Medical Payments under CGL Form — Tenants Covered?

Q

We have discovered that a number of our carriers consider tenants of an insured as completely excluded under medical payments coverage of the commercial general liability policy. When we questioned this, they refer us to exclusion b.

Our interpretation of this exclusion is that it applies to independent contractors hired by the insured or the tenant. The carrier is saying this exclusion applies to (1) independent contractors hired by the insured and (2) tenants. This seems illogical, as there would then be no reason for exclusion c., which states injuries sustained by tenants within the premises they occupy are excluded.

Georgia Subscriber

A

Exclusion 2.b. refers to a person hired to do work by an insured or hired by a tenant of any insured; this does not mean that tenants are excluded from medical payments coverage. The part of the medical payments exclusions that refers to tenants is 2.c., and that is limited to “that part of premises you own or rent that the person normally occupies.”

What may help here is to look at exclusion 2.b.'s make-up. The exclusion reads that the insurer will not pay expenses for bodily injury to a person hired to do work. What follows that main phrase gets its relevance from that phrase, namely, the person hired has to be hired to do work for or on behalf of any insured or a tenant of any insured. If the tenant part of 2.b. was meant to stand independently, as the carrier suggests, the form would use the connector “and” or there would be a semicolon or a period separating “any insured” from “a tenant.” The use of the connector “or” means that either any insured or a tenant of any insured has to hire the person to do work.

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