Exam DISC-RM Practice Question 406
Study guide: Exam DISC-RM
A furniture manufacturer's unendorsed ISO CGL policy lists only a manufacturing classification. Midway through the policy year it opened a showroom selling directly to the public, which it never reported. A customer trips in the showroom and sues. At audit, the insurer discovers the showroom. Which outcome is correct?
- A) The claim is excluded because the showroom's classification was not on the policy, and no premium is due for it
- B) The claim is covered, but the insurer can't charge any premium for the showroom until the policy renews next year
- C) The claim is covered, and at audit the insurer may add a mercantile class charged on showroom sales from its opening
- D) The policy is void from its inception because the insured never reported the showroom to the insurer
Answer this question and see the worked solution