Under the Commercial General Liability Coverage Form written on an occurrence basis, the insuring agreement imposes several conditions on the…

The Commercial General Liability (CGL) Coverage Form's insuring agreement states the insurer will pay sums the insured becomes "legally obligated to pay as damages because of 'bodily injury' or 'property damage' to which this insurance applies." This legal obligation is a fundamental condition. The policy also requires the bodily injury or property damage to be caused by an "occurrence" within the "coverage territory" and during the policy period.

A. The insurer's duty to defend is a separate, broader duty; the duty to pay is conditioned on the insured's legal liability.

B. The policy covers damages the insured is legally obligated to pay, not necessarily all damages that are claimed by a third party.

C. The policy covers bodily injury or property damage, not personal and advertising injury, which is covered under a separate insuring agreement (Coverage B).

1. The Institutes. (2023). CPCU 500: Managing Evolving Risks. Chapter 3, "Commercial Liability Risk and Insurance," Section: Commercial General Liability Policy, pp. 3.10-3.11.

2. Insurance Services Office, Inc. (2012). Commercial General Liability Coverage Form (CG 00 01 04 13). Section I, Coverage A, 1. Insuring Agreement.