The American Association of Insurance Services (AAIS) GL-200 - Commercial Liability Coverage provides occurrence based protection against claims for bodily injury, property damage, personal injury, or advertising injury arising out of the insured's business premises or operations. It also covers claims for bodily injury and property damage related to products and completed work associated with the insured business.

The copyright of the GL-200 dates back to 2006. To stay current, AAIS has added several mandatory endorsements over the years for use with this form. To help understand how these endorsements change coverage, we have inserted the changes into this analysis.

The endorsements being editorially inserted into the form are as follows:

CL-300–Amendatory Endorsement
GL 0163–Exclusion – War and Military Action
GL-890–Lead Liability Exclusion
GL 0950–Known Injury or Damage Amendments
GL 1020–Other Insurance Amendment
GL 1022–Information Distribution and Recording Violations Exclusion
GL 1353–Exclusion – Data Breach Liability

COVERAGE FORM INTRODUCTION

A table of contents is included in the coverage form to assist with the review process.

Certain words or phrases carry specific meanings. They are listed in the Definitions section, located after the Insuring Agreement, and are highlighted in bold or quotation marks throughout the coverage form.

NOTE: The bolded words above were added by the CL-300–Amendatory Endorsement.

INSURING AGREEMENT

The insurance company agrees to provide the commercial liability coverage specified in the policy. However, this coverage is subject to the policy's terms and conditions being fulfilled. All contracts require consideration, and in an insurance contract, the consideration is the insured’s payment of the required premium.

The policy terms concerning cancellation, policy alterations, book and record inspections, surveys, inspections, and the assignment or transfer of rights or responsibilities are also applicable, even though they are not included within this coverage part. These terms are listed separately because they are not part of this specific coverage form. They are outlined in CL 0100–Common Policy Conditions, which must be attached to every monoline commercial lines policy.

Related Article:CL 0100–Common Policy Conditions Analysis

DEFINITIONS

When any of the following terms are used in the policy, the explanation in this section takes precedence over the dictionary definition of the term.

NOTE: The Editors added titles to enhance clarity.

1. You and Your

The individual or entity named as the insured on the declarations. There could be several individuals or entities identified as 'you' or 'your.'

2. We, Us And Our

The insurance company providing the insurance coverage in this form.

3. Advertising Injury

An injury arising from any or all of the following offenses:

· Defamation, such as slander or libel, against a person or organization, whether spoken or written.

· Verbal or written statements diminishing the quality or reputation of another's goods, products, or services.

· The infringement of an individual's right to privacy in written or spoken communication.

· Using or copying another person's advertising concepts or business approach without authorization.

· The violation of copyright, title, slogan, trademark, or trade name.

NOTE: Advertising injury does not include bodily injury, property damage, or personal injury.

4. Auto

A vehicle designed for operation on public roads, which may be motorized or consist of a trailer or semi-trailer, and operates on land. Machinery or equipment attached to a vehicle is also considered an auto.

5. Basic Territory

The United States of America, including its territories and possessions, as well as Canada and Puerto Rico.

6. Bodily Injury

Bodily harm, illness, or disease to a person. The necessary care and loss of services they usually provide is also considered bodily injury. Death resulting from the initial bodily harm, sickness, or disease is also regarded as bodily injury, regardless of when it occurs. Mental or emotional injury, suffering, or distress is classified as bodily injury but only if it results from a physical injury.

Example: Geraldine slips on a lettuce leaf at Smith Brothers Buffet restaurant, resulting in a compound fracture of her leg. Her family witnessed the horrifying moment when the bone pierced through her flesh during the fall.

All medical services provided to Geraldine for the treatment of her injury are classified as bodily injury. Geraldine works full-time and also cares for her mother and sister in the evenings. The cost of replacing these services due to her injury is also considered bodily injury.

After the accident, Geraldine develops an infection in her leg, and despite three years of treatment, she ultimately passes away. Even though her death occurred three years after the initial injury, it is still classified as bodily injury.

Maggie, Geraldine's sister, witnessed the incident and has been receiving psychiatric treatment for the trauma since the accident. However, since Maggie did not sustain a physical injury, her condition is not classified as bodily injury.

7. Coverage Territory

The following are all regarded as the coverage territory:

The basic territory as defined above.
Bodily injury, property damage, personal injury, or advertising injury occurring in international waters or airspace during travel starting or ending in the basic territory
The world, but the injury or damage must arise out of the following:

1) Liability payment obligations must be confirmed within the basic territory or via a settlement agreed upon by the insurance company. Otherwise, coverage does not extend globally.

2) If condition 1) is met, liability for products produced or sold within the basic territory applies worldwide, regardless of where the incident occurs.

3) If condition 1) is satisfied, activities of a person outside the basic territory are covered, but only if the individual is away for a short period of time.

Example: Marilyn’s Must Haves sells women’s accessories through multiple retail outlets and online.

Scenario 1: Hector, an employee, travels from Arizona to Paris to meet a retail client. In Paris, he places his bag on a café floor, and a woman trips over it, breaking her leg. If a lawsuit is filed related to this injury within the basic territory, coverage applies. However, if the suit is filed in Paris, this coverage will not respond.

Scenario 2: Gretel purchases Marilyn’s product and is injured by it. She sues Marilyn for the injury. Gretel bought the product online, but lives in Germany. If the lawsuit is filed in the basic territory this insurance coverage will respond. However, if the lawsuit is filed in Germany, there is no coverage.

8. Damages

Money provided to a person as compensation for an injury.

Data Records (No number assigned)

(Editorially added from the mandatory amendment – GL 1353 – Exclusion Data Breach Liability - 09 14 edition date)

Documents, files, and other data stored electronically on a device used with computer hardware, networks, programs, or applications. Electronically controlled equipment is included if it is used with the computer hardware, network, program, or application.

9. Declarations

A broad term meaning the actual declarations, supplemental declarations, and schedules associated with this policy.

Designated Insured (No number assigned)

(Editorially added from the mandatory amendment – GL 0950 – Known Injury or Damage – 12 99 edition date)

There are five types of entities considered designated insureds. The first four depend on the type of business entity listed on the Declarations and are similar to the definition of insured described later in the policy:

Individual: The individual and their spouse are designated as insureds, but only in relation to the conduct of the business for which the named insured is the exclusive owner.
Partnership or Joint Venture: The named insured, and partners, or members, and their spouses are designated insureds, but only regarding the conduct of the named insured’s business.
Limited Liability Company: The named insured, members, and managers are designated insureds, but only within the scope of their particular duties.
Organization but Not a Partnership, Joint Venture, or LLC: The named insured, including all its executive officers and directors, is regarded as a designated insured. However, this applies only within the scope of their individual duties. Additionally, the named insured’s stockholders are also considered designated insureds, but only for liabilities arising from their capacity as stockholders.
Any employee defined below who is authorized to provide or receive an occurrence or claim notice.

NOTE: There is no indication as to who must authorize the employee.

10. Employee

This is an explanation rather than a definition. The term employee covers leased workers but excludes temporary workers.

11. Impaired Property

A property is considered impaired if it fails to meet any of the following criteria.

The property is tangible.
The property is neither the product nor the work of the named insured.

The property's value has decreased due to safety concerns, stemming from the named insured's products or work, or because the insured did not fulfill its contractual obligations.
The property value can be restored by repairing, replacing, adjusting, or removing the insured’s products or work, or by fulfilling the contract terms.

12. Insured

The first group of defined insureds is determined by the type of business entity listed on the Declarations:

Individual: The individual and their spouse are insureds, but only with respect to the conduct of the business for which the named insured is the sole owner.
Partnership or Joint Venture: The named insured, its partners, members, and their spouses are insureds, but only with respect to the conduct of the named insured’s business.
Organization That Is Not a Partnership or Joint Venture: The named insured, including all its executive officers and directors, is regarded as an insured. However, this applies solely within the scope of their individual duties. Additionally, the named insured’s stockholders are also considered insureds, but only for liabilities arising from their capacity as stockholders.

The following group is considered insureds, regardless of their business entity type.

· The real estate manager of the named insured can be an individual or organization. However, if it's an individual, that person cannot be an employee of the named insured.

· If the named insured dies during the policy term, their legal representative becomes an insured.

o The legal representative is covered as an insured, but only while acting within the scope of their responsibilities.

o The legal representative takes on all the named insured's rights and duties under this coverage.

o A person who has custody of the insured property will also be considered an insured, but only with respect to liability for the maintenance or use of that property, and only until a legal representative is appointed.

· The following are insureds while using the named insured’s mobile equipment, but only if they have permission:

o An employee of the named insured who uses the equipment during work is covered. However, if a coworker is injured, the employee responsible for causing the injury is NOT considered an insured.

o Any individual who is not an employee is covered, provided they do not have insurance coverage and the liability arises from the operation of equipment. Organizations or individuals legally responsible for the conduct of the other individual are also considered insured. However, they are not covered for damages they cause to equipment owned or rented by their employer, equipment the employer occupies, or equipment for which the employer is responsible.

o Insured status regarding mobile equipment use, as described above, does not apply to any loss involving damage to the named insured’s owned or rented equipment, equipment the insured is occupying, or equipment for which the insured is responsible.

The employees of the named insured are covered, but only for acts within the scope of their employment. However, they are not included as insureds for bodily injury, personal injury, or advertising injury to the named insured or fellow employees. Additionally, they are not insured against property damage to property owned, rented, or loaned to employees, or to partners, members, or their spouses.

Executive officers are excluded from being considered employees under this section.

Any newly acquired or formed organization of the named insured. However, this applies only when the named insured has a majority interest in the ownership.

o This definition does not include newly created or acquired joint ventures and partnerships. This means they are not considered insureds.

The organization newly acquired or formed is not insured for any of the following:

o When comparable insurance coverage is available.

o After the policy period during which it was formed or acquired ends, or 90 days after its formation or acquisition, whichever comes first.

o For any bodily injury or property damage occurring before the date of acquisition or formation.

o For any personal injury or advertising injury offense committed before the date of acquisition or formation.

