(April 2019)
PF&M subscribers in any manual or electronic form are permitted to reprint the following sample insurance proposal language when preparing insurance presentations for their commercial insurance customers. Other uses require permission from The Rough Notes Company, Inc.
The following paragraph or similar language should be included in all
insurance proposals:
Consult the policy for definitions and limitations. The terms of this proposal do not represent contract terms. The policy is subject to company underwriting practices.
This proposal language is not intended to be an entire insurance proposal. A client-specific section that includes the name and address of the insured, the insurance company and the agent, including information about them, a list of locations, limits, deductibles,and similar customer specific items are not included and should also be prepared.
The intent of any insurance proposal is not to reproduce the coverage form or policy but to give a summary of possible coverages.
Paragraphs that explain coverages unique to this coverage form or policy form may be the most important addition to your insurance proposal and sales effort. Coverage examples can be tailored to your individual customer. Be careful when altering any proposal language not to expand coverage beyond what the policy intends.
This proposal should be combined with proposals for other lines of business, such as commercial property, time element, automobile liability and physical damage, and workers compensation for a complete account proposal. A checklist of recommended endorsement could also be helpful if you can explain the endorsement and how it is to be used.
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ISO Commercial General Liability Coverage Forms Available Endorsements and Their Uses
ISO Commercial General Liability Coverage Forms Endorsements Checklist
The Insurance Services Office(ISO) Commercial General Liability (CGL) Coverage Forms can be used on either a stand-alone monoline basis or as part of a package policy. They provide broad comprehensive liability coverage that eliminates gaps in coverage. ISO developed two different CGL forms. One covers on an occurrence basis for eligible losses when the injury or damage occurs during the policy period, regardless of when the insurance company is notified of the loss. The key to coverage is the date of loss. The insured must promptly notify the company of a loss. Depending on circumstances, late notification could affect coverage.
The other CGL form covers on a claims-made basis. Coverage is triggered by the date of loss and the date the claim is filed. The coverage form handles any covered loss or claim filed within the policy period, regardless of when the loss or injury occurred provided it happened after the retroactive date on the declarations page.This Commercial General Liability Coverage Form Sample Insurance Proposal language follows CG 00 01, the occurrence form.
The insurance company pays amounts the insured is legally obligated to pay as damages due to bodily injury or property damage that this insurance covers. It also has the right and duty to defend the insured against lawsuits that seek those damages. At its option, the insurance company can investigate any claim and settle any lawsuit that may result but:
The only other obligation or liability to pay amounts, perform acts, or provide services is as stated in Supplementary Payments for bodily injury, property damage, and personal and advertising injury liability coverages.
Coverage applies only if the bodily injury or property damage:
Bodily injury or property damage that occurs during the policy period and was not known by any insured or authorized employee to have occurred before the policy period began includes any continuation, change, or resumption of that injury or damage after the policy period ends.
Bodily injury or property damage is determined to be known at the earliest date that any insured or authorized employee:
Damages for bodily injuryinclude damages any party claims for care, loss of services, or death that results at any time from the bodily injury.
Exclusions must be examined carefully because many of them have conditions, exceptions, limitations, or restrictions not stated below. Coverage does not apply to:
This is bodily injury or property damage that the insured intended. This exclusion does not apply to bodily injury that results from using reasonable force to protect persons or property.
This is bodily injury or property damage liability the insured assumes under a contract or agreement. This exclusion does not apply to liability the insured has even without the contract or agreement. It also does not apply to bodily injury or property damage assumed under an insured contract if the injury or damage occurs after the contract or agreement's effective date.
This is bodily injury or property damage liability the insured may be liable for due to causing or contributing to the intoxication of a person, furnishing alcoholic beverages to persons already under the influence of alcohol or who are under the legal drinking age, or laws that relate to selling, giving, distributing, or using alcoholic beverages. This exclusion also applies to the hiring, employing, monitoring, or training of others and the providing or failing to provide transportation to intoxicated persons. This exclusion is unique in that it applies only if the insured's business is the manufacturing, distributing, selling, serving, or furnishing of alcoholic beverages. Businesses that permit others to consume alcohol on their premises but that do not supply the alcohol are not subject to this exclusion.
This is any
obligation the insured has under workers compensation, disability benefits,
unemployment compensation, or similar laws.
This is liability
that arises out of bodily injury to the insured’s employee that occurs in the
course of employment. Consequential injury to the employee's family members is
also excluded.
