the Workers' Compensation policy - will defend the employer, not this policy.

If the employer has entered an agreement (an "insured contract") to hold a third party harmless for an employee injury, then protection is provided under the contractual coverage in this policy. This exception is extremely important, since most contractual assumptions of liability, such as in a lease of premises, do not differentiate between injury to the insured's employees and injury to others.

The definition of "employee" includes leased workers but does not include temporary workers. See technical reports Professional Employer Organizations and Temporary Employees in the Workers' Compensation section.

e. Damage To Property

"Property damage" to: 

e. Damage to Property

This exclusion applies to property damage only, and has a bearing only on the premises and operations coverage of the insured, not products or completed operations (see exclusions "h" and "i"). Most of the exposures excluded here can be covered by some form of property insurance.

(1) Property you own, rent or occupy, including any costs or expenses incurred by you, or any other person, organization or entity, for repair, replacement, enhancement, restoration or maintenance of such property for any reason, including prevention of injury to a person or damage to another's property;

(1) Own Premises

Some coverage is provided in the CGL for negligent fire damage to rented premises (see the paragraph at the end of the exclusions section). Another exception (see first paragraph at the end of Exclusion "e"). provides damage other than fire damage to premises and contents rented for fewer than seven days. All other property owned or occupied by the insured is excluded absolutely. Separate property insurance is required.

Previously Owned Premises

The CGL coverage form excludes property damage to premises sold, given away or abandoned by the named insured. The Auto Dealers Coverage Form does not contain a similar exclusion.

(2) Property loaned to the "insured";

(2) Loaned Property

This part applies to real and personal property.

(3) Property held for sale or being transported by the "insured"; or 

(3) Property Held for Sale or Being Transported

This exclusion prevents recovery for property damage to property on which, generally speaking, the insured should be carrying some form of direct property insurance.

The exclusion for property “held for sale” by the insured prevents coverage for damage to autos on consignment, creating a need for physical damage coverage. 

(4) Property in the "insured's" care, custody or control. 

(4) Care, Custody and Control

This exclusion precludes coverage for damage to personal property in the care of the insured, including employees. Property insurance or garagekeepers coverage is available for these exposures.

See technical reports Care, Custody, Control and the Garage Policy and Garagekeepers for Parking Lots.

Paragraphs (1), (2) and (4) of this exclusion do not apply to "property damage" (other than damage by fire) to premises, including the contents of such premises, rented to you for a period of seven or fewer consecutive days. A separate limit of insurance applies to Damage To Premises Rented To You as described in Paragraph F. Limits Of Insurance – General Liability Coverages.

This exclusion does not apply to liability assumed under a sidetrack agreement. 

Exceptions to Exclusion "e":

Rented Premises — This exception provides coverage for negligent damage (other than fire damage) to premises and contents rented by the insured by fewer than seven days. Fire damage to rented and occupied premises is covered by another exception (see the paragraph at the end of the exclusions below). A separate limit of liability applies to such claims (see Section F. Limits of Insurance – General Liability Coverages). Endorsement CA 25 50 (Exclusion - Damage to Rented Premises) removes this exception and thus excludes all damage to rented premises.

Sidetrack Agreements  This exception deals only with a sidetrack agreement that an insured might enter with a railroad company to install and maintain a railroad spur. Under such an agreement, the insured is responsible for all damage to property of others (rail company, other shippers, etc.) while on the insured's sidetrack. This exposure is covered.

f. Pollution

f. Pollution

This exclusion has two parts. Part (1) excludes bodily injury and property damage caused by escape of a pollutant for which the insured is liable. Part (2) excludes coverage for the expenses of remedial action to clean up a pollution release.

(1) "Bodily injury" or "property damage" arising out of the actual, alleged or threatened discharge, dispersal, seepage, migration, release or escape of "pollutants": 

(1) Pollution Damage

This exclusion is an almost absolute elimination of coverage for non-auto-related incidents involving pollutants, even if such incidents are "sudden and accidental," with a couple of significant exceptions. Virtually every possible means of polluting air, water or land is covered by the exclusion.

Auto dealers have a high exposure to pollution on the premises and elsewhere, due to the existence of underground storage tanks and waste oil disposal. 

(b) At or from any premises, site or location that is or was at any time used by or for any "insured" or others for the handling, storage, disposal, processing or treatment of waste;

(b) Premises Used for Waste Products

This part of the exclusion deals with the handling, treatment and disposal of waste. Any pollution at a waste disposal or treatment location, such as a landfill, is excluded. 

