Key CGL Exclusions and Endorsements
Key Takeaways
- Coverage A exclusions (a)-(q) mostly route exposures to the proper policy: employee injury to WC, autos to commercial auto, pollution to environmental, professional acts elsewhere.
- The 'Your Work' and 'Your Product' exclusions bar paying to redo faulty work, but resulting damage to other property is covered.
- Exclusion (b) bars assumed liability, then gives it back for 'insured contracts,' enabling additional-insured and hold-harmless arrangements.
- Standard endorsements include CG 20 10 / CG 20 37 (additional insured), CG 21 47 (employment practices), and CG 21 49/55 (pollution).
- CG 25 03 / CG 25 04 provide per-project or per-location aggregates so one job or site cannot exhaust the entire General Aggregate.
Key CGL Exclusions and Endorsements
The CGL is a broad form, but Coverage A (Bodily Injury and Property Damage) contains a list of named exclusions lettered (a) through (q) in CG 00 01. The exam tests both what is excluded and why — most exclusions exist because the exposure belongs in a different policy (auto, workers' compensation, professional liability) or is uninsurable (expected/intended harm). Endorsements then add back, restrict, or modify coverage.
The High-Yield Coverage A Exclusions
| Exclusion | What it bars | Where coverage belongs |
|---|---|---|
| Expected or Intended Injury (a) | Harm the insured expected or intended | Uninsurable (self-defense exception) |
| Contractual Liability (b) | Liability assumed in a contract | Add back via 'insured contract' definition |
| Liquor Liability (c) | Liability for serving alcohol (if in that business) | Liquor Liability policy |
| Workers' Compensation (d) / Employer's Liability (e) | Injury to employees | WC and Employer's Liability policy |
| Pollution (f) | Cleanup and bodily injury from pollutants | Environmental/pollution policy |
| Aircraft, Auto, Watercraft (g) | Ownership/operation of these | Commercial auto, aviation, marine |
| Mobile Equipment (h) | Use in prearranged racing | Specialty coverage |
| Damage to Your Product (k) / Your Work (l) | The insured's own product or completed work | Performance bond / warranty |
| Damage to Property (j) | Care, custody, control; property worked on | Inland marine / bailee |
| Recall of Products (n) | Cost to recall (the 'sistership' exclusion) | Product recall policy |
The employee injury exclusions and the auto exclusion are the two most-tested: a CGL never covers what the WC policy or the commercial auto policy should.
Why 'Your Work' and 'Your Product' Are Excluded
The CGL is liability insurance, not a warranty. Exclusions (k) Damage to Your Product and (l) Damage to Your Work mean the policy will not pay to repair or replace the insured's own faulty product or workmanship. If a contractor's defective wiring fails, the CGL won't pay to redo the wiring — but it will pay if that defective wiring causes a fire that burns the building (resulting damage to other property is covered).
This distinction — faulty work itself (excluded) versus resulting damage to other property (covered) — is one of the most tested fine points in commercial liability. Memorize it as: the CGL covers the consequences of bad work, not the cost of redoing the bad work.
The Business-Risk Exclusions
The CGL deliberately excludes ordinary business risks the insured controls. The "your product," "your work," "impaired property," and "damage to property" exclusions (often called the (j) through (n) exclusions) bar coverage for repairing or replacing the insured's own faulty product or work and for the cost of recalling defective products (the "sistership" exclusion). The policy covers damage the faulty product or work causes to other property or persons, but not the insured's own cost to redo the job, the line the exam tests repeatedly.
Pollution, Auto, and Liquor Exclusions
The CGL contains an absolute pollution exclusion barring most pollution liability, prompting separate environmental policies. It excludes liability arising from owned, operated, or entrusted autos, aircraft, and watercraft (covered instead by auto, aviation, and marine policies), though it covers certain mobile equipment and parking. The liquor liability exclusion applies only to businesses in the business of manufacturing, selling, or serving alcohol, so a host who is not in that business retains coverage, while a tavern needs separate liquor liability.
Endorsements That Restore or Restrict Coverage
Common CGL endorsements reshape the grant. Additional insured endorsements extend coverage to landlords, lessors, or project owners as required by contract. The Amendment of Insured Contract and contractual liability provisions cover liability the insured assumes in a covered contract. Other endorsements add liquor liability, modify the employee benefits exposure, or limit coverage to designated premises/operations. Recognizing that an additional-insured endorsement gives a third party direct rights under the policy is a frequent test point.
A plumbing contractor installs a pipe joint incorrectly. Months later the joint fails, and water destroys the building owner's hardwood floors and damages the contractor's own pipe assembly. Under a standard CGL, which damage is covered?
Contractual Liability and 'Insured Contracts'
Exclusion (b) bars liability the insured assumes by contract — then the policy gives back coverage for liability assumed under an "insured contract" (a defined term that includes leases of premises, easements, certain hold-harmless agreements, and the indemnification clauses common in construction contracts).
This give-back is why a general contractor can require subcontractors to name it as an additional insured and assume defense and indemnity. Endorsements such as CG 20 10 (additional insured — ongoing operations) and CG 20 37 (additional insured — completed operations) are the standard vehicles, frequently named on the exam.
Common Endorsements That Modify the CGL
- CG 20 10 / CG 20 37 — add an additional insured for ongoing or completed operations (required by upstream contracts).
- CG 21 47 — Employment-Related Practices Exclusion (pushes EPLI exposure to a separate policy).
- CG 21 49 / CG 21 55 — total or limited pollution exclusions.
- CG 25 03 / CG 25 04 — designated construction project or designated location per-project / per-location aggregate, giving each job or site its own General Aggregate so one project's losses don't exhaust the limit for others.
- CG 21 67 — Fungi or Bacteria (mold) exclusion.
The per-project aggregate endorsements are a favorite exam topic because they multiply the General Aggregate: a contractor with five active projects effectively gets five separate General Aggregates rather than one shared ceiling.
A general contractor wants each of its active construction jobs to have its own separate General Aggregate limit so that losses on one project cannot exhaust the aggregate available to the others. Which endorsement accomplishes this?