Unless a partnership or joint venture is specifically named as an insured on the declarations, no individual or entity is considered an insured for the actions of the partnership or joint venture, whether in the past or present.

13. Leased Worker

A leased worker is an individual contracted by the named insured from a labor leasing entity. The contract must specify the worker will perform duties related to the named insured's business operations. Temporary workers are not leased workers.

14. Limit

The amount of coverage this policy provides.

15. Loading or Unloading

The movement of property starts when it is taken from the point where it is accepted for transit by a vehicle. Loading or unloading continues while the property is inside or on the vehicle and stops when the property is taken off the vehicle at the destination. Movement by any mechanical device attached to the vehicle and movement by a hand truck are considered loading and unloading, but movement by any other type of mechanical device is not considered loading or unloading.

Example:

Step 1: Millie moves a television from its storage location to the loading dock.

Step 2: Jason picks up the television, intending to put it in his box truck.

Step 3: Jason loads the television into the truck.

Step 4: Jason drives his truck to his customer.

Step 5: Jason removes the television from his truck and sets it on the customer’s loading dock.

Step 6: Frank moves the television from the loading dock to another area of the building.

Steps 2, 3, 4, and 5 are considered loading and unloading.

16. Occurrence

This is an accident, but it is not limited to a single event. It can also involve repeated exposure to similar or identical conditions.

17. Personal Injury

This is an injury not involving bodily injury, property damage, or advertising. The injury must arise from any or all of the following offenses:

Slander or libel against a person or organization expressed verbally or in a written publication.
Verbal or written communication that disparages the goods, products, or services of another.
The infringement on a person's right to privacy, whether communicated verbally or in writing.

Arrest, detention, or imprisonment based on false pretenses.

Example: Millie asks a customer to stay in the store, but the customer refuses. Believing the customer has shoplifted, Millie grabs her arm and escorts her to the back of the store. Millie calls the police, convinced that a crime has taken place. After the customer proves she did not take any items from the store, she is released. Consequently, the customer files a lawsuit against the store for false arrest and detention.

Prosecution with malice.
Tenant-related offenses committed by or on behalf of the owner, landlord, or lessor of a room, dwelling, or premises. It includes wrongful entry into, eviction from, or invasion of the tenant’s right to private occupancy of the property.

Example: Paul, the property manager at Golden Acres, often uses his master key to access tenants’ apartments when they are not home. Pauline sues Golden Acres and Paul for invasion of privacy after finding Paul in her apartment.

18. Products/Completed Work Hazard:

The product hazard is bodily injury or property damage that meets two requirements: damage or injury must occur away from locations owned or rented by the insured and arise out of products physically released to others.
The completed work hazard is bodily injury or property damage, which must meet two requirements: damage or injury must occur away from locations owned or rented by the insured and must arise from the named insured’s work.

The work of the named insured excludes projects still ongoing or abandoned. Work is considered completed on the earliest date of the following:

o Once all contract work the named insured is responsible for is completed.

o When a single contract covers multiple jobs, the work at a specific jobsite is deemed complete once the named insured has finished their work at that jobsite.

o When the named insured's work at a job site is put to its intended purpose by any person or organization. However, completed work does not include instances where a subcontractor or contractor is still working at the same jobsite.

Work is considered completed even if it needs additional service, maintenance, correction, repair, or replacement due to a defect or deficiency.

Exclusions:

The products and completed work hazard does not include bodily injury or property damage arising from any of the following:

o Transportation of property. However, coverage applies if injury or damage is due to a condition in or on the vehicle caused by loading or unloading.

Example: Glen secured goods at the rear of his box truck to prevent shifting during transit. However, the tie-down was not tight enough, and the items came loose. Any resulting damage is considered a product hazard because it occurred during the loading process.

o When tools, uninstalled equipment, or abandoned and unused materials are present.

o When products or work are a part of the classification shown on the declarations, and it specifies Products/Completed Work is included.

NOTE: This product and work are classified as premises-type losses, not as products or completed work, and included in the General Aggregate instead of the products or completed work Aggregate.

Example: Kelly’s Consulting designed and manufactured small, liquid-center paperweights for a promotional event. One of the paperweights leaked and caused damage to a customer’s mahogany desk. The property damage claim is considered premises coverage because the Consulting classification included Products/Completed operations within the premises code.

19. Products

Goods or merchandise produced, sold, handled, disposed of, or distributed by the named insured are considered products. This also includes goods and merchandise belonging to others traded under the named insured's name for the purposes of manufacturing, selling, handling, disposing of, or distributing. Additionally, products include goods and merchandise acquired by the named insured for the purpose of these activities.

Products are also all the following:

· Anytime warranties or representations about the product’s fitness, quality, durability, or performance are provided.

· Containers, materials, parts, or equipment furnished with the products.

NOTE: Vehicles are not considered containers.

· Instructions and warnings provided or that should have been provided.

However, real property is never classified as a product. Furthermore, vending machines or other property rented or placed for the use of others, but not sold to them, are also not considered products.

Example: Peter sells ready-to-assemble furniture, which is classified as products. The instruction manual for assembling the furniture is also considered products. Additionally, the warnings that accompany the furniture are also regarded as products.

Likewise, the box used to ship the ready-to-assemble furniture is also considered products.

20. Property Damage

Physical injury to or destruction of tangible property, including the loss of use of such property. The property does not need to be damaged for there to be a loss of use property damage claim. Loss of use occurs simultaneously with the event that caused the loss.

Example: Piper Broadcasting’s antenna fell onto the sidewalk of Penny’s Fine Furniture, blocking its entrance. Customers couldn’t enter Penny’s store for two days while Piper coordinated with contractors to remove it. This two-day loss of access is regarded as property damage, even though Piper’s antenna did not physically damage Penny’s furniture or store.

21. Temporary Worker

A temporary replacement provided to the insured for a regular employee who is a natural person.

22. Terms

All provisions, limitations, exclusions, conditions, and definitions relevant to the coverage provided.

23. Your Work

Any or all of the following:

· Work or operations carried out either by the named insured or on its behalf.

· Materials, parts, or equipment provided for the insured’s work or operations.

· Warranties or representations concerning the quality, fitness, durability, or performance of the materials, parts, or equipment provided and related to the insured’s work or operations. These warranties or representations must be in writing and can be made at any time.

Example: Peter is very upset. In October, he hired Justin’s Fire Safety to prepare the extinguishing system for winter. Justin assured Peter the system could withstand temperatures as low as -30°F. Although temperatures drop, they never fall below –15°F. When temperatures rise above freezing, the sprinkler system begins to leak. Peter sues Justin’s for the damages caused by the leak. However, Justin’s insurance company denies the claim because the warranty was verbal, not in writing.

Instructions and warnings provided or should have been provided.

PRINCIPAL COVERAGES

The insurance company provides insurance coverage for the following, but only if a specific limit or premium is indicated on the declarations.

Coverage L–Bodily Injury Liability and Property Damage Liability

The insurance company will pay the amounts an insured is legally required to pay as damages for bodily injury or property damage covered by this policy. The injury or damage must be caused by an occurrence and occur within the coverage area. Additionally, the bodily injury or property damage must occur during the policy period.

(Editorially added wording from GL 0950–Known Injury or Damage Amendments)

Insurance for Coverage L only applies when the designated insured, as defined, is unaware of any bodily injury or property damage incidents prior to reporting a claim.

However, any prior knowledge of such incidents prior to the policy's inception date is not covered, and the insurance company will not have a duty to defend or pay a claim. Additionally, continuation, resumption, or change in such prior bodily injury or property damage is regarded as known by the designated insured within the relevant prior policy period.

Example: Paula falls at Penny’s Place. She sustains a head injury but makes it home before collapsing and slipping into a coma. She never regains consciousness. One year later, she dies from those injuries.

Scenario 1: Paula’s estate investigated her actions before her accident and found out that Paula fell at Penny’s Place. The family hired an investigator and was able to file a claim against Penny’s Place. This is covered under the current policy because no one at Penny’s was aware of the injury.

Scenario 2: Jill, a partner at Penny’s, saw the fall and was concerned. She asked Paula if she wanted an ambulance, but Paula declined and requested a cab instead. Since Jill is a designated insured and was aware of the bodily injury, her current policy does not cover the incident, though the previous policy might respond.

If no prior knowledge exists, or if the event is a continuation, resumption, or change of a previous bodily injury or property damage, then the insurance company has a duty to defend against any suit or claim seeking damages. Additionally, any resumption, change, or continuation of a bodily injury or property damage first known in the prior policy period is covered under the current policy.

Example: Mavis crashes her golf cart into her neighbor’s carport. The damage seems minor, and her insurance company covers the cosmetic repairs. Six months later, heavy snow overload causes the carport to collapse. An investigation by the neighbor’s insurance adjuster finds that Mavis’s earlier accident weakened the support beam, which contributed to the collapse. Mavis’s policy that paid for the cosmetic repairs will also cover the carport collapse claim, even though it occurred in a different policy period.

Coverage M–Medical Payments

Certain medical expenses are covered when bodily injury results from an accident, regardless of whether negligence is involved. The accident must occur on the insured’s owned or rented property or on nearby ways such as streets, alleys, or sidewalks adjacent to those premises. Additionally, medical expenses incurred off-premises but arising from the named insured's operations are also covered.

The expenses covered by the policy must be related to an accident occurring during the policy period and within the designated coverage territory. Only expenses incurred and reported to the insurance company within one year of the accident date will be paid.

Medical expenses must be both reasonable and necessary, and include the following:

· medical

· surgical

· x-ray

· dental services

· prosthetic devices

· eyeglasses

· ambulance

· hospital

· professional nursing

· funeral services

· first aid provided at the time of the accident

Example: Marcy is jogging past a new construction site. Milton, an employee of Brickmasters, Inc., is building a wall. He loses his grip and drops a heavy trowel, which hits Marcy, causing her to fall.

Milton immediately calls 911 and insists Marcy be taken to a hospital. All medical expenses related to the 911 transport and hospital stay are covered by Brickmasters, Inc.’s insurance, subject to the medical payments limit of the policy.

