Bodily Injury and Property Damage Liability
Addresses covered bodily injury or property damage caused by an occurrence within the coverage territory and applicable policy period.
Third-party liability
CGL protects against specified claims arising from the business
Commercial general liability insurance can pay covered damages and defense costs when a business faces qualifying third-party claims for bodily injury, property damage, or personal and advertising injury arising from its premises, operations, products, or completed work.
Personal and Advertising Injury Liability
Addresses injury arising from specified offenses such as certain libel, slander, false arrest, wrongful eviction, privacy, and advertising-related claims.
Medical Payments
Can pay limited medical expenses for qualifying accidental bodily injury without requiring the injured person to establish the insured’s legal liability.
CGL is not “all liability” coverage
The policy begins with broad insuring agreements, then narrows them through definitions, who-is-an-insured provisions, limits, conditions, exclusions, and endorsements. The business must still prove that the claim fits the coverage grant.
Who is insured depends on the entity and the facts
The named insured shown on the declarations is the starting point. Standard forms can extend insured status to qualifying partners, members, managers, executive officers, directors, stockholders, employees, volunteer workers, real-estate managers, and newly acquired organizations—but only within defined roles and time limits. Match the named insured to the legal entities, DBAs, joint ventures, subsidiaries, and contracts.
When the injury or damage arises
Premises and operations versus products and completed operations
Activity that is still underway
Includes qualifying injury or damage on the insured’s premises or arising from ongoing work. Examples include a customer fall, accidental damage during installation, or an injury at an active jobsite.
Harm after sale or completion
Includes qualifying injury or damage away from owned or rented premises caused by a product or completed work after it has been put to its intended use or is otherwise complete under the form.
Example: electrical contractor
A contractor damages a customer’s flooring while installing a panel: premises-and-operations analysis. Months after the work is completed, faulty wiring causes a covered fire: products-completed-operations analysis. The timing changes the applicable aggregate, exclusions, endorsements, and additional-insured coverage.
Maintain completed-operations protection
Claims can arise long after work is finished or a product is sold. Confirm that completed operations are included, determine how long contracts require additional-insured protection, preserve historical policies and endorsements, and coordinate discontinued operations or project-specific coverage when the business closes, sells, or changes carriers.
Most standard CGL
Occurrence coverage follows when injury or damage happens
Most CGL policies use an occurrence trigger. The policy in force when the covered bodily injury or property damage occurs can respond even if the claim is made years later. Late discovery does not move the loss automatically to the policy in force when the demand arrives.
Policy period
The event, injury, or property damage must take place during the policy’s coverage period and satisfy the insuring agreement.
Later discovery
The claimant may discover the injury or damage after the policy expires. The historical occurrence policy may still be the relevant policy.
Claim or lawsuit
The insured should give notice promptly and preserve the policy, endorsements, applications, certificates, contracts, incident reports, and evidence.
Occurrence does not mean unlimited reporting time
Notice, cooperation, statutes of limitation or repose, known-loss provisions, prior damage, exclusions, and proof of when injury or damage occurred can still affect coverage. Progressive or continuous damage may implicate more than one policy period.
Claims-made CGL forms also exist
“CGL is occurrence-based” is a useful default, not an absolute rule. Some general liability policies—especially specialty, excess, or nonstandard placements—can use claims-made or claims-made-and-reported terms. Verify the trigger on the declarations and form.
Continuity is essential
Claims-made coverage follows when the claim is made and reported
Professional liability, errors and omissions, cyber, management liability, pollution, and some specialty general liability policies commonly use a claims-made structure. Coverage generally requires the claim to be first made during the policy period or permitted extended reporting period, reported as the form requires, and based on an act after the applicable retroactive date.
| Claims-made element | Why it matters |
|---|---|
| Retroactive date | Acts, errors, incidents, injury, or damage before this date are outside coverage even if the claim is first made during the current policy. |
| Claim definition | A written demand, lawsuit, arbitration, regulatory proceeding, request for tolling, or other event may qualify. A complaint or circumstance can trigger notice before a formal suit. |
| Reporting requirement | Claims-made-and-reported forms may require notice within the policy period or a short post-policy window. Prompt reporting is critical. |
| Prior knowledge and pending litigation | Known circumstances, prior notices, or related claims can be excluded or assigned to an earlier policy. |
| Extended reporting period | Tail coverage extends time to report claims arising from covered acts before the policy ended. It does not cover new acts after termination. |
| Prior-acts or “nose” coverage | A replacement carrier may preserve the old retroactive date, subject to underwriting, warranties, and exclusions. |
Never replace a claims-made policy on price alone. Compare retroactive dates, claim and related-claims definitions, reporting language, pending-and-prior litigation dates, continuity warranties, defense treatment, extended-reporting options, and prior-acts protection before binding.
