Study guide
8.5 CGL Exclusions
Property & Casualty Insurance Exam
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1 Introduction
0.1 About the Property & Casualty Exam 0.2 How to Use This Course
2 Chapter 1: Insurance Fundamentals
1.1 Risk and Risk Management 1.2 Types of Risk 1.3 Principles of Insurance 1.4 The Insurance Contract 1.5 Policy Structure and Components
3 Chapter 2: Property Insurance Concepts
2.1 Property Coverage Basics 2.2 Perils, Hazards, and Exclusions 2.3 Valuation Methods 2.4 Coinsurance and Insurance to Value 2.5 Deductibles and Policy Limits
4 Chapter 3: Dwelling Policies
3.1 Dwelling Policy Overview 3.2 Dwelling Policy Forms (DP-1, DP-2, DP-3) 3.3 Dwelling Property Coverages 3.4 Dwelling Exclusions and Conditions
5 Chapter 4: Homeowners Policies
4.1 Homeowners Policy Overview 4.2 Homeowners Policy Forms (HO-2 through HO-8) 4.3 Section I: Property Coverages 4.4 Section II: Liability Coverages 4.5 Homeowners Exclusions 4.6 Homeowners Conditions 4.7 Common Homeowners Endorsements
6 Chapter 5: Personal Auto Policy
5.1 Personal Auto Policy Overview 5.2 Part A: Liability Coverage 5.3 Part B: Medical Payments Coverage 5.4 Part C: Uninsured/Underinsured Motorists 5.5 Part D: Physical Damage Coverage 5.6 PAP Exclusions 5.7 No-Fault Insurance and PIP
7 Chapter 6: Liability Insurance Concepts
6.1 Liability Insurance Basics 6.2 Negligence and Tort Law 6.3 Types of Legal Liability 6.4 Personal Umbrella Policies
8 Chapter 7: Commercial Property Insurance
7.1 Commercial Package Policy (CPP) 7.2 Building and Personal Property Coverage Form 7.3 Causes of Loss Forms 7.4 Business Income Coverage 7.5 Businessowners Policy (BOP)
9 Chapter 8: Commercial General Liability
8.1 CGL Policy Overview 8.2 Coverage A: Bodily Injury and Property Damage 8.3 Coverage B: Personal and Advertising Injury 8.4 Coverage C: Medical Payments 8.5 CGL Exclusions 8.6 CGL Limits and Conditions
10 Chapter 9: Commercial Auto Insurance
9.1 Business Auto Policy Overview 9.2 Covered Auto Designation Symbols 9.3 BAP Liability Coverage 9.4 BAP Physical Damage Coverage 9.5 Garage and Truckers Coverage Forms
11 Chapter 10: Workers Compensation
10.1 Workers Compensation Overview 10.2 Part One: Workers Compensation Insurance 10.3 Part Two: Employers Liability 10.4 Workers Compensation Exclusions 10.5 Other States and USL&H Coverage
12 Chapter 11: Other Commercial Lines
11.1 Inland Marine Insurance 11.2 Ocean Marine Insurance 11.3 Commercial Crime Insurance 11.4 Surety Bonds 11.5 National Flood Insurance Program 11.6 Professional Liability Insurance 11.7 Commercial Umbrella and Excess Liability 11.8 Boatowners and Personal Watercraft Insurance 11.9 Farm and Ranch Insurance 11.10 Mobile Home and Manufactured Housing Insurance 11.11 Title Insurance
13 Chapter 12: Insurance Regulations and Ethics
12.1 Producer Licensing 12.2 Producer Authority and Responsibilities 12.3 Unfair Trade Practices 12.4 Claims Settlement Practices 12.5 State Insurance Department 12.6 Penalties and Disciplinary Actions
8.5 CGL Exclusions
Key Takeaways Explain This Topic AI
CGL exclusions exist to remove exposures better placed on other policies (auto, workers comp, professional liability, pollution) and to bar uninsurable risks (intentional acts, war, contractual liability assumed beyond an insured contract).
The expected-or-intended exclusion bars injury the insured expected or intended, but contains an exception for reasonable force used to protect persons or property.
The contractual liability exclusion has the critical 'insured contract' exception — coverage is preserved for tort liability assumed in leases, easements, sidetrack agreements, elevator-maintenance agreements, and similar contracts.
Care, custody, or control plus the damage-to-your-product and damage-to-your-work exclusions remove coverage for the insured's own goods and workmanship; the your-work exclusion has a subcontractor exception.
The pollution exclusion is broad, but a hostile-fire exception preserves coverage when a fire that escapes its intended boundaries releases pollutants.
Last updated: June 2026
Why the CGL Excludes So Much
The CGL is a broad grant narrowed by exclusions that (1) bar uninsurable risk, (2) prevent duplicate coverage that belongs on another policy, and (3) reduce moral hazard . Coverage A has roughly 15 exclusions (lettered a–q in the form); Coverage B has its own set.
- Coverage A Exclusions to Master
- a. Expected or Intended Injury
BI/PD the insured expected or intended is excluded. Exception: BI resulting from the use of reasonable force to protect persons or property .
