Contracts

Commercial General Liability Insurance

Also known as: CGL, General Liability

Insurance covering third-party bodily injury, property damage, and completed-operations claims arising from the contractor's work.

Commercial General Liability is the foundational liability policy every contractor carries. It covers third-party bodily injury and property damage claims arising from the contractor's ongoing operations and from completed work. Standard limits are $1M per occurrence and $2M aggregate. Owners and GCs commonly require higher limits ($2M per occurrence, $4M aggregate) on larger commercial work, often supplemented by an umbrella policy.

CGL does not cover: damage to the contractor's own work (covered by builder's risk), damage from defective work itself (carved out by the "your work" exclusion in standard ISO forms), professional liability (separate E&O policy), or auto liability (separate commercial auto policy). Reading the actual policy form is the only way to know what is covered. Contractors should carry the ISO CG 00 01 occurrence form rather than a claims-made form whenever possible.

Frequently asked questions

What does CGL insurance cover?+

Third-party bodily injury and property damage from the contractor's ongoing and completed operations. Standard policy excludes damage to the contractor's own work, professional services, and auto liability. Read the actual policy form.

What CGL limits do contractors need?+

Common minimums are $1M per occurrence and $2M aggregate. Commercial work often requires $2M / $4M with umbrella coverage to $5M to $10M. Verify what the contract requires and what your work actually exposes you to.

Is occurrence-form CGL better than claims-made?+

Generally yes for contractors. Occurrence covers claims based on when the incident happened, even if reported years later. Claims-made requires the policy to be active when the claim is reported. Construction defects often surface years post-completion, which is why occurrence is preferred.

Related terms

Certificate of Insurance

A document proving a contractor carries required insurance coverage, typically required before work begins.

Umbrella Policy

Excess liability coverage layered above the contractor's primary CGL, auto, and employers' liability limits.

Additional Insured

A party added to another's liability insurance policy by endorsement, gaining coverage for claims arising from the named insured's work.

Builder's Risk Insurance

Insurance covering property under construction against fire, theft, vandalism, weather, and similar perils during the build.