InfoCentral: Commercial General Liability (CGL) Policy Guides
The Commercial General Liability section of InfoCentral concentrates on the 2013 edition of the ISO Commercial General Liability Coverage Form (Occurrence Version) CG 00 01 (ISO 04 13 edition).
The Commercial General Liability (CGL) policy is a product of the Insurance Services Office. The policy was first approved by the (then) State Board of Insurance for use in Texas in 1987 (ISO 11-85 Edition), and it underwent one major revision in 1990 (ISO 11-88 Edition). ISO introduced other revisions of the CGL policy in 1993 (ISO 10-93 Edition), 1996 (ISO 1-96 Edition), 1998 (ISO 7-98 Edition), 2001 (ISO 10-01 Edition), 2004 (ISO 10-04 Edition) and 2007 (ISO 12-07 Edition) and 2013 (ISO 04 13 edition). The 2013 edition is the subject of this policy guide.
The ISO claims-made version of the CGL (CG 00 02) is also approved for use in Texas, but is not analysed in this section.
While the term "comprehensive" was dropped from the title of this policy when it was revised in 1985, the current CGL provides the broadest liability protection available to most risks in the market today. As with its predecessor, the current CGL automatically covers new exposures that arise during the policy period and that are not otherwise excluded. The coverage is so broad that most of the endorsements are restrictive, and are used largely by underwriters to tailor coverage for specific risks.
The CGL policy may be written as a monoline policy, or as part of a Commercial Package Policy. Under the Insurance Reform Act of 1991, an insurer may file its own CGL policy for Texas Department of Insurance approval. These provisions allow the company to file the standard ISO policy (any edition), or any other form. These "prior approval" rules do not apply to CGL policies used for an insured that has a total CGL premium of $25,000 or more. Policies used for these "large risks" are exempt from Texas' filing and prior-approval law.
The CGL is composed of the following parts:
- Declarations Page
- Common Policy Conditions IL 00 17
- CGL Coverage Form CG 00 01
There are three mandatory endorsements required in Texas:
- Conditions Requiring Notice CG 01 03
- Duties IL 01 68
- Texas Cancellation and Non-Renewal IL 02 75
There are two mandatory multi-state endorsements:
- Broad Form Nuclear Exclusion IL 00 21
- Exclusion - Access or Disclosure of Confidential or Personal Information and Data-Related Liability - With Limited Bodily Injury Exception CG 21 06
Additional mandatory endorsements may apply to specific types of risks, such as pesticide applicators and airports, and the risk classification rules may call for the attachment of certain endorsements. The latter situation deserves additional comment: when the footnotes to a classification code call for the attachment of a specific exclusion endorsement, it simply means that ISO's loss costs filed with TDI do not contemplate this exposure. In Texas, any company can file special rates to cover an exposure not reflected in the ISO loss costs.
The CGL policy form provides coverage with three insuring agreements.
- Coverage A: Bodily Injury and Property Damage
- Coverage B: Personal and Advertising Injury
- Coverage C: Medical Payments
Each coverage has its own set of exclusions. Coverages B and C can be removed by endorsement and Coverage A can be limited to a specific premises or project. Without endorsement, all three coverages apply to all activities of the named insureds.
The occurrence policy form is divided into the following sections:
- Section I Coverages
- Coverage A
- Coverage B
- Coverage C
- Section II - Who Is Insured
- Section III - Limits of Insurance
- Section IV - Commercial General Liability Conditions
- Section V - Definitions