Coverage N–Products/Completed Work

The insurance carrier covers the amount the insured is legally required to pay for damages due to bodily injury or property damage related to the products or completed work hazard covered by this insurance. The injury or damage must be caused by an occurrence taking place within the coverage territory and during the policy period.

Example: Jelly Spot produces candy sold worldwide. On August 1, 2025, while in Paris, Kelly bites into a Jelly Spot and breaks a tooth after encountering a piece of metal in the candy. Kelly sues Jelly Spot.

An investigation reveals that an incident at the Jelly Spot Pennsylvania location on October 1, 2024, resulted in metal contamination of some of the candy. The plant believed they had identified all the problematic boxes, but this one slipped through.

The policy in effect on August 1, 2025, will cover this loss because it is the policy in effect at the time of the injury.

(Editorially added wording from GL 0950–Known Injury or Damage Amendments)

Insurance for Coverage N (if applicable) only applies when the designated insured, as defined, is unaware of any bodily injury or property damage incidents prior to reporting a claim.

Coverage O–Fire Legal Liability

The insurance covers property damage caused by fire when the named insured is legally responsible, including damage to buildings or parts of buildings rented or loaned to them. Buildings encompass any fixtures permanently attached to the building.

This coverage is not limited by any property damage exclusions, except as follows:

· Liability when it arises from any contract or agreement in which the insured agrees to indemnify any person or organization for fire damage to the premises.

NOTE: A misunderstanding could occur if the insured signs such a contract and a loss occurs. If the only reason for the obligation is the contract, the exclusion applies. However, if the insured is also legally liable beyond the scope of the contract, the exclusion may not apply.

· Liability when the insured expected, directed, or intended the property damage.

· Liability when the damage to the property is caused by acts of the insured that are both intentional and malicious.

Coverage P–Personal Injury Liability and Advertising Injury Liability

The insurance carrier will pay the sums an insured is legally required to pay as damages for personal injury or advertising injury covered by this policy.

Personal Injury

Coverage applies when an offense occurs during the named insured’s business activities. However, offenses related to advertising, publishing, broadcasting, or telecasting, if committed by or on behalf of the insured, are not covered. The injury must occur during the policy period and in the coverage territory.

Advertising Injury

Coverage applies when an offense is committed and the named insured’s goods, products, or services are being advertised. The injury must occur during the policy period and in the coverage territory.

SUPPLEMENTAL COVERAGES

The insurance company provides three supplemental coverages, which are subject to all the terms of the Principal Coverages. These Supplemental Coverages do not increase the limits of the Principal Coverages.

Contractual Liability

Liability for bodily injury and property damage assumed under the following contracts or agreements is covered:

· Premises leases.

· Agreements for easements or licenses are included. However, agreements related to construction or demolition within 50 feet of a railroad are excluded.

· Municipal indemnification agreements apply, but only when required by ordinance. Agreements for work done for the municipality are excluded.

· Sidetrack agreements. These are agreements between a party with a sidetrack on its premises and the railroad providing the track.

· Agreements for the maintenance of elevators.

· Any assumption of tort liability for damages resulting from bodily injury or property damage related to a contract or agreement involving the conduct of the named insured’s business. This also includes indemnification agreements with a municipality when work is performed for that municipality.

NOTE: Tort liability in this policy refers to the liability imposed by law when there is no contract or agreement in place.

This supplemental coverage does not apply to any part of the following types of contracts or agreements.

When indemnification is required for any person or organization for bodily injury or property damage occurring within 50 feet of railroad property. However, this requirement applies only when the operations impact railroad infrastructure, including bridges, trestles, tracks, roadbeds, tunnels, underpasses, or other crossings.
When indemnification of an architect, engineer, or surveyor for injury or damage is required, but only if it arises from the following situations:

o The process of preparing, approving, or not preparing or approving maps, drawings, opinions, reports, surveys, changes, orders, designs, or specifications.

o Providing directions or instructions, or failing to do so, but only if this action or inaction is the main cause of injury or damage.

Liability assumption for injury or damage arising from providing or failing to provide any professional services. However, this only applies if the insured is an architect, engineer, or surveyor. The excluded services include supervisory, inspection, or engineering services, as well as the preparation, approval, or failure to prepare or approve maps, drawings, opinions, reports, surveys, changes, orders, designs, or specifications.
When indemnification is required by any party for damage by fire to the named insured’s rented or loaned premises.

Incidental Medical Malpractice Injury

Bodily injury arising from providing or failing to provide the following medical-related services is covered:

Medical
Surgical
Dental
X-Ray
Nursing services or treatment
When food or drinks are provided alongside the above treatments, any bodily injury caused by these items is also covered.
Furnishing or dispensing of the following:

o drugs

o medical, dental, or surgical supplies or appliances

Example: Jessica is shopping at Simply Chic when she starts to feel faint and mentions she might pass out. Patty, a nursing student and part-time worker at Simply Chic, thinks Jessica might be diabetic and gives her some orange juice. However, Jessica is allergic to orange juice. This coverage will provide protection if Jessica sues Simply Chic.

This supplemental coverage does not cover any of the following:

When providing first aid to others, the expenses incurred by the insured during an accident.
When the insured or an employee’s occupation or business involves providing any of the services outlined in this supplemental coverage.
When injury is caused by an indemnitee whose occupation or business involves providing any of the services outlined in this supplemental coverage.

Mobile Equipment

The insurance company covers amounts the insured is legally liable for due to bodily injury or property damage resulting from mobile equipment or any machinery and attachments.

To be eligible for coverage, the mobile equipment must be a land motor vehicle and meet at least one of the following criteria. Additionally, the equipment must be permanently attached to the vehicle.

Equipment must be used exclusively at the named insured’s owned or rented locations, including adjoining accessways.
Designed for use primarily off public roads.

NOTE: It can be used on public roads, but the main point is that it must be primarily designed for off-road use.

Travel using crawler treads.

Self-propelled and designed for the exclusive purpose of providing mobility to power the following:

o cranes, shovels, loaders, diggers, or drills.

o concrete mixers, excluding mix-in-transit.

o graders, scrapers, rollers.

o other road construction or road repair equipment.

Non-Self-Propelled Mobile Equipment

If the equipment is not self-propelled but primarily used to provide mobility to the following, it must also be permanently attached to the vehicle.

Air compressors, pumps, and generators, including spraying, welding, and building cleaning equipment.
Geophysical exploration, lighting, and well servicing equipment.
Equipment used to raise or lower workers, such as cherry pickers. The equipment must be permanently installed on the vehicle.

Exclusions

This supplemental coverage does not apply to self-propelled vehicles if any of the following machinery and equipment are permanently attached.

Equipment designed for snow removal, street cleaning, or road maintenance is excluded. However, equipment used in road construction or resurfacing is included.
*Equipment used to raise or lower workers, such as a cherry picker.
*Air compressors, pumps, and generators, including equipment for spraying, welding, and cleaning buildings.
*Equipment used for geophysical exploration, specialized lighting systems, or equipment for servicing wells.

NOTE: *The insurance company will cover bodily injury or property damage arising from the operation of any of this equipment, but it does NOT cover damage or injuries resulting from the vehicle's operation.

The insurance company also provides liability, uninsured motorists, no-fault, or other coverages mandated by motor vehicle insurance laws, including the coverage limits specified by those laws.

NOTE: Providing uninsured motorist, no-fault, or other mandatory coverages could be costly because this item does not specify a liability limit for those coverages. The insurance carrier may be considering state minimums, while the insured may be considering CGL occurrence limits.

Related Article: CA 20 15-Mobile Equipment

DEFENSE COVERAGE

Payments under this coverage are in addition to the Commercial Liability Limits. The insurer has the right and obligation to defend any lawsuit seeking damages potentially covered by this insurance.

The insurance company has the right to conduct investigations and settle claims or lawsuits.

NOTE: The settlement decision is entirely at the discretion of the insurance company.

The term “suit” in this coverage is expanded to include arbitration or other alternative dispute resolution processes involving bodily injury, property damage, personal injury, or advertising injury, in which the named insured is required to participate or is permitted to participate by the insurance carrier.

Once the insurance limit has been exhausted due to a judgment or written settlement, this defense coverage is no longer provided.

Example: Piedmont Fireworks holds Commercial Liability Coverage with a $1,000,000 General Aggregate Limit.

During a fireworks display on their premises, explosions caused property damage to nearby buildings and injuries to several pedestrians. Each injured individual and property owner filed separate claims for their losses due to the explosion. The insurance company started settling with the injured parties.

After paying $1,000,000, the policy limit was exhausted, and the insurer no longer had an obligation to defend or cover any remaining lawsuits. Therefore, Piedmont was responsible for defending and paying all subsequent claims on its own.

(Editorially added wording from GL 0950 12 99 – Known Injury or Damage Amendments)

The insurance company is not obligated to defend suits or claims for damages if a designated insured was aware of the bodily injury or property damage before the policy inception date.

When the insurance company defends a suit, it pays the following:

Costs the courts tax to the insured.
Expenses the insurance company incurs.
Provides up to $100 per day for lost earnings due to time off work. Payment is made only if the insurance company requests the insured take time off.
The insurance company will reimburse expenses to the insured if they are incurred at the company’s request. However, if the insured incurs expenses without prior request from the insurance company, they should not expect reimbursement.
The amount of pre-judgment interest awarded against the insured applies only to the part of the judgment the insurance company pays. Once the insurance company offers to pay the policy limit, it is no longer responsible for pre-judgment interest incurred after the offer.
Accumulating interest on the judgment paid by the insurance company following a judgment entry. However, the obligation to pay ends when the insurance company tenders deposits in the court or pays up to the coverage limit.
Costs associated with appeal bonds or bonds for releasing attachments are limited to the bond amount up to the coverage limit. The insurance company is not obligated to apply for or provide these bonds.
Costs of bail bonds the insured must pay because of an accident or traffic violation involving a vehicle covered by Coverage L–Bodily Injury/Property Damage. There is a maximum limit of $500. The insurance company covers the expense only. The insured is responsible for applying for and securing the bonds.

