10.1 CGL Coverage A: Bodily Injury and Property Damage Liability
Key Takeaways
- CGL Coverage A (ISO CG 00 01, occurrence form) pays damages for bodily injury and property damage caused by an occurrence during the policy period within the coverage territory.
- Occurrence triggers on the DATE OF INJURY, not the date the claim is reported — that is what distinguishes the occurrence form from the CG 00 02 claims-made form.
- Property damage = physical injury to tangible property (with resulting loss of use) OR loss of use of undamaged tangible property; electronic data and pure economic loss are excluded.
- Coverage A contains two hazards: Premises-Operations (erodes General Aggregate) and Products-Completed Operations (erodes a SEPARATE PCOH Aggregate).
- The separate PCOH aggregate prevents finished-work and product claims from exhausting the General Aggregate.
Coverage A: The Core Liability Grant
The Commercial General Liability (CGL) policy is built on the ISO CG 00 01 Coverage Form, with the CG 00 02 form serving the claims-made alternative. The far more common CG 00 01 is an occurrence form. Coverage A is the heart of the policy: it pays sums the insured becomes legally obligated to pay as damages because of bodily injury (BI) or property damage (PD) to which the insurance applies, and it gives the insurer the right and duty to defend the insured against any suit seeking those damages.
What Triggers Coverage A
Three elements must align for Coverage A to respond:
- The BI or PD must be caused by an occurrence — defined as an accident, including continuous or repeated exposure to substantially the same general harmful conditions.
- The injury or damage must take place in the coverage territory (the US, its territories, Canada, and international waters/airspace in transit).
- The injury or damage must occur during the policy period.
Because CG 00 01 is occurrence-based, the date of injury triggers coverage, not the date the claim is reported. A policy in force in 2024 responds to an injury that occurred in 2024 even if the lawsuit is filed in 2027.
Bodily Injury vs. Property Damage
Bodily injury means bodily injury, sickness, or disease sustained by a person, including death resulting from any of these at any time.
Property damage has two prongs that the exam tests heavily:
- Physical injury to tangible property, including all resulting loss of use of that property; and
- Loss of use of tangible property that is not physically injured (e.g., the insured's excavation blocks access to a neighbor's undamaged store, shutting it down).
The key trap: electronic data is not tangible property, so corrupted data alone is not PD. Likewise, purely economic loss without physical injury or loss of use is not PD.
The Two Hazards Inside Coverage A
Coverage A bundles two related exposures, both subject to the Each Occurrence Limit:
| Hazard | When It Applies | Limit Affected |
|---|---|---|
| Premises-Operations | Injury/damage during ongoing operations or on the insured's premises | General Aggregate |
| Products-Completed Operations | Injury/damage after work is completed and put to intended use, or from the insured's product | Products-Completed Operations Aggregate (separate) |
The Products-Completed Operations Hazard (PCOH) has its own separate aggregate so that product/finished-work claims do not erode the General Aggregate. This separation is a top exam point.
Worked Example: Aggregate Erosion
A contractor carries CGL limits of $1,000,000 Each Occurrence / $2,000,000 General Aggregate / $2,000,000 Products-Completed Operations Aggregate.
During the year, premises-operations claims pay out $1,200,000. A later completed-operations claim (a roof finished last spring leaks in autumn) pays $900,000.
- The $1,200,000 in premises losses erodes the General Aggregate ($2M − $1.2M = $800,000 remaining).
- The $900,000 roof loss is a completed-operations claim, so it erodes the separate PCOH Aggregate ($2M − $900K = $1.1M remaining) — not the General Aggregate.
Result: the contractor still has $800,000 of General Aggregate and $1.1M of PCOH capacity. Without the separate aggregate, a single year of large product claims could exhaust all liability protection.
A contractor completes a deck in May. In September, a railing the contractor installed collapses and injures a guest. Which hazard within Coverage A responds, and which aggregate does the claim erode?
Which loss best illustrates 'property damage' under CGL Coverage A?
The Two Hazards Inside Coverage A and the Defense Promise
CGL Coverage A insures bodily injury and property damage the insured becomes legally obligated to pay, caused by an occurrence (an accident, including continuous or repeated exposure to substantially the same harmful conditions) in the coverage territory during the policy period. Coverage A actually bundles two distinct loss hazards the exam separates:
| Hazard | Triggered by | Aggregate that applies |
|---|---|---|
| Premises & Operations | Injuries at the insured's location or from ongoing work | General Aggregate |
| Products & Completed Operations | Harm from the insured's product or finished work, after it leaves the premises | Products-Completed Operations Aggregate (separate) |
Critical point: the insurer's duty to defend is broader than the duty to pay: it must defend any suit that potentially falls within coverage, even if groundless or fraudulent, and defense costs are paid in addition to the limits. The duty to defend ends once the applicable limit is exhausted by judgments or settlements — after which the insured funds its own defense. This is why eroding aggregates matter even for defense.
"Occurrence," Coverage Territory, and the Trigger in Practice
Coverage A responds only to BI or PD caused by an occurrence, defined as "an accident, including continuous or repeated exposure to substantially the same general harmful conditions." This wording is deliberate: it brings in gradual harm (a slow chemical exposure injuring a neighbor over months) while the expected-or-intended exclusion keeps out deliberate harm.
The injury or damage must take place in the coverage territory — the United States, its territories and possessions, Canada, international waters/airspace between those places, and, for products and certain internet/short-trip activities, anywhere in the world as long as the suit is brought in the coverage territory.
Worked trigger example: A contractor's defective waterproofing lets water seep into a client's wall over six months, rotting the framing. This is a covered occurrence (continuous exposure) causing property damage to other property. But the cost to rip out and redo the defective waterproofing itself is excluded as "your work" — the business-risk doctrine. The exam loves this split: the resulting damage to other property is covered; the cost to fix the insured's own faulty work is not.
Remember the order of analysis on any Coverage A question: confirm an occurrence, confirm BI or PD within the defined territory and period, then run the exclusions, then check the limits (each-occurrence capped, and reduced by an eroding aggregate).