Los Angeles Claims Adjuster Property and Causality Practice Exam

Who would need products coverage in the CGL context?

1. A retailer selling goods

2. A contractor performing renovations

3. A company manufacturing specific products

4. A logistics company moving goods

The correct answer is: A company manufacturing specific products

In the context of Commercial General Liability (CGL) insurance, products coverage is essential for businesses that manufacture goods. This type of coverage protects against claims related to bodily injury or property damage that may arise from the products they produce and sell. If a product malfunctions, causes injury, or leads to damages after it has been sold, the manufacturer can be held liable. In this scenario, a company manufacturing specific products would require this coverage as it directly addresses the risks associated with their products. The potential for lawsuits stemming from product defects or failures makes it crucial for manufacturers to have products coverage to safeguard against financial losses resulting from such claims. This means that if a consumer experiences harm due to a product made by the company, the products coverage would help cover legal costs and potential settlements. Other options, while relevant to the business context, do not specifically align with the need for products coverage. A retailer selling goods would generally focus on coverage related to the retail operation rather than the products themselves. A contractor performing renovations might require liability coverage related to their services, and a logistics company moving goods would more likely need coverage for transportation-related risks rather than specific product-related issues.