CGL Coverage A Exclusions

Coverage A is the bodily injury and property damage part of a commercial general liability (CGL) policy. It is not an all-purpose promise to pay whenever someone is hurt or property is damaged. The insuring agreement, definitions, exclusions, conditions, limits, and endorsements work together. An exclusion can remove a category of loss from an otherwise plausible coverage grant, while an exception can restore coverage for a narrower set of facts.

The exclusions discussed here reflect common ISO CGL form topics, not a universal checklist for every carrier or policy year. Insurers may amend standard wording, add endorsements, or use manuscript provisions. Texas Department of Insurance consumer guidance likewise cautions that CGL coverage varies and that policyholders should review their actual policy. Use the issued forms and endorsements for any real claim; use the exam’s stated facts and form assumptions when answering a test question.

How to analyze an exclusion

Start with the Coverage A grant: is there alleged bodily injury or property damage, caused by an occurrence, in the coverage territory, during the policy period, and is the insured legally obligated to pay covered damages? Next identify the conduct or relationship described by the exclusion. Read each defined term, then look for an exception, a carve-back, or an endorsement that changes the result. Do not stop at a phrase like ‘pollution exclusion’ or ‘your work exclusion’ without reading its complete paragraph.

A complaint can allege several causes of injury, some potentially covered and some excluded. The duty to defend is generally evaluated under the policy’s defense wording and applicable Texas law, often by comparing the factual allegations with the policy. The duty to indemnify concerns actual liability and covered facts. This page focuses on Coverage A exclusions; it does not decide either duty for a specific lawsuit. A claim should be reported promptly and reviewed by the insurer.

Expected or intended injury

This exclusion commonly removes bodily injury or property damage expected or intended from the standpoint of an insured. It distinguishes accidental liability from deliberate harm. The insured’s intent, the nature of the act, the resulting injury, and any wording about injury expected by an insured may matter. An intentional act does not always answer the question: an insured can intentionally perform an act while claiming an unintended result. The actual policy language and governing law control.

For example, a business owner intentionally throws a tool at a customer and causes injury; the exclusion may be implicated. By contrast, a worker performs a routine task and an unexpected accident damages property; the fact that the worker intentionally used the tool does not automatically make the damage expected or intended. Do not conclude from the word ‘intentional’ alone. Review the causal facts, allegations, policy definition, and any exception for reasonable force to protect persons or property if present.

Contractual liability

A business may assume another party’s liability in a contract, such as a construction indemnity agreement. CGL policies commonly limit coverage for liability assumed under a contract, while preserving a defined exception for certain liability the insured would have even without the contract and for an ‘insured contract’ as defined by the policy. The exact definition can include specified types of agreements and conditions. A contract’s label does not prove it is an insured contract.

Separate two questions: did the insured become liable under the contract, and does the policy cover that assumed liability? A business can owe defense or indemnity obligations to a customer that exceed its insurance. A certificate naming a party or a contract promise to procure insurance does not amend the policy. Send the contract and claim to the agent or insurer before signing, and have the actual indemnity and additional-insured wording reviewed.

Workers compensation and employers liability

CGL Coverage A generally is not a substitute for workers compensation or employers liability insurance. Exclusions address obligations under workers compensation, disability-benefit, unemployment-compensation laws, and bodily injury to an employee arising out of employment, subject to the wording. The policy may contain an exception for liability assumed under an insured contract, but that exception should not be read as a general employee-injury grant.

A third-party-over claim can be complicated. An employee may be injured at a customer’s site, and the customer may be sued for its role. The employer, general contractor, property owner, and subcontractor may each have different insured status, contractual duties, and insurance. Workers compensation benefits, employers liability, CGL, and additional-insured endorsements must be analyzed separately. Texas has unique subscriber and nonsubscriber rules, which do not mean CGL automatically replaces the statutory or contractual coverage needed.

Pollution

Pollution exclusions can apply to injury or damage arising from the discharge, dispersal, seepage, migration, release, or escape of a pollutant, with terms and exceptions varying by form. Pollutants may include smoke, vapors, chemicals, waste, or other irritants or contaminants. TDI notes that standard CGL wording may have exceptions for certain indoor emissions, products or completed operations, hostile fire, contractor situations, or equipment fluids; a total pollution endorsement may remove some of those exceptions.

Consider a cleaning contractor whose chemical spills into a storm drain and harms a neighboring business. The pollution exclusion may be central, and a separate pollution liability policy may be needed. A kitchen fire that produces smoke causing bodily injury can raise a different question if the form contains a hostile-fire exception. Do not assume every smoke claim is covered or excluded; identify the pollutant, event, location, operations, exception, and endorsement.

