Home Page The Publication The Editor Contact Information Insurance Key issues Book Subscribe

Vol. 5, Iss. 2
February 10, 2016

Rule No. 1:
A CGL Policy Does Not Provide Coverage For “Bodily Injury” Or “Property Damage”


It is as common of a refrain as you’ll hear in a conversation about a commercial general liability policy – “A CGL policy provides coverage for damages for ‘bodily injury’ or ‘property damage.’” But does it really? After all, that’s not what ISO’s workhorse insuring agreement says. It states: “We will pay those sums that the insured becomes legally obligated to pay as damages because of ‘bodily injury’ or ‘property damage’….”

As ISO’s language shows, a CGL policy does not provide coverage for damages “for” “bodily injury” or “property damage” but, rather, damages “because of” “bodily injury” or “property damage.” There is a real difference. It seems like a day does not go by that I do not hear, or read, the mistaken use of “for” -- and not the correct “because of” -- when describing the nature of “bodily injury” or “property damage” coverage in a CGL policy. I’m counting myself here too. It’s an easy mistake to make and a hard habit to beak.

“Because of” is broader than “for.” In Ryan Companies US Inc. v. Everest National Insurance Co., No. 14-3207 (D. Minn. Feb. 2, 2016), the Minnesota District Court recently addressed how broad “because of,” when used in the CGL Insuring Agreement, is. It is an interesting case with relevance to construction defect coverage and, more generally, allocation of a settlement between covered and uncovered claims. Time does not allow for a discussion of this here. Hey, it’s Super Bowl Sunday as I write this. Kickoff is just seven hours away – which means I’ve already missed half the pre-game show to finish up this issue of CO. [There’s a limit to my commitment to this newsletter that you’re not paying for.]

So I’ll put Ryan Companies on my to-do list. I mentioned it here just to make the point about “for” versus “because of” as used in the CGL Insuring Agreement. Take note if you mistakenly use “for” when describing the nature of “bodily injury” or “property damage” coverage.


Website by Balderrama Design Copyright Randy Maniloff All Rights Reserved