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Section II – General Liability Coverages

E – Supplementary Payments

F – Limits of Insurance 

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). 

E.  Supplementary Payments

With respect to coverage provided under Bodily Injury And Property Damage Liability and Personal And Advertising Injury Liability Coverages, we will pay for the "insured": 

E. Supplementary Payments

Supplementary payments are limited to the coverages that provide liability and defense protection. The expenses described here are the sole responsibility of the insurance company, have no limit, and are paid in addition to the policy limits.

1. All expenses we incur.

1. Legal Fees

Since the company is obligated to defend the insured, these expenses can be high, including legal fees, investigations, expert witnesses and court costs.

2. The cost of bonds to release attachments in any "suit" against the "insured" we defend, but only for bond amounts within our Limit of Insurance. 

2. Release of Attachment Bonds

The company is not obligated to provide these bonds, only pay for them, to enable the insured to get the attachment on his equipment or other property "released" by the court.

3. All reasonable expenses incurred by the "insured" at our request, including actual loss of earnings up to $250 a day because of time off from work. 

3. Reasonable Expenses

If an insured is asked to participate in the defense of a claim, the company will pay all direct expenses incurred. If the insured can show a loss of earnings, he can collect up to $250 a day. This latter benefit is not an automatic payment. Taking a day of leave to be in court is not considered a loss of earnings for a salaried individual.

4. All court costs taxed against the "insured" in any "suit" against the "insured" we defend. However, these payments do not include attorneys' fees or attorneys' expenses taxed against the "insured".

4. Court Costs

When an insured is on the losing end of a lawsuit, the insured may be required to pay court costs as part of the judgment.  Those costs are covered by this supplementary coverage.  However, the insured may also be required to pay the opposing party’s attorney’s fees.  These costs are not covered by this supplementary coverage; they would be covered as part of the liability coverage and therefore subject to the limit of liability.

5. All interest on the full amount of any judgment that accrues after entry of the judgment in any "suit" against the "insured" we defend; but our duty to pay interest ends when we have paid, offered to pay or deposited in court the part of the judgment that is within our Limit of Insurance.

These payments will not reduce the Limit of Insurance.

g. Postjudgment Interest

Postjudgment interest is payable in addition to the policy limit. The company is required to pay the interest on the entire judgment, even that portion in excess of policy limits.

Unlike the CGL, this policy does not pay prejudgment interest as a supplementary payment. Prejudgment interest is payable as part of the liability coverage and therefore subject to the limit of liability.

Defense of Contractual Indemnitee

An indemnitee's defense costs are covered when

  • The insured is contractually obligated to pay those costs, and 
  • The costs are incidental to a suit or other legal proceeding which is covered by the policy.

However defense costs are covered as “damages” within the limit of liability. There is no provision in this policy, as there is in the CGL policy, to pay a contractual indemnitee’s defense costs as a supplementary payment under certain conditions.

F.  Limits Of Insurance – General Liability Coverages

1. Regardless of the number of "insureds", claims made or "suits" brought or persons or organizations making claims or bringing "suits", the:

F.1. Limits of Insurance

1. Maximum Limits

The company makes it clear that the policy limits shown on the declarations are the most they will pay under the policy, regardless of the number of insureds involved, the number of suits brought, or the number of claims that arise out of one occurrence.

a. General Liability Aggregate Limit shown in the Declarations is the most we will pay for the sum of all:

(1) Damages under Paragraph A. Bodily Injury And Property Damage Liability, except damages because of "bodily injury" and "property damage" that are both:

(a) Sustained away from locations owned, maintained or used for your "auto dealer operations"; and

(b) Arising out of your "products" or "work you performed";

(2) Damages under Paragraph B. Personal And Advertising Injury Liability; and

(3) Medical expenses under Paragraph C. Locations And Operations Medical Payments.

a. General Aggregate

The general aggregate is the most that will be paid out during the policy term for claims arising out of all exposures except products and completed operations. The general aggregate is reduced only by the payment of claims, not by claims reserves established by the company.

