Idaho Property and Casualty Practice Exam 2026 - Free Practice Questions and Study Guide

The correct choice highlights an essential principle of products liability within the framework of Commercial General Liability (CGL) insurance. This principle establishes that coverage extends to bodily injury (BI) and property damage (PD) caused by the product but does not extend to damage to the product itself.

When a product causes injury or damage, the liability coverage is designed to protect the insured against claims arising from the consequences of that product's use. However, if the product itself is damaged while in the possession of a purchaser, such damage is typically excluded from coverage because the policy is intended to cover third-party claims rather than the product’s inherent quality or defects.

As a result, if the product fails and causes harm to individuals or surrounding property, that liability would be covered under the CGL. Still, any damage to the product once it has been sold and is in the care of the purchaser is not covered, emphasizing the CGL's focus on third-party claims rather than the product's integrity once sold.

The other options include elements that do not align with the standard principles of products liability under CGL coverage. For instance, the notion that coverage starts immediately upon sale of the product before the purchaser leaves the insured’s premises or that it includes dram shop liability insurance