Pennsylvania Property & Casualty: Commercial General Liability & Commercial Automobile

Correct

The answer is A: Coverage does not apply under the new policy because its retroactive date falls after the incident.

A claims-made policy covers only injury or offenses that happen after its retroactive date, and only for claims first made during the policy period or an extended reporting period. A new insurer that is not asked for prior acts coverage normally sets the retroactive date at the new policy's inception, so an incident from three years earlier falls before it. The old policy does not respond either: the claim came long after it ended, outside the 60-day Basic Extended Reporting Period that applies to unreported incidents, and no supplemental tail was bought. The old retroactive date does not carry over automatically, and a claim made during the policy period satisfies only half of the test.

Reviewed in our October 2026 Pennsylvania fact-check.

Correct

The answer is B: The insurer may deny coverage only if it proves the delay prejudiced its ability to investigate or defend.

The CGL requires notice as soon as practicable, but in Pennsylvania an insurer that relies on late notice to avoid its obligations under an occurrence liability policy must prove both that notice was late and that the delay prejudiced it (Brakeman v. Potomac Insurance Co., Pa. 1977). A delay of a few weeks may or may not have hurt the insurer, so it can deny only on proof of prejudice. The policy has no clause that reduces limits for late notice, and notice is a policy condition that Pennsylvania enforces only on a showing of prejudice.

Reviewed in our October 2026 Pennsylvania fact-check.

Correct

The answer is A: No, because the pollution exclusion removes damage from the release of pollutants at the insured's premises.

The ISO CGL's pollution exclusion removes bodily injury and property damage arising out of the discharge or release of pollutants at or from premises the insured owns or rents, and the cleanup costs a neighbor claims fall with it. A chemical tank leak is a classic pollution loss, so the policy does not respond. Damage to Premises Rented to You applies to premises rented to the insured, not to a neighbor's land, and the products-completed operations hazard cannot override an exclusion. Filing quickly does not cure an excluded loss.

Reviewed in our October 2026 Pennsylvania fact-check.

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