10.1 CGL Coverage A: Bodily Injury and Property Damage Liability
Key Takeaways
- Coverage A of ISO form CG 00 01 04 13 pays sums the insured is legally obligated to pay as damages for bodily injury (BI) or property damage (PD) caused by an occurrence and arising during the policy period.
- An occurrence is an accident, including continuous or repeated exposure to substantially the same general harmful conditions; expected or intended injury is excluded.
- The 2013 edition added the coverage-territory and known-injury (loss-in-progress) provisions and clarified that BI/PD must take place in the coverage territory.
- Coverage A splits exposures into premises-operations and products-completed operations, the latter capped by a separate aggregate limit.
- Key exclusions include expected/intended injury, contractual liability (with an insured-contract exception), workers compensation, pollution, the auto/aircraft/watercraft exclusion, and the business-risk damage-to-your-work/your-product group.
Coverage A: The Core Insuring Agreement
Coverage A of the Commercial General Liability (CGL) policy is Bodily Injury and Property Damage Liability. The standard contract is Insurance Services Office (ISO) form CG 00 01 (occurrence) and the edition tested is CG 00 01 04 13 (April 2013). The insurer agrees to pay sums the insured becomes legally obligated to pay as damages because of bodily injury (BI) or property damage (PD) to which the insurance applies.
Coverage A is strictly third-party coverage: the claimant is always someone other than the named insured. The CGL never repairs the insured's own building or pays the insured's own injuries.
Defining Bodily Injury and Property Damage
Bodily injury (BI) means physical injury, sickness, or disease sustained by a person, including death that results. It does not, in the unendorsed form, include purely emotional distress unless it accompanies physical harm.
Property damage (PD) has two parts:
- Physical injury to tangible property, including resulting loss of use of that property; and
- Loss of use of tangible property that is not physically injured.
A frequent trap: electronic data is not tangible property, so corrupting a customer's database is not PD under the standard form.
The Occurrence Trigger and Coverage Territory
Coverage A applies only if the BI or PD is caused by an occurrence. An occurrence is defined as an accident, including continuous or repeated exposure to substantially the same general harmful conditions. This wording extends coverage to gradual, repeated exposures (think repeated fume inhalation), not just sudden events.
Three conditions must all be met:
- The BI/PD is caused by an occurrence in the coverage territory (the United States, its territories and possessions, Puerto Rico, and Canada, plus international waters/airspace and certain worldwide products situations).
- The BI/PD occurs during the policy period.
- No insured knew the injury had occurred before the policy period (the known-injury / loss-in-progress rule, formalized in the 2013 edition).
Two Exposure Categories
Coverage A bundles two distinct exposures, each metered against its own aggregate.
| Exposure | What it covers | Aggregate that applies |
|---|---|---|
| Premises-Operations | Injury/damage from the business's premises and ongoing operations (a customer slips in the store) | General Aggregate |
| Products-Completed Operations | Injury/damage after a product leaves the insured's control or work is finished (a faulty installed water heater bursts a month later) | Products-Completed Operations Aggregate |
Work is in the products-completed operations hazard once it is finished or abandoned, or when the portion put to its intended use is complete. Ongoing-operations injuries stay in premises-operations.
A landscaping company finishes installing a retaining wall. Three weeks later the wall collapses and injures a pedestrian. Which Coverage A category and aggregate apply?
Coverage A Exclusions
The occurrence wording is broad, so exclusions do the real work of shaping Coverage A. Memorize these tested exclusions:
- a. Expected or Intended Injury — no coverage for harm the insured expected or intended, except reasonable force to protect persons or property.
- b. Contractual Liability — liability assumed under contract is excluded, except liability the insured would have anyway and liability assumed under an insured contract (leases, sidetrack agreements, certain hold-harmless agreements).
- c. Liquor Liability — applies only to those in the business of selling/serving alcohol.
- d. Workers Compensation and e. Employer's Liability — injuries to employees belong on a WC/EL policy.
- f. Pollution — the broad absolute-pollution exclusion.
- g. Aircraft, Auto, Watercraft — these need commercial auto/aviation/marine policies (with mobile-equipment and small-watercraft exceptions).
The Business-Risk (Damage-to-Property) Exclusions
Exclusions j through n are the business-risk group; they push the cost of an insured's own faulty work back onto the insured rather than the liability insurer.
| Exclusion | Excludes |
|---|---|
| j. Damage to Property | The insured's own property and property in the insured's care, custody, and control |
| k. Damage to Your Product | The insured's product damaging itself |
| l. Damage to Your Work | The insured's completed work damaging itself (subcontractor exception) |
| m. Damage to Impaired Property | Loss of use of property not physically injured due to the insured's faulty work |
| n. Recall (Sistership) | Cost to recall/withdraw a defective product |
Trap: the CGL is not a performance bond. It does not pay to redo the insured's own defective work; it pays when that defective work injures a third party or damages other property.
Worked Numeric: How Limits and Aggregates Interact
Assume a CGL with Each Occurrence $1,000,000, General Aggregate $2,000,000, and Products-Completed Operations Aggregate $2,000,000.
- A single premises slip-and-fall judgment of $1,200,000 is capped at $1,000,000 by the Each Occurrence limit; the remaining $200,000 is the insured's exposure.
- That $1,000,000 also reduces the General Aggregate to $1,000,000 remaining.
- A later completed-operations product claim does not draw on the General Aggregate; it draws on the separate $2,000,000 Products-Completed Operations Aggregate.
Takeaway: premises-operations and products-completed-operations losses run against different aggregates, so a busy general-aggregate year does not erode the products tower.
Under CG 00 01 04 13, which of the following losses would Coverage A most likely pay?
Coverage A Exclusions - The Most-Tested Gaps
CGL Coverage A insures sums the insured is legally obligated to pay for bodily injury or property damage caused by an occurrence in the coverage territory during the policy period. Its exclusions are where most exam questions live.
| Exclusion | Why it exists |
|---|---|
| Expected or intended injury | CGL covers accidents, not deliberate harm |
| Contractual liability | Liability assumed by contract (with insured-contract exceptions) |
| Workers comp / employers liability | Employee injury belongs to WC |
| Pollution | Environmental claims need separate coverage |
| Auto, aircraft, watercraft | Covered by auto/aviation/marine policies |
| Damage to your product / your work | Business-risk exclusions ('the broad form') |
| Damage to property in your care/custody | Belongs to inland marine/bailee forms |
Exam Trap: The 'your work' / 'your product' exclusions reflect a core principle: the CGL covers damage caused to others by the insured's product or work, not the cost to repair the insured's own faulty product or workmanship - that is a business risk, not insurable liability. The products-completed operations hazard is a separate aggregate covering injury arising after work is finished and away from the premises.