Los Angeles Claims Adjuster Property and Causality Practice Exam

What is excluded under CGL coverage regarding pollution?

1. Bodily injury from natural disasters

2. Bodily injury arising from the discharge of pollutants

3. Property damage to personal belongings

4. Any type of environmental damage

The correct answer is: Bodily injury arising from the discharge of pollutants

CGL, or Commercial General Liability insurance, typically excludes coverage for bodily injury or property damage that arises from the discharge, dispersal, seepage, migration, release, or escape of pollutants. This is an important aspect of CGL coverage because pollution-related damages often involve complex legal and environmental issues, leading to potentially high costs. The rationale behind this exclusion is to prevent higher risks insuring businesses that might cause or contribute to pollution, thereby protecting insurers from substantial potential losses associated with environmental claims. Bodily injury from natural disasters does not fall within the purview of pollution exclusions, as these events are typically covered under general liability policies unless otherwise specified. Similarly, property damage to personal belongings is not inherently linked to pollution, nor is it categorized as environmental damage. While environmental damage refers to a wide array of pollution-related issues, the specific exclusion for bodily injury arising directly from the discharge of pollutants is particularly emphasized to delineate the limits of CGL coverage.