This is bodily injury or property damage that arises out of the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of pollutants at or from any premises, site, or location that any insured ever owned or occupied, or that it ever rented or had loaned to it. Coverage also does not apply to any loss, cost, or expense that arises out of any request, demand, order, law, requirement, claim, or suit by a government entity to test for, monitor, clean up, remove, contain, treat, detoxify, neutralize, respond to, or assess the effects of pollutants in any way. This exclusion has numerous exceptions and conditions that must be reviewed carefully and in their entirety within the exclusion's context.
This is liability that arises out of owning, operating, occupying, renting, loaning, supervising, maintaining, use, entrusting, loading, or unloading aircraft, autos, or watercraft owned or operated by, or rented or loaned to, any insured. This exclusion has five separate exceptions that must be reviewed carefully and in their entirety within the exclusion's context.
This is bodily injury or property damage that arises out of mobile equipment being transported by an auto that is owned or operated by or rented or loaned to any insured. The use of mobile equipment in, or to practice or prepare for, racing, speed, pulling, pushing, demolition, stunt activities, or contests of any kind is also excluded.
This is bodily injury or property damage that arises out of any act of war or resistance to it.
Coverage does not apply to property damage to:
This exclusion has four separate exceptions that must be reviewed carefully and in their entirety within the exclusion's context.
This is property damage to the named insured's products that arise out of them or any part of them.
This is property damage to the named
insured's completed work that arises out of that work. There is an
exception for subcontracted work.
Property damage to impaired property or property not physically damaged is excluded if it arises out of:
There is an exception. This exclusion does not apply to any loss of use of other property that arises because of a sudden and accidental physical injury to the named insured’s product or work after it has been put to its intended purpose.
This is damages claimed as a result of the loss of use, withdrawal, recall, inspection, repair, replacement, adjustment, removal, or disposal of the insured's product, work, or impaired property due to a defect, deficiency, inadequacy, or dangerous condition in it.
This is bodily injury that results from personal and advertising injury. This is covered under Coverage B -Personal and Advertising Injury Liability.
This is damage that arises out of loss, loss of use of, damage to, corruption of, or inability to access or manipulate electronic data. This exclusion does not apply to bodily injury.
This is bodily injury or property damage that arises from the violation of the CAN-SPAM Act of 2003, the Telephone Consumer Protection Act (TCPA), the Fair Credit Reporting Act (FRCA), and related Acts, and other similar local, state and federal laws and regulation.
The insurance company pays amounts the insured is legally obligated to pay as damages due to personal and advertising injury that this insurance covers. It also has the right and duty to defend the insured against lawsuits that seek those damages. At its option, the insurance company can investigate any claim and settle any lawsuit that may result but:
The only other obligation or liability to pay amounts, perform acts, or provide services is as stated in Supplementary Payments for bodily injury, property damage, and personal and advertising injury liability coverages.
Coverage applies to personal and advertising injury caused by an offense that arises out of the insured's business but only if it was committed in the coverage territory during the policy period.
Exclusions must be examined carefully because many of them have conditions, exceptions, limitations, or restrictions not shown below. Coverage does not apply to:
This is personal and advertising injury the insured causes or directs with the knowledge that it will violate the rights of another and inflict personal and advertising injury.
This is when personal and advertising injury is caused by material published by the insured or at its direction that the insured knows is false. The publication can be either oral or written. This exclusion applies regardless of the way the material is published.
This is personal or advertising injury that is due to the material that was initially published prior to the policy’s inception date regardless of the way the material was published.
This is personal and advertising injury that arises out of criminal acts committed by the insured or at its direction.
This is personal and advertising injury liability the insured assumes in a contract or agreement,unless the liability would have existed without the contract.
This is personal and advertising injury that arises out of a breach of contract unless it is a breach of an implied contract related to ideas of others being used in the insured's advertisement.
This is a personal and advertising injury that results when goods, products, or services fail to conform to statements made in an advertisement about their quality or performance.
This is a personal and advertising injury that arises out of the wrong description of prices of goods, products, or services stated in the insured's advertisement.
This is personal and advertising injury that arises from infringing on copyright, patent, trademark, trade secret, or any other intellectual property rights but this does not apply to such infringement in the insured's advertisement.
Coverage for personal and advertising injury does not apply to an insured in the business of:
There are several exceptions.
This is personal and advertising injury that arises out of an electronic chatroom or bulletin board but only those that the insured owns, hosts, or controls.
