The Two Core Coverages in Every CGL Policy
A commercial general liability policy is built around two primary insuring agreements: bodily injury liability and property damage liability. These aren't interchangeable terms -- they respond to different types of harm, measured in different ways, and capped by different limits.
Understanding how each works helps you predict when your policy responds, what it pays, and where the gaps are.
Bodily Injury Liability
Bodily injury (BI) covers physical harm to a third party ( someone who isn't you or your employee ) caused by your business operations.
What it pays:
- •Medical expenses: emergency room, hospitalization, surgery, physical therapy
- •Lost wages: income the injured person couldn't earn while recovering
- •Pain and suffering: non-economic damages for the physical experience of the injury
- •Legal defense: attorney fees, court costs, and settlement amounts if they sue
Common claims:
- •A customer slips and falls at your business location
- •A visitor is injured by equipment at your job site
- •A bystander is hurt when your delivery vehicle backs into them (off-road; on-road is auto coverage)
- •A client's employee is injured due to your work conditions
What triggers it: Physical injury to a person, caused by your operations, your premises, or your products/completed work.
What it does NOT cover: Injuries to your own employees ( that's workers' compensation. Injuries caused by your vehicle while driving ) that's commercial auto.
Property Damage Liability
Property damage (PD) covers physical damage to someone else's property caused by your business operations.
What it pays:
- •Repair costs: fixing or restoring the damaged property
- •Replacement costs: replacing property that can't be repaired
- •Loss of use: in some cases, compensation for the time the property was unusable
Common claims:
- •Your crew accidentally damages a client's flooring during a project
- •A fire caused by your operations spreads and damages neighboring property
- •You break a window or fixture while working in a client's space
- •Your pressure washing operation causes water damage inside a building
What triggers it: Physical damage to tangible property belonging to a third party, caused by your work, your people, or your equipment.
What it does NOT cover: Your own property or equipment ( that's commercial property insurance. Damage to property you're actively working on ) that falls under the "your work" exclusion (though completed operations coverage picks up after the job is done).
How the Limits Work
Both coverages are subject to the policy's per-occurrence limit and aggregate limit.
The per-occurrence limit is the maximum the policy pays for any single incident -- one slip-and-fall event, one property damage accident. A $1M per-occurrence policy pays up to $1M for each separate event.
The aggregate limit is the total the policy pays across all claims in a policy year. A $2M aggregate means the policy stops paying once it has paid out $2M in total claims -- across all incidents, combined.
Most small businesses in California carry $1M per occurrence / $2M aggregate. Clients with higher risk exposure ( large commercial accounts, government contracts, construction projects ) may require $2M per occurrence.
When Both Coverages Apply to One Incident
Some incidents trigger both bodily injury and property damage in a single event. A contractor's scaffolding collapses: a worker on the ground (third party) is injured (bodily injury) and the client's equipment below is destroyed (property damage). Both coverages respond under the same per-occurrence limit.
This is why understanding that the per-occurrence limit is shared across both coverages matters -- a large enough incident can exhaust the limit across both categories simultaneously.
Coverage in Southeast LA County
For businesses operating in Santa Fe Springs, Norwalk, Pico Rivera, Downey, and surrounding communities, the most common claims involve:
- •Bodily injury from customer foot traffic (retail, restaurants, service businesses)
- •Property damage during contractor work (cleaning, HVAC, plumbing, general contracting)
- •Completed operations claims -- property damage discovered after the job is done
A standard $1M/$2M CGL policy covers all of these scenarios under the bodily injury and property damage insuring agreements.
