CG 00 01, the ISO commercial general liability coverage form, works through three separate insuring agreements, Coverage A for bodily injury and property damage, Coverage B for personal and advertising injury, and Coverage C for medical payments, each with its own trigger, its own exclusions, and its own slot in the limits structure. The insurer pays covered damages up to a per-occurrence limit that is capped by one of two annual aggregates, while defense costs are paid on top of those limits rather than out of them.
If you want to know whether general liability fits your business, start with our buyer-oriented guide to what general liability insurance covers. This post is the companion piece for readers who want to see how the policy itself is engineered: how the standard CG 00 01 coverage form is organized, what each insuring agreement actually promises, how the limits interact when claims start landing, and how endorsements rewire the whole machine.
CG 00 01 (Commercial General Liability Coverage Form)
CG 00 01 is the standardized ISO coverage form at the core of a commercial general liability policy. It contains three insuring agreements, the rules for who qualifies as an insured, the limits of insurance, the policy conditions, and the definitions that give quoted terms their precise meaning.
How is the CG 00 01 coverage form organized?
The coverage form sits behind the declarations page and is divided into five sections that work as a system: Section I sets out the three coverages and their exclusions, Section II defines who is an insured, Section III establishes the limits of insurance, Section IV lists the policy conditions, and Section V defines the quoted terms used everywhere else. No section stands alone.
A claim can satisfy the Coverage A insuring agreement and still fail because the person being sued does not qualify under Section II, or because a Section V definition quietly excludes the type of harm involved. Reading a CGL policy therefore means cross-referencing constantly, the word "occurrence" in Section I means exactly what Section V says it means, nothing more.
The form's language also assigns fixed meanings to everyday pronouns. "You" and "your" always refer to the named insured shown in the declarations, while "we," "us," and "our" refer to the insurance company. Any word in quotation marks is a defined term, which is the form's signal that the plain-English meaning does not control. These drafting conventions matter because most coverage disputes turn on definitions rather than on the broad promises in the insuring agreements.
How do Coverage A and its occurrence trigger work?
Coverage A contains two distinct promises: the insurer will pay sums the insured becomes legally obligated to pay as damages because of bodily injury or property damage, and the insurer has the right and duty to defend the insured against any suit seeking those damages. Legal obligation means a jury verdict, a bench judgment, or a negotiated settlement, a claimant's mere allegation does not establish it, though in most jurisdictions the insurer must defend the entire suit if even one allegation would fall within coverage if proven.
The insuring agreement also lets the insurer investigate and settle claims as it sees fit, with no consent-to-settle provision, so the company can resolve a claim on the insured's behalf without asking permission first.
For the payment promise to apply, the injury or damage must be caused by an occurrence, which the form defines as an accident, including continuous or repeated exposure to substantially the same general harmful conditions. The occurrence must take place in the coverage territory, and the injury or damage must happen during the policy period, when the claim is eventually filed is irrelevant, which is the defining feature of the occurrence trigger.
Our comparison of occurrence and claims-made policies walks through why that distinction matters years down the road. The form adds one important backstop: if specified insureds knew about the injury or damage before the policy began, any continuation or resumption of it is not covered, which prevents a business from buying a policy to respond to a problem it already knows about.
What do Coverage B and Coverage C add?
Coverage B mirrors the structure of Coverage A but swaps the trigger. Instead of responding to an occurrence, it responds to an offense committed during the policy period, drawn from a closed list of seven: false arrest or imprisonment, malicious prosecution, wrongful eviction or invasion of private occupancy, libel and slander, publication that violates a person's right of privacy, use of another's advertising idea in the insured's advertisement, and infringement of another's copyright, trade dress, or slogan in that advertisement.
If the harm complained of is not one of those seven offenses, Coverage B simply does not engage, no matter how sympathetic the claim. Consequential bodily injury flowing from a covered offense is picked up here because Coverage A excludes it.
Coverage C is built differently from both. It pays medical expenses for third parties injured by an accident on or next to the insured's premises, or arising from the insured's operations, regardless of fault, its entire purpose is to resolve small injuries quickly and preserve goodwill before anyone hires a lawyer.
The typical limit is $5,000 per person, expenses must be incurred and reported within one year of the accident, and the coverage never applies to the insured's own employees. Because it is a no-fault goodwill coverage rather than a liability coverage, Coverage C carries no defense obligation and no Supplementary Payments.
Why do defense costs sit outside the limits?
The Supplementary Payments section is where the CGL earns much of its value, and it applies to Coverages A and B only. When the insurer investigates, settles, or defends a claim, it pays all the associated expenses, lawyers, expert witnesses, court costs, adjusters, in addition to the limits of insurance, and those payments do not reduce the limits at all.
A business can burn through years of litigation without touching the money available to pay the eventual judgment. The section also picks up smaller items: up to $250 for bail bonds tied to covered vehicle accidents, the cost of bonds to release attachments within the limit, the insured's reasonable expenses incurred at the company's request including up to $250 per day in lost earnings, court costs taxed against the insured, and both pre-judgment and post-judgment interest.
This "defense outside the limits" arrangement has one hard stop. Once the applicable limit of insurance is exhausted by payments of judgments, settlements, or medical expenses, the insurer's duty to defend ends, for that suit and for future ones under the exhausted aggregate.
A business facing a wave of claims can find itself paying its own lawyers mid-lawsuit because earlier settlements drained the aggregate. There is also a narrower wrinkle for contractual indemnitees: when the insured has agreed in a contract to defend another party, that party's defense costs are paid as Supplementary Payments outside the limits only if a list of cooperation conditions is met, and otherwise those defense costs are paid inside the limits.
