Cognitive Reflection Test (CRT) Practice

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A U.S. manufacturer sells a product made in the United States. A customer is injured by that product while traveling in Spain and later files suit against the manufacturer in the United States. Which statement best describes the CGL coverage-territory issue?

The claim is automatically excluded because the injury occurred outside North America The claim can be covered only if the product was purchased in Spain The claim is covered only if the insured also owns property in Spain The claim may qualify under the worldwide products extension because the product was made or sold in the coverage territory and the suit is brought there

Correct Answer:

The claim may qualify under the worldwide products extension because the product was made or sold in the coverage territory and the suit is brought there

Explanation:

The standard CGL coverage territory is the United States, its territories and possessions, Puerto Rico, and Canada, but certain product-related injuries occurring elsewhere may qualify when the product was made or sold in the coverage territory and the suit is brought there, subject to the policy's other conditions and exclusions.

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