(a) At or from any premises, site or location that is or was at any time owned or occupied by, or rented or loaned to, any "insured"; 

(a) Insured's Premises

There is no protection for pollution liability arising out of any location the insured owns, rents or occupies, or ever has owned, rented or occupied.

See the two significant exceptions to this otherwise absolute exclusion, in the paragraphs after Paragraph (d) below.

(c) At or from any premises, site or location on which any "insured" or any contractors or subcontractors working directly or indirectly on any "insured's" behalf are performing operations:

(i) To test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of the "pollutants"; or

(ii) If the "pollutants" are brought on or to the premises, site or location in connection with such operations by such "insured", contractor or subcontractor; or

(d) Activities at Other Premises

This addresses work sites away from the insured's premises.

In Paragraph (i), there is no coverage if the insured or others working on the insured’s behalf are testing for or remediating pollution.

In Paragraph (ii), there is no coverage if the insured or others working on the insured’s behalf cause the release of a pollutant that has been brought to the premises. Protection is afforded if the pollutant is already at the job site.

See the two significant exceptions to Paragraph (c)(ii) of this otherwise absolute exclusion, in the paragraphs after Paragraph (d) below.

(d) That are or were at any time transported, handled, stored, treated, disposed of, or processed as waste by or for any "insured" or any person or organization for whom you may be legally responsible. 

Pollution arising out of waste products of the insured (such as waste oil for recycling) and wastes of others handled by the insured is excluded.

Exceptions to the Pollution Exclusion

Paragraphs (1)(a) and (1)(c)(ii) do not apply to "bodily injury" or "property damage" arising out of heat, smoke or fumes from a hostile fire. A hostile fire means one that becomes uncontrollable, or breaks out from where it was intended to be. 

Hostile Fire Exception -- A hostile fire is one outside its intended confines. If the insured's building catches on fire, smoke damage to neighboring property is covered. If the insured is burning wastes in a furnace (a "friendly" fire), resulting property damage or bodily injury is excluded.

Paragraph (1)(a) does not apply to "bodily injury" if sustained within a building and caused by smoke, fumes, vapor or soot produced by or originating from equipment that is used to heat, cool or dehumidify the building, or equipment that is used to heat water for personal use, by the building's occupants or their guests.

Building Equipment Exception — A building system malfunction can produce carbon monoxide or other dangerous fumes. This exception makes it clear that the pollution exclusion does not apply to such accidents.

Paragraph (1)(c)(ii) does not apply to "bodily injury" or "property damage" sustained within a building and caused by the release of gases, fumes or vapors from material brought into that building in connection with operations being performed by you or on your behalf by a contractor or subcontractor.

Gas, Fumes or Vapors Exception — If fumes or vapors escape from materials brought to a job site (such as paint or cleaning solvents), claims arising out of such release are covered.

Pollution Caused by Products and Completed Operations

A close reading of Part (1) reveals that coverage applies for damages caused by pollution damage arising out of products and completed operations exposures.

For example, if a dealership is sued because an automobile sold or repaired by the dealership caused a pollution incident, the claim is not excluded here.

(2) Any loss, cost or expense arising out of any:

(a) Request, demand, order or statutory or regulatory requirement that any "insured" or others test for, monitor, clean up, remove, contain, treat, detoxify or neutralize, or in any way respond to, or assess the effects of "pollutants"; or

(b) Claim or suit by or on behalf of a governmental authority for damages because of testing for, monitoring, cleaning up, removing, containing, treating, detoxifying or neutralizing, or in any way responding to or assessing the effects of "pollutants".

However, this paragraph does not apply to liability for damages because of "property damage" that the "insured" would have in the absence of such request, demand, order or statutory or regulatory requirement, or such claim or "suit" by or on behalf of a governmental authority.

(2) Clean Up Costs

These two paragraphs exclude cleanup costs associated with escape of a pollutant.

However, if the escape causes property damage which is covered under the policy (for example, a product or completed operation causes pollution incident) then the expense of removing the pollutant is covered.

However, cleanup costs demanded by others because of potential or excluded damage is not covered. For example, the building owner and installation contractor have no coverage for removal of asbestos used in building insulation.

The federal government may sue a polluter under the Superfund legislation to clean up a polluted site. Such suits are not covered, regardless of any coverage remaining under paragraph (1) of the exclusion.

g. Aircraft, Auto Or Watercraft

"Bodily injury" or "property damage" arising out of the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft owned or operated by or rented or loaned to any "insured". Use includes operation and "loading or unloading".

