Casualty Insurance and Liability Coverage
Liability coverage triggers and limits
Casualty coverage responds to claims for bodily injury, property damage, personal injury, and advertising injury. Commercial general liability (CGL) policies are usually occurrence forms: the injury or damage must occur during the policy period, even if the claim is reported later. Claims-made forms require the claim to be made and reported during the policy period or an extended reporting period. CGL limits include each occurrence, general aggregate, products-completed operations aggregate, and personal and advertising injury limits. The aggregate caps total payments in the policy period. Exclusions typically bar intentional injury, expected damage, contractual liability (unless insured contract), pollution, and auto liability. Umbrella and excess policies sit above underlying limits and may drop down when an underlying policy is exhausted.
Worked example
A customer slips in a store in March and sues in November. The CGL is an occurrence policy in force in March with a $1,000,000 occurrence limit and $2,000,000 aggregate. The injury occurred during the policy period, so the March policy responds even though the suit came later. If the policy were claims-made, the claim would need to be reported within the current policy period or extended reporting period. Medical payments coverage might pay the customer’s medical bills without a liability finding, but it does not admit fault.
Traps
Do not confuse occurrence and claims-made triggers. Do not treat the aggregate as a per-claim limit. Do not assume an additional insured has the same limits as the named insured. Do not overlook exclusions for intentional acts.