EXCLUSIONS

The insurance company will not cover a loss if one or more of the excluded events listed below occur. This remains true regardless of other causes or factors that may contribute to or worsen the loss, whether these causes occur before, during, or after the excluded event.

EXCLUSIONS APPLYING TO BODILY INJURY, PROPERTY DAMAGE, PERSONAL INJURY AND/OR ADVERTISING INJURY

NOTE: The Editors added titles to enhance clarity.

1. Contractual or Agreement

Coverage does not apply to bodily injury, property damage, personal injury, or advertising injury liabilities the insured assumed through a contract or agreement.

However, there are exceptions to this exclusion as follows:

· If a liability existed independent of a contract, coverage applies.

Example: Preston Furs, LLC owns the building it occupies, and it leases additional space in the building to Kevin’s Stamp and Coin Shop. Kevin requires a written lease of the premises to ensure the premises is safe and complies with all life and public safety regulations and requirements. Because Preston Furs holds this obligation, even though it is also included in the lease, coverage applies.

· This exclusion also does not apply to bodily injury or property damage covered under the Contractual Liability Supplemental Coverages. However, for such injuries or damages to be covered, they must occur after the effective date of the covered contract or agreement.

2. Professional

There is no coverage for bodily injury, property damage, personal injury, or advertising injury arising out of the providing or failing to provide any professional service. However, limited coverage is available under the Incidental Medical Malpractice Injury Supplemental Coverage.

3. Racing

The insurance company will not cover bodily injury, property damage, personal injury, or advertising injury resulting from the use of mobile equipment in racing, stunts, or similar contests. Additionally, this exclusion applies not only during the event itself but also during practice and preparation for the event.

4. Mobile Equipment Transport

Coverage does not apply to bodily injury, property damage, personal injury, or advertising injury associated with transporting mobile equipment by a vehicle owned, operated, rented, or loaned to any insured.

Example: Merle, an employee of Juniper Construction, uses a company truck to transport a trailer with a skid steer to a job site. When the trailer hitch breaks, the trailer overturns, and the skid steer ends up in the path of multiple vehicles.

This coverage form does not cover any property damage or bodily injury for Juniper Construction. However, the automobile liability policy covering the towing vehicle might provide coverage.

5. Auto, Aircraft, Watercraft, Mobile Equipment

This is a wide-ranging exclusion. It excludes coverage for bodily injury, property damage, personal injury, or advertising injury arising out of not only the ownership of auto, aircraft, watercraft, or mobile equipment but also their operation, occupancy, renting, loaning, supervision, maintenance, use, entrusting, loading, or unloading. Additionally, the coverage for the auto, aircraft, watercraft, or mobile equipment is excluded if owned or operated by, or rented or loaned to, any insured.

Example: Michael and Michelle, proud owners of a sleek boat, decided to share their adventure by loaning it to Peter and Jane. However, things took a turn for the worse when disaster struck—the boat sank! In the chaos, Jane sustained injuries, but to Michael and Michelle’s dismay, their Commercial General Liability (CGL) policy didn’t cover Jane's injuries.

However, there are exceptions to this exclusion as follows:

Coverage applies if bodily injury or property damage arises out of autos or mobile equipment covered under the Mobile Equipment Supplemental Coverage.

Example: A modified pickup truck with permanently installed well drilling equipment accidentally hits the side of a building while maneuvering into position over a well, causing damage to the building. The damage to the building is covered.

Coverage applies when non-owned autos are being parked at locations owned, controlled, or rented by the insured, including the areas immediately adjoining the location.

Example: Gerald is announcing the opening of his newest location with a large catered celebration. He asks employees Janet and Max to handle valet parking. While parking a car, Janet accidentally shifts it into reverse instead of park, pinning a guest between it and another vehicle. Coverage applies in this situation.

Coverage applies when liability is assumed for owning, maintaining, or using an aircraft or watercraft under a contract covered by Contractual Liability Supplemental Coverages.

Example: Pete charters an emergency flight to meet an important client, and the charter company requires a hold-harmless agreement.

Coverage applies when watercraft are on shore at a location owned, controlled, or rented by the named insured.

Example: A pontoon boat is stored on the insured's property during winter. The neighborhood children think it's fun to slide off the ice-covered boat. When one is seriously injured and the insured is sued, there is coverage.

· Coverage applies to watercraft not owned by the named insured if it is less than 26 feet long and not used to carry either persons or property for a fee.

Example: Power Dynamics rents a pontoon boat for an afternoon sales event and uses a small grill to prepare appetizers. Unfortunately, the grill causes a fire. As guests move away from the fire, the boat shifts, throwing several guests overboard and causing injuries. Since the pontoon is less than 26 feet and is non-owned, there is coverage for the injuries.

6. Liquor

This exclusion applies only if the named insured is in the business of manufacturing, distributing, selling, or servicing alcoholic beverages.

The insurance company does not cover bodily injury, property damage, personal injury, or advertising injury if any insured is found liable for these claims due to the following reasons:

Causing or contributing to a person’s intoxication.
Serving alcohol to individuals who are already intoxicated.
Providing alcohol to individuals who are under the legal drinking age.
Laws or regulations affecting the sale, gifting, distribution, or use of alcoholic beverages.

Examples:

Scenario 1: The insured is a medical supplies distributor hosting a Christmas party where alcoholic beverages are served for free.

Scenario 2: The owner of a printing business takes a client out to lunch and pays for a bottle of wine to accompany the meal.

Both scenarios are covered by liquor liability if an alcohol-related loss or injury occurs to clients or guests.

On the other hand, consider this:

Example: Backinthewoods Liquor Manufacturing, Inc. is sponsoring a fundraiser called "Casino Night." The event features betting and gambling opportunities, accompanied by food and alcoholic beverages available for a fee. However, Backinthewoods has not obtained the necessary permits and licenses required for this event.

A patron who consumed alcoholic beverages at the event was injured on the way home. Due to various state and local statutes and ordinances, as well as the fact that the insured is in the alcoholic beverage business, coverage for this situation does not apply.

NOTE: An alternative way to address an insured's liquor liability risk is by using a separate Liquor Liability Policy.

Related Court Cases:

Liquor Liability Exclusion Held Applicable to Nonprofit VFW

Liquor Liability Suit Based on Failure to Restrain Patron Did Not Circumvent Exclusion

7. War

(Editorially changed wording from GL 0163 01 08 – Exclusion – War and Military Action)

The following wording in the GL-200 is deleted.

Coverage does not apply to bodily injury, property damage, personal injury, or advertising injury arising out of war. War includes civil war, undeclared war, insurrection, revolution, rebellion, or any act or condition of war.

The replacement wording from GL 0163 – Exclusion – War and Military Action is analyzed as follows:

There is no coverage for any bodily injury, property damage, personal injury, or advertising caused directly or indirectly by any act of war.

Loss or damage from any of the following activities is specifically excluded:

a. War, encompassing civil conflicts and undeclared hostilities.

b. Warlike action refers to any aggressive activity carried out by a military force, including actions taken to prevent or disrupt actual or anticipated wartime activities. Additionally, the military force involved must be part of a government, a sovereign state, or another authoritative body employing military personnel or agents.

NOTE: The last sentence of Paragraph b. is important because without it, coverage for riot and civil commotion could be excluded.

Example: A group of cat enthusiasts petitioned and received approval to hold a rally in the local park to oppose a new law mandating license tags for cats. Some dog owners were very upset, believing the law was unfair since they had already paid the license fee. They petitioned for a counter-protest.

Things quickly escalated, and Millie’s Dog Parlor, situated right next to the park, became caught in the chaos. A fight in the parking lot between a large Persian cat and a Chihuahua resulted in several bystanders, who tried to break up the fight, getting injured. These injured bystanders sued Millie.

Since a military force must be involved in the conflict for the war exclusion to apply, Millie had coverage for the suits.

c. War also encompasses insurrection, rebellion, revolution, usurpation of power, or any actions by governmental authorities intended to hinder or defend against any of the above activities.

NOTE: There are no exceptions to the War exclusion. All loss or damage related to war is excluded.

8. Intentional Acts

Coverage does not apply if the insured expected, directed, or intended the injury or damage. Additionally, there is no coverage if the injury or damage results from an act by the insured that is both intentional and malicious.

This exclusion protects the insurance company from covering intentional damages or injuries caused by an insured. It serves the public interest by ensuring the insured does not misuse the insurance policy for personal gain, such as theft, harming competitors, seeking revenge, or pursuing other selfish or self-serving purposes.

However, there is an exception for bodily injury. If the insured causes bodily injury while protecting persons or property, coverage applies, provided the force used is considered reasonable.

Example: Oscar hears a strange sound outside his store and goes out the back door to investigate.

Scenario 1: He notices three young men trying to open his basement window. He warns them by firing a shot over their heads before calling 911. The shot hits a nearby pedestrian, but although it was intentional, it was not malicious and was meant to defend his property, so it is covered.

Scenario 2: He notices three young men passing by his basement window and fires his shotgun at them, hitting one. Since there was no reason to defend the property, this deliberate act would not be covered if the injured man sues.

9. Products/Completed Work Hazard

Coverage is not applicable to bodily injury or property damage for products/completed operations hazard. However, an exception is provided under Coverage N, which offers specific protections for Products/Completed Work Hazard.

This prevents duplicate coverage under Coverage L – Bodily Injury/Property Damage and Coverage N – Products/Completed Work.

10. Pollution

Coverage does not apply to bodily injury or property damage arising out of the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of pollutants from any of the following:

An event occurring at or originating from any premises, site, or location currently or previously owned, occupied, rented, or loaned to the insured.

However, there is an exception:

If injury or damage is due to a fire's heat, smoke, or fumes becoming uncontrollable or escaping from the container in which it was meant to be confined, coverage is provided. This type of fire is commonly known as hostile fire.

NOTE: Pollution from friendly fire is still excluded.

