1. Lastovica Construction is insured under a commercial general liability (CGL) policy. The firm agreed to build a new manufacturing facility for the Jones Corporation. A heavy machine used by Lastovica Construction accidentally fell from the roof of a partially completed building. Brian, an employee of the construction firm, was severely injured when the falling machine crushed his foot. Heather, a pedestrian, was also injured by the machine while she was walking on a public sidewalk in front of the building.
a. Heather sued both Lastovica Construction and the Jones Corporation for her injury. Indicate the extent, if any, of the CGL insurer’s obligation to provide a legal defense for Lastovica Construction.
b. What legal defense could the Jones Corpora- tion use to counter Heather’s claim based on the nature of its relationship with Lastovica Con- struction? Explain your answer.
c. Does Lastovica Construction have any responsibility for Brian’s medical expenses and lost wages? Explain.
2. Helen is director of research for a pharmaceutical company. The company recently introduced a new drug to reduce the symptoms of arthritis. The com- pany is insured under a claims-made CGL policy. The policy term was January 1, 2015, through December 31, 2015. On December 15, 2015, a patient of a physician that prescribed the drug became seriously ill after taking the prescribed dos- age. On February 1, 2016, the patient filed a claim against the company for the illness. Helen had no prior notice that the patient had become ill. Explain whether the.