Endorsement CA 25 59 (Designated Location(s) General Liability Aggregate Limit for Certain General Liability Coverages) changes the general liability aggregate limit to apply per location.

b. The Products And Work You Performed Aggregate Liability Limit is the most we will pay under Paragraph A. Bodily Injury And Property Damage Liability for "bodily injury" and "property damage" that are both:

(1) Sustained away from locations owned, maintained or used for your "auto dealer operations"; and

(2) Arising out of your "products" or "work you performed".

b. Products and Work You Performed Aggregate

The Products and Work You Performed Aggregate shown in the Declarations is the most that will be paid out during the policy term for claims arising out of products and completed operations claims.

Claims for damages arising out of Work You Performed are subject to a $500 deductible for each damaged auto – see below.

2. Subject to Paragraph 1.a. above, the Personal And Advertising Injury Liability Limit is the most we will pay for the sum of all damages because of all "personal and advertising injury" sustained by any one person or organization under Paragraph B. Personal And Advertising Injury Liability.

2. Personal and Advertising Injury Limit

The personal and advertising injury limit must be the same as the limit shown for Each Occurrence. However, separate claims may apply to the two limits in one occurrence. The store owner who grabs a suspected shoplifter may be liable for bodily injuries (each occurrence limit) as well as personal injury (wrongful detention, payable under the personal injury limit). Both claims will be subject to the general aggregate.

3. Subject to Paragraph 1.a. above, the Locations And Operations Medical Payments Limit is the most we will pay for all medical expenses because of "bodily injury" for each person injured in any one "accident" under Paragraph C. Locations And Operations Medical Payments.

3. Medical Expense

The maximum medical expense limit is $5,000 per person, which cannot be increased or decreased. The Each Occurrence limit is the maximum medical payments that will be paid out in one occurrence of bodily injury.

This coverage is not subject to the limit for each accident (below) but is subject to the General Aggregate (above).

4. Subject to Paragraph 1.a. or 1.b. above, whichever applies, the General Liability Bodily Injury And Property Damage Liability Each "Accident" Limit shown in the Declarations is the most we will pay for the sum of all damages under Paragraph A. Bodily Injury And Property Damage Liability resulting from any one "accident". 

4. Each Accident

The limit for each accident shown in the Declarations governs the maximum amount payable for all bodily injury and property damage arising out of one accident, regardless of the number of claims.

An insured may have several "accidents" during the policy term and the limit for each accident will apply, in full, to each separate occurrence, subject to the General Aggregate or Products or Work You Performed Aggregate.

However, if the General Aggregate or Products or Work You Performed Aggregate has been reduced by the payment of claims below the each occurrence limit, then the remaining aggregate becomes the maximum available in the next occurrence, be it from the general or the products or work performed exposures, respectively.

Damages payable under any applicable Limits of Insurance for General Liability Coverages are not payable under Section I – Covered Autos Coverages or Section III – Acts, Errors Or Omissions Liability Coverage. 

Damages Covered Under Auto Liability and General Liability

If any accident is covered under the Auto Liability Coverages as well as the General Liability Coverages, the limits of liability for the General Liability Coverages will apply.

5. Subject to Paragraph 4. above, the Damage To Premises Rented To You Limit is the most we will pay under Paragraph A. Bodily Injury And Property Damage Liability for damages because of "property damage" to any one premises, while rented to you, or in the case of damage by fire, while rented to you or temporarily occupied by you with permission of the owner. 

5. Damage to Premises Rented to You

Regardless of the other limits in the policy, the most the company will pay for legal liability damage to premises rented to or temporarily occupied by the insured in one occurrence is the Premises Rented to You Limit shown in the Declarations. 

6. The Aggregate Limits of Insurance for General Liability Coverages apply separately to each consecutive annual period and to any remaining period of less than 12 months, starting with the beginning of the policy period shown in the Declarations, unless the policy period is extended after issuance for an additional period of less than 12 months. In that case, the additional period will be deemed part of the last preceding period for purposes of determining the Aggregate Limits of Insurance – General Liability Coverages.

 

6. Annual Limits

The aggregate limits apply to occurrences during an annual period, regardless of the policy term. Thus, Aggregate limits are reinstated each 12 months under a multiple-year policy.

7. We will deduct $500 from the damages in any "accident" resulting from "property damage" to an "auto" as a result of "work you performed" on that "auto".

7. Completed Operations Deductible

This $500 deductible applies only to completed operations claims for damage to the auto on which the operation was performed. Endorsement CA 03 03 (500 Dollar Deductible for Work You Performed Does Not Apply) removes the $500 deductible.