Example: The Jones family lives in an apartment building as tenants. A fire breaks out in a neighboring unit, causing the family to become ill from the smoke and fumes. They develop serious, long-term health problems as a result. The family decides to sue their landlord.

The landlord’s commercial liability coverage includes protection for bodily injuries sustained by the family, as these injuries resulted from a hostile fire in the apartment building. Additionally, the family claims the smoke caused the deaths of their pet dog and cat. These losses may be covered under property damage, as pets are considered property.

An event occurring at or emanating from any waste-related premises, site, or location. Waste-related means it was used by the insured or others at any time to handle, store, dispose of, process, or treat waste.

NOTE: The hostile fire exception does not apply in this case.

Pollutants are regarded as waste when they are being or have been transported, handled, stored, treated, disposed of, or processed in this way. Coverage also does not apply if these processes are performed by or on behalf of the insured, or by any other entity for which the insured is legally responsible.

NOTE: There is no exception to this section.

An event occurring at or emanating from any premises, site, or location where work occurs. The work can be conducted by any insured, contractor, or subcontractor directly or indirectly under the control of the insured.

However, this part of the exclusion applies only under the following circumstances:

o Pollutants brought onto the premises, site, or location as part of the work performed by the insured, but there is an exception.

› If injury or damage is due to a fire's heat, smoke, or fumes becoming uncontrollable or escaping from the container in which it was meant to be confined, coverage is provided. This type of fire is commonly known as hostile fire.

o The work involves testing, monitoring, cleanup, removal, containment, treatment, detoxification, neutralization, or any response to or assessment of pollutant effects.

The insurance company will not cover any loss, cost, or expense caused by, resulting from, or arising out of either of the following:

· Any manner of response to or evaluation of the effects of pollutants.

· Any lawsuit or claim by a government authority related to responding to or assessing the effects of pollutants.

Pollutants are defined in this exclusion as follows:

· Any solid, liquid, gaseous, thermal, or radioactive irritant or contaminant.

· Acids, alkalis, chemicals, fumes, smoke, soot, vapor, and waste.

· Waste not only includes items to be disposed of but also encompasses those to be recycled, reclaimed, or reconditioned.

· Electrical or magnetic emissions, whether visible or not, and sound emissions.

Related Court Cases:

Contaminant Clarified With Respect to Application of Pollution Exclusion

Environmental Cleanup Costs Held Not Covered by CGL Insurance

11. Employee

Coverage does not apply to bodily injury or personal injury to an employee of the insured if the injury occurs during employment by the insured. Additionally, coverage does not apply to consequential injuries to a spouse, child, parent, brother, or sister related to the injury of an employee.

This exclusion applies regardless of whether the insured is liable because of their role as an employer or any other relationship. If a third party pays and then seeks recovery against the insured for an injury to the insured’s employee, there is still no coverage.

The only exception to this exclusion is if the insured assumed liability under a contract covered in Contractual Liability Supplemental Coverage.

NOTE: The purpose of this exclusion is to prevent duplicate coverage for injuries that should be covered by employers liability insurance. The exclusion of work-related injuries applies regardless of the reason for which the insured might be held liable.

Liability applies regardless of whether it arises from direct employment, indirect employment, or a contract. All bodily injuries and personal injuries related to an insured’s work are excluded. This is especially important to understand due to the widespread use of contractors, subcontractors, independent contractors, or leased employees, as well as the uncertainty about who is responsible for such workers.

It is important to be cautious in monopolistic states where workers compensation is provided or required, but coverage for the Employer’s Liability is not necessarily required, available, or needed. This discrepancy can create a significant gap in coverage for the insured. Many insurance companies in these states offer their own endorsements to add Employer’s Liability coverage to the commercial liability policy.

Example: Lizzie works at the Greater Cake Emporium. While taking a break and admiring one of the newest multi-tiered cakes, the bottom holder unexpectedly breaks, causing the cake to fall and severely injure her wrist. Lizzie believes the injury resulted from Greater Cake using the cheapest possible holders. She files a lawsuit against Greater Cake as a retailer, not as her employer. However, there is no coverage for the lawsuit due to the employee exclusion.

12. Workers Compensation and Other Benefits

Coverage does not apply to bodily injury or personal injury when the insured either does or should provide benefits under laws such as workers compensation, disability benefits, occupational disease, and unemployment compensation. The purpose of this exclusion is to prevent duplicate coverage for injuries that should be provided under workers compensation and other mandatory types of insurance policies.

Example: John’s Roofing has no direct employees. Instead, it uses independent contractors who work exclusively for John’s Roofing, wear clothing required by John’s Roofing, use its tools, and follow the schedule provided by John’s Roofing.

When one of the independent contractors falls off a roof and injures himself, he files a benefit claim with the workers compensation board. The board rules all of John’s Roofing’s independent contractors are actually employees. John is then required to compensate the injured worker and pay a fine for failing to maintain workers compensation coverage.

The commercial general liability policy will not cover this because of the exclusion.

13. Employment-Related Practices

Coverage does not apply to bodily injury or personal injury arising out of any employment-related practices, including such activities as policies, actions, or omissions. Examples of such practices are as follows:

· refusal to employ

· termination of employment

· coercion

· demotion

· evaluation

· reassignment

· discipline

· defamation

· harassment

· humiliation

· discrimination

· sexual misconduct

· consequential injury resulting from any of the above

This exclusion applies if the insured is liable as an employer, in any other capacity, or must reimburse a third party fully or partially for damages resulting from any of the above. It clarifies that liability is not limited to just being an employer.

Related Court Case: Termination of Employee Was Not a Covered Occurrence

14. Data Breach Liability

NOTE: Editors added number 14 for clarity.

This is a Mandatory Amendment to the GL 200 Edition 1.0.

Editor's Note: This is editorially added wording from GL 1353 09 14 – Exclusion – Data Breach Liability.

There is no coverage for bodily injury, property damage, personal injury, or advertising injury arising from the disclosure or access to private or confidential information. This information may belong to any individual or organization.
There is no coverage for loss, cost, expense, or damages due to corrupted, damaged, altered, or manipulated data records. Additionally, it excludes coverage if these records are inaccessible or unusable.

Any expenses resulting from one of the following, related to either of the above, are also excluded:

Credit monitoring
Notification
Forensic investigation
Legal Research
Similar type expenses

15. Information, Distribution, and Recording Violations

NOTE: Editors added number 15 for clarity.

This is a Mandatory Amendment to the GL 200 Edition 1.0.

Editor's Note: This is editorially added wording from GL 1022 09 09 – Information Distribution and Recording Violations Exclusion.

There is no coverage for property damage, bodily injury, personal injury, or advertising injury from actual or alleged direct or indirect violations of any of the following:

The Telephone Consumer Protection Act of 1991 (TCPA)
The Can-Spam Act of 2003
The Fair Credit Reporting Act (FCRA)
Similar local, state, or federal ordinances, statutes, laws, or regulations related to, prohibiting, or restricting any of the following as they pertain to information or material.

o Recording

o Printing

o Collecting

o Transmitting

o Communicating

o Sending

o Disposing

o Distributing

· Amendments to any of the above acts, as well as any similar federal, state, or local laws or regulations, are also excluded.

16. Lead Liability Exclusion

NOTE: Editors added number 16 for clarity.

This is a Mandatory Amendment to the GL 200 Edition 1.0.

Editor's Note: This is editorially added wording from GL 890 – 2.0 – Lead Liability Exclusion.

There is no coverage for the following:

Bodily injury, whether actual or alleged, caused by any form of lead being ingested, inhaled, or absorbed in any way.
Property damage, personal injury, or advertising injury, whether actual or alleged, related in any way to any form of lead.
Any loss, cost, or expense arising out of any of the following:

o Any type of response to or assessment of the effects of lead.

o Any lawsuit or claim from the government or on behalf of any government related to any response to or assessment of the effects of lead.

ADDITIONAL EXCLUSIONS APPLYING ONLY TO PERSONAL INJURY AND/OR ADVERTISING INJURY

NOTE: The Editors added titles to enhance clarity.

1. Violation of Law

There is no coverage for personal injury or advertising injury if the insured intentionally violates an ordinance, law, regulation, or statute. Additionally, there is no coverage if someone other than the insured violates the regulation with the insured’s consent.

Example: Joiner, Inc. has secured a restraining order preventing John Smith, a persistent salesman, from entering its premises. However, John’s supervisors want him to continue approaching Joiner employees. If John is caught on the premises and his employers are sued, there is no coverage for either John or his employers because they are in violation of the court order.

2. False Material and Publication Prior to Policy Period

There is no coverage for personal injury or advertising injury when known false material is published (oral or written) by or at the direction of the insured. Coverage also does not apply when the offense is based on any material published by any party prior to the policy period.

3. Breach of Contract

Coverage excludes advertising injury caused by a breach of contract. However, it covers cases where an advertising idea is misappropriated through an implied contract.

Example: Jerry submitted a suggestion for an advertising campaign to Make My Day Enterprises. In response, the company sent him a letter thanking him for his idea. Three years later, Jerry noticed their ad campaign closely resembled his original suggestion. Based on the letter he received, he believed there was a binding agreement, so he decided to sue them for breach of contract. Since the contract was only implied, there is coverage for the suit.

4. Quality or Performance of Goods

Coverage does not apply to advertising injury when the goods or services fail to meet the advertised quality or performance standards.

5. Insured's Business is Media

Coverage does not apply to advertising injury when the insured’s business operation is publishing, advertising, telecasting, or broadcasting.

6. Wrong Description of Prices

Coverage does not apply if an advertising injury arises from inaccurate price descriptions of the insured's goods, products, or services in an advertisement.

7. Pollution

This is an absolute pollution exclusion. Coverage does not apply to any personal injury or advertising injury arising out of the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of pollutants at any time.

The insurance company does not pay any loss, cost, or expense caused by, resulting from, or arising out of either of the following:

· Any manner of response to or evaluation of the effects of pollutants.

· Any governmental authority, or on behalf of it, involving lawsuits or claims related to responding to or assessing the effects of pollutants.

