Commercial general liability (CGL) policy

A commercial general liability policy is the core liability protection for a business, covering legal liability to third parties — customers, visitors, and the public — arising from the business's premises, operations, products, and completed work. It does not cover injuries to the business's own employees (that's workers compensation) or damage to the business's own property.

The standard CGL form contains three coverages. Coverage A pays for bodily injury and property damage the insured is legally liable for, including defense costs. Coverage B covers personal and advertising injury — offenses like libel, slander, false arrest, wrongful eviction, and copyright infringement in advertisements. Coverage C provides medical payments to third parties injured on the premises or by operations, paid regardless of fault to help avoid lawsuits.

CGL policies are written on one of two triggers. An occurrence form covers injury or damage that happens during the policy period, no matter when the claim is filed. A claims-made form covers claims first made during the policy period, typically subject to a retroactive date. A CGL can be purchased as a standalone monoline policy or bundled into a commercial package policy (CPP) or business owners policy (BOP).

Property and casualty licensing exams test the CGL heavily — know the three coverage parts, what each covers, and the difference between occurrence and claims-made forms.