Standard commercial general liability policies

Bodily injury

What constitutes bodily injury under a standard CGL policy?

The scope of bodily injury under a CGL policy may vary from one policy to another, but bodily injury is generally understood to mean any bodily injury, sickness, disease or death that is sustained by a person. Black’s Law Dictionary defines bodily injury as ‘physical damage to a person’s body’.

Property damage

What constitutes property damage under a standard CGL policy?

What constitutes property damage under a standard CGL policy may differ in scope from one policy to another, but it is usually understood to mean physical injury to tangible property resulting in the loss of use of that property.

Occurrences

What constitutes an occurrence under a standard CGL policy?

What constitutes an occurrence under a standard CGL policy may differ in scope from one policy to another, but it is usually defined as an accident, including continuous or repeated exposure to substantially the same general harmful conditions.

How is the number of covered occurrences determined?

If multiple covered claims are made by the insured in the course of the policy year, the insurer is liable to indemnify the insured until such time as the limit of liability set out under the policy is exhausted.

It appears, therefore, that there can be no predetermined number of covered occurrences to which a policy may respond, and the number of occurrences that trigger coverage under the policy is determined solely by the limit of liability set out under the policy and the time at which this sum is exhausted. There are certain policies that make the deductible applicable individually to each and every loss that arises under the policy.

Coverage

What event or events trigger insurance coverage?

The insuring clause sets out what events trigger cover, as, for instance, bodily injury and property damage typically trigger cover under a CGL policy, subject to other terms and conditions.

How is insurance coverage allocated across multiple insurance policies?

Policies usually contain an ‘other insurance’ clause to cater to situations when the claim notified may be covered by two or more policies covering the same risk. This clause will determine how the loss will be allocated or distributed between the policies and the level of risk to be borne by each insurer. This other insurance clause would normally say either that the policy operates in excess of any valid or collectible insurance or that the policy will contribute rateably in proportion to the amount covered under the contract and that covered under the other policy. If both policies operate in excess over one another, or when there are no such terms in the policy, there will be rateable allocation between different policies.

Law stated date

Correct on

Give the date on which the information above is accurate.

6 December 2019