CASUALTY PROVISIONS · 5 MIN READ
CGL Definitions That Drive Coverage
Most CGL coverage disputes are won or lost in Section V Definitions, so the exam drills them hard. An occurrence is an accident, including continuous or repeated exposure to substantially the same general harmful conditions — which means a slow plumbing leak damaging a building over two years is one occurrence, not many, compressing the loss into a single Each Occurrence Limit while raising trigger questions about which policy periods respond. Property damage has two prongs: physical injury to tangible property, with all resulting loss of use deemed to occur at the time of the physical injury; and loss of use of tangible property that is not physically injured, deemed to occur at the time of the occurrence that caused it. That timing language assigns claims to the correct policy period. Bodily injury, coverage territory, and the mobile equipment versus auto boundary complete the front line: mobile equipment is covered by the CGL while autos are pushed to the auto policy. Loading and unloading is defined with bookends: handling of property counts as use of an auto from the moment it is moved toward the vehicle at the place of acceptance, while on the vehicle, and while being moved from the vehicle to the place of final delivery — but movement by a mechanical device not attached to the vehicle (other than a hand truck) is carved out. So a forklift injury near the truck stays with the CGL, while hand-loading injuries shift to the auto policy. This bookend definition replaced the older coming-to-rest and complete-operations doctrines. Two more definitions carry heavy freight. Insured contract lists six categories of contracts — including a lease of premises and the tort-liability-assumption category for business contracts — in which contractually assumed liability is carved back into coverage despite the contractual-liability exclusion. And the undefined word damages generally means compensatory damages; whether punitive damages are insurable is jurisdiction-dependent, with many states covering vicariously assessed punitives but barring directly assessed ones on public-policy grounds.
Watch it instead: Section V: Definitions That Decide Coverage6:29 interactive video · pauses twice to check youKey rules
Continuous or repeated exposure to the same harmful conditions is ONE occurrence
A progressive loss like a slow leak counts as a single occurrence under the accident definition, even when damage spans several policy periods.
Why the exam cares: Occurrence-counting questions decide how many Each Occurrence Limits apply, and the exam expects the single-occurrence answer.
Property damage includes loss of use of property that is not physically injured
Prong (a) is physical injury with resulting loss of use timed to the injury; prong (b) is pure loss of use timed to the causing occurrence — a building made uninhabitable without physical harm still suffers property damage.
Why the exam cares: Examiners test both that pure loss of use qualifies and when each prong is deemed to occur.
Loading and unloading is 'use of an auto' under a bookend definition
Handling runs from acceptance into or onto the vehicle through delivery, but a detached mechanical device such as a forklift (hand trucks excepted) is outside the definition, leaving that injury with the CGL.
Why the exam cares: The CGL-versus-BAP boundary for loading injuries is a favorite crossover question.
The insured contract definition carves six contract categories back into coverage
Leases of premises, sidetrack agreements, easements, obligations required by ordinance, elevator maintenance agreements, and business-contract tort assumptions escape the contractual-liability exclusion; CG 24 26 narrows the tort-assumption category to third-party liability.
Why the exam cares: Contractual-liability questions turn on whether the agreement fits an insured contract category.
Whether 'damages' includes punitive damages depends on the jurisdiction
Compensatory damages are always included; states split among full punitive coverage, vicarious-only coverage, and complete uninsurability on public-policy grounds.
Why the exam cares: The exam rewards the jurisdiction-dependent answer over any absolute yes or no on punitives.
Numbers to memorize
- 6 — categories in the CGL insured contract definition
- 1 — occurrence resulting from continuous or repeated exposure to substantially the same harmful conditions
Common traps
- Counting each policy period or each day of a progressive loss as a separate occurrence — continuous exposure to the same conditions is a single occurrence.
- Assuming loss of use requires physical damage — prong (b) of property damage covers loss of use of property never physically injured.
- Treating a forklift as part of loading and unloading — mechanical devices not attached to the vehicle (other than hand trucks) fall outside the auto exclusion and back into the CGL.
- Assuming punitive damages are always excluded or always covered — insurability is a state-by-state public-policy question.
When a coverage question feels ambiguous, check Section V first — the defined term in quotation marks usually contains the answer the examiner is testing.
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