CGL Coverage A: Bodily Injury and Property Damage Liability

Coverage A: The Core Liability Promise

Coverage A of the Commercial General Liability (CGL) policy is the insuring agreement that pays sums an insured becomes legally obligated to pay as damages because of bodily injury (BI) or property damage (PD). The standard form is the Insurance Services Office (ISO) CG 00 01, the occurrence version most commonly sold today.

The insurer also has the right and duty to defend the insured against any suit seeking those damages, even if the allegations are groundless or fraudulent. This defense duty is broader than the duty to pay.

What Triggers Coverage

Coverage A applies only if the BI or PD is 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 and during the policy period.

Bodily injury means physical harm, sickness, or disease, including resulting death. Property damage means physical injury to tangible property (including loss of use) or loss of use of property that is not physically injured.

Occurrence vs. Claims-Made Trigger

The CG 00 01 is an occurrence form: coverage attaches based on when the BI or PD happens, regardless of when the claim is reported. A loss in 2026 reported in 2029 is covered by the 2026 policy.

The CG 00 02 is a claims-made form: coverage attaches when the claim is first made during the policy period (or extended reporting period), provided the injury occurred on or after the retroactive date. Claims-made forms add concepts not found in occurrence forms.

Key claims-made-only features the exam tests:

• Retroactive date — the earliest date an injury can occur and still be covered. Injury before this date is excluded.
• Extended Reporting Period (ERP) — "tail" coverage allowing late-reported claims after the policy ends. A Basic ERP is automatic; a Supplemental ERP must be purchased and lasts indefinitely for known events.
• Trigger — the claim date, not the injury date, governs which policy responds.

The Three Coverage A Limits

The CGL declarations list three limits relevant to Coverage A:

The General Aggregate resets each policy period. Once exhausted, no further Coverage A or B payments are made even if the Each Occurrence limit remains.

Worked Limits Example

A contractor carries: Each Occurrence $1,000,000; General Aggregate $2,000,000; Products-Completed Operations Aggregate $2,000,000.

• A customer is injured in a slip-and-fall: a $1,300,000 judgment is rendered. The insurer pays only $1,000,000 (the Each Occurrence cap); the insured owes the $300,000 excess.
• That $1,000,000 also erodes the $2,000,000 General Aggregate, leaving $1,000,000 of premises/operations capacity for the rest of the period.
• Defense costs of $150,000 are paid outside the limits, so the aggregate is unaffected by defense.

Coverage A Trigger, "Occurrence," and Exam Traps

Coverage A of the ISO Commercial General Liability form (CG 00 01) pays sums the insured becomes legally obligated to pay as damages for bodily injury (BI) or property damage (PD) caused by an occurrence in the coverage territory during the policy period. An "occurrence" is an accident, including continuous or repeated exposure to harmful conditions; expected or intended injury is excluded.

The exam stresses the difference between Coverage A's two key dates: the BI/PD must take place during the policy period (the occurrence trigger), and the insurer's duty to defend continues until the limits are exhausted by payment of judgments or settlements.

Worked scenario: A contractor's faulty roof installation leaks slowly for three years, damaging a building's interior across two policy periods. The "continuous or repeated exposure" language means each policy in force during the damage may be triggered, and limits from multiple years could apply — a classic long-tail occurrence problem. Contrast a one-time crane collapse, which is a single occurrence triggering only the policy in force that day. The "your work" / "your product" exclusions then determine whether the damage to the contractor's own completed work is covered (generally not) versus damage to other property (covered).

"Your Work / Your Product" Exclusions and Worked Outcomes

Coverage A's most tested exclusions are the business-risk exclusions: damage to your product, damage to your work, damage to impaired property, and the contractual liability exclusion. The CGL is not a performance guarantee — it will not pay to repair or replace the insured's own defective product or faulty workmanship, because that is a business risk, not an insurable accident. It will pay when the defect causes injury or damages other property.

Worked scenario: A contractor installs a defective water heater that bursts, ruining a homeowner's hardwood floors. The CGL excludes replacing the contractor's own defective heater ("your product"/"your work") but pays for the floor damage to the customer's other property. If instead the only "damage" is that the heater simply doesn't heat, there is no covered occurrence at all — pure economic disappointment is not BI or PD. This product-vs-resulting-damage line is one of the most frequently tested CGL distinctions.