CMFAS CGI Commercial Liability Insurance question: contractual liability exclusion removes cover for assumed obligations

CMFAS CGICommercial Liability Insurance

The contractual liability exclusion removes cover for assumed obligations, but what liability generally remains covered?

A Liability the insured assumed under a hold-harmless clause
B Any liability the insured agreed to in a signed contract
C Fines imposed for breach of the contract
D Liability that would have existed anyway in tort

Show the answer and explanation

Answer: D. Liability that would have existed anyway in tort

The exclusion targets liability assumed beyond ordinary legal liability; liability that would have existed anyway in tort usually remains covered, because the insurer priced for the insured's normal legal liability.

Common mistake

Assuming the contractual exclusion strips out all liability connected to a contract, including underlying tort liability.

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CMFAS CGI Commercial Liability Insurance question: contractual liability exclusion removes cover for assumed obligations

Answer: D. Liability that would have existed anyway in tort

Common mistake

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CMFAS CGI Commercial Liability Insurance question: contractual liability exclusion removes cover for assumed obligations

Answer: D. Liability that would have existed anyway in tort

Common mistake

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