11.3 Key CGL Exclusions and Endorsements

Reading the Exclusions in Coverage A

The CGL's Coverage A insuring agreement is broad, then narrowed by a lettered list of exclusions (a) through (q). The exam does not ask you to recite all of them - it tests the handful that decide real claims and the endorsements that add the coverage back. The recurring theme: the CGL is a third-party liability form, not a form that pays for the insured's own losses or its own faulty work.

Understand the purpose of each exclusion - what it is steering the buyer toward another policy - and you can reason through the questions even on unfamiliar fact patterns.

The Big-Ticket Exclusions

The "Your Work," "Your Product," and "Damage to Property" exclusions (j through n) are the most misunderstood. They exist because the CGL is not a performance bond or a warranty - it will not pay to redo the insured's defective work, only to pay for resulting damage to other property or persons.

Pollution Exclusion

The absolute pollution exclusion bars bodily injury and property damage arising from the discharge, dispersal, or release of pollutants - at the insured's premises, at a job site, or during transport. It is one of the broadest exclusions on the form.

Coverage is bought back narrowly through specialty forms: a CPL (Contractors Pollution Liability) or a site-specific environmental policy. Limited "hostile fire" and certain heating-equipment exceptions survive inside the CGL itself, but candidates should treat pollution as essentially excluded unless an endorsement says otherwise.

Contractual Liability and the Insured Contract

Exclusion (b) removes liability the insured assumes under a contract - then the definition of "insured contract" adds back the most common business hold-harmless agreements (leases of premises, easements, sidetrack agreements, and most contracts where the insured assumes another party's tort liability). This is why a tenant's promise to indemnify a landlord is usually still covered: it fits the insured-contract definition.

Exception: liability the insured would have had even without the contract (its own negligence) is never excluded - it is covered as ordinary liability, not as assumed liability.

Employer's Liability vs. the WC Line

Exclusion (e) bars bodily injury to the insured's own employees arising out of employment - that exposure belongs to Workers Compensation and Employers Liability (Part Two), not the CGL. The exam tests the boundary: an injured customer is a third party covered by the CGL, while an injured employee falls to the WC policy.

Watch the related cross-liability and "separation of insureds" wording. The CGL treats each insured separately for most purposes, but the employee exclusion still applies broadly, including consequential claims by an injured worker's spouse or family arising out of the same injury - those are excluded too, steering the entire chain of loss to the WC line.

Coverage B and Coverage C in Brief

The form has three insuring agreements. Coverage A is bodily injury and property damage. Coverage B - Personal and Advertising Injury responds to a defined list of offenses: false arrest, malicious prosecution, wrongful eviction, libel, slander, disparagement, copyright/slogan/title infringement in advertising, and use of another's advertising idea. It is not triggered by an "occurrence" - it triggers on the offense.

Coverage C - Medical Payments pays small no-fault medical bills regardless of liability, encouraging quick goodwill settlements before a claim becomes a Coverage A lawsuit. Each coverage has its own exclusions, and the exam frequently asks which insuring agreement a given fact pattern (a slander suit vs. a slip-and-fall) belongs under.

Common Endorsements That Modify the CGL

Endorsements are where the exam connects forms to real placements:

• Additional Insured (CG 20 10 / CG 20 37): Extends the named insured's coverage to a third party (often a landlord or project owner). CG 20 10 covers ongoing operations; CG 20 37 covers completed operations - both are frequently required together in construction contracts.
• Primary and Noncontributory (CG 20 01): Makes the named insured's CGL pay first, ahead of the additional insured's own coverage.
• Waiver of Subrogation (CG 24 04): The insurer gives up its right to recover against a named party, commonly required in leases and construction contracts.
• Designated/General Aggregate Per Project (CG 25 03): Gives each construction project its own General Aggregate, so one bad project does not exhaust limits for the others.