What is commercial general liability (CGL) insurance?

What CGL covers

Commercial general liability is the foundational third-party liability coverage almost every business carries. On the standard ISO form, it responds to three broad categories of claim brought against the insured by someone else:

• Bodily injury—a third party is physically hurt because of the business’s operations, premises, or products (for example, a passerby injured near a job site).
• Property damage—the business damages someone else’s property in the course of its work.
• Personal and advertising injury—offenses such as libel, slander, or copyright infringement in advertising.

Critically, CGL covers third-partyclaims. It does not cover injury to the insured’s own employees—that is the job of workers’ compensation insurance—and it does not cover damage to the insured’s own work or auto liability, which are handled by other policies.

Occurrence vs. claims-made

CGL policies are written on one of two triggers. An occurrence policy covers incidents that take place during the policy period, regardless of when the resulting claim is actually made—so a claim filed years later is still covered if the event happened while the policy was in force. A claims-madepolicy only covers claims that are reported while the policy (or an extended reporting “tail”) is active.

Construction contracts almost universally require occurrence-based CGL. That is because construction claims—especially defect claims— often surface long after the work is done, and only an occurrence form reliably responds to a loss that happened during the project but is discovered later.

Limits: per-occurrence and aggregate

A CGL policy carries several limits. The two most important are the each-occurrence limit—the most the policy pays for any single claim—and the general aggregate limit, which is the most the policy will pay in total during the entire policy period. A common requirement is $1,000,000 per occurrence and $2,000,000 general aggregate.

The aggregate matters because it can be eroded by other, unrelated claims. If a subcontractor’s aggregate has already been partly consumed by losses on other projects, less coverage may remain for yours. That is why many GCs require a per-project aggregate endorsement or higher limits reached with umbrella / excess liability coverage.

Products–completed operations coverage

CGL includes a sub-part called products–completed operations coverage. This responds to bodily injury or property damage that occurs afterthe insured has finished its work—the classic construction-defect scenario where a problem surfaces months or years later. Because this exposure outlives the project, GCs should confirm the sub’s completed-operations coverage is in force and that the GC is named as an additional insured for completed operations, not just ongoing operations.

Why CGL is the core coverage GCs require

For a general contractor, requiring CGL of every subcontractor is the first line of risk transfer. When a sub’s work injures someone or damages property, the GC can easily be named in the resulting claim. If the sub carries CGL and names the GC as an additional insured on a primary and non-contributorybasis, the sub’s carrier defends and pays first, keeping the loss off the GC’s own policy and loss history. A sub with no CGL—or with limits below the contract requirement—pushes that exposure straight back onto the GC.

How does Wardly help?

Wardly is free COI tracking software built for general contractors. It reads each subcontractor’s certificate of insurance, confirms CGL is in force, checks the per-occurrence and aggregate limits against your requirements, verifies additional insured and completed operations status, and grades every certificate A–F automatically. See how it compares to myCOI and TrustLayer on the comparison hub.

This is general information, not legal or insurance advice.