This is personal and advertising injury that results from using the name or product of others in the insured's e-mail address, domain name, or metatag without authorization. This also includes any other tactics intended to mislead potential customers of others.
This is personal and advertising injury due to the actual, alleged, or threatened discharge, dispersal, seepage, migration, release, or escape of pollutants at any time.
There is no coverage for any loss, cost, or expense that arises out of any request, demand, order, law, requirement, claim, or suit by a government entity to test for, monitor, clean up, remove, contain, treat, detoxify, neutralize, or in any way respond to or assess the effects of pollutants.
This is personal and advertising injury that arises out of any act of war and reactions to it.
This is personal and advertising injury that arises from the violation of the CAN-SPAM Act of 2003, the Telephone Consumer Protection Act (TCPA), the Fair Credit Reporting Act (FRCA), and related Acts, and other similar local, state and federal laws and regulation.
The insurance company pays medical expenses that consist of:
These expenses must be caused by an accident that occurs on premises the insured owns or rents, on ways next to such premises, or because of the insured's operations. The accident must take place in the coverage territory during the policy period. The expenses must be incurred and reported to the insurance company within one year of the date of the accident. The injured person must submit to examinations the insurance company pays for by physicians it chooses as often as reasonably required.
The insurance company does not pay expenses for bodily injury:
With respect to claims it investigates or settles, or suits against the insured it defends, the insurance company pays:
None of these payments reduce the limits of insurance.
If the insurance company defends an insured against a suit and an indemnitee of the insured is also named as a party to the suit, the insurance company also defends the indemnitee. This is subject to several conditions on and requirements of the indemnitee.
The insurance company's obligation to pay Supplementary Payments ends when the limit of insurance is used up paying judgments or settlements.
The named insured entity on the declarations determines who is an insured:
The following are also insureds:
Newly acquired or formed organizations are named insureds for not more than 90 days. This is subject to certain conditions, exceptions, and exclusions.
The limits of insurance apply separately to each consecutive annual policy period and to any remaining period of fewer than 12 months. This starts with the policy period on the declarations, unless it is extended after issuance for an additional period of less than 12 months. In that case, the additional period is considered part of the last prior period in order to determine the limits of insurance.
Bankruptcy or insolvency of the insured or the insured's estate does not relieve the insurance company of its obligations.
No person or organization has the right to include the insurance company as a party to a suit that seeks damages from an insured or to sue it with respect to this coverage form until all its terms are met. The company may be sued but it is not liable for damages that this coverage form does not require to be paid or that exceed the limit of insurance that applies.
The insurance company's obligations are limited if there is other valid and collectible insurance for losses that bodily injury and property damage liability or personal and advertising injury liability insurance covers.
This insurance is primary in most situations. If another policy is also primary the loss is shared with that other insurance using the applicable method of sharing basis.
This insurance is excess over any other insurance, whether primary, excess, contingent, or on any other basis under limited circumstances and is subject to certain conditions as outlined and detailed.
The insurance company follows the method of contribution by equal shares if all other insurance permits it. Under this method, each insurance company contributes equal amounts until either its limit of insurance or the amount of loss is paid, whichever happens first.
If any other insurance does not contribute by equal shares, contribution is by limits. Under this method, each insurance company's share is based on the ratio of its limit of insurance to the total limits of all insurance.
Premiums are calculated based on the insurance company's rules and rates. Advance or deposit premiums are estimates that are adjusted based on audited figures at the close of each audit period. If the advance premium is less than the audit earned premium, the first named insured pays the difference. If the advance premium is more than the audit earned premium, the insurance company returns the difference to the first named insured. The first named insured must keep records of the information the insurance company needs for the audit and the premium calculations and send copies to the company when it requests them.
The named insured agrees that the entries on the declarations are accurate and complete, are based on the representations it made to the insurance company, and that coverage is based on those representations.
Insurance applies as if each named insured is the only named insured and separately to each insured subject to a claim or suit. This condition does not apply with respect to the limits of insurance and any rights or duties specifically assigned to the first named insured.
The insured has the option to contractually waive its rights of recovery to any party and that will be honored as long as the waiver was made prior to a loss. After a loss the insured transfers those rights of recovery that have not been waived to the insurance company and must not do anything to impair those rights. If the insurance company requests, the insured must help the insurance company enforce those rights including bringing suit.
If the insurance company decides to not renew this coverage, it mails or delivers notice of its intent to the first named insured at least 30 days before the expiration date. If the notice is mailed, proof of mailing is enough proof of notice.
Refer to the coverage form for the definitions.