Casualty Insurance Coverage and Claims
Liability coverage basics
Commercial general liability (CGL) covers bodily injury and property damage caused by an occurrence, plus personal and advertising injury. Know the difference between occurrence forms and claims-made forms: a claims-made policy responds when the claim is made and reported during the policy period or extended reporting period, while an occurrence policy responds to injury or damage that happens during the policy period, whenever the claim is later made. CGL limits are usually an each-occurrence limit, a general aggregate, a products-completed operations aggregate, and a personal and advertising injury limit. Defense costs are generally paid in addition to limits unless the policy is written with a self-insured retention or defense within limits.
Auto, workers' compensation, and UM/UIM
Business auto policies cover owned, hired, and non-owned autos; the "care, custody, and control" and "your work" exclusions often defeat CGL coverage for damaged customer property or faulty work. Workers' compensation provides statutory benefits and usually an exclusive remedy against the employer, while employer's liability covers tort suits outside the workers' compensation bar. Personal auto policies may include medical payments/PIP, uninsured motorist, and underinsured motorist coverage; Mississippi requires insurers to offer UM/UIM, and rejection must be documented.
Worked example
A contractor's CGL has a $1 million each-occurrence limit and a $2 million general aggregate. A homeowner is injured at a jobsite; the claim is worth $1.4 million. The insurer pays $1 million, and the contractor may face excess exposure. A second occurrence that year reduces the aggregate, so later claims can exhaust the policy.
Traps
- Missing a claims-made reporting deadline.
- Assuming CGL covers faulty work itself rather than resulting damage.
- Overlooking contractual liability or additional-insured endorsements.
- Applying the auto exclusion too broadly to non-owned autos.