Pollutants are defined in this exclusion as any of the following:

· Solid, liquid, gaseous, thermal, or radioactive irritant or contaminant.

· Acids, alkalis, chemicals, fumes, smoke, soot, vapor, or waste.

o Waste includes items to be recycled, reclaimed, or reconditioned.

· Electrical or magnetic emissions, regardless of whether they are visible.

· Sound emissions.

NOTE: Due to specific language in earlier versions of personal injury and advertising injury liability forms, there have been efforts to include coverage for pollution-related losses by labeling them as trespass, wrongful entry, or invasion of private occupancy rights. However, the personal or advertising injury coverage was never meant to cover pollution damages or cleanup expenses. This exclusion confirms no coverage is provided for any pollution exposure arising from the personal and advertising injury provisions in the policy.

ADDITIONAL EXCLUSIONS APPLYING ONLY TO PROPERTY DAMAGE

NOTE: The Editors added titles to enhance clarity.

1. Fire Legal Liability

Coverage does not apply to property owned or occupied by or rented to the named insured unless it is covered under Coverage O–Fire Legal Liability.

2. Sold or Abandoned

Coverage does not apply to property damage for premises sold, given away, or abandoned by the named insured if the property damage arises out of any part of those premises. However, this exclusion does not apply to premises related to the named insured's work that were never occupied, rented, or held for rent by the insured.

NOTE: This exclusion is especially relevant to homebuilders. Prior to adding this exception, homebuilders lacked coverage for buildings they constructed and sold. However, they should understand that once a building is put into use—like a model home with an office or as a rental—the exception no longer applies.

3. Used By or Loaned To

Coverage does not apply to property damaged when the property is used by or loaned to the named insured. However, this exclusion does not apply to any liability assumed under a sidetrack agreement.

NOTE: A sidetrack agreement is between a property owner and a railroad company regarding a railroad sidetrack on the insured's premises. A sidetrack is a transfer or access track. The railroad company permits the property owner to use the sidetrack if the owner guarantees access by the railroad and agrees to certain maintenance conditions. A mutual hold-harmless agreement between the railroad and the property owner may also be required.

4. Care, Custody or Control

Coverage does not apply to property damage for any type of personal property while in the insured's care, custody, or control. However, this exclusion does not apply to any liability assumed under a sidetrack agreement.

NOTE: While the commercial liability coverage form does not include an endorsement for property in the insured's care, custody, or control, many insurance companies have developed their own forms or endorsements to address this gap. Additionally, Inland Marine Bailees insurance is available, covering the property of customers or clients under the insured's care, custody, or control.

Various versions of this coverage are offered through organizations such as the American Association of Insurance Services (AAIS) and the Insurance Services Office (ISO), or through specific endorsements developed and filed by individual insurance companies, depending on the insured’s operational needs.

Related Articles:

AAIS Bailee Customers Floater Coverage–Dry Cleaners And Laundry Form Coverage Analysis

ISO Bailees Customers Coverage Form Analysis

Property of Others

Care, Custody or Control

5. Specific Part of Real Property

Coverage does not apply to property damage to the specific part of real property being worked on if the damage results from that work. This exclusion applies whether the work is performed by the named insured or a contractor or subcontractor acting directly or indirectly on behalf of the insured. However, this exclusion does not apply to liability assumed under a railroad sidetrack agreement.

Example: Sally hired Fred to install a skylight in her roof. While he was cutting the opening for the skylight, Fred accidentally nicked a water line. He finished the installation and received payment. However, Fred was surprised to receive a lawsuit claiming he caused a major leak in the piping, which led to water and mold damage to the roof, insulation, ceiling, and walls. Although there would be no coverage for damage to the roof or skylight, coverage would apply to all the damage because the only item Fred damaged was the piping, which was not part of the real property he was working on.

6. Specific Part of Property

Coverage does not apply to property damage affecting a specific part of any property requiring restoration, replacement, or repair due to errors in the insured’s work. However, this exclusion does not apply to property damage when it is covered by the products/completed work hazards, as well as liability assumed under a sidetrack agreement.

Example: Fred damaged the piping in the example above, which must be repaired due to his mistake. As a result, the repair and replacement of the piping is not covered under the policy because of this exclusion.

7. Named Insured’s Products

Coverage does not apply to property damage to the named insured’s products when the damage arises from the products themselves or their parts.

Example: Green Furnace and Design manufactures gas furnaces. One of their installed furnaces malfunctioned and caught fire. There is no coverage for the furnace itself, but there is coverage for the damage it causes.

8. Named Insured’s Work

Coverage does not apply to property damage to the named insured's work if the damage arises from that work and the work is considered a products/completed work hazard. However, this exclusion does not apply if the property damage arises from work by a subcontractor working on behalf of the named insured.

Example: Gene’s Builders handles electrical wiring repairs in buildings. If the wiring overheats and needs replacement, there is no coverage. However, if a subcontractor performs the wiring repair for Gene’s Builders, coverage applies for the benefit of Gene’s Builders but not the subcontractor.

Related Court Cases:

Work Product Exclusion in Contractor's Liability Insurance Held Applicable To Claim for Negligent Location of House

Work Project Exclusion Held Applicable To Control of Project by Construction Manager, in Court Cases

9. No Physical Damage or Impaired Property

NOTE: Property damage includes loss of use of property. Coverage for loss of use can apply even in the absence of tangible damage. This exclusion applies to such situations.

This policy does not cover specific situations where loss of use property damage occurs.

When the named insured, or someone acting for the named insured, delays or fails to perform a contract.
When the named insured’s product is defective, deficient, inadequate, or unsafe.

However, this exclusion does not apply to property damage of products already in use for their intended purpose, when the loss of use of other property results from sudden physical injury or destruction of the insured’s product or work.

Example: Jerry was hired to install an entry system at Sally’s store.

Scenario 1: Jerry installed the locking mechanism but did not provide Sally with the combination before leaving for his vacation. As a result, Sally was unable to access her store for a week. This loss of use property damage is not covered since Jerry failed to fulfill his contractual obligations.

Scenario 2: Jerry installed the locking mechanism and gave Sally the lock's combination. She was able to open the lock successfully at first, but it short-circuited on the second try, making it unusable. Jerry had to order replacement parts to fix the problem, which prevented Sally from accessing her store for a week. This loss of use property damage is covered since it was sudden, accidental, and occurred after the work was completed.

Additionally, expenses related to product recall or withdrawal are also excluded. These costs include loss of use, disposal, withdrawal, recall, inspection, repair, replacement, adjustment, or removal of the insured's work, products, or impaired property. This exclusion applies even if the loss results from a known or suspected defect, deficiency, or unsafe condition.

Example: Continuing with the previous example, because of the issue with Sally’s entry system, Jerry believes he must notify his other customers using that device. He schedules visits to all of them to replace the faulty mechanism. His insurance company will not reimburse him for his work, but his customers are very pleased with his proactive approach to their security.

ADDITIONAL EXCLUSIONS APPLYING ONLY TO MEDICAL PAYMENTS

The following medical payment exclusions apply in addition to the bodily injury exclusions.

NOTE: The Editors added titles to enhance clarity.

1. Any Insured

Coverage for bodily injury does not apply to the medical expenses of an insured.

Example: Jim Maxwell, of Maxwell and Maxwell, slips and falls on ice on the front steps of the building he owns and needs X-rays to determine the extent of his injuries. The X-ray expenses are not covered by Maxwell and Maxwell’s policy.

2. Hired Person

Coverage excludes medical expenses for bodily injury to anyone hired by or on behalf of an insured to do work for either the insured or a tenant of the insured.

Example: A painter hired by the insured to paint the building falls from a ladder and injures his wrist. This incident is not covered under medical payments loss.

3. Injury on Normally Occupied Premises

Coverage does not include medical expenses for bodily injury to individuals injured on the insured's premises if that person normally occupies that specific part of the premises.

Example: A tenant in the insured's building falls down the stairs in their own apartment and sustains an injury. The policy does not cover their injuries or medical costs in this case. However, if the same tenant falls in a different apartment building nearby, coverage would apply.

4. Athletic Activities

Coverage excludes medical expenses for bodily injury sustained by a person during athletic activities.

Example: The insured permits a little league team to practice on their premises, but when a girl injures her leg while sliding into third base, medical payments coverage will not cover her medical expenses.

5. Products/Completed Operations Hazard

Coverage excludes medical payments for bodily injury covered under the products/completed work hazard.

Example: An appliance made by the insured catches fire due to faulty wiring and burns the purchaser's fingers at their home. Medical payments coverage does not cover his injuries or expenses.

6. Club Members

Coverage does not apply for medical expenses when the named insured is a club and bodily injury occurs to its members.

7. Guests

Coverage does not apply for medical expenses related to bodily injury sustained by guests at a hotel, motel, or tourist court owned or operated by the named insured.

8. Workers Compensation or Similar Benefit

If a person qualifies for benefits under workers compensation, non-occupational disability, occupational disease, or similar laws, there is no coverage for medical payments.

NOTE: This exclusion applies even if the insured is not the party required to provide the benefits.

Example: Mike is carrying a supply of beer into Luke’s liquor store when he slips on ice outside the entrance. Since Mike is eligible for workers compensation from his employer, Luke’s medical payments will not cover the injury.

9. Student, Camper, Patient, or Inmate

Coverage does not apply to medical expenses for bodily injury to:

· A student or camper participating in a program operated by or on behalf of the named insured.

· A patient or inmate who receives treatment or is held at a facility owned or operated by or on behalf of the named insured.

WHAT MUST BE DONE IN CASE OF LOSS

1. Notice

If an incident or claim arises that may be covered by the policy and the insured is aware of it, they must promptly inform their insurance agent or the insurance company, or ensure that someone else does so. Notifying the agent is regarded as equivalent to notifying the insurance company.
The insured is required to provide at least the following information:

o Name of the insured and policy number.

o Time, place, and circumstances of the loss, event, or situation suggesting a claim may be imminent.

o Names and addresses of all potential claimants and witnesses known to the insured.

