What Damages Are Covered By A CGL Policy?

A Commercial General Liability (CGL) policy is the workhorse of business insurance. Its coverages form the backbone of almost every risk‑management plan and, according to more than one court, even the litmus test of whether a company is a real company.

Below, we break down the three coverage parts found on ISO form CG 00 01 (the form number of the standardized general liability coverage) and show the types of damages each one pays for. We’ll also flag a few gray areas that usually aren’t covered so you know when to layer on additional policies.

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Coverage A: Bodily Injury & Property Damage

What is covered

1. Property Damage
   If you damage someone else’s tangible property in the course of your operations, the cost to repair or replace it is covered. Example: A painting contractor cracks a marble countertop while standing on it.
2. Bodily Injury
   Harm you unintentionally cause to a third party. Example: The same contractor slips from the countertop and injures the homeowner.
3. Products & Completed Operations
   Injuries or property damage caused by a product you manufactured or work you finished away from your premises. Example: A food manufacturer’s salsa causes salmonella two weeks after purchase.

Real‑world claim snapshot

Product liability verdict $9.2 million. A defective ladder collapsed and paralyzed the user. The CGL paid policy limits and the umbrella picked up the remainder after defense costs (which sat outside the occurrence limit).

Coverage B: Personal & Advertising Injury

Heads‑up: Coverage B applies only if the offense arises out of your advertising activities and was committed unintentionally. If you’re in the business of advertising, or you knowingly infringed, the policy will likely decline the claim.

Coverage C: Medical Payments

Small, goodwill payments (usually up to $5,000–$10,000) for minor injuries that occur on your premises regardless of fault. These quick payouts often prevent fender‑bender disputes from snowballing into lawsuits.

What’s not covered (usually)

• Professional services errors (buy Errors & Omissions)
• Employment‑related claims (buy EPLI)
• Auto accidents involving your owned or rented vehicles (buy Commercial Auto)
• Intentional wrongdoing or expected injury
• Damage to your product or your work resulting from faulty workmanship

Summary

CGL insurance wraps the most common third‑party risks to cover injuries, property damage, and even advertising slip‑ups into one affordable policy and writes the check for your legal defense along the way. Pair it with property coverage or a business owners policy (BOP) and you have the foundation of a solid risk‑management portfolio.