CASUALTY TYPES & BONDS · 6 MIN READ
CGL, Umbrella, and Excess Liability
The Commercial General Liability policy comes in two trigger versions. The occurrence form (CG 00 01) covers bodily injury or property damage that happens during the policy period, no matter when the claim is filed. The claims-made form (CG 00 02) has a two-prong trigger: the injury must occur on or after the retroactive date, and the claim must first be made against the insured during the policy period or an extended reporting period. Coverage A pays damages for bodily injury and property damage, Coverage B addresses personal and advertising injury offenses, and Coverage C provides no-fault medical payments. All Coverage A and B losses normally share a single General Aggregate limit, so a bad early loss can leave later claims unprotected — unless the insured buys CG 25 03 (per designated construction project) or CG 25 04 (per designated location), which give each project or location its own aggregate equal to the general aggregate. Construction risk transfer layers more forms on top. Additional-insured endorsement CG 20 10 protects an upstream party for the contractor's ongoing operations, while CG 20 37 extends that protection into the products-completed-operations period; both are routinely required together. The standalone Owners and Contractors Protective policy (CG 00 09) is a different animal: the owner is the named insured on a dedicated policy whose limits are not shared with the contractor's other work, but coverage reaches only vicarious liability and general supervision for ongoing operations — no completed operations and no coverage for the owner's sole negligence. Wrap-up programs (OCIP when the owner sponsors, CCIP when the contractor does) centralize coverage for all project participants. Above the primary layer sit umbrella and excess policies. A true umbrella performs two jobs: it is excess over scheduled underlying limits when those policies pay, and it drops down to act as primary for losses the underlying policies do not cover at all — subject to a self-insured retention the insured pays first. A follow-form excess policy only mirrors the underlying coverage and pays nothing for an uncovered peril. Finally, the federal Liability Risk Retention Act of 1986 created two alternative liability structures: the Risk Retention Group, an insurer owned by its similar-business insureds that actually retains risk and, once licensed in one state, may operate nationwide with only limited non-domiciliary regulation; and the Risk Purchasing Group, a buying cooperative that purchases coverage from a licensed insurer and assumes no risk itself.
Watch it instead: The Liability Tower: CGL, Umbrella, Excess6:38 interactive video · pauses twice to check youKey rules
Claims-made coverage needs the act after the retro date AND the claim made during the period
Both prongs of CG 00 02 must be satisfied; a claim first made after expiration is covered only through an extended reporting period.
Why the exam cares: Date-line fact patterns giving a retro date, an act date, and a claim date are the signature question of this topic.
CG 25 03 gives each designated project its own aggregate equal to the general aggregate
Exhausting one project's aggregate does not erode another project's aggregate or the policy's general aggregate for non-project work; CG 25 04 does the same by location.
Why the exam cares: Exams test whether a loss at Project A reduces what remains for Projects B and C — with the endorsement, it does not.
CG 20 10 covers ongoing operations; CG 20 37 covers completed operations
An upstream party needs both endorsements on the contractor's CGL to be protected before and after project completion.
Why the exam cares: The pairing is tested by asking which endorsement responds to a defect claim surfacing after the work is done.
OCP (CG 00 09) is a dedicated owner policy limited to vicarious liability and supervision
The owner is the named insured with limits not shared with the contractor's other jobs, but there is no products-completed-operations coverage and no coverage for the owner's sole negligence.
Why the exam cares: Examiners contrast OCP with additional-insured status and reward candidates who know OCP's narrower scope but dedicated limits.
A true umbrella drops down for uncovered losses subject to an SIR; follow-form excess does not
When no underlying policy covers a loss within the umbrella's broader grant (libel, for example), the umbrella pays as primary after the insured pays the self-insured retention; a strict follow-form excess denies the claim entirely.
Why the exam cares: Drop-down-with-SIR math and the umbrella-versus-follow-form distinction are among the most reliable hard questions in casualty testing.
Numbers to memorize
- $250–$1,000 — typical personal umbrella self-insured retention (SIR) range
- Drop-down payment = loss amount − SIR (e.g., $300,000 loss − $10,000 SIR = $290,000 paid)
- 1986 — federal Liability Risk Retention Act creating RRGs and RPGs
Common traps
- Confusing the occurrence trigger with the claims-made trigger — occurrence looks at when the injury happened; claims-made looks at when the claim is first made plus the retro date.
- Assuming the umbrella SIR applies to every claim — it applies only in drop-down situations where no underlying policy responds, not when the umbrella sits excess over a paying primary.
- Confusing a Risk Retention Group with a Risk Purchasing Group — the RRG is an insured-owned insurer that retains risk; the RPG only buys coverage as a group and retains nothing.
- Thinking OCP protects the owner's own negligence — it covers only vicarious liability and general supervision for the designated contractor's ongoing operations.
When a question mixes coverage layers, sketch the tower — primary, endorsements, then umbrella — and ask at each layer whether the peril is covered before moving up.
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