The Four Core Coverages in a CGL Policy
A commercial general liability policy isn't a single blanket protection — it's structured around four distinct coverage grants. Each covers a different type of third-party claim. Understanding all four helps you know exactly when your policy will respond.
Bodily Injury Coverage
Bodily injury coverage kicks in when someone outside your business is physically harmed as a result of your operations.
A customer slips on a wet floor in your store. A visitor trips over a power cord at your job site. Someone walking past a construction zone is hit by falling material. These are all bodily injury scenarios your policy addresses.
The coverage pays for the injured party's medical expenses, lost wages, and pain and suffering damages. It also covers your legal defense costs if they file a lawsuit — and in California's litigation environment, that legal defense coverage alone is worth the premium.
The coverage applies to incidents that happen during your operations — not just at your own location. A cleaning business that causes an injury at a client's office, a landscaper whose equipment injures a bystander, a contractor whose crew has an incident at a remote job site: all covered.
Property Damage Coverage
Property damage coverage applies when your business operations accidentally damage someone else's property.
The most common scenarios: you damage a client's flooring while doing renovation work, your pressure washing causes water intrusion into a neighboring unit, your painting crew gets overspray on a customer's vehicle, or you break a client's window during a delivery.
The key word is "accidentally." Intentional damage isn't covered. But careless, incidental, or unavoidable damage in the course of normal business operations typically is.
For contractors and service businesses in Southeast LA County, property damage claims are the most common type of CGL claim. They're also the category clients are most nervous about — which is why requiring proof of insurance before authorizing work has become standard practice.
Personal and Advertising Injury
This coverage category is less intuitive but equally important. It covers non-physical harm caused by your business communications and marketing.
Covered scenarios include:
- •Copyright infringement in your advertising materials
- •Using someone else's slogan or creative work in your marketing
- •Defamation — making false statements that damage someone's reputation
- •False advertising claims
- •Wrongful eviction in certain property management contexts
For businesses that actively market themselves — running ads, posting on social media, distributing printed materials — advertising injury coverage is a meaningful protection. A competitor who claims you copied their marketing language or a business that says your advertising made false comparative claims could trigger an advertising injury case.
Completed Operations Coverage
Completed operations is the coverage category most business owners underestimate until they actually need it.
This coverage applies to claims arising from work you've already finished. The job is done, the client signed off, you moved on — and then something goes wrong.
A plumbing repair develops a leak two months later. Electrical work you completed causes a fire hazard discovered during a later inspection. Flooring you installed buckles because of a substrate issue that wasn't visible during installation. Roofing you replaced develops leaks after the next rainstorm.
Completed operations coverage is included in standard CGL policies. It's not a separate endorsement you have to add. But it's worth knowing it's there, and it's why maintaining continuous coverage — not just getting covered job-by-job — matters for contractors and service businesses.
What Additional Coverages Are Sometimes Added
Some businesses add endorsements to their CGL policy to address specific needs:
Additional insured endorsements add a third party (client, GC, property owner) to your policy as an insured. This is the most common endorsement request from commercial clients.
Primary and non-contributory wording specifies that your policy is primary over any other coverage the additional insured may carry. Required by some commercial contracts.
Waiver of subrogation prevents your carrier from going after a client or other party if they caused the claim. Also required by some contracts.
None of these change what the policy covers — they change how the policy interacts with other parties' insurance arrangements.
What General Liability Does Not Cover
Just as important as what's included is what's excluded from a standard CGL policy:
- •Employee injuries — covered by workers' compensation
- •Your own property and equipment — covered by commercial property
- •Vehicle accidents — covered by commercial auto
- •Professional mistakes and bad advice — covered by professional liability (E&O)
- •Intentional acts — no coverage for deliberate harm
- •Pollution — typically excluded unless you have a pollution endorsement
- •Liquor liability — usually excluded; requires a separate policy
Understanding these exclusions upfront helps you identify whether you need additional policies alongside your CGL coverage.