This exclusion applies even if the claims against any "insured" allege negligence or other wrongdoing in the supervision, hiring, employment, training or monitoring of others by that "insured", if the "accident" which caused the "bodily injury" or "property damage" involved the ownership, maintenance, use or entrustment to others of any aircraft, "auto" or watercraft that is owned or operated by or rented or loaned to any "insured".

g. Aircraft, Auto or Watercraft

This exclusion addresses three means of transportation, only one of which (autos) is defined in the policy.

The definition of “auto” includes any type of “land motor vehicle,” so this exclusion applies to mobile equipment owned or used by the dealership. These exposures are covered by Section I – Covered Autos Liability Coverage, subject to Coverage Symbol selection.

The exclusion applies when these conveyances are "owned or operated by or rented or loaned to any insured." There is coverage for the vicarious liability of the insured arising out of others' ownership or operation of these conveyances on behalf of the insured (such as a contractor performing work for the insured).

This exclusion does not apply to: 

Exceptions to Vehicle Exclusion

(1) A watercraft while ashore on premises where you conduct "auto dealer operations";

(2) A watercraft you do not own that is:

(a) Less than 26 feet long; and

(b) Not being used to carry persons or property for a charge; or

Exceptions (1) and (2) Watercraft

The first two exceptions to the exclusion deal with watercraft.

Watercraft on the insured's premises (and out of the water) is covered for liability.

The use of watercraft not owned by the named insured is covered, in or out of water, as long as it is less than 26 feet in length and not being used as a taxi or ferry.

If a non-owned watercraft exceeds 25 feet, an umbrella policy with broader non-owned watercraft coverage may be needed.

(3) Liability assumed under any "insured contract" for the ownership, maintenance or use of aircraft or watercraft.

Exception (3) Assumed Liability (Watercraft and Aircraft Only)

The liability of another person assumed under an "insured contract" for the use of any aircraft or watercraft is covered. 

h. Defective Products

"Property damage" to any of your "products", if caused by a defect existing in your "products" or any part of your "products", at the time it was transferred to another.

h. Defective Products

This is a significant exclusion for a dealership due to the high price of items sold.

This exclusion can be removed by attaching endorsement CA 25 01 (Broad Form Products Coverage), subject to a $500 deductible.

i. Work You Performed

"Property damage" to "work you performed" if the "property damage" results from any part of the work itself or from the parts, materials or equipment used in connection with the work. 

i. Damage to Work

This may be the most troublesome exclusion on the garage policy, creating confusion and ill will when used to deny a claim. The main problem is determining the extent of the work performed and attempting to limit the exclusion only to the work. 

The exclusion generally applies only to completed operations, since otherwise the object of the work – the auto – is in the insured’s care and thus subject to the care custody and control exclusion. Damage to work performed while an auto is in the insured’s care is excluded by the Faulty Work exclusion (Exclusion 4.a.(4) in the Garagekeepers Coverage section.

j. Damage To Impaired Property Or Property Not Physically Damaged

"Property damage" to "impaired property" or other property not physically damaged if caused by:

(1) A delay or failure by you or anyone acting on your behalf to perform a contract or agreement in accordance with its terms.

(2) A defect, deficiency, inadequacy or dangerous condition in your "products" or "work you performed". But this exclusion, j.(2), does not apply if the loss of use was caused by sudden and accidental damage to or destruction of your "products" or "work you performed" after they have been put to their intended use.

j. Damage to Impaired Property

The auto dealers policy will not pay for "loss of use" (such as rental of a substitute auto) when loss of use is caused by failure of the insured's product to work properly or a defect in the work performed by the insured.

If there is actual physical damage as the result of an accident, there will be coverage. For example, a dealer would not be covered for a claim for loss of use on a new auto that turns out to be a "lemon" and spends its first few months in the dealer's shop. But if some defect causes the auto to be damaged or destroyed, the policy will respond to a claim for loss of use while it is being repaired. 

k. Products Recall

Damages claimed for any loss, cost or expense incurred by you or others for the loss of use, withdrawal, recall, inspection, repair, replacement, adjustment, removal or disposal of your "products" or "work you performed" or other property of which they form a part, if such product, work or property is withdrawn or recalled from the market or from use by any person or organization because of a known or suspected defect, deficiency, inadequacy or dangerous condition in it. 

k. Products Recall

There is no coverage on the auto dealers policy for the expenses involved in recalling the insured's products to correct a defect and no coverage for loss of use in the event of recall.  

