Commercial General Liability
Trigger and structure
The CGL is written on an occurrence basis (injury or damage occurring during the policy period, reported later) or a claims-made basis (claim first made during the policy, with a retroactive date and optional extended reporting period). It has three coverages: A - Bodily Injury and Property Damage, B - Personal and Advertising Injury, and C - Medical Payments (no-fault, short-term, typically excluding the insured and employees).
Limits
Learn the limit architecture: general aggregate (per policy period, applies to most Coverages A and B claims), products-completed operations aggregate, each occurrence limit, personal and advertising injury limit, damage to premises rented to you limit, and medical expense limit. Defense costs are usually outside the limits and paid as supplementary payments.
Key exclusions and concepts
Expect exclusions for expected or intended injury, contractual liability (except an insured contract), liquor liability, aircraft and watercraft, autos, workers' compensation and employer's liability, pollution, your product, your work (with the subcontractor exception), impaired property, and professional services. The products-completed operations hazard covers liability arising from the insured's products or completed work away from the premises.
Traps
- Coverage B covers offenses like libel, slander, and infringement of advertising ideas - not employment practices.
- The damage-to-premises-rented limit applies to fire damage to leased space.
- Additional insured status is granted by endorsement, not automatically.
Worked example: A painter's ladder falls and breaks a customer's window - Coverage A, property damage, general aggregate eroded by each occurrence payment; defense costs typically do not erode the limit.