Common changes made by surplus line companies to general liability forms typically include?

The emphasis on punitive damage exclusion and defense inside the limit highlights the typical adjustments that surplus line companies may incorporate into general liability policy forms. Surplus line insurers often provide coverage for high-risk exposures that are not adequately addressed by standard insurance products. Consequently, they may exclude coverage for punitive damages, which are intended to punish the insured rather than compensate for losses. This exclusion can protect the insurer from potentially hefty payouts that are difficult to estimate and reserve for.

Additionally, the inclusion of defense costs within the limit of liability is a significant change that surplus line companies might implement. This means that any legal defense costs incurred will diminish the overall coverage available for claims. By including defense costs within the limit, the surplus lines insurance can manage risk and overall exposure, aligning with their business model of taking on riskier insurance scenarios.

The other answer choices provide types of changes that may occur in various forms of insurance, but they do not reflect the common adjustments specific to surplus lines companies dealing with general liability forms. For example, lifetime coverage and broader definitions may enhance a policy but are less characteristic of surplus lines, which often aim for clarity in exclusions. Similarly, higher aggregate limits and extended reporting periods can be useful but do not specifically capture the quintessential modifications made by surplus lines