Which statement is NOT typically true about CGL coverages?

• A. Punitive damages are generally excluded
• B. Cross-Liability provisions treat insureds as separate
• C. Defense costs always reduce policy limits
• D. Products-Completed Operations covers BI/PD after distribution

Answer: (C)

Defense costs and policy limits don't have a single, universal rule in CGL coverages. The statement that defense costs always reduce the policy limits isn’t typically true because many CGL forms offer defense costs outside the limit or in addition to it. In other words, some policies pay defense costs separately, so paying for defense won’t necessarily deplete the amount available to pay judgments or settlements. Other forms do apply defense costs to the limit, but that behavior isn’t universal across all CGL forms, endorsements, or specialty versions.

Also, several standard features of CGL coverage help keep you protected in common scenarios. Punitive damages are generally excluded, meaning they aren’t paid under the standard CGL form. Cross-liability provisions are designed to treat insureds as separate for purposes of coverage, which helps when multiple insureds are involved in a single claim. Products-Completed Operations coverage typically extends to bodily injury or property damage that arises after a product has been distributed or after operations are completed, which is a core aspect of CGL protection.