OVERVIEW OF THE AAIS COMMERCIAL LIABILITY COVERAGE FORM

(December 2018)

INTRODUCTION

The AAIS Commercial Liability Program consists of the following coverage forms:

GL-200–Commercial Liability Coverage (Broad Form) can be used for any commercial risk. It provides bodily injury, property damage, personal injury, and advertising injury. Premises, operations, products and completed operations exposures are covered.

GL-100–Commercial Liability Coverage provides more limited coverage than is provided by the GL-200 but has the same broad eligibility. Coverage is limited to bodily injury and property damage.
GL-600–Commercial Liability Coverage provides limited coverage (compared to the GL-200) but has the same broad eligibility. Coverage is limited to bodily injury and property damage. Only premises and operations are covered.
GL-610–Commercial Liability Coverage (Farm Premises and Operations) provides less coverage than the GL-200 and is available only to farm operations. Coverage is limited to bodily injury and property damage.

The discussions in this section concentrate only on the GL-200-Commercial Liability Coverage (Broad Form).

ELIGIBILITY

Eligibility is, essentially, unrestricted and applies to all commercial operations and businesses.

COMPARISON

The AAIS and ISO General Liability Coverage Form are similar but there are important differences.

PRINCIPAL COVERAGES

The following is a general description of the principal coverages provided by GL-200.

Coverage L–Bodily Injury and Property Damage pays all sums the insured is legally obligated to pay as damages arising out of bodily injury or property damage caused by an occurrence covered by the insurance.
Coverage M–Medical Payments pays the medical expenses for bodily injury caused by an accident on the insured's premises or by the insured's operations. Medical expenses are paid regardless of fault.
Coverage N–Products/Completed Work pays all sums the insured is legally obligated to pay as damages arising out of the products or completed work hazard covered by the insurance. The product injury or damage must occur away from the insured's premises and arise from the named insured's product after it is released into the custody of others. Bodily injury or property damage from the completed work hazard must arise out of work completed or abandoned by the named insured. This coverage does not apply to work that is still in progress.
Coverage O–Fire Legal Liability pays for the named insured’s legal liability for fire property damage to buildings or parts of buildings leased or rented to the named insured.
Coverage P–Personal Injury Liability and Advertising Injury Liability pays all sums the insured is legally obligated to pay as damages for personal injury and advertising injury offenses that arise out of the conduct of the insured's business.

POLICY CONSTRUCTION

The AAIS Commercial Liability Coverage Form is made up of the following basic parts or forms:

Commercial Liability Coverage Declarations

GL-200–Commercial Liability Coverage Form

CL-100–Common Policy Conditions

Mandatory and Optional Coverage Endorsements

State Amendatory Endorsements

AVAILABLE ENDORSEMENTS

Various endorsements are available to tailor the AAIS Commercial Liability Coverage Forms. Some are always mandatory while others are mandatory only for specific classifications and types of business. Many are optional and permit a standard form to be customized to meet a specific risk's coverage needs.

UNDERWRITING

Underwriting commercial liability coverage for a specific risk involves identifying and evaluating its exposures, classifying both the risk and those exposures, and then properly rating them.

RATING

Commercial liability coverage rating is prescribed in the AAIS Commercial Liability Program Manual. It is very specific but some of the details can be extremely confusing. The Commercial Liability Rating Section gives general details on how to rate and provides examples.