Commercial General Liability & Commercial Automobile

Correct

The answer is A: Coverage applies because the faulty valve failure (occurrence) happened during the policy period.

Under an occurrence-form CGL, coverage is triggered by bodily injury or property damage that happens during the policy period, no matter when the claim is made. The valve failed and damaged the customer's equipment while the policy was in force, so the policy responds even though the claim came 18 months after expiration. Asking when the claim was filed is claims-made thinking, and extended reporting periods exist only for claims-made forms. The products-completed operations hazard is part of the standard occurrence form, not excluded from it.

Reviewed in our October 2026 Pennsylvania fact-check.

Correct

The answer is A: The insurer must pay the judgment up to the $750,000 federal minimum, then may seek reimbursement from the carrier.

The MCS-90 obligates the insurer to pay a final judgment against the motor carrier for public liability, up to the federal minimum, even where the policy's own terms would not cover the accident. For for-hire interstate carriers of nonhazardous property over 10,000 pounds the minimum is $750,000 (49 CFR 387.9), so the insurer pays $750,000 of the $800,000 judgment, and the carrier bears the rest. The insurer may then seek reimbursement from the carrier for what the policy would not have paid. The endorsement does not remove limits above the minimum and it covers property damage as well as bodily injury, though not cargo or the carrier's employees.

Source: 49 CFR 387.9

Correct

The answer is C: The insurer pays $750,000: the $500,000 policy limit plus $250,000 under the MCS-90, which the carrier must reimburse.

The MCS-90 guarantees the public a final judgment for public liability (bodily injury, property damage and environmental restoration) up to the federal minimum. For for-hire nonhazardous freight in a vehicle of 10,001 pounds or more, that minimum is $750,000 (49 CFR 387.9). The policy pays its own $500,000 limit, and the endorsement fills the gap up to $750,000, so the insurer pays $750,000. The endorsement is not unlimited. Because the policy would not have paid the extra $250,000 without the endorsement, the carrier must reimburse the insurer. The carrier remains responsible for the $250,000 of the judgment above the federal minimum.

Source: 49 CFR 387.9

Correct

The answer is A: The insurer pays its $750,000 limit; the MCS-90 adds nothing because $750,000 is the federal minimum, so the carrier owes the other $150,000.

The MCS-90 guarantees payment of a public liability judgment up to the federal minimum for the carrier's cargo. For a for-hire carrier of nonhazardous general commodities in a vehicle of 10,001 pounds or more, that minimum is $750,000 (49 CFR 387.9). The policy already has a $750,000 limit, so the endorsement adds nothing, and the insurer pays $750,000. The trucking company is responsible for the remaining $150,000. Higher minimums, such as $1,000,000, apply only to listed hazardous materials and oil.

Source: 49 CFR 387.9