16.1 CGL Coverage A — Bodily Injury and Property Damage
Key Takeaways
- The ISO occurrence CGL (CG 00 01) pays sums the insured is legally obligated to pay because of bodily injury or property damage caused by an occurrence in the coverage territory during the policy period, and it includes a duty to defend qualifying suits.
- An occurrence is an accident, including continuous or repeated exposure to substantially the same general harmful conditions—not an intended injury and not merely the filing of a lawsuit.
- Premises and operations and products-completed operations are both Coverage A; they use different aggregate limits, not different insuring agreements.
- Who Is an Insured includes the named insured, employees acting in the scope of employment, volunteer workers performing business duties, and newly acquired organizations for a limited period, typically 90 days.
- Coverage A exclusions carve out expected or intended injury, most contractual liability except insured contracts, liquor if the insured is in that business, workers compensation, pollution, auto/aircraft/watercraft, the insured’s own product and work, impaired property, and recall.
16.1 CGL Coverage A — Bodily Injury and Property Damage
Quick Answer: The standard ISO Commercial General Liability (CGL) form is the occurrence form CG 00 01 (the claims-made sibling is CG 00 02). Coverage A pays damages the insured is legally obligated to pay because of bodily injury (BI) or property damage (PD) caused by an occurrence in the coverage territory during the policy period. The insurer has a duty to defend suits seeking those damages. A shopper who slips in the aisle is premises and operations. A jar of salsa that injures a customer at home after sale is products-completed operations. Both are Coverage A. Exclusions—expected or intended injury, liquor-in-that-business, workers compensation, pollution, auto, damage to your product or your work, impaired property, recall—then decide whether the grant actually pays.
The Coverage A insuring agreement
Coverage A is not “we pay whoever got hurt.” It is a stack of gates:
| Gate | What the form is asking |
|---|---|
| Legal obligation | Damages the insured must pay as damages—typically because of tort liability or liability assumed in an insured contract, not a voluntary goodwill check |
| Bodily injury | Bodily injury, sickness, or disease sustained by a person, including death resulting from any of these at any time |
| Property damage | Physical injury to tangible property, including resulting loss of use, or loss of use of tangible property that is not physically injured |
| Occurrence | An accident, including continuous or repeated exposure to substantially the same general harmful conditions |
| Coverage territory | The United States (including territories and possessions), Puerto Rico, and Canada, plus limited worldwide products and short business-travel grants if responsibility is determined in a suit in that territory or a settlement the insurer agrees to |
| Policy period | On CG 00 01, the BI or PD occurs during the policy period. When the complaint is filed is not the trigger |
| Duty to defend | The insurer has the right and duty to defend the insured against a suit seeking those damages, even if the suit is groundless, false, or fraudulent. There is no duty to defend a suit to which the insurance does not apply. Defense generally sits in supplementary payments, in addition to limits, until the applicable limit is exhausted by judgments or settlements |
Occurrence is the exam word students flatten into “something happened.” A leaning display that was stacked badly over three weeks and finally falls on a shopper is still an occurrence: continuous or repeated exposure to the same harmful condition. A manager who intends to injure a restrained shoplifter is not looking at an accident. A recall of unsold units with no BI and no damage to other property is not Coverage A PD. A lawsuit is a claim vehicle. It is not, by itself, the occurrence.
On the occurrence form, a child who is injured by a toy in 2024 and whose parents sue in 2026 is a 2024 CGL problem if 2024 was when the BI occurred. The 2026 insurer does not inherit that injury just because the complaint arrived on its watch. That is the point of CG 00 01 and the reason CG 00 02 (claims-made) is a different product—section 16.3.
Premises and operations versus products-completed operations
Coverage A is one insuring agreement. The form then splits how the injury happens because two aggregates (section 16.3) track two hazards:
- Premises and operations — BI or PD arising from the insured’s premises or from ongoing work. The wet produce aisle, the contractor still on the roof, the customer who trips over a pallet during business hours.
