Hawaii Insurance Adjuster License Practice Exam

A Commercial General Liability form provides automatic coverage for newly acquired organizations for up to how many days?

1. 60 Days

2. 90 Days

3. 120 Days

4. 180 Days

The correct answer is: 90 Days

The correct answer reflects that a Commercial General Liability (CGL) policy provides automatic coverage for newly acquired organizations for up to 90 days. This provision is significant for businesses as it ensures that newly acquired entities or newly formed subsidiaries are covered without the need for an immediate endorsement or amendment to the policy. This automatic coverage is important because it offers seamless protection during the initial period after acquisition, where latent liabilities might exist that the new owner may not be fully aware of. Typically, after the 90 days, the insured will need to formally include the new organization within their policy to maintain continuous coverage, thus emphasizing the importance of timely updates and communication with the insurance provider.