Casualty-Only common mistakes
Casualty-Only · Understand the traps and how to avoid them.
Treating the CGL occurrence trigger as the date the claimant files suit or the date the injury is discovered, instead of the date bodily injury or property damage first occurs, when working through a multi-year exposure timeline.
Candidates carry over claims-made thinking from professional liability and apply it to the CGL, and the 'occurrence' wording feels intuitive as 'the event that caused the whole problem' rather than the injury-in-fact date.
What to do instead
Before answering any trigger question, write three columns on scratch paper: date of injurious exposure, date of first injury-in-fact, date of claim. Then match the policy period covering column two for an occurrence form, and the retro date plus claims-made period for a claims-made form. Drill ten hypothetical timelines until the column mapping is automatic.
Confusing the CGL aggregate limit with the per-occurrence limit when computing how much remains available after a loss, or assuming the aggregate applies to products-completed operations.
The two limits sit side by side on the declarations page and candidates memorize the numbers without internalizing that the general aggregate is reduced by sums paid under Coverage A and C but not by products-completed operations, which carries its own separate aggregate.
What to do instead
Redraw the declarations page by hand for a sample policy, labeling which coverages erode the general aggregate, which erode the products-completed operations aggregate, and which erode neither. Then solve three 'remaining limit' problems requiring subtraction from the correct bucket.
Applying the wrong sublimit to a commercial property loss - for example paying the full building limit for an ordinance-or-law upgrade cost, or treating business income as unlimited because the property limit is high.
Candidates read the coverage grant and stop, skipping the sublimits, extensions, and coinsurance conditions buried later in the form, and they assume all limits on the declarations page stack together.
What to do instead
For each coverage line, build a one-page 'limit map' listing the blanket limit, every sublimit, and what triggers each. Practice with a loss scenario that touches three sublimits simultaneously so the interaction becomes concrete.
Missing coinsurance penalties on a property loss by dividing the loss by the limit instead of comparing the carried limit to the required limit (coinsurance percentage times the value at risk).
The formula is easy to state but candidates invert the ratio under time pressure, or they forget that the penalty applies to the loss amount, not to the policy limit, and is capped by the limit actually purchased.
What to do instead
Work the formula in a fixed three-step order every time: required insurance equals percentage times value; compare to carried limit; if carried is lower, multiply the loss by carried over required, then cap at the limit. Do five problems with values that make the ratio obvious, then five where it is close to one.
Assuming a workers' compensation policy responds to an employee's tort suit against the employer, or that employers liability limits apply to the exclusive-remedy benefits.
Part One and Part Two sit on the same declarations page and candidates blur them, forgetting that Part One has no dollar limit and pays statutory benefits, while Part Two is the liability coverage for suits that fall outside the exclusive remedy.
What to do instead
Write out the three-part structure from memory: Part One statutory benefits with no limit, Part Two employers liability with a per-occurrence limit, Part Three other states. Then classify ten fact patterns as Part One, Part Two, or neither, including a third-party-over action and a dual-capacity claim.
Treating a PAP 'owned auto' as covering a vehicle the insured rents for a week, or denying coverage for a newly acquired auto because it is not yet listed on the declarations.
The definitions of owned auto, newly acquired auto, and temporary substitute auto overlap in everyday language, and candidates rely on the common meaning of 'own' rather than the policy definition and its timing conditions.
What to do instead
Memorize the definitional triangle with one example each: a leased vehicle for a year is an owned auto, a rental while the insured's car is in the shop is a temporary substitute, and a newly purchased car gets automatic coverage for a defined window. Then run a scenario where the insured buys a car and crashes it the same day.
Answering a claims-handling question by describing general fairness instead of naming the specific duty breached - for example failing to acknowledge a claim, failing to conduct a timely investigation, or failing to document the claim file.
Candidates know unfair-claims-practice rules exist but have not organized them into a checklist, so they reach for generic language about good faith rather than the discrete acts regulators enumerate.
What to do instead
Build a numbered checklist of claim-handling duties (acknowledge, investigate promptly, communicate status, document, explain denials in writing, pay within a stated period) and practice mapping each fact pattern to a numbered duty. Cite the duty number in your answer.
Failing to distinguish first-party bad faith from third-party bad faith, or to identify the excess-exposure duty to settle within limits when the insured faces a judgment above the policy limit.
Both involve an insurer's duty of good faith, so candidates treat them as one concept and miss that the third-party duty runs to the insured's exposure to an excess judgment, not merely to the insured's own loss.
What to do instead
Write a two-column comparison: who is owed the duty, what conduct triggers breach, and what damages flow. Then analyze a demand-within-limits scenario and articulate why the insurer's failure to settle can expose it to the full excess judgment.
Classifying a loss under the wrong crime coverage - for example putting employee dishonesty under forgery or alteration, or assuming computer fraud covers a social-engineering wire transfer.
The crime form's insuring agreements each have narrow definitions, and candidates match on the story's surface ('an employee tricked us') rather than on the defined conduct and the required direct loss to covered property.
What to do instead
Create a matrix of the crime insuring agreements with the defined act, the covered property, and the key exclusion for each. Then classify eight short scenarios, including a fraudulent instruction and a forged check, and justify each placement by definition element.
Ignoring the difference between a risk-selection judgment and a rating judgment when answering underwriting questions, or assuming a declined risk can be declined on a protected characteristic.
Underwriting and rating both involve pricing and acceptance decisions, so candidates conflate them, and they forget that regulatory and ethical constraints limit the characteristics an underwriter may use.
What to do instead
Separate the two decisions explicitly: selection is whether to accept, rate, or decline based on measurable risk characteristics; rating is how to price an accepted risk. For every scenario, name which decision is being made and whether the characteristic used is permitted under the applicable regulation.