Certificate of Liability Insurance

Commercial General Liability (CGL) - The CGL policy is an ISO form, widely used to provide commercial enterprises with premises and operations liability coverage, products and completed operations insurance and personal injury coverage. Premises medical payments coverage is often included as well.

A policy form introduced by the Insurance Services Office in 1986, and subsequently amended, to replace the comprehensive general liability policy. The two basic coverage forms available under the CGL are an occurrence form (ISO form CG 00 01), patterned after the 1973 CGL form, and a claims-made form (ISO form CG 00 02), providing an extended reporting period.

Claims-Made Coverage.
A policy providing liability coverage only if a written claim is made during the policy period or any applicable extended reporting period. For example, a claim made in the current year could be charged against the current policy even if the injury or loss occurred many years in the past. If the policy has a retroactive date, an occurrence prior to that date is not covered. Contrast with Occurrence Coverage.

Occurrence Coverage.
A policy form providing liability coverage only for injury or damage that occurs during the policy period, regardless of when the claim is actually made. For example, a claim made in the current policy year could be charged against a prior policy period, or may not be covered, if it arises from an occurrence prior to the effective date. Contrast with Claims-Made Coverage.

These include the following coverages:

• Coverage A, bodily injury and property damage liability;
  
• Coverage B, personal injury and advertising injury liability;
  
• Coverage C, medical payments; and, as applicable, products-completed operations coverage.
  
  

An aggregate limit applies to coverages A, B and C, and a separate aggregate limit applies to the products-completed operations coverage. Coverage is provided for most of the premises, products, completed operations, personal injury, advertising, and contractual liability exposures of an organization. Unlike older forms that required endorsements to broaden coverage, the CGL provides very broad coverage that can be narrowed by endorsement. It is a modular policy that can provide several coverages in combinations. There are five basic parts:

1. Common policy declarations;
2. Common policy conditions;
3. Commercial general liability declarations;
4. Coverage section (either the occurrence or claims-made form);
5. Broad form nuclear exclusion.

Bodily Injury and Property Damage Liability: Coverage Part A of the ISO commercial general liability policy, which combines both bodily injury and property damage in a single insuring agreement and limit of liability.

Bodily Injury Liability: Liability for physical harm or death of a person caused by negligent or intentional acts or omissions of an insured. It includes sickness or disease contracted by the injured person as a result of an injury.

Property Damage Liability: Coverage for the obligation to compensate another person for lost use or destruction or damage to that person's tangible property. This coverage is included in most personal and commercial liability policies along with bodily and personal injury coverages.

Personal and Advertising Injury Liability: Coverage Part B of the Insurance Services Office commercial general liability policy, which combines both personal injury and advertising injury into a single insuring agreement and limit of liability.

Advertising Injury Coverage: Coverage for advertising injury provided by the commercial general liability policy under coverage Part B and by some umbrella policies. Advertising injury is a statement made in the course of advertising activities that causes loss to another person or business by libel, slander, defamation, violation of a right of privacy, piracy or misappropriation of ideas, or infringement of copyright, trademark, title or slogan. Coverage can also be purchased as a separate advertiser's liability policy or as an endorsement to another business policy form.

Personal Injury Liability: Liability for personal injury to third parties, which includes both bodily harm and nonphysical, noneconomic harm. Injuries that are neither physical nor economic may include libel or slander, false arrest, discrimination, and invasion of privacy. These either cause psychological harm or are presumed to be damaging (as with defamation of character). The insurance covering this liability is automatically included in the Insurance Services Office's commercial general liability policy under coverage Part B.

Products-Completed Operations Insurance: Coverage against loss arising out of the liability of a manufacturer, merchant or distributor for injury or damage resulting from the use of a product; product liability coverage when part of a commercial general liability policy. Coverage also includes liability incurred by a contractor as the result of improperly performed work (construction or installation) after a job has been completed. This coverage can be included in the ISO commercial general liability policy under coverage Part A.

Automobile Liability insurance - Insurance in which the insurer agrees to pay all sums for which the insured is legally obligated because of bodily injury or property damage arising from the ownership, maintenance, or use of an auto.( BMC-91 / BMC-91X )

Excess Liability insurance - Insurance coverage that is written in excess of primary insurance. It is designed to increase the limits of liability, thereby providing catastrophe coverage. Excess liability coverage does not respond to a loss until the amount of the loss exceeds (or exhausts) any existing primary policy limits. Example: A primary $500,000 liability policy is written, and excess insurance is written for $2 million excess of the primary. The primary policy would pay all losses within $500,000 and the excess policy would pay losses in excess of the primary coverage, up to the excess policy limit of $2 million.

Workers Compensation insurance - Insurance that covers an employer's responsibility to compensate injuries, illnesses, disabilities or death of employees, as prescribed by state workers' compensation laws; coverage provided by Part I (prior to 1986, section A) of the standard workers' compensation policy (NCCI form WC 00 00 00A). The insurance ordinarily covers legally imposed employers' liability for medical and surgical treatment, disability benefits, rehabilitation therapy, and survivors' death benefits.

Cargo insurance - A general term for a marine insurance policy that covers goods being transported by ship, truck, railroad, or airplane. This coverage insures against most perils to which the property may be subject. ( BMC-34 / BMC-32 )

Trailer Interchange - Insurance coverage for truckers who frequently trade trailers under an agreement that makes them responsible for any damage to a trailer in their care or custody. It covers the insured's liability for damage to a trailer not belonging to the insured.

Physical Damage - The part of automobile insurance that covers damage to the insured's property. Damage from perils such as collision, vandalism, fire and theft are included.

Surety Bond - An agreement by which a party (called the surety) obligates itself to a second party (the obligee) to answer for the default, acts or omissions of a third person (the principal). A bond can guarantee the performance of the principal under a contract with the obligee (i.e., a performance bond), or it can protect against the dishonesty of employees (i.e., a fidelity bond).

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