I know this will be CGL 101 for many of you, but two inquiries/comments in the past couple of days have come to my attention. One was in response to this question on an agent association discussion board:

“An HVAC customer is closing his business. I have not yet canceled his CGL policy because of concern about completed operations should he be sued next year for a faulty installation that occurred several years ago.”

One of the agents responding to this question commented:

“The occurrence should go back to when the gas line wasn’t hooked up properly (that is the cause of loss) and coverage was in place during that time….”

Another agent association got an email coverage inquiry from a member agent that said this:

“I just need to make sure I’m correct in what I’m telling the insured. One of our insureds sent me an email over the weekend stating he just received notice of claim for a job done 6 years ago. We have had the insured for 5 years so the claim should be reported to the agent that had him insured when the job in question was done. Is this correct?”

Both of these comments are incorrect if we’re talking about this ISO CGL insuring agreement language:

“This insurance applies to ‘bodily injury’ and ‘property damage’ only if…The ‘bodily injury’ or ‘property damage’ occurs during the policy period….”

The policy that responds to a claim for BI or PD is the policy in force at the time of the BI or PD regardless of when the alleged negligence occurred. This is something that is usually taught in licensing school and should be common knowledge, yet I find repeatedly that this is not the case.


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Bill Wilson

Founder at InsuranceCommentary.com
One of the premier insurance educators in America on form, coverage, and technical issues; Founder and director of the Big “I” Virtual University; Retired Assoc. VP of Education and Research from Independent Insurance Agents & Brokers of America. Reprint Request Information