CGL Coverage A: Bodily Injury & Property Damage

The Commercial General Liability Policy

The Commercial General Liability (CGL) policy is the foundation of a business's liability protection. It is organized into three insuring agreements, Coverage A (bodily injury and property damage), Coverage B (personal and advertising injury), and Coverage C (medical payments), plus supplementary payments. This section covers Coverage A, the core grant.

Coverage A Insuring Agreement

Coverage A pays sums the insured becomes legally obligated to pay as damages because of bodily injury or property damage to which the insurance applies, caused by an occurrence within the coverage territory during the policy period, and it provides a defense. The standard CGL is an occurrence form, so it responds when the injury or damage takes place during the policy period regardless of when the claim is made. An occurrence is defined as an accident, including continuous or repeated exposure to substantially the same harmful conditions.

The Three Exposures Coverage A Addresses

Coverage A protects against the main business liability exposures: premises and operations (a customer injured on the premises or by ongoing work), products (injury from a product the business made or sold), and completed operations (injury after work is finished and the insured has left the job site). Products and completed operations together form the products-completed operations hazard, which has its own aggregate limit. The exam tests whether a loss arises from ongoing operations or from a completed product or job, because the limits and sometimes the coverage differ.

Defense and Supplementary Payments

The insurer's duty to defend is broad: it must defend any suit seeking covered damages even if groundless, false, or fraudulent, and defense costs are paid in addition to the limits (not eroding them, unlike some claims-made professional forms). The duty to defend ends when the applicable limit is exhausted by payment of judgments or settlements. Supplementary payments, also outside the limits, include the cost of bonds, reasonable expenses the insured incurs at the insurer's request, prejudgment interest, and post-judgment interest.

Bodily Injury and Property Damage Defined

As in the liability-concepts chapter, bodily injury means physical injury, sickness, or disease (including death), and property damage means physical injury to tangible property or loss of its use. The occurrence requirement means Coverage A responds to accidental harm, not intended or expected injury, which is excluded.

When the exam presents a CGL Coverage A scenario, confirm there is bodily injury or property damage, that it arises from an occurrence (accident) during the policy period and territory, and that no exclusion applies, then recognize that defense and supplementary payments come on top of the limits. This structured read, occurrence trigger, BI/PD harm, premises/products/completed-operations exposure, defense outside the limits, is the framework for every Coverage A question, and it sets up the limits, triggers, and exclusions tested in the next CGL section.

Structuring a Coverage A Analysis

CGL Coverage A is an occurrence form paying damages for bodily injury and property damage caused by an occurrence (an accident, including continuous or repeated exposure) during the policy period and territory, plus a broad defense. The first step in any Coverage A scenario is to confirm there is BI or PD arising from an accidental occurrence, intended or expected injury is excluded, and that it falls within the policy period and territory.

Coverage A addresses three exposures the exam expects you to distinguish: premises and operations (a customer hurt on the premises or by ongoing work), products (injury from a product the business made or sold), and completed operations (injury after work is finished and the insured has left). Products and completed operations share a separate aggregate limit, so classifying a loss into ongoing operations versus a finished product or job affects which aggregate erodes.

The duty to defend is broad and economically important: the insurer must defend even groundless suits, and defense costs are paid in addition to the limits, so they do not reduce the amount available for damages. Supplementary payments, also outside the limits, include bonds, the insurer's expenses, court costs, and prejudgment and post-judgment interest. The duty to defend ends when the limit is exhausted by settlements or judgments.

When a Coverage A scenario appears, confirm the occurrence and BI/PD, identify the exposure, scan for exclusions, and remember that defense and supplementary payments sit on top of the limits.

Structure every Coverage A analysis the same way: confirm bodily injury or property damage from an accidental occurrence during the policy period and territory, classify the exposure as premises-and-operations, products, or completed operations (the last two share a separate aggregate), then scan the exclusions. Remember that the duty to defend is broad, covering even groundless suits, and that defense and supplementary payments are paid in addition to the limits, so they never reduce the amount available for damages.

The duty to defend ends when the applicable limit is exhausted by settlements or judgments.