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The Little Understood Claims-Made CGL Policy

Our guest poster Craig Stanovich has an interesting perspective to share on the little understood claims-made CGL policy.


"Virtually all contracts or agreements that obligate others to purchase insurance require a general liability policy to be "occurrence-based." In other words, "claims-made" general liability policies are not allowed. If you show up with a claims-made general liability policy, you risk being shunned. Furthermore, it seems claims-made general liability insurance is similar to religion and politics - not to be discussed in polite company. So why does the claims-made commercial general liability (CGL) policy have such a "poor reputation?"


The difference between an occurrence and claims-made liability policy is all about timing - that is, the coverage "trigger." The question is not only what event must take place to obligate the CGL policy to respond but also when that event must take place.  The "occurrence" CGL is triggered when the bodily injury or property  damage is deemed to have occurred. Despite its "occurrence" title, when the occurrence happens has no bearing on the coverage trigger.  Instead, the event that must occur and that obligates the CGL insurer to respond is bodily injury or property damage - not the occurrence.  The obligation of the CGL insurer(s) to respond to bodily injury or property damage occurring during its policy period(s) remains, even if a claim or lawsuit seeking damages resulting from that bodily injury or property damage is filed months or even years after the "occurrence" CGL policy has ended. The Claims-Made CGL Policy

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