Commercial general liability (CGL) insurance is designed to cover the bodily injury and property damage liability exposures related to operating a commercial venture. Instead of having to select and group the specific hazards to be insured, which may result in potential gaps in an insurance program, an integrated coverage approach is used. The basic areas covered by the CGL include the insured’s ownership or use of the premises; the insured’s ongoing operations that are on and off the premises; products manufactured, sold or distributed by the insured; completed operations of the insured; personal and advertising injury liability of the insured; and medical payments coverage. It also covers liability assumed by the insured under certain types of contracts. All coverages are subject to policy definitions, exclusions and limitations.
The basic CGL coverage form can be customized and tailored with a multitude of optional forms and endorsements that broaden, delete or restrict the contract’s core coverages to form a contract specifically designed for the individual insured.
Two CGL policy programs are available. The first is the “occurrence-based” coverage form that provides protection for covered losses when the actual injury happens during the covered policy period, regardless of when notification of the loss or claim takes place. The key to coverage is the date on which the covered loss or injury happens.
The second is the “claims-made” coverage form. In these forms, coverage is triggered by the actual filing date or receipt of the claim, in addition to the date or time in which the loss or injury happened. Any covered loss or claim filed within the policy period is handled by that policy, regardless of when the actual loss or injury happened, subject to the retroactive date. The retroactive date is shown on the declarations. The retroactive date can be the policy inception date or any date prior to it. However, for complete protection, it should be the date on which claims-made coverage first began. This is because prior to that date, loss or injury was covered by an occurrence policy. Only losses or injuries that occur after the retroactive date will be considered by the carrier of a claims-made policy.