Trap: the act may be intentional while the injury is not. Swinging a hammer is intentional; accidentally striking a bystander is not an intended injury, so coverage may still apply.
b. Contractual Liability — the Insured-Contract Exception
Liability the insured assumes under a contract is excluded, except :
- liability the insured would have without the contract (i.e., its own tort liability); and
- liability assumed in an "insured contract."
- Six "insured contracts"
- Lease of premises Sidetrack (railroad) agreement
- Easement or license agreement Obligation to indemnify a municipality (permits)
Elevator maintenance agreement Tort liability assumed in another's behalf in any contract pertaining to the insured's business
c. Liquor Liability
Excluded for businesses in the alcohol trade (manufacture, sale, serving) — bars, restaurants, liquor stores. Social hosts are not excluded. Solution: separate Liquor Liability coverage.
d–e. Workers Comp & Employer's Liability
Excludes any obligation under workers compensation law and BI to an employee arising out of employment. Employee injuries go to WC / Employers Liability ; wrongful-termination and harassment go to EPLI .
f. Pollution — the Hostile-Fire Exception
The pollution exclusion is very broad (cleanup, discharge, dispersal of pollutants). Key exception: BI/PD caused by heat, smoke, or fumes from a hostile fire (a fire that breaks out from where it was intended to be) is covered . Other pollution needs Environmental/Pollution Liability .
g. Aircraft, Auto, Watercraft — and the Mobile-Equipment Line
BI/PD from owning, operating, or using aircraft, autos, or watercraft is excluded (use Aviation, Business Auto, or Watercraft policies). But mobile equipment is covered by the CGL.
Vehicle CGL covers it?
- Forklift used on premises Yes (mobile equipment)
- Bulldozer/crane at a job site Yes (mobile equipment)
- Licensed road vehicle No (Business Auto)
- j. Care, Custody, or Control (CCC)
Excludes PD to property the insured owns, rents, occupies, sells, loans, or has in its care, custody, or control , and to that particular part of property the insured is working on. Exception: the Damage to Premises Rented to You grant covers fire (and short-term rental) damage up to a separate limit (typically $100,000 ).
k–n. Damage to Your Product / Your Work / Impaired Property / Recall
Your product — PD to the insured's own product is excluded (business risk, not insurance).
Your work — PD to the insured's completed work is excluded, except when the damaged work or the cause was performed by a subcontractor (the subcontractor exception is heavily tested).
Impaired property — loss of use of property not physically damaged, when caused by a deficient product/work.
Recall ("sistership") — costs of withdrawing or recalling products are excluded.
Coverage B Exclusions (Recap)
- Exclusion Bars
- Knowing violation of rights Intentional rights violations
- Material published with knowledge of falsity Knowing-falsity defamation
- Material first published before the policy Prior publication
- Criminal acts By or at the insured's direction
- Quality/performance/price of goods Advertising misstatements
- Patent/trademark/trade-secret infringement Except copyright/trade-dress/slogan in an ad
- Insureds in the media business Need media liability
- Exclusion-to-Solution Cheat Sheet
- Excluded exposure Buy this instead
- Auto liability Business Auto Policy
- Employee injury Workers Comp / Employers Liability
- Professional error Professional Liability (E&O)
- Pollution Environmental/Pollution Liability
- Employment practices EPLI
- Liquor (in the trade) Liquor Liability
- Directors & officers acts D&O Liability
- Reading an Exclusion the Way the Exam Tests It
Exclusions are tested less on memorizing names and more on applying exceptions . A typical question gives a fact pattern that looks excluded, then rewards the candidate who spots the exception that restores coverage . Train yourself to ask, for each major exclusion, "Is there an exception, and does it apply here?"
- Exclusion Exception that can restore coverage
- Expected or intended Reasonable force to protect persons/property
- Contractual liability Liability in an "insured contract" or own-tort liability
- Care, custody, control Damage to Premises Rented to You (fire, ~$100K)
- Damage to your work Work performed by a subcontractor
- Pollution Heat/smoke/fumes from a hostile fire
- Mobile Equipment vs. Auto — the Classic Crossover
The auto exclusion and the mobile-equipment definition interact in a way the exam loves. A vehicle is mobile equipment (covered by the CGL) if it is land machinery used at a job site or premises and not subject to motor-vehicle registration. The same physical machine can flip to being an auto (excluded, needs Business Auto) if it travels public roads under its own power and carries permanently attached equipment.
Worked example: A self-propelled crane working inside a fenced job site is mobile equipment under the CGL. The same crane causing damage while driven on a public highway is treated as an auto and is excluded — the contractor needs Business Auto coverage for that exposure. Always check where and how the machine was being used.
Business-Risk Exclusions (Your Product / Your Work)
The "your product" and "your work" exclusions reflect a core insurance principle: the CGL covers liability for damage to others , not the cost of redoing the insured's own defective work or replacing its own defective product . Those are business risks the insured controls through quality and warranty, not insurable fortuities. The narrow but vital subcontractor exception to the your-work exclusion recognizes that a general contractor cannot fully control a sub's workmanship, so damage caused by a sub's faulty work can remain covered.