What's covered?
The three basic coverage areas of a CGL policy are property damage, bodily injury and personal and advertising injury. Also included are premises and operational liability, medical payments and contractual liability.
Property Damage (PD)
Bodily injury/property damage provides coverage for the legal liability of insureds for bodily injury or property damage to others arising out of non-professional negligent acts or for liability arising out of their premises or business operations. The CGL policy defines property damage as "physical injury to tangible property, including all resulting loss of use of that property."
Bodily Injury (BI)
Bodily injury is defined as "bodily injury, sickness or disease sustained by a person, including death resulting from any of these at any time." Death that results after a period of time from an earlier injury will be covered by the policy in effect at the time the injury was sustained.
The meaning of "bodily injury" is open to judicial interpretation. Some courts have held that mental injuries and emotional distress can be considered bodily injuries, even in the absence of physical bodily harm.
Personal and Advertising Injury
Personal and advertising injury liability protects an insured against liability arising out of certain offenses, such as libel, slander, false arrest, infringing on another's copyright, malicious prosecution, use of another's advertising idea; or wrongful eviction, entry, or invasion of privacy, which is committed during the policy period and within the coverage territory.
Premises and Operational Liability
There are several coverages included under BI/PD that provide protection for an insured against loss from legal liability arising out of the (1) operation, maintenance, or use of the premises and (2) liability arising out of business operations. This liability involves the insured's (1) legal responsibility for bodily injury or property damage to others on the insured's premises, or (2) liability arising out of the insured's business operations or work performed by independent contractors on the named insured's behalf.
Medical Payments
Coverage for medical payments includes payments for injuries sustained by members of the general public caused by an accident that takes place on the insured's premises or when exposed to the insured's business operations. Injuries must be reported within one year of the accident. Medical payments coverage can be triggered without legal action from a third party.
This provides for prompt settlement of smaller medical claims without litigation. It is included in the CGL policy and pays for all necessary and reasonable medical, surgical, ambulance, hospital, professional nursing, and funeral expenses for a person injured or killed in an accident arising out of the premises or business operations of the insured, regardless of negligence or liability. There is no defense or legal liability coverage as there is with BI/PD liability and personal and advertising liability since coverage is provided on a no-fault basis.
Contractual Liability
The CGL policy provides broad coverage for the following types of contractual obligations:
- Contract for a lease of premises
- Sidetrack agreement (related to railroad deliveries)
- Easement or license agreement
- An agreement, as required by ordinance, to indemnify a municipality
- Elevator maintenance agreements
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