Los Angeles Claims Adjuster Property and Causality Practice Exam

What is the significance of the products-completed operations aggregate limit in CGL?

1. It applies to personal injury claims only

2. It is the total limit for operations-related claims in a policy period

3. It sets liability limits specifically for product-related injuries

4. It restricts claims for completed operations exclusively

The correct answer is: It is the total limit for operations-related claims in a policy period

The products-completed operations aggregate limit in a commercial general liability (CGL) policy is significant because it represents the maximum amount that the insurer will pay for all claims related to products and completed operations during a specified policy period. This limit is crucial for businesses as it safeguards them against a series of claims that may arise from the use or operation of their products or completed work after they have been delivered or completed. This aggregate limit applies to all operations-related claims, including those for bodily injury and property damage, that occur after the product has been sold or the work has been finished, regardless of when the claims are reported. Having this comprehensive coverage helps ensure that a business can manage its risk exposure for operations-related activities, thereby maintaining financial stability. In contrast, other options miss the broader applicability of the limit. For instance, the limit does not pertain solely to personal injury claims, nor does it restrict claims exclusively to completed operations or the specific injuries related to products—rather, it encompasses all claims during the policy period related to both products and completed operations combined.