2. Cooperation

Any insured involved in an occurrence or offense must cooperate with the insurance company and comply with all requirements, as outlined in this coverage form.

3. Volunteer payments

Volunteer payments and obligations can be made by an insured, but only at its own expense. However, this exclusion does not apply to expenses incurred for providing first aid to others at the time of an injury.

4. Other duties

If a claim is made or legal action is brought, the insured must promptly provide the insurance company with all of the following:

· copies of all legal papers

· demands

· notices

The insured must also take the following actions if requested by the insurance company:

· Assist it in settlements.

· Assist in the conduct of lawsuits, including attending trials or hearings.

· Enforce its rights against any parties that might be liable to the insured for the injury or damage.

· Assist the insurance company in gathering and providing evidence.

· Securing the attendance of all witnesses.

NOTE: Remember, assistance to the insurance company is only required when requested. It is not the insured's responsibility to act on their own, as such actions could hinder the insurance company.

If a medical payment loss occurs, the injured person or the person acting on behalf of the injured person must provide the following:

· Provide the insurance company with written proof of the claim as soon as possible.

· If required, provide a statement under oath.

· Provide the insurance company with permission to obtain copies of medical records.

· Agree to medical examinations by a doctor chosen by the insurance company.

o More than one examination may be required, but the number and the type of examination must be reasonable.

NOTE: Enforcing these obligations could be challenging since the injured party is not a signatory to this contract. However, failure by the injured party to fulfill these obligations might result in denial of coverage under medical payments coverage.

HOW MUCH WE PAY

NOTE: The Editors added titles to enhance clarity.

1. Maximum Amount Paid

The limits of insurance shown on the declarations represent the maximum amount the insurance company will pay, regardless of the number of insureds, persons, or organizations sustaining injury or damage, the number of claims made, or the number of suits brought.

Any claim paid under medical payments coverage does not constitute an acknowledgment or admission of liability under any other coverage.

2. Per Policy Term – General Aggregate Limit

The general aggregate limit is the maximum amount the insurance company will pay for all damages during the policy period. This includes total damages for bodily injury and property damage, all medical expenses under medical payments, all damages for fire legal liability, and all damages for personal injury and advertising injury liability coverages. However, it does not include damages related to bodily injury or property damage under the products/completed operations hazard.

Example: Growing Strong, Inc. has a commercial liability policy with a $2,000,000 general aggregate limit. During one policy period, there was a covered premises loss of $1,000,000, as well as two covered personal injury and advertising injury losses of $1,000,000 each, totaling $3,000,000. The most the insurance company will pay is the $2,000,000 general aggregate limit.

3. Products/Completed Work Hazard Aggregate Limit

The aggregate limit for the products/completed work hazard is the maximum amount the insurance company will pay during a policy period for damages due to bodily injury or property damage covered under Coverage N – Products/Completed Work liability.

Example: Microfilament, LLC holds a commercial liability policy with a $3,000,000 products/completed work aggregate limit. During one policy period, eight separate claims for covered products occur. The total of all eight payments amounts to $4,000,000. The $3,000,000 aggregate limit for products/completed work is the maximum the insurance company will pay.

4. Each Occurrence Limit

The limit for each occurrence is the maximum amount the insurance company will pay for damages covered under Coverage L – Bodily Injury/Property Damage, Coverage N – Products/Completed Work, Coverage O – Fire Legal Liability, and Coverage M – Medical Payments in a single occurrence.

NOTE: This limit is subject to the general aggregate limit and the products/completed work hazard aggregate limit.

Example: Marmy Associates is a manufacturer carrying a commercial liability policy with an occurrence limit of $1,000,000. While a tour group is visiting the premises, an explosion occurs, resulting in injuries to 25 members of the group. The total claims amount to nearly $5,000,000. Since this incident is a single occurrence, the insurance policy will cover a maximum of $1,000,000. Consequently, Marmy Associates is responsible for covering the remaining $4,000,000 in claims using its own financial resources.

5. Personal and Advertising Injury Liability Limit

The limit for Coverage P – Personal Injury/Advertising Injury liability represents the maximum amount the insurance company will pay for personal injury or advertising injury sustained by an individual or organization. This limit is also subject to the policy's General Aggregate Limit.

6. Fire Legal Liability

Coverage O – Fire Legal Liability has a limit of $50,000 per occurrence. This limit can be increased, but is subject to both the Each Occurrence and General Aggregate Limits.

7. Medical Payments

The limit for Coverage M – Medical Payments is the maximum amount the insurance company will pay for all covered medical expenses incurred by a single person. This limit is subject to both the Each Occurrence and General Aggregate Limits.

Example: Piddlewink, Inc. has a commercial liability policy with a $5,000 medical expense limit per person. The day after a snowstorm dumps 5 inches of snow and ice on Piddlewink’s parking lot and sidewalks, 15 people suffer injuries falling on the slippery walk and parking lot.

Since the medical expense limit is applied on a per-person basis, each injured customer has up to $5,000 available to cover their medical expenses.

8. General and Products/Completed Work Hazard Aggregate Limits

The General Aggregate Limit and the Products/Completed Work Hazard Aggregate Limit are treated separately for each consecutive 12-month period indicated on the declarations. These limits also apply to any remaining policy period shorter than 12 months, unless the commercial liability coverage is extended after the coverage inception date. If coverage is extended after the inception date, the extended period is treated as part of the most recent prior period when determining limits.

Example: Bottia Limited’s policy was issued with effective dates from January 1 to January 1. At renewal, Bottia wants to change the policy expiration date to align its insurance with its accounting period.

Scenario 1: Bottia requests the policy expiration date be extended to July 1. The policy aggregates apply to the first annual 12-month policy period from January 1 to January 1. The renewal aggregate period starts on January 1 and extends for 18 months to July 1.

Scenario 2: Bottia requests a short-term policy be issued from January 1 to July 1, followed by an annual policy from July 1 to July 1. She will have an aggregate for the initial policy period, a second aggregate for the January to July short-term policy, and another aggregate for the July to July policy.

CONDITIONS

1. Bankruptcy

If an insured becomes bankrupt or insolvent, the insurance company must continue to fulfill all its commitments under this policy. It remains responsible for all duties, responsibilities, and obligations.

2. Insurance under More Than One Policy

This condition applies to all coverages except Coverage M – Medical payments.

This commercial liability coverage is primary unless otherwise specified below (2.c. excess insurance) or if stated otherwise. The insurance company's liability is not reduced by other insurance unless that insurance is also considered primary.
If the other insurance is considered primary, the insurance company will share in the loss as follows:

o If the other insurance is contributed by equal share, the insurance company will pay equally with the other insurer(s) until the lowest limit applying to one policy is reached or the loss is paid in full.

If part of the loss remains unpaid, the insurance company will contribute an equal share with other insurers until the total payout equals the full amount or the insurance company reaches its maximum insurance limit.

Example: Originality Inc. carries three primary commercial liability policies as follows:

· Policy A has a $50,000 limit for each occurrence.

· Policy B has a $150,000 limit for each occurrence.

· Policy C has a $1,000,000 limit for each occurrence.

Originality Inc. is liable for a loss and is ordered to pay $500,000. Their policies are based on equal shares, resulting in each of the three policies contributing equally to the loss as follows:

Step 1: Each company contributes $50,000, totaling $150,000 of the $500,000 needed.

NOTE: Once the limits of Policy A are exhausted, it no longer contributes to the loss.

Step 2: Policy B and Policy C then each contribute an additional $100,000, bringing their combined contribution to $200,000.

NOTE: At this point, the coverage provided by Policy B is fully exhausted, so it will no longer contribute to the loss.

Step 3: The remaining $200,000 must then be paid by Policy C to make the total of $500,000.

The resulting equal contributions for Policy A is $50,000, Policy B is $150,000, and Policy C is $300,000.

o If the other insurance is not considered a contribution by equal share, the insurance company will pay up to the full limit of coverage, but no more than the proportionate part of the loss for the applicable policy limit, which is the total limit applicable for all insurance covering the loss.

o If the other insurance does not require equal contribution shares, the insurance company pays proportionally. This means each primary insurer pays the part of the loss that corresponds to the proportion of its limit relative to the total primary limits carried.

Example: Originality Inc. carries three primary commercial liability policies as follows:

· Policy A has a $50,000 limit per occurrence.

· Policy B has a $150,000 limit per occurrence.

· Policy C has a $1,000,000 limit per occurrence.

Originality Inc. is liable for a loss and ordered to pay $500,000. However, this time their policies are based on proportional shares rather than equal shares, resulting in a total limit of $1,200,000 available to pay the claim.

· Company A has 50,000/1,200,000 of the obligation or 4.2% of the loss.

· Company B has 150,000/1,200,000 of the obligation or 12.5% of the loss.

· Company C has 1,000,000/1,200,000 of the obligation or 83.3% of the loss.

The resulting proportional shares for the loss are as follows:

· Company A pays $21,000

· Company B pays $62,500

· Company C pays $416,500

Editor's Note: The following is editorially replaced wording from the GL 1020 09 09 – Other Insurance Amendment.

This is an amendment to the GL 200 Edition 1.0 - Mandatory Endorsement and has been incorporated here. It pertains to item 2.c. of the policy Conditions section, which addresses excess insurance coverage in relation to other policies. The original policy language has been replaced with the following:

The Commercial Liability Coverage under this policy will be excess over any other insurance in the following circumstances:

· Regardless of whether the other insurance is primary, excess, contingent, or on any other basis, if the insured has other insurance providing the following coverage:

o Fire, extended coverage, builder’s risk installation risk, or any similar coverage for the insured’s work.

o Fire insurance for premises rented to the insured.

· Any loss arising out of the maintenance or use of aircraft, automobiles, or watercraft insured under this policy.

· When the insured has other primary insurance available that covers liability related to the premises, operations, completed work, or products, and the insured is named as an additional insured through a policy endorsement.

Example: T&R Contracting maintains a commercial liability policy for its contracting business. They are building a home for Pam and John, who purchased a builder's risk policy for the project. Initially, the project's value was estimated at $500,000. However, after several client-requested modifications, the estimated value of the unfinished building has risen to $750,000, yet the builder's risk policy has not been adjusted accordingly.