- Products-completed operations (PCO) — BI or PD that occurs away from premises the insured owns or rents and that arises out of your product or your work, after the product has been relinquished or the work is complete (or abandoned). Work is treated as complete when the contract work is done, when work at that job site is done, or when that portion has been put to its intended use—even if service or repair might still be needed.
Your product is goods or products, other than real property, that the named insured (or a business the named insured acquired) manufactured, sold, handled, distributed, or disposed of, including containers and parts furnished with them, plus related warranties. Your work is work or operations performed by the named insured or on the named insured’s behalf, plus materials furnished in connection with that work, plus warranties.
A product still sitting in the insured’s warehouse that injures a visiting buyer is usually still premises. That same product, sold and in a customer’s kitchen, is PCO. A GC whose unfinished stairwell collapses under a building inspector is ongoing operations. The same stairwell, accepted and in use, that fails a year later is completed operations.
Who is an insured
Section II — Who Is an Insured is not “anyone the named insured feels responsible for.”
| Person or organization | Typical CGL status |
|---|---|
| Named insured | As shown on the declarations. Entity type matters: individual and spouse as to that business; partnership or joint venture and partners/members; LLC and members/managers as to the business; corporation and executive officers and directors as to their duties, plus stockholders as to stockholder liability |
| Employees | Insureds for acts within the scope of employment or while performing duties related to the business. ISO employee includes a leased worker and does not include a temporary worker |
| Volunteer workers | Insureds while performing duties related to the conduct of the named insured’s business |
| Newly acquired or formed organizations | Automatic insured status for organizations other than a partnership, joint venture, or LLC, typically until the 90th day after acquisition or formation or the end of the policy period, whichever is earlier. No Coverage A for BI/PD that occurred before the insured acquired or formed the organization |
| Real estate manager | A person or organization acting as the named insured’s real estate manager |
Employees and volunteers are not insureds for BI or PD to the named insured, to partners or LLC members, or (in the fellow-employee rule) to a co-employee while in the course of employment. A stock clerk who knocks a shopper down is usually an insured. A stock clerk who injures a coworker is a workers compensation / employer’s liability problem, not a CGL gift to the coworker’s lawsuit against the employee.
Coverage A exclusions the exam actually uses
The insuring agreement is broad. The exclusions are the job.
| Exclusion | Workplace meaning | Classic exception or sibling policy |
|---|---|---|
| Expected or intended injury | The insured expected or intended the injury | Reasonable force to protect persons or property |
| Contractual liability | Liability the insured has only because of a contract | Liability the insured would have anyway in tort, and liability assumed in an insured contract (lease of premises, sidetrack, easement, municipal indemnity, elevator maintenance, and assumption of another’s tort liability to a third person) if the BI/PD occurs after the contract is executed |
| Liquor liability | Applies if the insured is in the business of manufacturing, distributing, selling, serving, or furnishing alcoholic beverages | Host liquor—an accounting firm’s holiday wine, a retailer that is not in the liquor business—typically remains a Coverage A analysis. A bar’s overserve is a liquor-liability policy |
| Workers compensation and employer’s liability | Employee injury arising out of employment | A WC/EL policy, not an endorsement on the CGL |
| Pollution | Very broad: irritants and contaminants released into land, air, or water | Narrow exceptions (often taught: certain hostile fire, certain building heating-equipment fumes). A process spill is the classic no |
| Aircraft, auto, or watercraft | Registered/road autos, aircraft, most watercraft | Mobile equipment in ordinary use; customer autos parked on the insured’s premises (valet BI/PD to others, not damage to the customer’s auto in care, custody, or control); certain small non-owned watercraft ashore or under a length/charge test |
| Mobile equipment (limited) | Transportation of mobile equipment by auto, or racing | A forklift stocking a warehouse aisle is usually CGL mobile equipment. The company pickup on the highway is commercial auto |
| Damage to property | Property the insured owns, rents, or occupies; premises sold; property loaned; personal property in care, custody, or control; that particular part of real property being worked on | |
| Damage to your product | The product itself that failed | Resulting damage to other property can still be PCO |
| Damage to your work | The insured’s own completed work that failed | Work performed on the insured’s behalf by a subcontractor is a common exception |
| Impaired property | Other property that cannot be used because it incorporates the insured’s defective product or work, and that can be restored by repair or replacement of that product or work | Pure economic loss, not physical injury to other property |
| Recall of products, work, or impaired property | Withdrawal, inspection, repair, or loss of use because of a known or suspected defect | Sistership—the cost of the campaign, not the third-party BI/PD already caused |
Electronic data and certain recording/distribution-of-material (TCPA, CAN-SPAM, FCRA-type) exclusions also sit on modern CGL forms. They are why cyber and media are not “just Coverage B.”
