10.1 CGL Coverage A: Bodily Injury and Property Damage Liability

The Coverage A Insuring Agreement

Coverage A of the Commercial General Liability (CGL) policy, written on ISO form CG 00 01 04 13 (occurrence) or CG 00 02 (claims-made), pays "those sums the insured becomes legally obligated to pay as damages because of bodily injury or property damage" to a third party. It is liability coverage to others — never first-party damage to the insured's own property.

Two defined terms control the grant. Bodily injury (BI) is bodily injury, sickness, or disease, including death that results. Property damage (PD) is physical injury to tangible property (including loss of use of that property) or loss of use of tangible property that is not physically injured. A classic trap: pure economic loss with no physical injury is generally not PD.

The Occurrence Trigger and Coverage Territory

Coverage A responds only when 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 must occur during the policy period and within the coverage territory (the U.S., its territories, Canada, and international waters/airspace in transit between them, plus a limited worldwide extension for products made or sold in the territory).

Because the standard form is occurrence-based, the trigger is when the injury happens, not when the claim is made. A 2026 claim for an injury that occurred during a 2024 policy is the 2024 policy's responsibility — a heavily tested distinction from claims-made coverage.

The Limit Structure (Worked Example)

The CGL limits are layered, and the exam loves to test how a single occurrence erodes multiple aggregates. A typical declarations page reads:

Worked numeric: A restaurant has a kitchen fire injuring two patrons. The insurer pays $600,000 to patron A and $700,000 to patron B — a combined $1,300,000 from one occurrence. Because the each-occurrence limit is $1,000,000, the insurer pays only $1,000,000 total; the remaining $300,000 is the insured's exposure. That $1,000,000 then reduces the $2,000,000 general aggregate to $1,000,000 of remaining capacity for the rest of the policy term.

The Occurrence Trigger and Coverage Territory

CGL Coverage A pays for bodily injury and property damage caused by an occurrence — defined as an accident, including continuous or repeated exposure to substantially the same harmful conditions. The injury or damage must happen in the coverage territory (the U.S., its territories, Canada, and, for products sold there or injuries from short trips abroad, worldwide on a limited basis) and during the policy period.

The duty to defend is broad: the insurer must defend any suit seeking covered damages, even if groundless, false, or fraudulent, and defense costs are paid in addition to the limits. The defense duty ends once the applicable limit is exhausted by payment of judgments or settlements.

Premises/Operations vs. Products/Completed Operations

Coverage A bundles two major exposure groups that the exam keeps distinct:

The Products-Completed Operations hazard has its own aggregate limit, separate from the general aggregate, because product claims can surface long after the sale. Matching a fact pattern to the right hazard tells you which aggregate applies.

Defense Costs and the Duty to Defend

Under Supplementary Payments, the insurer's defense costs are paid in addition to the limit of insurance — they do not erode the each-occurrence or aggregate limits. The duty to defend is broader than the duty to indemnify: the insurer must defend even a groundless, false, or fraudulent suit if any allegation could fall within coverage.

The defense obligation has a hard stop. The CGL states the insurer's right and duty to defend ends when the applicable limit of insurance has been exhausted by payment of judgments or settlements. So once the $1,000,000 occurrence limit (or the aggregate) is paid out, the insurer may withdraw from the defense.

Major Coverage A Exclusions

The broad grant is narrowed by exclusions tested on nearly every exam:

• Expected or intended injury (the 'a.' exclusion) — except reasonable force to protect persons or property.
• Contractual liability — except liability the insured would have without the contract, and liability assumed under an insured contract (lease, sidetrack agreement, easement, indemnification in a contract referencing your work).
• Pollution — the absolute pollution exclusion bars most environmental claims.
• Aircraft, auto, and watercraft — these belong on auto/aviation/marine policies.
• Damage to your product / your work / impaired property — the CGL is not a performance warranty (the 'business risk' exclusions, often diagrammed as exclusions j through n).
• Workers compensation / employer's liability — injury to employees in the course of employment is excluded; that belongs on the WC and employer's liability policy.