D. Liability And Medical Expenses Limits Of Insurance

1. The Limits Of Insurance of Section II – Liability shown in the Declarations and the rules below fix the most we will pay regardless of the number of:
a. Insureds;
b. Claims made or "suits" brought; or
c. Persons or organizations making claims or bringing "suits".
2. The most we will pay for the sum of all damages because of all:
a. "Bodily injury","property damage" and medical expenses arising out of any one"occurrence"; and
b. "Personal and advertising injury" sustained by any one person or organization;

is the Liability and Medical Expenses limit shown in the Declarations. But the most we will pay for all medical expenses because of "bodily injury" sustained by any one person is the Medical Expenses limit shown in the Declarations.

3. The most we will pay under Business Liability Coverage for damages because of "property damage" to a premises while rented to you or in the case of fire while rented to you or temporarily occupied by you with permission of the owner is the applicable Damage To Premises Rented To You limit shown for that premises in the Declarations. For a premises temporarily occupied by you, the applicable limit will be the highest Damage To Premises Rented To You limit shown in the Declarations.

Analysis

This section advises that the limit of liability insurance as indicated in the declarations is the most that will be paid regardless of the number of insureds, claims made, suits brought, or persons making the claims or bringing suits. For example, if the insured business carries $500,000 liability and two persons, each claiming damages of $500,000, bring a suit for the same incident, the limits remainat $500,000. (The basic limit for Businessowners liability and medical expenses is $300,000, which may be increased to either $500,000, $1 million, or $2 million. Medical expenses coverage is limited to $5,000 per person.)

The section also advises that the sum of all damages arising out of any one occurrence—including bodily injury, property damage, medical expenses, and personal and advertising injury—is the liability and medical expenses limit shown in the declarations. However, medical expense coverage is on a per person basis even though it is included within the overall liability limit. For example, if the insured business carries a $500,000 limit of liability and $5,000 medical expenses, and the business is responsible for negligently injuring five persons, each person could incur up to $5,000 in medical expenses. But if all file suit asking $500,000 in damages, the maximum that will be paid for this occurrence is $500,000 total.

The sum of all damages arising out of any one personal and advertising injury is likewise limited to the limit of liability indicated in the declarations.

This limit is separate, however, from the limit shown in the declarations for damage caused by fire to premises rented to the insured, or fire legal liability. If this were not the case, and the insured was responsible for a fire resulting in property damage and bodily injury, the limit would quickly be eaten up.

The basic limit for this coverage is $50,000, which may be increased by endorsement.

For premises temporarily occupied by the insured, the applicable limit is the highest Damage To Premises Rented To You limit in the declarations.

4. Aggregate Limits

The most we will pay for:

a. All "bodily injury" or "property damage" that is included in the "products-completed operations hazard" is twice the Liability and Medical Expenses limit; and
b. All:
(1) "Bodily injury" or "property damage" except damages because of "bodily injury" and "property damage" included in the "products-completed operations hazard";
(2) Plus medical expenses;
(3) Plus all "personal and advertising injury" caused by offenses committed;

is twice the Liability and Medical Expenses limit.

Subject to Paragraph a. or b. above, whichever applies, the Damage To Premises Rented To You limit is the most we will pay for damages because of "property damage" to any one premises, while rented to you, or in the case of fire, while rented to you or temporarily occupied by you with the permission of the owner.

The Limits of Insurance of Section II – Liability apply separately to each consecutive annual period and to any remaining period of less than twelve 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 twelve months. In that case, the additional period will be deemed part of the last preceding period for purposes of determining the Limits of Insurance.

Analysis

The Businessowners liability coverage contains two aggregate limits. One, as in the CGL form, applies to all injury or damage during the policy period that falls within the products-completed operations hazard. The other Businessowners aggregate limit applies to all other injury or damage during the policy period, other than fire legal liability losses. In the CGL form, the general aggregate limit applies to, and is reduced by, fire legal liability losses.

