Commercial General Liability (CGL)
Commercial general liability (CGL) insurance covers a business's legal liability to third parties for bodily injury, property damage, and personal and advertising injury. Under the standard ISO form it typically responds on an occurrence basis and includes a duty to defend covered suits.
Last updated October 13, 2026
How CGL works
The standard ISO form (CG 00 01) is built around three coverages. Coverage A applies to bodily injury and property damage, Coverage B to personal and advertising injury, and Coverage C to medical payments. Property damage means physical injury to tangible property, including loss of use of it, which is why purely financial loss usually does not qualify.
- Occurrence trigger: the injury or damage must occur during the policy period, regardless of when the claim is made.
- Duty to defend: the insurer has the right and duty to defend suits seeking covered damages. That duty typically ends once the applicable limit is used up by payments.
- Defense costs: under the standard form these typically sit outside the limit rather than reducing it.
- Coverage B offenses: include listed offenses such as false arrest, malicious prosecution, wrongful eviction, libel, slander, and certain infringement in advertising.
Limits are usually stated as each occurrence, general aggregate, products-completed operations aggregate, personal and advertising injury, damage to premises rented, and medical expense.
Occurrence-based means the policy in force when the injury happens responds, so older policies can matter years later. Umbrella or excess coverage commonly sits above the CGL limits when contracts or exposures call for higher totals.
Example
A visitor trips on a cable at a hypothetical startup's office and is injured. The CGL insurer defends the suit and pays covered damages up to the each-occurrence limit. If instead a customer claims a software bug cost it sales, there is generally no bodily injury or property damage, so that dispute is more likely a technology E&O question.
What to watch for
- Endorsements. Carriers may add exclusions or restrict coverage. ISO introduced optional generative AI exclusions in January 2026 (CG 40 47, CG 40 48, CG 35 08), and some carriers also exclude professional services or data-related losses.
- Shared aggregates. Claims across the year draw on the same general aggregate, so umbrella limits often sit above it.
- Contract requirements. Leases and customer agreements often require additional insured status and other endorsements.
CGL vs. related terms
- CGL vs. professional liability and E&O. CGL responds to bodily injury, property damage and listed advertising offenses. Professional liability responds to financial loss from errors in the services you provide. A software failure that costs a customer money usually belongs on the second kind of policy. See technology E&O.
- CGL vs. product liability. Product liability is not always a separate policy. Under the standard CGL form, injury or damage caused by your products after they leave your control is addressed through the products-completed operations coverage, subject to the policy terms.
- CGL vs. umbrella. An umbrella or excess policy sits above CGL and other underlying liability limits. It raises the total available but generally follows the underlying coverage.
- CGL vs. cyber. Data breaches and privacy claims are generally handled by cyber liability, and many CGL forms exclude or limit data-related losses.
- CGL vs. auto and workers compensation. Standard CGL typically excludes auto liability and employee injury obligations, which are covered by their own policies. See workers compensation.
Second example: a hardware product claim
A hypothetical company sells a desktop charging dock. A customer alleges that a unit overheated and damaged part of their home, and files a suit. Property damage caused by a product is the kind of loss the products-completed operations part of a CGL policy is built to address. The insurer would typically evaluate the suit against the policy, defend it if it alleges covered damage, and pay covered damages up to the applicable limit. The cost of recalling the product from the market is a different question: standard forms typically exclude recall expenses, so that exposure needs separate coverage.
Questions to ask your broker or underwriter
- Is the form occurrence-based, and what are the each-occurrence, general aggregate and products-completed operations aggregate limits?
- Does the aggregate apply per policy, per location or per project?
- Which endorsements limit coverage, such as professional services, data, designated operations or generative AI exclusions?
- Are defense costs paid outside the limit, and does a retention change that?
- Can the policy provide blanket additional insured status, waiver of subrogation and primary and non-contributory wording when contracts require it?
- Do our contracts require an umbrella or higher limits than the primary policy provides?
- Will the insurer issue a certificate of insurance that matches those requirements?
Why it matters for technology, AI, fintech and digital-asset companies
CGL is usually required by landlords and customers, but it is not designed for software failures or AI outputs. Hardware companies also face products-completed operations exposure. See general liability, product liability, and errors and omissions coverage.
Most technology companies buy CGL because a lease, customer or event venue asks for it, not because their core exposure is bodily injury. Venture-backed startups often carry it alongside D&O and E&O as part of a first program, and hardware, robotics and device companies need to look harder at products-completed operations and any exclusions added by endorsement. Digital-asset and fintech companies usually have the lease and visitor exposure only, with their financial exposures sitting on other lines. See venture-backed startups, physical AI and hardware and AI liability for how these fit together.
Related terms
Related coverage
Frequently asked questions
What is commercial general liability insurance?
Commercial general liability (CGL) insurance covers a business's legal liability to third parties for bodily injury, property damage, and personal and advertising injury. Under the standard ISO form it typically responds on an occurrence basis and includes a duty to defend covered suits.
Does CGL cover software errors or data breaches?
Usually not on its own. The standard form responds to bodily injury, property damage, and listed advertising offenses, and purely financial loss from a software failure typically does not fit. Carriers also add exclusions by endorsement. Technology E&O and cyber policies are built for these exposures.
What is the difference between each occurrence and general aggregate?
The each-occurrence limit is the most the insurer pays for all damages from one occurrence. The general aggregate is the most it pays for covered claims during the policy period overall, with some categories such as products-completed operations often carrying their own aggregate.
Do CGL defense costs reduce the limit?
Under the standard ISO form, defense costs are typically paid in addition to the limit, as supplementary payments. The duty to defend generally ends when the limit is used up by payments, and endorsements or a self-insured retention can change how defense is treated.
What does commercial general liability insurance not cover?
Standard CGL typically does not cover professional errors or purely financial loss, data breaches, auto accidents, employee injuries, damage to your own property, or product recall costs. Exact exclusions depend on the form and endorsements, so review the policy wording and ask which other policies address each gap.
Who needs commercial general liability insurance?
Any business with a physical location, visitors, customers, contractors or products can face bodily injury or property damage claims. In practice many companies buy it because a lease, customer contract or venue requires it. Whether it is enough on its own depends on the business and its other exposures.
Is commercial general liability the same as a business owner's policy?
No. A business owner's policy, or BOP, is a package that typically bundles general liability with property and business income coverage for smaller businesses. CGL is the liability coverage itself and can be bought on its own. Eligibility for a BOP varies by insurer and industry.
How much general liability coverage does a company need?
It depends on the business, its contracts and its risk. Many leases and customer agreements specify minimum limits, so start with the contract requirements and then discuss exposure with a broker. Umbrella coverage is often used when requirements exceed what the primary policy provides.
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