General Liability Insurance
General liability covers third-party bodily injury, property damage, and personal and advertising injury arising from premises, operations, and products. The exam tests the CGL occurrence form's structure, its major exclusions and their exceptions, and the line between general liability, professional liability, and umbrella coverage.
Coverage parts of the CGL
- Coverage A: bodily injury and property damage liability.
- Coverage B: personal and advertising injury - libel, slander, wrongful eviction, and infringement of copyright or trade dress in an advertisement.
- Coverage C: medical payments to others, paid without a fault determination, under a small sublimit.
- Supplementary payments cover defense and related costs outside the limit.
Limit structure
- The per-occurrence limit applies to Coverage A; personal and advertising injury carries its own limit, usually equal to the per-occurrence amount.
- The general aggregate covers all claims except products-completed operations, which has a separate aggregate.
Exclusions that drive exam questions
- Damage to property owned, rented, or occupied by the insured, and the care, custody, or control exposure.
- Damage to the insured's product or work, including repair, replacement, and recall costs.
- Employer's liability, auto liability, pollution (with limited exceptions), and liability assumed under contract.
- Expected or intended injury from the standpoint of the insured.
Worked example
A furniture maker ships 400 chairs assembled with defective glue. When the chairs collapse, customers' hardwood floors are scratched and the chairs themselves must be replaced. The floor damage is damage to other property and is covered under the products-completed operations aggregate; replacement of the chairs is damage to the insured's product and is excluded. Defense costs are typically paid in addition to the limit under the standard form.
Traps that cost marks
- Applying one per-occurrence limit to each claimant rather than to the occurrence.
- Confusing the products-completed operations aggregate with the general aggregate.
- Missing the professional-services exclusion - design errors and advice belong in errors and omissions coverage, not the CGL.
- Assuming the CGL covers employee injuries; that is workers' compensation and employers liability territory.