Worked scenario: wet floor versus salsa jar
Facts. Harbor Grocers is the named insured on an unendorsed CG 00 01. During the policy period:
- A shopper slips on melted ice in the produce aisle, breaks a wrist, and sues Harbor for premises negligence.
- A customer who bought Harbor’s private-label salsa last month is injured at home by a glass fragment in the jar and sues Harbor as manufacturer/seller.
Slip-and-fall. This is bodily injury caused by an occurrence (the fall) in the coverage territory during the policy period. The insured is legally obligated if Harbor was negligent. It is premises and operations, not PCO: the injury happened on Harbor’s premises because of ongoing operations. Coverage A can defend and indemnify. Coverage C Medical Payments (section 16.2) may also offer a small no-fault medical grant for the same accident. The payment hits the general aggregate, not the PCO aggregate.
Salsa jar. The BI happens away from Harbor’s premises after the product was sold and relinquished. That is the products-completed operations hazard. Still Coverage A. Still an occurrence form looking at when the injury happened. Coverage C does not apply—medical payments exclude PCO. Damage to the jar itself is your product; the customer’s injury is not. If the fragment also chips a countertop, that PD to other property is PCO PD. If Harbor then recalls remaining jars, the recall cost is excluded.
Same policy, same Coverage A, two hazards, two aggregate buckets. Assignment 2’s BPP never enters: nobody’s building burned. The CSR who files the salsa claim as “shopkeepers’ premises” has mis-classified the hazard, not merely picked the wrong deductible.
Exam traps in this section
- CG 00 01 is occurrence; CG 00 02 is claims-made. Most CGL the exam hands you is occurrence unless the stem says otherwise.
- PCO is still Coverage A. It is not a secret Coverage D.
- Duty to defend is broader than duty to pay, and it ends when the limit is exhausted by judgments or settlements.
- Employee hurt at work is WC/EL, even if the workplace is the CGL premises.
- The product that fails is not the covered property damage; the other property and the person can be.
- A hold-harmless is not automatically uncovered—ask whether it is an insured contract and whether the insured would have been liable anyway.
Section 16.2 adds personal and advertising injury, medical payments, and supplementary payments. Section 16.3 splits occurrence versus claims-made, walks the limits, and treats additional insureds.
Harbor Grocers has an unendorsed ISO occurrence CGL (CG 00 01). During the policy period a shopper slips on a wet produce-aisle floor and breaks a wrist, and a customer is injured at home by glass in a jar of Harbor’s private-label salsa that was sold the previous month. How should Coverage A classify those two losses?
Which fact pattern best fits the ISO CGL definition of an occurrence for Coverage A?
A tavern that sells alcohol has an unendorsed CGL. A patron is overserved and injures a pedestrian outside. Separately, an accounting firm that is not in the liquor business hosts a holiday party, serves wine, and a guest later causes a car accident. Which statement is most accurate?
A toaster manufacturer has an unendorsed occurrence CGL. A toaster sold last year catches fire in a customer’s kitchen this year during the policy period, destroying kitchen cabinets and the toaster. The customer sues. Which statement is most accurate?