Question

Jerome was shopping at ABC Imports when a light fixture fell from the ceiling and hit him on the head. Jerome's injuries resulted in an extended hospital stay, so he sued ABC Imports and was awarded $400,000. Assuming ABC Imports carries a CGL with a General Aggregate of $750,000 and a Per Occurrence limit of $250,000, what will the new Per Occurrence Limit be after this claim is paid?

A. $150,000.
B. $250,000
C. $0
D. $100,000

Answer 1

The Per Occurrence limit on ABC Imports' CGL policy remains unchanged at $250,000 after paying out Jerome's $400,000 claim, as this limit is the maximum payout per claim and does not decrease after a claim is made.

Step-by-step explanation:

Jerome was shopping at ABC Imports when a light fixture fell and he sustained injuries resulting in a claim against the store's CGL (Commercial General Liability) insurance policy. If ABC Imports has a CGL policy with a General Aggregate of $750,000 and a Per Occurrence limit of $250,000, the payout for the claim does not alter the Per Occurrence limit for future claims. Therefore, after the $400,000 claim is paid to Jerome, the Per Occurrence limit will remain the same at $250,000. The General Aggregate will be reduced by the amount of the claim paid, but the Per Occurrence limit remains constant until it is reached by a single claim, or the policy conditions change.