T&R keeps a salamander heater running overnight, which causes an explosion, destroying the building. At the time of the incident, the building's value was $650,000. The builder's risk policy is primary and covers $500,000. The commercial liability policy then pays the remaining $150,000.

We have now returned to the GL 200 1.0 Edition of the policy under Conditions 2.d.

· When this insurance is considered excess over any other insurance applicable to a loss, the insurance company is not obligated to defend any claims or legal proceedings for which another insurer is responsible. However, if no other insurer provides a defense, this insurance company may choose to do so, but only after securing the insured's rights against the other insurer.

The insurance company pays its share of any loss that exceeds the total amount that should have been covered by all other insurance, including all deductibles and self-insured amounts required by the other insurance. It will also share in the remaining loss with any other insurance not described in this provision and not specifically purchased to act as excess coverage over the limits stated in the declaration.

3. Misrepresentation, Concealment, or Fraud

All coverage under this policy becomes void for all insureds if any insured intentionally hides or distorts a material fact related to the insurance or its subject. It is also void if an insured's interest is misrepresented or concealed. Additionally, coverage is void if any insured commits false swearing or fraud concerning the insurance or the subject of the insurance.

NOTE: This condition clarifies when the named insured accepts the policy, they confirm the declaration information is accurate and complete. They also affirm the policy is based on the representations made in the application, which the insurance company relied upon when issuing the policy. Additionally, it is crucial to understand that policy voidance can result not only from the named insured’s fraud but also from fraud committed by other insureds.

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4. Motor Vehicle Financial Responsibility Certification

When this insurance is presented as proof of financial responsibility under any motor vehicle law, it will meet the law's requirements for both coverage and limits regarding bodily injury liability and property damage liability.

NOTE: Using a CGL for motor vehicle coverage can be quite difficult. It's better to provide this coverage through an automobile policy that clearly states the coverage and limits. Misunderstandings about coverage and limits can be very costly.

Example: Jerry, the named insured, is riding his snowmobile on his property when he is hit. He is later found by an employee who did not see the accident. Jerry files a claim with his CGL carrier for uninsured motorist coverage because, although tire tracks indicate he was struck by a vehicle, it was a hit-and-run incident involving an unidentified person. Jerry’s injuries are serious, so he is requesting the full CGL occurrence limits, but the CGL carrier is offering only the minimum limits.

5. Premium

When the premium listed on the declarations is considered a deposit premium, the insurance company anticipates a change in the final premium. The actual earned premium is determined at the end of the audit period, as reflected on the declarations.

If the earned premium exceeds the deposit premium, the insurer bills the named insured for the difference. However, if the earned premium is lower than the deposit premium, the insurer refunds the overpayment to the insured.

The named insured is responsible for maintaining records of the information necessary to calculate the premium and submitting this data to the insurance company at the end of the audit period or when requested by the insurance company.

NOTE: It’s essential for the insured to provide the most accurate exposure information possible to avoid large fluctuations up or down. Additionally, it’s important for the insured to supply the necessary information for their audit. Often, the premium audit department will add a 25% increase in exposure if the insured fails to provide the requested audit information.

6. Separate Insureds

The coverage applies to each insured individually in the event of a claim or lawsuit. However, this does not change or increase the limits outlined in the How Much We Pay section of the form. Essentially, aside from the specified limits, coverage is treated as if each insured is the only one covered, with separate coverage for each insured against whom a claim or lawsuit is filed.

7. Subrogation

If the insurance company pays under this coverage, the insurer may require the insured to relinquish all rights to recover from another party. However, these rights are limited to those related only to the loss paid. If the insured impairs or otherwise hinders the insurance company’s ability to exercise these rights, the insurer is not required to make any payments for the loss. A key exception is that the insured may waive their recovery rights against a third party in writing prior to the occurrence of a loss or incident.

NOTE: The subrogation transfer right is automatically granted upon payment. If the insured wishes to retain this right or prefers the insurance company not to use it, they should refuse the payment. The insured may also need to assist in filing a lawsuit, transferring these rights, or helping to enforce them, which may not be what the insured prefers to do.

Example: The side door at McDuff’s was left propped open. This allowed someone to enter unnoticed, attack a customer, and then leave. The customer sues McDuff’s for trauma, and Friendly Insurance Company covers the claim. During the investigation, it was found that Nancy, a family friend, had propped the door open while making a delivery and had forgotten to remove the prop.

Friendly then sues Nancy for negligence. McDuff’s states it will not help in this lawsuit since Nancy is a family friend. Friendly warns McDuff’s if it does not assist, it will be required to reimburse Friendly for the expenses incurred in investigating and settling the claim.

8. Suit Against Us

The insurance company can be sued, but only after certain requirements are satisfied. First, all terms and conditions of the coverage form must be fulfilled. Second, the liability amount must be determined either by a final judgment against the insured in a trial or by a written agreement between the insured, the party filing the claim, and the insurance company.

No party is authorized to join the insurance company in any legal actions or designate it as a defendant in proceedings to establish an insured's liability.

NOTE: While the insurance company may be sued to recover an agreed-upon settlement or final judgment against an insured, it is not liable for damages if the insured has not satisfied the policy's conditions and terms.

9. Knowledge or Bodily Injury or Property Damage

NOTE: Editors added number 9 for clarity.

This is a Mandatory Amendment to the GL 200 Edition 1.0.

Editor's Note: This is editorially added wording from GL 0950 12 99 – Known Injury or Damage Amendments.

It is essential to know exactly when an insured is considered to be aware of bodily injury and property damage, since the timing of such awareness determines which policy responds to a loss. Coverage under this policy does not include any bodily injury or property damage loss that occurred and was known by a designated insured to have occurred before the policy period. A loss is considered known at the earliest of the following:

When any designated insured receives suit papers, a claim, or a damage demand related to an alleged bodily injury or property damage
When any designated insured reports bodily injury or property damage to their insurer or any other insurance company.
When any designated insured first becomes aware of or learns about anything indicating bodily injury or property damage has occurred or is actively occurring.

NUCLEAR ENERGY LIABILITY EXCLUSION

This exclusion consists of two parts: the actual exclusion itself and eight specific definitions applicable only to this exclusion.

Exclusion

1. Coverage does not apply to any of the following bodily injury or property damage:

a. When the insured is also an insured under a Nuclear Energy Liability policy issued by Nuclear Energy Liability Insurance Association, Mutual Insurance Association, Mutual Atomic Energy Liability Underwriters, Nuclear Insurance Association of Canada, or any of their successors. This exclusion applies if coverage would be available under any such policy, except it has been terminated due to its limits being exhausted.

b. When resulting from the dangerous nature of nuclear material concerning any person or organization required to maintain financial coverage, as described in the Atomic Energy Act of 1954. As well as, when resulting from the hazardous nature of nuclear material, the insured would, without this policy, be entitled to indemnity from the United States of America due to agreements between the United States of America and any person or organization.

2. Coverage does not apply to M–Medical Payments for bodily injury resulting from the hazardous properties of nuclear material or injuries resulting from a nuclear facility operated by any person or organization.

3. Coverage does not apply to bodily injury or property damage resulting from the hazardous properties of nuclear material if:

a. Nuclear material is considered to be at a nuclear facility owned or operated by an insured, or managed on its behalf, if the material was discharged or dispensed from that facility.

b. Nuclear material is contained within spent fuel or waste, and at any point, it may be possessed, handled, used, stored, processed, transported, or disposed of by an insured or others acting on their behalf.

c. Bodily injury or property damage arising from an insured providing services, materials, parts, or equipment involved in planning, constructing, maintaining, operating, or using any nuclear facility. If the facility is within the United States, its territories, possessions, or Canada, this exclusion applies only to property damage to that specific nuclear facility and property at that site.

2. Definitions

The following definitions apply only to this Nuclear Energy Liability Exclusion:

a. Hazardous Properties

This includes, but is not limited to, radioactive, toxic, or explosive properties.

b. Nuclear Material

This is source material, special nuclear material, or by-product material, which are defined terms as outlined in the Atomic Energy Act of 1954.

c. Source Material, Special Nuclear Material, and By-product Material

These terms have the meanings assigned to them by the Atomic Energy Act of 1954 or any amendatory law.

d. Spent Fuel

This refers to any solid or liquid fuel element or component used in or exposed to radiation within a nuclear reactor.

e. Waste

This refers to waste material containing by-product material, excluding tailings or wastes from uranium or thorium extraction, which are primarily processed for source material. Waste also covers any waste material generated during the operation of a nuclear facility. The definition of a nuclear facility is provided below and within the first two paragraphs.

f. Nuclear Facility

This refers to any nuclear reactor and associated equipment used to separate uranium or plutonium isotopes, as well as for the processing, utilization, waste management, or packaging of spent fuel.

It also involves equipment or devices used in the processing, fabrication, or alloying of special nuclear materials. This is determined by the total amount of such material at any time, which must be either (or contain not more than) 25 grams of plutonium or uranium-233 (or any combination thereof) or more than 250 grams of uranium-235.

Finally, it includes any structure, basin, excavation, premises, or area used for waste storage or disposal, including the sites where these activities take place and all premises involved in such operations.

g. Nuclear Reactor

This refers to any device engineered or utilized to maintain a nuclear fission process in a self-sustaining chain reaction. It also serves to contain a critical mass of fissionable material.

h. Property Damage

This is all forms of radioactive contamination of property.

NOTE: The Nuclear Energy Liability Exclusion is a broad and detailed exclusion covering incidents and materials linked to nuclear energy in all forms. It includes specific definitions relevant only to this exclusion. Its purpose is to exclude coverage for bodily injury or property damage covered by any nuclear liability insurance policy. It also excludes coverage for companies legally required to maintain financial protection under various federal laws and acts related to nuclear energy. Additionally, it disallows all types of medical payments and covers issues such as discharges, leaks, waste, or work carried out at nuclear facilities.