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- info@goldbridgeins.com
- 888‑590‑2667
Goldbridge Insurance Services
Everyone has a million dollar GL policy. What separates them is the endorsements, and nobody reads those until a claim.
General liability is the policy every business has and almost nobody has read. It gets bought because a contract demanded it, renewed because it was already there, and examined for the first time when a claim comes in.
The frustrating part is that the policy is mostly standardized. Most carriers start from the same ISO commercial general liability form. What actually differs between two quotes at the same limit is the endorsement schedule, and that is the part a price comparison never shows you.
A standard CGL has three insuring agreements, and they are not interchangeable.
| Coverage | What it responds to |
|---|---|
| Coverage A | Bodily injury and property damage to third parties caused by an occurrence |
| Coverage B | Personal and advertising injury: libel, slander, wrongful eviction, advertising offenses |
| Coverage C | Medical payments, small no-fault amounts paid regardless of liability to keep minor incidents from becoming claims |
Alongside those sits the duty to defend, which is usually worth more than the limit itself. Defense costs are typically paid in addition to the limit on a CGL, not inside it, and a defense on a construction defect case can run into six figures before anyone discusses settlement. When a policy pays defense inside the limit, that is a material difference and it will be in an endorsement, not in the price.
A typical schedule reads $1,000,000 each occurrence, $2,000,000 general aggregate, $2,000,000 products and completed operations aggregate.
If you run several jobs at once, ask about a per project aggregate. It gives each project its own general aggregate instead of making every job share one. A single bad project on a shared aggregate can leave the rest of your work effectively uninsured for the remainder of the term, and a general contractor reading your certificate cannot see that from the face of it.
Almost every commercial contract requires you to name the other party as an additional insured. Owners treat this as a box to check. It is the single most consequential endorsement on the policy.
Three things decide whether the status you provided is the status the contract required.
Which form. The ongoing operations form covers the additional insured for your work while it is in progress. It does not cover them after the job is complete. Completed operations status is a separate endorsement. A contractor who provides only the ongoing operations form on a project that will generate a defect claim in year six has satisfied the certificate and not the risk.
Which edition. Editions of the standard forms from 2004 onward narrowed the grant considerably, and the 2013 editions limit coverage to the extent permitted by law and to liability caused by the named insured’s acts or omissions. A contract written to an older, broader edition is not satisfied by a newer one, and the certificate will not show you the difference.
How it stacks. Contracts routinely require your policy to be primary and non-contributory. The unendorsed CGL other-insurance clause does not do that on its own. It takes a specific endorsement. Same story with a waiver of subrogation, which gives up your carrier’s recovery rights against the other party and has to be endorsed to exist.
A certificate of insurance is evidence, not coverage. It confers no rights and amends nothing. The only proof that you have the additional insured status, the primary wording and the waiver your contract demands is the endorsement schedule attached to the policy. Ask for it.
Indemnity clauses in California construction contracts are not freely enforceable, and that is in your favor.
Under Civil Code section 2782.05, for construction contracts entered into on or after January 1, 2013, a provision requiring a subcontractor to indemnify or insure a general contractor, construction manager or other subcontractor is void and unenforceable to the extent the claim arises out of that party’s active negligence or willful misconduct, or out of defects in design furnished by that party.
That does not make a one-sided contract harmless, because you can still be obligated to defend and to tender, and the fight over who owed what happens after the lawsuit lands. But it does mean the worst clauses are not as enforceable as the party who drafted them would like. Send us the insurance requirements page before you sign, not after.
Claim denials rarely come out of nowhere. They come out of the same handful of exclusions.
Then there are the carrier-specific exclusions that get added quietly at renewal. Residential and tract work, condominium conversions, EIFS, subsidence and earth movement, height or depth restrictions, roofing, excavation, assault and battery, habitability, and action-over exclusions that strip out exactly the employee-injury-turned-contractual-claim scenario above. Any one of these can gut a policy for a specific business while the premium stays attractive.
For contractors, the claim that hurts is usually the one that arrives long after the job is finished and the policy that wrote it is gone.
California’s statute of repose for latent construction defects, Code of Civil Procedure section 337.15, bars actions brought more than ten years after substantial completion for latent deficiencies in design, planning, supervision or construction, and for property damage arising from them. Patent defects run on a shorter clock.
Ten years is a long tail, and it produces two practical consequences.
Nearly all commercial general liability is written on an occurrence basis, which means the policy that was in force when the injury or damage happened responds, no matter when the claim is made. That is the structure you want.
Some surplus lines placements, particularly in difficult classes, are offered claims-made. On a claims-made policy the claim has to be reported during the policy period and the loss has to post-date the retroactive date. Switching from occurrence to claims-made, or letting a claims-made policy lapse without buying tail coverage, can leave you with no coverage for work you have already done. If your quote is claims-made, that should be a conversation, not a footnote.
General liability is usually rated on gross sales, payroll, square footage or job cost, depending on classification. Two things follow from that.
First, the deposit premium is an estimate and the policy is audited. Growth means an audit bill. Plan for it rather than being surprised by it.
Second, your classification drives the rate, and the wrong one causes problems in both directions. Underwriters and auditors look hard at the description of operations, and a business described as something it is not has handed the carrier an argument at claim time. We have seen this specifically where a specialty operation gets written under a generic service classification because it was easier to quote.
Subcontractor costs are rated too. Uninsured subs are typically charged back at your own rate at audit, which is the practical reason to collect certificates before the work starts rather than at renewal.
No. Employee injury is excluded and belongs on workers’ compensation, with the lawsuit side handled by employers liability.
No. It covers damage your work causes to other property. Repairing or replacing your own defective work is excluded. This is the most common misunderstanding we encounter.
Ongoing operations covers the other party while your work is in progress. Completed operations covers them for claims arising after the work is finished. They are separate endorsements, and most construction contracts require both.
No. A certificate is evidence only and confers no rights. The endorsement schedule attached to the policy is the proof.
Contract language requiring your policy to pay first without seeking contribution from the other party’s insurance. The standard form does not do this by itself. It requires an endorsement.
Not fully. Under Civil Code 2782.05, for construction contracts entered into on or after January 1, 2013, indemnity is void to the extent the claim arises from that party’s active negligence or willful misconduct. Send us the requirements before you sign.
For latent construction defects, up to ten years after substantial completion under Code of Civil Procedure 337.15. Patent defects run on a shorter period.
It gives each job its own general aggregate rather than sharing one across everything you do in a year. If you run multiple projects simultaneously, it is usually worth the cost.
No on both. Those are cyber liability and professional liability.
Often, for smaller premises-based businesses. A business owner’s policy packages GL with property at a better price, but eligibility is restricted and most contracting operations do not qualify.
General liability anchors the program. Around it sit commercial property for the building and contents, inland marine for equipment that leaves the premises, commercial auto for the vehicles, commercial umbrella for the limits contracts demand, employment practices liability for the employment relationship, and workers’ compensation for your crews. Our business insurance overview lays out the whole program.
Not just the certificate. We will tell you which additional insured forms and editions you are actually providing, whether primary and non-contributory and waiver of subrogation are endorsed or only promised, which exclusions your carrier has added, whether your aggregate is shared across every job, and whether any of it matches the contracts you have signed.
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This page is general information about how commercial general liability coverage is typically structured. It is not legal advice and it is not a description of any specific policy. Form editions, endorsements and statutory provisions change; coverage is determined solely by the terms, conditions and exclusions of the policy you hold, including all endorsements.
