Wisconsin Liability Insurance

Liability insurance is essential for Wisconsin businesses and professionals to protect against claims from third parties.

Commercial General Liability (CGL)

Standard CGL Coverages

Coverage A - Bodily Injury & Property Damage

Covers legal liability for:

• Bodily injury to third parties
• Property damage to third party property
• Defense costs (in addition to limits)
• Judgments and settlements

Trigger Options:

• Occurrence: Coverage triggered when injury occurs during policy period
• Claims-made: Coverage triggered when claim is made during policy period

Coverage B - Personal & Advertising Injury

Covers claims for:

• Libel and slander
• False arrest and detention
• Wrongful eviction
• Malicious prosecution
• Invasion of privacy
• Copyright infringement in advertising
• Misappropriation of advertising ideas

Coverage C - Medical Payments

CGL Policy Structure

Limits of Insurance

Common Exclusions

• Expected or intended injury
• Contractual liability (except insured contracts)
• Liquor liability
• Workers' compensation claims
• Pollution
• Aircraft, autos, and watercraft
• Professional services (requires separate coverage)

Exam Tip: CGL Coverage A uses either an occurrence or claims-made trigger. Know the difference for the exam. Occurrence policies cover injuries that occur during the policy period, regardless of when the claim is filed.

Professional Liability Insurance

Errors & Omissions (E&O) Coverage

Professional liability insurance is essential for Wisconsin professionals and service providers.

Who Needs Professional Liability

Coverage Features

Tail Coverage

When coverage ends, professionals may need:

• Extended Reporting Period (ERP): Allows reporting of claims for acts during policy
• Prior Acts Coverage: Covers acts before policy inception (retroactive date)

Products Liability Coverage

For Wisconsin Manufacturers and Sellers

Types of Product Defects

1. Design defects: Inherently dangerous design
2. Manufacturing defects: Error in production process
3. Warning defects: Inadequate warnings or instructions

Products/Completed Operations Coverage

• Included in CGL policies
• Separate aggregate limit
• Covers products after leaving control
• Covers completed work/operations

Exam Tip: Professional liability (E&O) typically uses claims-made coverage. This means the policy in effect when the claim is MADE provides coverage, not the policy in effect when the error occurred.

Umbrella and Excess Liability

Purpose

Umbrella and excess policies provide additional limits of liability above underlying policies.

Umbrella Liability

Excess Liability

Underlying Insurance Requirements

Umbrellas typically require:

• Commercial General Liability
• Auto Liability
• Employers Liability
• Specified minimum limits on each

When to Recommend Umbrella/Excess

• High net worth individuals
• Businesses with significant liability exposure
• Professionals with malpractice risk
• Companies with fleet vehicles
• Manufacturers with products liability risk

Wisconsin-Specific Liability Considerations

Comparative Negligence Impact

Wisconsin's modified comparative negligence affects liability claims:

• Damages reduced by plaintiff's fault percentage
• No recovery if plaintiff more than 50% at fault
• Joint and several liability rules apply

Statute of Limitations

Direct Action

Wisconsin allows direct action against liability insurers:

• Injured parties can sue insurer directly
• Include insurer as defendant
• Jury may be aware of insurance

Exam Tip: Umbrella policies provide both excess coverage AND may drop down to cover claims not covered by underlying policies (subject to a self-insured retention). Excess policies only follow the terms of the underlying policy.