CG 00 01–COMMERCIAL GENERAL LIABILITY COVERAGE FORM

This coverage form begins by stating that certain of its provisions restrict coverage. It encourages the named insured to carefully read the coverage form in order to understand each party’s rights and duties and to determine what is covered and not covered. It also points out that the terms “you and your” refer to the named insured and that an insured is any person or entity that qualifies as such under Section II–Who Is an Insured. The terms “we, us, and our” refer to the insurance company that provides the coverage. Reference is made to Section V–Definitions because understanding the definitions is critical to understanding the coverage form.

SECTION I–COVERAGES

Coverage A–Bodily Injury and Property Damage Liability

1. Insuring Agreement

a. The insurance company agrees to pay amounts the insured is legally obligated to pay as damages for bodily injury and property damage that this insurance covers. It also has the right and duty to defend the insured against any suit that seeks those damages. However, this right and duty is only for those suits that seek damages covered by this insurance.

The insurance company can investigate any loss and settle any claim or suit that results at its discretion, but the amount it pays as damages is limited as described under Section III–Limits of Insurance. Its right and, more importantly, its duty to defend ends when the limit of insurance that applies to pay judgments and settlements under Coverage A or Coverage B or medical expenses under Coverage C has been exhausted. The insurance company has no other obligation or liability to pay sums or perform acts or services except for those specifically listed and described under Supplementary Payments–Coverages A and B.

Example: The Road Runner sues Wiley Coyote for numerous attempts on his life. The insurance company is not obligated to defend Wiley because the CGL Coverage Form does not insure intentional acts.

Example: Feels Good Mutual insures Eric's Etchings under the CGL Coverage Form with a $1,000,000 General Aggregate Limit. An explosion occurred due to Eric's negligence, and several people were injured. In addition, several adjacent properties were damaged. Each injured person and property owner file a separate claim for its injuries and damages and Feels Good begins to make settlements. Once the $1,000,000 General Aggregate Limit is used up, Feels Good has no further obligation to pay for injuries or damages or to defend against any lawsuits that might be filed.

b. Coverage applies to bodily injury and property damage subject to both of the following:

• Is caused by an occurrence that takes place in the coverage territory
• Occurs during the policy period