Endorsement CA 25 49 (Limited Product Withdrawal Expense Endorsement) provides reimbursement for expenses incurred because of a product withdrawal with respect to a recall or tampering.

l. War

"Bodily injury" or "property damage" arising directly or indirectly out of:

(1) War, including undeclared or civil war;

(2) Warlike action by a military force, including action in hindering or defending against an actual or expected attack, by any government, sovereign or other authority using military personnel or other agents; or

(3) Insurrection, rebellion, revolution, usurped power, or action taken by governmental authority in hindering or defending against any of these.

l. War

This war exclusion does not apply unless the insured has agreed to assume war damage in a contract or agreement. 

m. Recording And Distribution Of Material Or Information In Violation Of Law

"Bodily injury" or "property damage" arising directly or indirectly out of any action or omission that violates or is alleged to violate:

(1) The Telephone Consumer Protection Act (TCPA), including any amendment of or addition to such law;

(2) The CAN-SPAM Act of 2003, including any amendment of or addition to such law;

(3) The Fair Credit Reporting Act (FCRA), and any amendment of or addition to such law, including the Fair And Accurate Credit Transaction Act (FACTA); or


(4) Any federal, state or local statute, ordinance or regulation, other than the TCPA or CAN-SPAM Act of 2003 or FCRA and their amendments and additions, that addresses, prohibits or limits the printing, dissemination, disposal, collecting, recording, sending, transmitting, communicating or distribution of material or information.

m. Violation of Consumer Privacy Statutes

This exclusion makes it clear that no claim arising out of statutory violations of federal, state, or local consumer privacy laws will be covered by the policy.

n. Personal And Advertising Injury

"Bodily injury" arising out of "personal and advertising injury".

n. Personal and Advertising Injury

This exclusion prevents recovery under Coverage A for a  consequential bodily injury suffered as a result of personal or advertising injury. Such injury is covered by Coverage B (Personal and Advertising Injury). See CGL technical report Personal Injury in EPL Claims.

o. Liquor Liability

"Bodily injury" or "property damage" for which any "insured" may be held liable by reason of:

(1) Causing or contributing to the intoxication of any person;

(2) The furnishing of alcoholic beverages to a person under the legal drinking age or under the influence of alcohol; or

(3) Any statute, ordinance or regulation relating to the sale, gift, distribution or use of alcoholic beverages.

This exclusion applies only if you are in the business of manufacturing, distributing, selling, serving or furnishing alcoholic beverages. 

o. Liquor Liability

The exception makes the exclusion applicable only to those insureds engaged "in the business" of manufacturing, distributing or furnishing alcoholic beverages such as bars, restaurants, motels, grocery stores, and country clubs. Social hosts are not subject to any part of the exclusion.

The exception affords protection under the policy to a lessor of premises occupied by a server of alcoholic beverages, assuming the lessor is also not "in the business."

Also, any contractual obligation of the insured to protect a provider of alcoholic beverages would be covered by the policy, as long as the contract is an "insured contract." 

Exclusions c. through o. do not apply to damage by fire to premises while rented to you or temporarily occupied by you with permission of the owner. A separate limit of insurance applies to this coverage as described in Paragraph F. Limits Of Insurance – General Liability Coverages.

Exception to Exclusions "c" through "o" - Damage to Rented or Occupied Premises

The last paragraph provides a small limit of coverage for negligent damage by the named insured caused by fire to premises that have been rented or that are temporarily occupied by the named insured. This is commonly referred to as "fire legal liability" coverage.

The Damage to Premises Rented To You Limit is shown in the Declarations. The base limit is $50,000 but can be higher for an additional premium.

This coverage does not apply (1) to damage by any cause of loss other than fire, (2) to damage for which the insured is not liable (negligent), or (3) to any kind of personal property. However, damage by other causes of loss to premises (and contents of premises) rented for a period of seven or fewer consecutive days is covered by an exception to exclusion "e" above.

The need for this paragraph arises out of exclusion "e.(1)” above that excludes damage to any premises owned, rented or occupied by the insured. The exclusion applies only to that portion of a premises the insured rents, not to the rest of the building. Damage to the rest of the building - not rented to the insured nor in his care, custody, and control - is covered up to the insured's property damage limit.

Tenants are often responsible for damage by many other perils and for much higher values. The best way to handle this exposure is with direct property insurance, in the name of the tenant or owner or both, or mutual waivers of subrogation in the lease. "All risks" legal liability protection can also be provided by endorsement to a commercial property policy. See CGL technical report Lease Agreements and Legal Liability -- Damage to Rented Buildings.

Endorsement CA 25 50 (Exclusion - Damage to Rented Premises) removes this exception and thus excludes all damage to rented premises.