The declarations work as a system
Read each limit and aggregate separately
| Limit | What it generally controls |
|---|---|
| Each Occurrence | The most paid for Coverage A damages arising from one occurrence, subject to other applicable limits and aggregates. |
| General Aggregate | The total for many Coverage A premises-and-operations claims, Coverage B claims, and medical payments during the policy period, subject to form wording. |
| Products-Completed Operations Aggregate | A separate annual total for covered products-completed-operations damages. |
| Personal and Advertising Injury | The most for covered Coverage B injury sustained by one person or organization, subject to the general aggregate. |
| Damage to Premises Rented to You | A sublimit for specified damage to premises rented to or temporarily occupied by the insured, subject to the actual coverage grant and exclusions. |
| Medical Expense | The per-person limit for qualifying Coverage C medical expenses. |
Defense can be as important as the damage limit
A standard occurrence CGL commonly gives the insurer a duty to defend a suit seeking covered damages, with defense costs paid as supplementary payments outside the liability limits. Proprietary, surplus lines, claims-made, or specialty forms may include defense costs within the limit, use a retention, reimburse defense, limit counsel, or end defense differently. Verify the form.
Aggregates can be modified
Contracts may require a general aggregate that applies separately per project or per location. An endorsement—not the certificate—must create that structure. Coordinate primary limits with excess or umbrella coverage, scheduled underlying policies, retained limits, and defense provisions.
A $1 million limit can mean several different things
Identify whether the number is each occurrence, aggregate, products-completed operations, personal and advertising injury, a sublimit, or excess. Also show whether defense erodes it.
Protection for another party
Additional-insured coverage must match the contract and endorsement
Leases, construction agreements, vendor contracts, service agreements, and facility-use agreements often require the insured to extend CGL protection to another person or organization. Additional-insured status is created by the policy endorsement—not by the contract alone and not by a certificate.
Modern endorsements often restrict coverage to the contract
Many current standard additional-insured endorsements provide no broader coverage than the written contract requires and cap the insurer’s payment at the lesser of the amount required by contract or the applicable policy limit. Exact language, edition date, and governing law control.
| Requirement | What to verify |
|---|---|
| Named or blanket status | Does the endorsement schedule the party, or does a blanket provision activate only when a qualifying written contract requires additional-insured status? |
| Ongoing operations | Does the endorsement protect the additional insured for liability caused in whole or part by the named insured’s current work? |
| Completed operations | Is there a separate endorsement for injury or damage arising after the work is complete, and how long must it be maintained? |
| Primary and noncontributory | Does a policy endorsement make the coverage primary and waive contribution from the additional insured’s insurance when the contract requires it? |
| Limits | What limit does the contract require, what limit does the endorsement allow, and how do aggregates and other additional insureds share it? |
| Scope | Whose acts, which operations, which project or location, which tier of contracting party, and which exclusions determine coverage? |
Additional insured is not additional named insured
An additional insured receives limited liability protection for the relationship described by the endorsement. It does not receive every right or coverage of the named insured and generally cannot change or cancel the policy.
Three documents, three jobs
The contract, endorsement, and certificate are not interchangeable
Contract
Creates obligations between the parties, including indemnity, insurance limits, additional insured, waiver, primary wording, completed operations, and notice requirements.
Policy endorsement
Changes the insurance contract and determines whether the insurer actually provides the requested status or term.
Certificate of insurance
Provides evidence of coverage. Under Texas law it cannot amend, extend, or alter the policy or create rights the policy and endorsements do not provide.
Texas certificate rules
For a risk located in Texas, use a certificate form filed with and approved by the Texas Department of Insurance. A certificate may not state that a party is a specifically named additional insured when the policy only contains a blanket endorsement; it may state that the blanket endorsement exists. Cancellation or change notice can be shown only when the policy, endorsement, or law provides that right.
