3.2 Casualty & Liability Insurance in Oregon
Key Takeaways
- Commercial General Liability (CGL) pays third-party bodily injury, property damage, and personal & advertising injury; it does NOT cover professional errors
- CGL is written on an occurrence trigger by default; the claims-made/ISO occurrence distinction is heavily tested
- Oregon workers' compensation is mandatory for any employer with one or more subject workers, with no waiting period or size threshold
- Oregon workers' comp pays temporary total disability at roughly two-thirds (66 2/3%) of the worker's average weekly wage, subject to a statutory maximum
- Workers' comp is the exclusive remedy against the employer, but injured workers may still sue negligent third parties
- Professional liability (E&O) is claims-made and turns on the retroactive date; insurance producers carry it for negligence claims
Commercial General Liability (CGL)
The Commercial General Liability (CGL) policy, built on standard Insurance Services Office (ISO) forms, is the foundation of business casualty insurance. It protects an insured business against claims brought by third parties — customers, visitors, and bystanders — not against the insured's own losses or its employees (those go to property and workers' comp).
The Three Coverage Parts
| Coverage | What It Pays | Example |
|---|---|---|
| Coverage A — Bodily Injury & Property Damage | Third-party injury or property damage the insured is legally liable for | A customer slips on a wet floor |
| Coverage B — Personal & Advertising Injury | Libel, slander, false arrest, copyright/slogan infringement in advertising | A competitor sues over an ad's wording |
| Coverage C — Medical Payments | Small no-fault medical bills regardless of liability (typically $5,000-$10,000) | A visitor's minor cut treated immediately |
Limit Structure
A standard CGL stacks several limits. An each-occurrence limit (commonly $1,000,000) caps a single loss. The general aggregate (commonly $2,000,000) caps total payments for the policy term. A separate products/completed operations aggregate ($2,000,000) applies to losses arising after the insured's product leaves its hands or a job is finished. Under standard ISO CGL forms, defense costs are paid in addition to the limits — a major contrast with E&O, where defense usually erodes the limit.
Exam Tip: CGL responds on an occurrence trigger — coverage attaches when the injury or damage happens during the policy period, even if the claim arrives years later. Do not confuse this with the claims-made trigger used by professional liability.
A Key Exclusion
CGL explicitly excludes professional services. A consulting firm's faulty advice, an agent's coverage error, or a contractor's design mistake is not a CGL loss — it requires a separate professional liability policy. This exclusion is one of the most tested distinctions on the casualty portion of the exam.
Oregon Workers' Compensation
Oregon imposes one of the strictest workers' compensation mandates in the country. Any employer with one or more subject workers must carry coverage, including part-time, seasonal, and brand-new hires. There is no size threshold and no waiting period — the obligation attaches the moment a subject worker begins. Workers are presumed "subject" unless they fall within a narrow list of statutory exemptions (such as certain sole proprietors, partners, and corporate officers who elect out).
Benefits Provided
| Benefit | What Oregon Provides |
|---|---|
| Medical treatment | All reasonable and necessary care, no dollar cap |
| Temporary total disability | About 66 2/3% (two-thirds) of average weekly wage, subject to a statutory maximum |
| Permanent disability | Scheduled/unscheduled awards based on impairment rating |
| Vocational rehabilitation | Retraining when the worker cannot return to the prior job |
| Death benefits | Payments to surviving spouse and dependents |
Coverage Sources and Administration
Employers may buy from a private insurer, from SAIF Corporation (Oregon's state-chartered nonprofit carrier serving tens of thousands of employers), or qualify as a self-insurer. The Workers' Compensation Division of the Department of Consumer and Business Services administers the system, and the Workers' Compensation Board hears disputes. Penalties for going uninsured begin at twice the unpaid premium or a $1,000 minimum, with daily fines and potential personal liability for owners.
Exam Tip: Workers' comp is the exclusive remedy against the employer — an injured worker generally cannot sue the employer in tort. The worker may still sue a negligent third party (such as an equipment manufacturer), and the insurer holds subrogation rights against that recovery.
Professional Liability (Errors & Omissions)
Errors & Omissions (E&O), a form of professional liability, covers negligence in the rendering of professional services — claims a CGL specifically excludes. It is essential for insurance producers, real estate agents, accountants, and consultants.
- Claims-made trigger: coverage applies only if the claim is first made during the policy period.
- Retroactive date: sets the earliest date a covered act may have occurred; acts before it are not covered.
- Extended reporting period ("tail"): lets a retiring or switching producer report later claims for past work.
- Defense costs typically erode the limit, unlike standard CGL.
Many insurers and contracts require Oregon producers to maintain E&O because of the fiduciary duty owed to clients and the litigation risk in placing complex coverage.
Occurrence vs. Claims-Made Side by Side
| Feature | Occurrence (CGL) | Claims-Made (E&O) |
|---|---|---|
| Trigger | Injury/damage happens during the term | Claim first made during the term |
| Late claims | Covered even if reported years later | Not covered unless a tail is bought |
| Retroactive date | Not used | Critical — earliest covered act |
| Defense costs | Usually outside the limit | Usually inside (erode) the limit |
Other Oregon Casualty Lines
The casualty portion of the exam reaches beyond CGL and workers' comp. Producers should recognize these adjacent coverages:
- Commercial auto — applies the same Oregon mandatory coverages (liability, PIP, UM/UIM) to business-owned vehicles, plus hired and non-owned auto endorsements for employee driving.
- Umbrella / excess liability — sits above CGL, commercial auto, and employers liability, adding $1 million or more once the underlying limit is exhausted; it also fills some primary gaps subject to a self-insured retention.
- Employment Practices Liability Insurance (EPLI) — covers wrongful termination, discrimination, harassment, and retaliation claims by employees; these are not injuries and fall outside both CGL and workers' comp.
- Liquor liability and product liability — respond to dram-shop and defective-product claims that the CGL liquor and product exclusions may otherwise bar.
Employers Liability vs. Workers' Comp
Workers' comp (sometimes called Part One) pays statutory benefits regardless of fault. Employers liability (Part Two) responds to the rarer situations where a worker or family member sues outside the comp system — for example, third-party-over actions or consequential bodily injury. Knowing that comp is no-fault and exclusive while employers liability backstops suits is a frequently tested pairing.
Exam Tip: Match the loss to the right policy. Employee injury → workers' comp. Employee lawsuit alleging wrongful firing → EPLI. Customer injury → CGL. Agent's coverage error → E&O. The exam rewards quick, correct routing of a scenario to its line of business.
How many subject workers must an Oregon employer have before workers' compensation coverage is required?
Approximately what share of wages does Oregon workers' compensation pay for temporary total disability?
What does the 'exclusive remedy' doctrine mean in Oregon workers' compensation?
Which coverage is written on a claims-made trigger and turns on a retroactive date?
Which loss is NOT covered by a standard Commercial General Liability (CGL) policy?