Question

In a CGL policy, when does coverage for Product Liability begin?

A. All of the choices
B. When the insured has physically relinquished possession of the item to another.
C. When it is in the insureds possession
D. From the date of policy inceptions

Answer 1

In a CGL policy, coverage for Product Liability begins when the insured has physically given up possession of the product to another party. Option B is correct.

Step-by-step explanation:

In a Commercial General Liability (CGL) policy, coverage for Product Liability begins when the insured has physically relinquished possession of the item to another.

This means that for the insurance to apply to a product, the item in question must no longer be in the possession or control of the insured; essentially, the product liability coverage is triggered once the products have been distributed or sold and are now in the hands of a consumer or another party.

It is essential to note that CGL policies are designed to protect businesses from financial losses due to liabilities, and product liability is a crucial aspect of this.

It covers claims against the business for bodily injury or property damage caused by the products it manufactures, distributes, or sells. However, if an incident occurs while the product is still with the insured or before the coverage period starts, the CGL policy would not cover such an incident.