Contractual liability is not the same as additional-insured coverage
The CGL contractual-liability exclusion generally preserves liability the insured would have without a contract and certain liability assumed in an “insured contract,” subject to definitions, timing, defense, and exclusions. An indemnity agreement can create an obligation without making the indemnitee an insured; an additional-insured endorsement can protect the other party without covering every contractual obligation.
Texas construction anti-indemnity law
Texas Insurance Code Chapter 151 can void construction-contract indemnity and related additional-insured requirements to the extent they require protection for the indemnitee’s own negligence or fault, subject to the statute’s scope and exceptions. Contract review requires qualified legal counsel; the agent’s role is to identify the requirement, explain available insurance, and avoid representing that an unenforceable obligation is covered.
Do not certify the contract. Compare the contract requirement with the issued endorsement and report the difference. Do not add manuscript certificate wording that goes beyond the policy.
Classic assumed-but-absent protection
Common CGL exclusions and separate coverage needs
| Exposure | Typical CGL treatment | Potential coverage response |
|---|---|---|
| Professional services | Professional acts, advice, design, treatment, or technical services may be excluded by general or class-specific wording. | Errors and omissions, architects and engineers, medical professional, technology E&O, or another professional-liability form. |
| Auto liability | Ownership, maintenance, use, entrustment, loading, or unloading of autos is substantially excluded, subject to limited exceptions. | Commercial auto with correct owned, hired, and non-owned auto symbols and endorsements. |
| Employee injury | Workers’ compensation and employers-liability obligations are excluded; bodily injury to employees can also be excluded. | Workers’ compensation and employers liability, plus state-specific occupational or nonsubscriber analysis in Texas. |
| Pollution | Standard pollution exclusions are broad but contain limited exceptions; total pollution endorsements can remove those exceptions. | Contractors pollution, site pollution, transportation pollution, environmental impairment, or another specialized form. |
| The insured’s work or product | Business-risk exclusions limit repair or replacement of defective work or products, impaired property, and recall costs. | Quality control, warranties, bonds, contractors E&O, product recall, manufacturer E&O, or specialty coverage. |
| Employment practices | Discrimination, harassment, termination, retaliation, and employment-related injury can be excluded. | Employment practices liability insurance. |
| Cyber and electronic data | Electronic data is not treated like tangible property, and access, privacy, media, breach, and cyber events can be excluded or narrowly covered. | Cyber, privacy, technology E&O, media liability, and crime coverage. |
| Property in care, custody, or control | Damage to property the insured occupies, rents, borrows, controls, works on, or holds can be limited by multiple exclusions. | Bailee, inland marine, installation, garagekeepers, property, or a targeted endorsement. |
Exclusions can be broader than the standard form
Watch for residential construction, roofing, exterior insulation, subsidence, assault or battery, abuse, communicable disease, firearms, liquor, designated operations, classification limitation, subcontractor warranty, employee injury, total pollution, silica, PFAS, wildfire, habitational, and geographic endorsements.
CGL is not a performance bond
Defective work and resulting damage must be separated
When a contractor’s work is defective, the CGL policy generally does not function as a warranty that pays to replace the insured’s own faulty work. It may, however, cover resulting bodily injury or damage to other property when the insuring agreement is satisfied and no exclusion removes coverage.
Example: faulty roof installation
The cost to remove and replace the contractor’s defective roof may fall within the “your work” business-risk exclusion. Covered rain damage to the customer’s interior, furniture, or equipment may be analyzed separately as resulting property damage. Endorsements, timing, subcontractor involvement, and other exclusions can change the outcome.
The subcontractor exception can matter
The standard completed-operations “your work” exclusion commonly contains an exception when the damaged work or the work out of which the damage arises was performed on the insured’s behalf by a subcontractor. Carriers can remove or narrow that exception. Review subcontractor warranty endorsements, independent-contractor exclusions, minimum insurance requirements, additional-insured requirements, and certificates from every tier.
Texas construction-defect analysis is claim-specific
Defective construction is not automatically outside CGL merely because the insured performed the work. The claim must still allege covered bodily injury or property damage caused by an occurrence during an applicable period, and the policy’s “your work,” “your product,” impaired-property, recall, contractual, prior-work, residential, and other endorsements must be applied.
