Supplemental Information. SA & F has procured a business owner policy (BOP) that contains a commercial general liability policy (CGL) with each occurrence limit of $1 million, a personal and advertising injury limit of $1 million, a general aggregate limit of $2 million, and a products completed operations aggregate limit of $2 million. Damage to premises rented to SA & F - $250,000 on any one premise and medical expense of $5,000 for any one person. Any and all other incidental coverages contained within the CGL are established at minimum levels. SA & F has also procured a commercial excess liability (umbrella) following form with each occurrence limit (liability coverage) of $1 million; personal and advertising injury limit (any one person or organization) of $1 million; and aggregate limit (liability coverage - except with respect to covered autos) of $1 million. What dollar amount, if any, will SA & F's BOP insurer (including umbrella carrier) pay for each of the following liability losses that occurred during the policy period and why will it pay the loss? If the loss is not covered, or not fully covered, explain why. Assume that each loss would be paid in the order presented. C. SA & F sells a dishwasher to a homeowner and delivers it and hires Joe's Plumbing Services to install it. While the homeowner is gone for a 10 day cruise, the dishwasher malfunctions causing water to flow to and remain on the kitchen wood floor. The Homeowner incurs $20,000 in damages to the floor, $5,000 for the cost of meals and hotel expense while repairs are being made and $15,000 for removal and remediation of mold damage. The Homeowner's insurance carrier sues SA & F for the damages it paid to the homeowner for the loss. (5 POINTS) D. SA & F leases its building from Smith Family Enterprises, LLC, which is owned by Adam Smith and his brother Rodney Smith. The lease terms are accomplished by a handshake. The building is insured by ABC Insurance but is written through Bill Best, the same agent for SA & F. The storage area of the building suffers damages in the amount of $750,000 when an employee of SA & F forgets to turn off an electric heater which subsequently malfunctioned causing the fire. ABC Insurance Company pays the loss but seeks reimbursement from SA & F for all of its payments. (5 POINTS) Supplemental Information. SA & F has procured a business owner policy (BOP) that contains a commercial general liability policy (CGL) with each occurrence limit of $1 million, a personal and advertising injury limit of $1 million, a general aggregate limit of $2 million, and a products completed operations aggregate limit of $2 million. Damage to premises rented to SA & F - $250,000 on any one premise and medical expense of $5,000 for any one person. Any and all other incidental coverages contained within the CGL are established at minimum levels. SA & F has also procured a commercial excess liability (umbrella) following form with each occurrence limit (liability coverage) of $1 million; personal and advertising injury limit (any one person or organization) of $1 million; and aggregate limit (liability coverage - except with respect to covered autos) of $1 million. What dollar amount, if any, will SA & F's BOP insurer (including umbrella carrier) pay for each of the following liability losses that occurred during the policy period and why will it pay the loss? If the loss is not covered, or not fully covered, explain why. Assume that each loss would be paid in the order presented. C. SA & F sells a dishwasher to a homeowner and delivers it and hires Joe's Plumbing Services to install it. While the homeowner is gone for a 10 day cruise, the dishwasher malfunctions causing water to flow to and remain on the kitchen wood floor. The Homeowner incurs $20,000 in damages to the floor, $5,000 for the cost of meals and hotel expense while repairs are being made and $15,000 for removal and remediation of mold damage. The Homeowner's insurance carrier sues SA & F for the damages it paid to the homeowner for the loss. (5 POINTS) D. SA & F leases its building from Smith Family Enterprises, LLC, which is owned by Adam Smith and his brother Rodney Smith. The lease terms are accomplished by a handshake. The building is insured by ABC Insurance but is written through Bill Best, the same agent for SA & F. The storage area of the building suffers damages in the amount of $750,000 when an employee of SA & F forgets to turn off an electric heater which subsequently malfunctioned causing the fire. ABC Insurance Company pays the loss but seeks reimbursement from SA & F for all of its payments. (5 POINTS)
