Los Angeles Claims Adjuster Property and Causality Practice Exam

What additional costs are included in Commercial General Liability (CGL) supplementary payments?

1. Expenses for employee training

2. Cost of repairs to damaged properties

3. Prejudgment interest awarded against the insured

4. Cost of advertising lawsuits

The correct answer is: Prejudgment interest awarded against the insured

In Commercial General Liability (CGL) insurance, supplementary payments cover certain additional costs that may arise during the process of defending against claims and lawsuits. One of these costs includes prejudgment interest awarded against the insured. Prejudgment interest refers to the interest that may be awarded by a court to a plaintiff from the time of the incident that caused the claim until the judgment is made. This interest compensates the plaintiff for the time they had to wait for their compensation, acknowledging the time value of money and the potential financial impacts of the delay. The CGL policy provides for this payment to ensure that the insured is not further financially burdened by the legal process after a liability claim arises. Other options focus on costs that are either not typically included in the scope of supplementary payments under CGL policies or that pertain more to different types of coverage or expenses associated with general business operations. Thus, prejudgment interest stands out as a specific liability-related cost covered under CGL supplementary payments.