Do not promise “resulting damage is covered.” Say that resulting damage may be covered, then identify the damaged property, who performed each part of the work, when the damage occurred, which policy periods apply, and which exclusions or endorsements control.
Texas market and policy administration
Placement terms can materially change the coverage
Licensed versus surplus lines
Texas CGL may be written by a licensed insurer or, when coverage is unavailable in the admitted market, an eligible surplus lines insurer. Surplus lines forms may be more restrictive, defense costs may erode limits, minimum earned premium may apply, and Texas cancellation, nonrenewal, and guaranty-association protections differ. Explain the market and compare the form—not only the premium.
Premium audit
Many CGL policies use estimated payroll, sales, subcontracted cost, area, admissions, or units as a deposit premium basis. At audit, the insurer applies actual exposures and classifications. Additional premium can result from growth, uninsured subcontractors, incorrect class codes, omitted operations, or differences in payroll allocation.
Claims reporting and records
Report incidents, demands, suits, regulatory notices, and circumstances promptly under the policy. Preserve contracts, certificates, endorsements, job files, photos, communications, product records, subcontract agreements, and prior policies. Do not agree to liability, make voluntary payments, or dispose of evidence without coordinating with the insurer.
Renewal is a coverage reconstruction. Reconcile legal entities, operations, locations, products, completed work, payroll, sales, subcontracting, contracts, certificates, claims, exclusions, limits, aggregates, and umbrella attachment every year.
Agent workflow
Questions to resolve before recommending CGL coverage
Which legal entities, locations, operations, products, completed work, joint ventures, DBAs, and people need insured status?
Is the form occurrence, claims-made, or claims-made-and-reported, and what retroactive date, reporting requirement, or extended-reporting option applies?
Which each-occurrence, aggregate, products-completed operations, personal and advertising injury, rented-premises, medical-expense, deductible, or retention amounts apply?
Are defense costs outside the limit, and who controls defense, counsel, settlement, and tender?
Which contracts require indemnity, additional insured, ongoing and completed operations, primary and noncontributory wording, waiver, per-project aggregate, limits, or notice?
Do the actual endorsements satisfy those requirements, and does Texas law restrict any construction-contract or certificate request?
Which professional, auto, employee, pollution, cyber, employment, liquor, property-in-control, product, work, recall, and specialty exposures remain excluded?
For contractors, who performs each operation, what subcontractor controls apply, and have residential, prior-work, height, depth, roofing, subsidence, and designated-operation endorsements been reviewed?
Is the insurer licensed, surplus lines, a risk retention group, or another structure, and how do cancellation, defense, audit, minimum premium, and insolvency protections differ?
Document the placement. Retain applications, class codes, exposure estimates, loss runs, quotes, forms, endorsements, contracts, certificate requests, limit and defense comparisons, retroactive dates, rejected coverage, umbrella coordination, and the client’s decisions.
References and further reading
Sources
Texas Department of Insurance — Commercial general liability insuranceCGL coverages, premises and operations, products-completed operations, occurrence and claims-made triggers, business-risk and contractual exclusions, pollution, premium audit, and Texas market structures.
Texas Department of Insurance — Certificates of Insurance FAQTexas requirements for approved certificates, additional-insured statements, blanket endorsements, waiver wording, cancellation notice, contract references, and prohibited certificate alterations.
Texas Insurance Code, Chapter 1811Official Texas law governing property and casualty certificates of insurance.
Texas Insurance Code, Chapter 151Official Texas construction-contract indemnity and additional-insured restrictions, definitions, scope, and exceptions.
Insurance Information Institute — Types of commercial insurance policiesCGL purpose, occurrence and claims-made policy structures, defense costs, package policies, and separate business coverage needs.
Progressive Commercial — Claims-made versus occurrenceCarrier explanation of policy triggers, retroactive dates, reporting requirements, and extended reporting periods.
Texas Department of Insurance — Property and casualty insuranceCurrent Texas commercial form, rate, certificate, CGL, professional-liability, terrorism, and market resources.
Coverage descriptions are general. CGL forms, endorsements, triggers, exclusions, defense provisions, underwriting, and contract requirements vary. The issued declarations, insuring agreements, definitions, limits, exclusions, conditions, endorsements, contracts, and applicable law control.