The Businessowners aggregate limit that applies to products-completed operations losses is equal to twice the liability and medical expenses limit discussed previously. This marks a broadening of coverage from the previous forms, where the amount available for products-completed operations losses was limited to the liability and medical expenses limit. The aggregate limit that applies to all other losses, including medical expenses, is also equal to twice the liability and medical expense limit. It does not matter whether separate claims are made for personal and advertising injury, for bodily injury, and for property damage. Once the aggregate limit is exhausted, no more claims will be paid during the policy period.

The Damage To Premises Rented To You Limit is the most paid for property damage to premises rented to or temporarily occupied by the insured with the owner's permission, if the damage arises out of fire or explosion.

Finally, the limits of insurance apply separately to each annual term, but if policy is extended for a period of less than twelve months that period is considered to be part of the previous term. For example, an insured business carries liability limit of $500,000 and the policy term is one year. But the businessowner asks for the policy to be extended two months because he is closing the business at that time. The liability limit of $500,000 will apply during the entire fourteen months.

Liability and Medical Expenses Conditions

Liability and Medical Expenses Conditions

E. Liability And Medical Expenses General Conditions

1. Bankruptcy
Bankruptcy or insolvency of the insured or of the insured's estate will not relieve us of our obligations under this Policy.

2. Duties In The Event Of Occurrence, Offense, Claim Or Suit
a. You must see to it that we are notified as soon as practicable of an "occurrence" or an offense which may result in a claim. To the extent possible, notice should include:
(1) How, when and where the "occurrence" or offense took place;
(2) The names and addresses of any injured persons and witnesses; and
(3) The nature and location of any injury or damage arising out of the "occurrence" or offense.
b. If a claim is made or "suit" is brought against any insured, you must:
(1) Immediately record the specifics of the claim or "suit" and the date received; and
(2) Notify us as soon as practicable.
You must see to it that we receive written notice of the claim or "suit" as soon as practicable.
c. You and any other involved insured must:
(1) Immediately send us copies of any demands, notices, summonses or legal papers received in connection with the claim or "suit";
(2) Authorize us to obtain records and other information;
(3) Cooperate with us in the investigation, or settlement of the claim or defense against the "suit"; and
(4) Assist us, upon our request, in the enforcement of any right against any person or organization that may be liable to the insured because of injury or damage to which this insurance may also apply.
d. No insured will, except at that insured's own cost, voluntarily make a payment, assume any obligation, or incur any expense, other than for first aid, without our consent.

Analysis

These conditions are similar to those found in other liability forms such as the CGL. The insured is reminded that information must be obtained and forwarded to the insurer as soon as practicable so that the insurer can investigate and mount a defense. Delay can result in insufficient or loss of information—a key witness moves, for example, and leaves no forwarding address. The insured can give an oral notice to the insurer of an occurrence or offense that might result in a claim but must give a written notice in event a suit or claim actually occurs.

Insureds volunteering any payments other than for first aid do so at their own expense.

3. Legal Action Against Us
No person or organization has a right under this Policy:
a. To join us as a party or otherwise bring us into a "suit" asking for damages from an insured; or
b. To sue us on this Policy unless all of its terms have been fully complied with.
A person or organization may sue us to recover on an agreed settlement or on a final judgment against an insured; but we will not be liable for damages that are not payable under the terms of this policy or that are in excess of the applicable limit of insurance. An agreed settlement means a settlement and release of liability signed by us, the insured and the claimant or the claimant's legal representative.

4. Separation Of Insureds
Except with respect to the Limits of Insurance of Section II – Liability, and any rights or duties specifically assigned in this Policy to the first Named Insured, this insurance applies:
a. As if each Named Insured were the only Named Insured; and
b. Separately to each insured against whom claim is made or "suit" is brought.

Analysis

Condition 3. states that the insurer cannot be drawn into a suit against its own insured and adds that no legal action against the insurer can be taken unless all policy terms have been complied with.

Condition 4. states that the insurance applies separately to each named insured and to each insured against whom suit is brought, except with regard to the limits of insurance and the duties specifically assigned to the first named insured.

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