How does the CG 00 01 limits structure work?
Section III arranges the limits as a hierarchy rather than a menu, and the declarations of a typical policy show how the pieces stack:
| Limit | Typical amount | What it caps |
|---|---|---|
| Each Occurrence | $1,000,000 | The most paid for any one occurrence under Coverage A, including Coverage C payments from the same occurrence |
| General Aggregate | $2,000,000 | The most paid in the policy term for everything except products-completed operations losses |
| Products-Completed Operations Aggregate | $2,000,000 | The most paid in the policy term for products and completed work losses |
| Personal and Advertising Injury | $1,000,000 | The most paid to any one person or organization under Coverage B |
| Damage to Premises Rented to You | $100,000 | A sublimit within the each-occurrence limit for damage to rented premises |
| Medical Expense | $5,000 | The most paid per person under Coverage C |
The aggregates are the ceilings that matter most. Every damages payment first applies against the each-occurrence limit, and the same dollars simultaneously reduce the general aggregate, unless the loss falls within the products-completed operations hazard, in which case they reduce that separate aggregate instead.
The two aggregates never share: a named insured cannot move unused limit from one to the other, and exhausting one leaves the other fully intact. The sublimits nest inside the structure rather than adding to it, so a $20,000 medical payments claim from an occurrence leaves only $980,000 of that occurrence's limit for a later bodily injury suit arising from the same event.
Contractors and multi-location businesses should know the aggregates can be re-plumbed by endorsement. The Designated Construction Project General Aggregate endorsement (CG 25 03) gives each scheduled project its own separate aggregate equal to the declarations amount, and CG 25 04 does the same per scheduled location, so a bad year at one jobsite or store does not drain the limit available everywhere else.
Who is an insured under the form?
Section II sorts insureds into recognizable tiers rather than listing names. The named insured shown in the declarations comes first, and the entity type shown there determines who is automatically swept in, a sole proprietor's spouse, a partnership's partners and their spouses, an LLC's members and managers, or a corporation's executive officers, directors, and stockholders, each only within their business roles.
Employees and volunteer workers are automatic insureds for acts within the scope of their duties, subject to carve-outs for injuries to co-workers, professional health care services, and damage to property in the insured's care. Newly acquired or formed organizations other than partnerships, joint ventures, and LLCs get automatic named insured status, but only for 90 days or until the policy period ends, whichever comes first. Our general liability overview walks through these categories entity by entity.
Just as important is who is not an insured: no person or organization has coverage for the conduct of any current or past partnership, joint venture, or LLC that is not shown as a named insured in the declarations. That single sentence produces real-world gaps, as when a partnership incorporates and the old partnership quietly loses completed operations coverage for its past work unless it stays on the policy. Anyone outside Section II who needs insured status, a landlord, a project owner, a general contractor, must be added by endorsement, which is exactly what additional insured endorsements do.
How do endorsements modify the base form?
The coverage form is a standardized starting point, and endorsements are the amendments that add, change, or restrict its terms for a specific policyholder. Some broaden coverage: CG 24 07 redefines the products hazard so a restaurant patron sickened by food eaten on the premises is still covered, and the CG 25 series described above multiplies the aggregates by project or location.
Others graft new insureds onto Section II, with CG 20 10 for ongoing operations being the workhorse that construction contracts demand, our form library has explainers for these and the other endorsements you will see on real endorsement schedules. Still others narrow the form: CG 21 44 restricts coverage to designated premises or projects listed in its schedule, CG 21 35 deletes Coverage C entirely, and CG 24 13 removes the right-of-privacy publication offense from Coverage B.
The practical consequence is that no two CGL policies with the same base form are necessarily the same policy. The endorsement schedule on the declarations controls, and a single narrowing endorsement can undo more coverage than the base form grants. Reviewing that schedule against your actual operations, every location, every project, every contract that names other parties, is the step that separates owning a policy from being covered by one.
Frequently asked questions
What is the difference between the each-occurrence limit and the general aggregate?
The each-occurrence limit is the most the insurer pays for any single occurrence, while the general aggregate is the most it pays for all covered losses combined during the policy term, excluding products and completed operations losses. Every payment erodes both at once, and when the aggregate runs out coverage ends even if no single claim ever hit the per-occurrence cap.
Do defense costs reduce my CGL limits?
No. Under the standard form, defense costs are Supplementary Payments made in addition to the limits of insurance, so investigation expenses, attorney fees, and court costs do not draw down the money available for judgments and settlements. The duty to defend does end, however, once the applicable limit is exhausted by payments of judgments, settlements, or medical expenses.
Why does the CGL have two separate aggregate limits?
Products and completed operations losses tend to surface long after the work is done, so the form quarantines them under their own aggregate. That separation means a bad year of premises and operations claims cannot drain the limit reserved for product and completed-work claims, and vice versa. The two aggregates cannot be combined or transferred between each other.
Is Coverage C really no-fault coverage?
Yes. Coverage C pays medical expenses for third parties injured on or next to your premises or by your operations without any determination that you were legally liable. It exists to settle small injuries quickly and preserve goodwill, with a modest per-person limit, a one-year window to incur and report expenses, and no application to your own employees.
This guide is for educational purposes and summarizes standard ISO policy language. Your policy's specific terms, conditions, and endorsements control. Talk to a licensed broker about your actual exposures.