Core Definitions
Occurrence
An accident, including continuous or repeated exposure to the same harmful conditions.
Timeline Examples:
Single Occurrence Example:
One slip-and-fall = one occurrence
Continuous Exposure Example:
Factory pollution over 5 years = typically ONE occurrence (same harmful condition)
New Occurrence:
If they fix the problem, then it starts again = NEW occurrence
Key: Look for when the "harmful conditions" START and STOP
Coverage Key Points:
- Coverage exists for covered occurrences during the policy period
- AND after the policy period if due to the same circumstances that occurred during the policy period
- Must take place within the coverage territory as defined in the policy
Bodily Injury
Defined as bodily injury, sickness, or disease sustained by a person, including death resulting from any of these at any time.
Property Damage
Physical injury to tangible property, including loss of use.
Includes:
- Physical injury to tangible property
- Loss of use of property that is not physically injured
Important: Electronic data is NOT tangible property!
Personal and Advertising Injury
Includes consequential bodily injury arising from these offenses:
Copyright, Trade Secret, or Slogan Infringement
Used in an insured advertisement
False Arrest, Detention, or Imprisonment
Wrongful or Unlawful Eviction, Entry, or Invasion of Privacy
By landlord, owner, lessor, or someone on their behalf
Malicious Prosecution
Use of Another's Advertising Idea
Slander or Libel
Oral or written publication in any manner
Oral or Written Publication
That violates or invades the privacy of another
Coverage Territory
The territory in which the policy is applicable:
1 Primary Territory
- The United States
- Its territories and possessions
- Puerto Rico
- Canada
2 International Waters & Airspace
If the injury or damage occurs during travel to or from the defined coverage territories.
3 Anywhere in the World
If injury or damage results from goods or products manufactured or sold in a coverage territory.
Premises/Operations & Products/Completed Operations
Premises and Operations
The premises and operations hazard includes:
- Ownership of insured's premises
- Maintenance of insured's premises
- Use of the insured's premises
- All business operations
Simple Rule:
Work being done AT the job site (injury happens while you're working)
Products and Completed Operations
Bodily injury or property damage occurring away from the insured's premises and arising out of:
- The insured's product ("your product")
- The insured's work ("your work")
Simple Rule:
Work is DONE and you've left (injury from your finished work)
Edge Cases: When Does Coverage Switch?
EDGE CASE 1: Warranty Repair
You finish a job but come back for warranty repair - while you're there, it's Premises/Ops again!
EDGE CASE 2: Equipment Installation
You install equipment, leave, equipment explodes = Products/Completed Ops
Exceptions to Products/Completed Operations:
- Products still in the physical possession of the insured do NOT meet the definition
- Work that has not been completed is also an exception
- Work while being transported by the insured is an exception
"Your Work"
Work or operations performed by the insured or on the insured's behalf.
Includes: Materials, parts, or equipment furnished in connection with the work.
"Your Product" - Scope & Examples
Any goods or products (other than real property):
- Manufactured, sold, handled, distributed, or disposed by the insured
- Others trading in the insured's name
- Acquired business assets
Includes: Containers, materials, parts, or equipment used in connection with products.
IS "Your Product":
- Items you manufacture, sell, handle, or distribute
- Packaging/containers you put products in
IS NOT "Your Product":
- Real property (buildings)
- Products you buy and use (not resell) - like office supplies
GRAY AREA:
You import widgets and resell with your label = YES, your product
Employee, Auto & Mobile Equipment Definitions
Employee vs Temp vs Leased Worker
The term "employee" includes a leased worker but NOT a temporary worker.
WHY IT MATTERS:
CGL excludes injuries to EMPLOYEES (workers comp covers them). Classification determines whether CGL or Workers Comp applies!
Temp Worker
Working for you under contract with temp agency
= Treated like employee
= EXCLUDED from CGL
Leased Worker
Permanent arrangement with staffing company
= Treated like employee
= EXCLUDED from CGL
Independent Contractor
NOT an employee
= Their injury COULD be covered by your CGL
Bottom Line:
Classification determines whether CGL or Workers Comp applies
Mobile Equipment vs Auto
Mobile equipment (forklifts, cranes, bulldozers) = covered by CGL, not auto policy
Compulsory Insurance Caveat:
If the vehicle is required to have auto insurance by state law, it's an AUTO, not mobile equipment - even if it otherwise meets the definition above!
Example: Mobile Equipment
A forklift that never leaves the warehouse = mobile equipment (CGL)
Example: Becomes an Auto
A forklift that drives on public roads = might be an "auto" if state requires insurance
Auto
A land motor vehicle, trailer, or semitrailer designed to travel on public roads, including attached machinery or equipment.
Also Includes:
Any other land vehicle that requires compulsory insurance or other financial responsibility where it is licensed or principally garaged.
Exam Trap Alerts
Occurrence timeline trick: Factory pollution over 5 years = ONE occurrence (same harmful condition). If fixed then restarts = NEW occurrence. Look for when harmful conditions START and STOP.
Premises/Ops vs Products boundary: Come back for warranty repair? While you're there = Premises/Ops again! Finish and leave, then equipment explodes = Products/Completed Ops.
"Your Product" scope: Items you resell with your label = YES. Office supplies you buy and use (not resell) = NO. Buildings = NO (real property).
Employee classification matters: Temp workers AND leased workers = treated like employees = EXCLUDED from CGL (Workers Comp covers them). Independent contractors = could be covered by CGL.
Mobile equipment vs Auto caveat: Forklift in warehouse = mobile equipment (CGL). Same forklift on public roads requiring state insurance = AUTO (not mobile equipment), even if it otherwise fits definition.
Electronic data is NOT tangible property: This is a common exam question. Data loss is NOT property damage under CGL.
Coverage territory - worldwide for products: If a product was made/sold in the US and causes injury anywhere in the world, it's covered.
Quick Reference Summary
Occurrence Timeline
- Single: One slip-and-fall = one occurrence
- Continuous: 5 years pollution = ONE occurrence
- New: Fix then restart = NEW occurrence
Premises vs Products Boundary
- Premises/Ops: While working at job site
- Products/Ops: Done and left
- Edge: Return for warranty = Premises again!
"Your Product" Scope
- IS: Sell, distribute, handle, containers
- NOT: Buildings, office supplies you use
- Gray: Import & resell with label = YES
Employee Status
- Temp & Leased: = Employee (CGL excludes)
- Independent: NOT employee (CGL may cover)
- Why: Determines CGL vs Workers Comp
Mobile Equipment vs Auto
- Mobile: Off-road, warehouse only
- Auto: Roads OR state requires insurance
- Key: Compulsory insurance = AUTO
Territory
- Primary: US, territories, Puerto Rico, Canada
- Transit: International waters/air
- Worldwide: For products made/sold in US