Commercial General Liability (CGL)
A foundational liability policy that covers third party bodily injury, property damage, and personal and advertising injury arising out of business operations.
What It Is
Commercial General Liability, or CGL, is the foundational third party liability policy carried by virtually every operating business in the United States. The standard ISO form CG 00 01 covers three principal exposures: Coverage A for bodily injury and property damage, Coverage B for personal and advertising injury, and Coverage C for medical payments to non employees injured on premises.
Limits are typically written as $1 million per occurrence, $2 million general aggregate, $2 million products and completed operations aggregate, $1 million personal and advertising injury, and $5,000 to $10,000 medical payments. The aggregate resets each policy year, while the per occurrence cap applies to each separate event.
Common exclusions include auto, watercraft, aircraft, professional services, employer's liability, pollution, expected or intended injury, and damage to property in the insured's care, custody, or control. These exclusions explain why the CGL is one piece of a broader insurance program that also includes Commercial Auto, Workers Comp, Professional Liability, and other lines tailored to the operation.
Why It Matters for Brokers
Brokers who treat CGL as a commodity miss substantial coverage differences between carriers and forms. The pollution exclusion, contractual liability handling, additional insured endorsements, and primary and non contributory wording vary widely, and these variations decide whether a contract requirement is actually met. Beyond form review, limit adequacy is critical: a $1 million per occurrence limit is rarely enough on accounts with significant premises traffic, fleet exposure, or product distribution. Annual limit benchmarking and umbrella structuring are core broker services.
Real-World Example
A specialty manufacturer renews its CGL on a $1 million per occurrence, $2 million aggregate limit with a $5 million umbrella. After a product liability suit consolidates 14 plaintiffs and exhausts the $2 million products aggregate, the broker rebuilds the program at renewal with a $2 million per occurrence, $4 million aggregate primary, $10 million umbrella, and a $5 million excess, while updating product warranty review and recall procedures documented in the Review Queue.
Common Mistakes
- 1Defaulting to $1 million / $2 million CGL limits on every account regardless of revenue, premises traffic, or product distribution, leaving severity exposed.
- 2Failing to compare additional insured endorsement forms across carriers and binding a CG 20 26 when a CG 20 10 plus CG 20 37 combination is required by contract.
- 3Overlooking the difference between products and completed operations aggregate and general aggregate when planning umbrella attachment points.
- 4Ignoring the contractual liability exclusion's exception for insured contracts and missing opportunities to leverage the indemnification structure of client agreements.
How brokerageaudit.com Handles This
Submission Intake captures revenue, payroll, and operations data to right size CGL limits, and Policy Checker reads the bound CG 00 01 and endorsement schedule against the prior policy and contract requirements. Renewal Manager benchmarks limits across the book and flags accounts where umbrella attachment or aggregate structure no longer fits the exposure.