Key Takeaways
- Coverage A protects against claims for BODILY INJURY (physical harm, sickness, disease, death) and PROPERTY DAMAGE (physical damage to tangible property or loss of use).
- There are TWO coverage triggers under Coverage A: PREMISES-OPERATIONS (injuries at your location or from your work) and PRODUCTS-COMPLETED OPERATIONS (injuries after work is done or from products).
- The policy pays for DAMAGES the insured is legally obligated to pay—this includes compensatory damages but typically EXCLUDES punitive damages.
- BODILY INJURY must be caused by an OCCURRENCE—an accident including continuous or repeated exposure to conditions.
- Coverage A has its own AGGREGATE LIMIT for Products-Completed Operations, separate from the General Aggregate that applies to other Coverage A claims.
Coverage A: Bodily Injury and Property Damage
What Coverage A Provides
Coverage A is the core liability coverage in a CGL policy. It covers sums the insured becomes legally obligated to pay as damages because of:
- Bodily Injury (BI): Physical injury, sickness, disease, or death
- Property Damage (PD): Physical injury to tangible property or loss of use of tangible property
Key Definitions
Bodily Injury
| Term | Definition |
|---|---|
| Bodily Injury | Physical harm, sickness, disease, or death of a person |
| Includes | Mental anguish or emotional distress IF resulting from physical injury |
| Does NOT Include | Purely emotional distress without physical injury |
Property Damage
| Type | Definition | Example |
|---|---|---|
| Physical Injury | Actual damage to tangible property | Customer's car dented in your parking lot |
| Loss of Use | Inability to use property that is NOT damaged | Construction blocking access to business |
Key Point: "Loss of use" can occur even if there is no physical damage—just inability to use property.
Two Coverage Triggers
1. Premises-Operations Liability
Covers bodily injury or property damage arising from:
- Ownership, maintenance, or use of premises
- Operations (business activities) away from premises
| Scenario | Covered? |
|---|---|
| Customer slips on wet floor in store | ✓ Yes |
| Contractor injures pedestrian while working at job site | ✓ Yes |
| Employee injures customer during service | ✓ Yes |
| Fire spreads from your building to neighbor's | ✓ Yes |
2. Products-Completed Operations Liability
Covers bodily injury or property damage arising from:
- Products: Goods or products manufactured, sold, or distributed by insured
- Completed Operations: Work that has been completed or abandoned
| Term | When Coverage Applies |
|---|---|
| Products | After product has left insured's possession |
| Completed Operations | After work is completed at the site |
Completed Operations Location: The coverage applies to injuries occurring AWAY from premises you own or rent.
Products vs. Completed Operations
| Type | Examples |
|---|---|
| Products Liability | Defective product causes injury to consumer |
| Completed Operations | Roof installed 6 months ago leaks and causes injury |
The Occurrence Requirement
Coverage A only applies to bodily injury or property damage caused by an occurrence.
Occurrence Definition: An accident, including continuous or repeated exposure to substantially the same general harmful conditions.
| Scenario | Occurrence? |
|---|---|
| Customer trips on unmarked step | ✓ Yes - accident |
| Repeated exposure to toxic fumes | ✓ Yes - continuous exposure |
| Intentional punch by employee | ✗ No - not an accident |
| Expected or intended injury | ✗ No - excluded |
Damages Covered
Coverage A pays damages the insured is legally obligated to pay:
| Type | Covered? |
|---|---|
| Compensatory Damages | ✓ Yes |
| General Damages | ✓ Yes (pain, suffering) |
| Special Damages | ✓ Yes (medical bills, lost wages) |
| Punitive Damages | Varies by state (often excluded) |
| Fines and Penalties | ✗ No |
| Criminal Prosecution | ✗ No |
The Insuring Agreement
The policy will:
- Pay those sums that the insured becomes legally obligated to pay as damages
- Defend the insured against any suit seeking those damages
Conditions for Coverage
All of these must be met:
- Bodily injury or property damage must be caused by an occurrence
- Injury or damage must occur during the policy period
- Injury or damage must occur in the coverage territory
- Prior to the policy period, no insured knew injury had occurred
Common Coverage A Claims
| Industry | Common Claims |
|---|---|
| Retail | Slip and fall, falling merchandise |
| Restaurant | Burns, slips, food poisoning |
| Contractor | Property damage at job site, falling objects |
| Manufacturing | Product defects, equipment injuries |
| Professional Services | Client injury at office |
Coverage Territory
Coverage A applies to injuries occurring in:
- United States (including territories and possessions)
- Puerto Rico
- Canada
- International waters or airspace (between US/Canada)
- Worldwide (for products made in US/Canada)
- Worldwide (for business travel of persons whose home is in US/Canada)
A contractor completes a roofing job in January. In June, the roof leaks during a storm, causing water damage to the homeowner's furniture. This claim falls under which CGL coverage?
Under Coverage A, which of the following would be considered "property damage"?
Which of the following is required for Coverage A to apply?
8.3 Coverage B: Personal and Advertising Injury
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