Auto, aircraft, and watercraft

CGL forms commonly exclude many injuries or damage arising from ownership, maintenance, or use of autos, aircraft, or watercraft. The policy may include exceptions for liability assumed in an insured contract, certain nonowned watercraft, or equipment described as mobile equipment rather than auto. Business auto, aircraft, watercraft, or garage policies may be the intended coverage. The exclusion’s definitions and the vehicle’s actual use matter.

A delivery van that strikes a pedestrian is usually analyzed under auto coverage, not simply under the CGL because the business was making a delivery. A forklift operating inside a warehouse can require the mobile-equipment analysis. A contractor’s boat used to transport workers may implicate watercraft terms. If the vehicle is hired or employee-owned, CGL and business-auto policies can both require review. Never infer coverage from the business activity alone.

Damage to property

CGL forms commonly exclude damage to property owned, rented, or occupied by the insured, property in the insured’s care, custody, or control, and certain property on which the insured is working. There may be exceptions for fire damage to premises rented to the insured, temporary use, or specific property types. These clauses help distinguish liability insurance from first-party property insurance and prevent CGL from becoming a warranty for the insured’s own assets.

If a contractor accidentally breaks the exact component it was hired to repair, the care-custody-control or work-related provisions may apply. If the contractor damages adjacent third-party property, the result can differ. An exclusion may focus on the particular part of property being worked on, the part that must be restored, or property that was physically injured. Identify precisely what was damaged, who owned it, and what work was being performed.

Damage to your product, your work, and impaired property

The ‘your product’ exclusion generally concerns property damage to the insured’s product arising out of the product or a part of it. The ‘your work’ exclusion generally concerns damage to the insured’s completed work, with an exception in common forms when the damaged work or work out of which the damage arises was performed on the insured’s behalf by a subcontractor. The exception’s conditions matter. Neither clause should be paraphrased as ‘CGL never covers faulty work.’

Impaired-property wording can address loss of use of tangible property that is not physically injured, when it is less useful because the insured’s product or work is defective or inadequate and can be restored by repair, replacement, adjustment, or removal. A separate failure-to-perform contract exclusion may also apply. If a defective component causes a fire that damages other property, the resulting physical damage and the cost to replace the insured’s product can be treated differently. Breakdown of each claimed item is essential.

Recall, electronic data, and other limitations

A product-recall or withdrawal exclusion can limit costs to inspect, repair, replace, withdraw, or recall the insured’s product or work because of a known or suspected defect. Product recall insurance may address some expenses that a CGL policy does not. Electronic-data exclusions can also limit property-damage coverage for corruption, loss, or inability to access data, even though data may be operationally critical. Separate electronic-data, cyber, or technology coverage should be evaluated.

Other Coverage A limitations can concern war, nuclear energy, fungi or bacteria, communicable disease, designated operations, or specific professional exposures, depending on form and endorsement. The existence of an exclusion title does not reveal whether a particular loss fits it or an exception. Policyholders should request the actual wording and ask the insurer to identify the paragraph supporting its position.

Coverage A exclusion comparison

A disciplined claim review

1. Identify the named insured, alleged insured, policy period, and Coverage A limit.
2. Separate bodily injury, physical injury to tangible property, loss of use, and claimed expenses.
3. Determine the alleged event or occurrence and when injury or damage took place.
4. Apply the form’s definitions, then identify exclusions that match the facts.
5. Read any exception in full and check endorsements that alter the exclusion.
6. Review other potentially relevant coverage parts and policies, including auto, workers compensation, property, and pollution.
7. Report the claim and provide the complaint, contracts, incident records, and requested information.
8. Distinguish the insurer’s defense position from the eventual indemnity analysis.
9. Ask for a written explanation if the insurer denies or limits coverage.

Exclusions do not all operate the same way

Some exclusions remove a type of damage, some turn on the insured’s relationship to the property, and others depend on the source of the event or the kind of operation. For example, a property-in-care exclusion asks what property the insured controlled; an auto exclusion asks whether the injury arose out of use of an auto; a work exclusion asks whose work was damaged and whether the subcontractor exception applies. Do not stack exclusions as interchangeable labels. Identify the exact policy facts that satisfy each clause and read any carve-back that narrows it.

Compare the allegation with evidence

An initial complaint may describe a loss generally, while investigation later identifies a specific source, such as faulty installation, a chemical release, or a vehicle collision. The insurer may have separate defense and indemnity positions as facts develop. Provide contracts, photographs, maintenance records, incident reports, and expert findings through the claim process. A policyholder can ask the insurer to identify each exclusion and exception it relies on, and whether a factual allegation could still fall within Coverage A. Avoid altering records or making admissions before the investigation is complete.

Study CGL coverage

Coverage A exclusion questions reward careful reading of the exception and the damaged property. Sitonce’s Texas Property and Casualty exam prep course helps you compare CGL parts and common exclusions.

Frequently asked questions