Definition:Commercial general liability insurance (CGL)
🛡️ Commercial general liability insurance (CGL) is one of the foundational coverages in commercial insurance, protecting businesses against claims of bodily injury, property damage, and personal and advertising injury caused by the insured's operations, products, or premises. Nearly every business that interacts with customers, vendors, or the public needs some form of CGL coverage, making it among the most widely purchased commercial lines products. The standard CGL form, developed and maintained by the Insurance Services Office (ISO), serves as the backbone for most policies issued in the United States, though carriers frequently attach endorsements to modify terms.
📋 A CGL policy is typically structured around two main coverage forms: Coverage A addresses bodily injury and property damage liability arising from an occurrence, while Coverage B handles personal and advertising injury claims such as defamation, wrongful eviction, or copyright infringement in advertising. Coverage C provides medical payments coverage regardless of fault for minor injuries on the insured's premises. Policies carry both per-occurrence and aggregate limits, and most are written on an occurrence basis, though claims-made forms exist in certain market segments. Underwriters evaluate the insured's industry classification, revenue, payroll, square footage, and claims history to determine pricing, often referencing ISO classification codes and experience modification factors.
🔑 Because CGL serves as the primary shield against third-party liability, it often functions as a prerequisite for doing business — landlords, general contractors, and government agencies routinely require proof of CGL coverage before entering into leases or contracts. The policy's broad scope, however, comes with important limitations: it typically excludes professional liability, pollution, cyber-related losses, and intentional acts, each of which demands its own specialized product. For brokers assembling a comprehensive program, the CGL policy is the starting point around which excess, umbrella, and specialty layers are built, making a thorough understanding of its terms and exclusions indispensable.
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