Section 10.1 Introduction

• Library: Insurance Practice 2015

In recent years the “new” commercial general liability (CGL) policy has come into general use, replacing the “old” comprehensive general liability policy, as well as various owner’s, landlord’s, and tenant’s policies, manufacturer’s and contractor’s policies, and other commercial liability forms. Although the older forms may continue to be involved in insurance litigation, the CGL policy is and will be the policy form most generally referred to in this chapter. The CGL policy offers coverage on either an “occurrence” basis or a “claims-made” basis.

Insurance coverage is continuously evolving as a result of the ever-changing needs of the marketplace combined with the experience of the insurers and judicial interpretation of the policy forms. In the mid-1970s, the insurance industry decided that a new approach was necessary for insuring commercial risks. Asbestos and other latent disease litigation had given rise to liabilities under policies long expired. Different courts applied different triggers to coverage: exposure, injury in fact, manifestation, etc. Defense costs increased dramatically. The insurers were paying limits on policies that had expired decades ago and that were issued on an entirely different basis. In addition, the courts were expanding coverage and liability beyond that contemplated by the insurers.

The insurers felt that it was necessary to take a different approach to insuring commercial liability. The result was the CGL policy. Among other changes, the CGL policy adopted the simplified language now used in insurance contracts. The CGL policy is now much different in many ways from the forms over which lawyers have become glassy-eyed for generations.

The CGL policy combines in one document the coverages most commonly required by the commercial user of...