11.3 Key CGL Exclusions and Endorsements
Key Takeaways
- CGL exclusions mostly route specialized exposures to the correct policy: employee injury to workers comp, vehicles to auto, pollution to CPL.
- Business-risk exclusions (j, k, l, m) bar repair of the insured's own product/work but not damage that work causes to others' property.
- Exclusion l's subcontractor exception restores coverage for faulty subcontractor work - the basis for additional-insured requirements.
- Coverage B covers libel, slander, false arrest, wrongful eviction, and advertising-idea offenses, subject to its own exclusions.
- Know the key endorsements by number: CG 20 10 / CG 20 37 (additional insured), CG 21 47 (employment practices exclusion), CG 25 03/04 (separate aggregates).
Why Exclusions Define the CGL
The CGL's insuring agreement is broad, so the exclusions in Coverage A do most of the underwriting work. The exam tests roughly a dozen exclusions by name and asks you to recognize which one defeats a given fact pattern. Most exclusions exist to push a specialized exposure onto the correct policy - workers compensation, commercial auto, professional liability, or pollution coverage - rather than to leave the insured bare.
The Coverage A (bodily injury and property damage) exclusions you must know, lettered a through q in CG 00 01:
| Exclusion | What it removes | Where coverage belongs |
|---|---|---|
| a. Expected or Intended Injury | Deliberate harm (self-defense excepted) | None - uninsurable |
| b. Contractual Liability | Liability assumed in a contract | Insured contract exception restores some |
| e. Employer's Liability | Injury to employees in the course of work | Workers compensation |
| g. Aircraft, Auto, Watercraft | Ownership/operation of vehicles | Commercial auto / aviation |
| j. Damage to Property | Insured's own / care, custody, control | Property or inland marine |
| k. Damage to Your Product | The insured's product itself | Product recall / warranty |
| l. Damage to Your Work | The insured's completed work | Subcontractor exception may restore |
| m. Impaired Property | Pure economic loss, no physical damage | None - business risk |
The pollution exclusion and the business-risk exclusions
The pollution exclusion (f) is the most heavily litigated provision in the form. It removes bodily injury or property damage arising from the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of pollutants - including smoke, fumes, acids, chemicals, and waste. A manufacturer with any meaningful pollution exposure must buy separate pollution legal liability or CPL coverage; the CGL will not respond.
Exclusions j, k, l, and m are the business-risk group. They embody the principle that the CGL covers liability for damage the insured does to others' property, not the cost of repairing or replacing the insured's own defective product or workmanship. A roofer whose roof leaks looks to a warranty, not the CGL, for the cost to redo the roof - but the CGL would respond if the leak ruined the homeowner's furniture (damage to others' property).
The Business-Risk ("Your Work/Your Product") Family
The exam clusters several CGL exclusions under the business-risk umbrella because they shift the cost of the insured's own defective work back to the insured rather than the insurer. Exclusion (k) Damage to Your Product and (l) Damage to Your Work bar the cost to repair the insured's own product or completed work — the CGL is not a warranty or performance bond.
The crucial subcontractor exception to (l) restores coverage for completed-operations damage arising from work performed by a subcontractor on the insured's behalf, which is why general contractors require subs to name them as additional insureds. Exclusion (j) Damage to Property and (m) Impaired Property bar economic-loss claims tied to faulty work that has not caused physical injury to other property.
Add the (d) workers-comp/employer's-liability, (e) employment-related practices (EPLI is separate), and (g) auto exclusions, and you can see the CGL's edges: it covers third-party injury and damage caused by the business, not the business's own product, work, or contractual performance.
An electrical contractor's faulty wiring (its own completed work) short-circuits and burns down part of the customer's house, also destroying the customer's furniture. Under the standard CGL, which damage is most likely covered?
The subcontractor exception and Coverage B exclusions
Exclusion l (damage to your work) contains a key carve-back: it does not apply if the damaged work, or the work out of which the damage arises, was performed by a subcontractor. This subcontractor exception is why general contractors require subs to carry their own CGL and to name the GC as an additional insured - the GC's policy can respond to faulty subcontractor work that would otherwise be excluded.
Coverage B - Personal and Advertising Injury has its own exclusions: knowing violation of another's rights, material published with knowledge of falsity, criminal acts, contractual liability, breach of contract, quality/performance of goods (failure-to-conform), and infringement of patent, trademark, or copyright (except in the insured's advertisement). Coverage B reaches offenses such as libel, slander, false arrest, malicious prosecution, wrongful eviction, and use of another's advertising idea.
The endorsements that reshape the CGL
A short list of endorsements appears repeatedly on the exam. Memorize the form numbers and what they do:
| Endorsement | Effect |
|---|---|
| CG 20 10 | Additional Insured - Owners, Lessees or Contractors (ongoing operations) |
| CG 20 37 | Additional Insured - Completed operations (pairs with CG 20 10) |
| CG 20 11 | Additional Insured - Managers or Lessors of Premises |
| CG 25 03 / CG 25 04 | Designated project / location separate general aggregate |
| CG 21 47 | Employment-Related Practices Exclusion |
| CG 22 94 / CG 22 95 | Damage to Your Work / removing the subcontractor exception |
Additional-insured status under CG 20 10 is the most-tested endorsement: it extends the named insured's coverage to a third party (often an owner or GC) for liability arising out of the named insured's ongoing operations. It does not cover the additional insured's sole negligence in most current editions.
Common exam traps on exclusions and endorsements
- Contractual liability (b) is widely misread. The exclusion removes assumed liability, but the insured contract exception restores coverage for liability the insured would have had anyway, plus tort liability assumed in defined business contracts (leases, sidetrack agreements, etc.). Candidates wrongly conclude all contractual liability is gone.
- Auto vs. CGL: loading and unloading of a vehicle can fall to either policy; mobile equipment (forklifts, cranes not designed for road use) stays under the CGL, while licensed road vehicles go to commercial auto.
- Employer's liability (e) sends employee injuries to workers comp - but a CGL can still respond to an injured independent contractor who is not an employee.
- An endorsement controls over the base form when the two conflict; coverage changes must be in writing under the Changes condition.
A general contractor's CGL has the standard 'damage to your work' exclusion (l). Defective work performed by a subcontractor causes property damage to the completed project. Why might the GC's CGL still respond?