Liability Glossary       A B C D E F G H L M O P S U

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Advertising Injury
Injury arising out of libel or slander, violation of the right to privacy, misappropriation of advertising ideas, or infringement of copyright, title or slogan committed in the course of advertising goods, products, or services. Contrast with Personal Injury.

Aggregate Products Liability Limit
This limit represents the amount of money which an insurer will pay during the term of a policy for all Products Liability claims which it covers.

Bodily Injury Liability (BI)
A legal liability that may arise as a result of the injury or death of another person.

Broad Form Property Damage Endorsement
An endorsement to a General Liability policy that deletes the exclusion referring to property in the care, custody, or control of the insured and replaces it with a less restrictive exclusion.

Business Liability
The term used to describe the liability coverages provided by the Businessowners Liability Coverage Form. It includes liability for bodily injury, property damage, personal injury, advertising injury, and fire damage.

Businessowners Policy
A policy similar to the Special Multi-Peril policy. It provides Broad Property and Liability coverage in a single contract and is designed for small and medium-sized mercantile, office, or apartment risks. (The SMP policy can also be made to provide broad coverage, but additional endorsements are required.)

Care, Custody and Control
Most Liability Insurance policies exclude coverage for damage to property in the care, custody, or control of the insured. In some cases this type of coverage is not available; in other cases it can be purchased through certain forms of Inland Marine Insurance, like Installation Floaters, and in some cases this exclusion can be made less restrictive by adding a Broad Form Property Damage Endorsement.

Casualty Insurance
That type of insurance that is primarily concerned with the legal liability for losses caused by injury to persons or damage to the property of others. It also includes such diverse forms as Plate Glass Insurance, Crime Insurance, Boiler and Machinery Insurance, and Aviation Insurance. Many Casualty insurers also write surety bonds. Casualty insurers write forms of insurance not considered Property forms. Contrast with Property Insurance.

Care, Custody and Control
Most Liability Insurance policies exclude coverage for damage to property in the care, custody, or control of the insured. In some cases this type of coverage is not available; in other cases it can be purchased through certain forms of Inland Marine Insurance, like Installation Floaters, and in some cases this exclusion can be made less restrictive by adding a Broad Form Property Damage Endorsement.

Casualty Insurance
That type of insurance that is primarily concerned with the legal liability for losses caused by injury to persons or damage to the property of others. It also includes such diverse forms as Plate Glass Insurance, Crime Insurance, Boiler and Machinery Insurance, and Aviation Insurance. Many Casualty insurers also write surety bonds. Casualty insurers write forms of insurance not considered Property forms. Contrast with Property Insurance.

Claims-Made Coverage
A policy providing liability coverage only if a written claim is made during the policy period or any applicable extended reporting period. For example, a claim made in the current year could be charged against the current policy even if the injury or loss occurred many years in the past. If the policy has a retroactive date, an occurrence prior to that date is not covered. Contrast with Occurrence Coverage.

Combined Single Limit
A single limit of protection for both Bodily Injury and/or Property Damage, contrasted with split limits, where specific limits apply to Bodily Injury and Property Damage separately. (

Commercial General Liability (CGL) Coverage Part
General liability coverage which may be written as a monoline policy or part of a commercial package. "CGL" now means "commercial" general liability forms which have replaced the earlier "comprehensive" general liability forms. The latest forms include all sublines, provide very broad coverage, and two variations are available _ "Occurrence" or "Claims-Made" coverage.

Completed Operations Insurance
A form of insurance issued particularly to various types of contractors. It covers a contractor's liability for accidents arising out of jobs or operations that he has completed. See also Products-Completed Operations Insurance.

Comprehensive General Liability
A policy covering a variety of general liability exposures, including Premises and Operations (OL&T or M&C), Completed Operations, Products Liability, and Owners and Contractors Protective. Contractual Liability and Broad Form coverages could be added. In most jurisdictions, the "Comprehensive" General Liability policy has been replaced by the newer "Commercial" General Liability (CGL) forms which include all the standard and optional coverages of the earlier forms. See also Commercial General Liability.

Comprehensive Personal Liability
This coverage protects individuals and families from liability for nearly all types of accidents caused by them in their personal lives as opposed to business lives. It is most commonly a part of the protection provided by a Homeowners policy.

Contingent Liability
A liability imposed because of accidents caused by persons other than employees for whose acts an individual, partnership or corporation may be responsible. For example, an insured who hires an independent contractor can in some cases be held liable for his negligence.

Contractual (or Assumed) Liability Insurance
This insurance protects the insured in the event a loss occurs for which he has assumed liability, express or implied, under a written contract. For example, under most construction agreements with a municipality, the contractor agrees to "hold the municipality harmless" for any accidents arising out of the job. Contractual Liability Insurance would thus protect the contractor from any loss for which the municipality would be liable in connection with the construction.

Directors and Officers Liability Insurance
Insurance that protects directors and officers from liability claims arising out of alleged errors in judgment, breaches of duty, and wrongful acts related to their organizational activities.

Dram Shop Liability Insurance
A form of insurance contract that protects the owners of an establishment in which alcoholic beverages are sold against liability arising out of accidents caused by intoxicated customers who have been served or sold the alcoholic beverages.

ERISA Liability
Liability imposed by law upon officers or other employees operating in a fiduciary capacity for the proper handling of pension funds and other employee benefits. It is excluded from most General Liability policies. See Employee Retirement Income Security Act (ERISA).

Errors and Omissions Insurance
A form of insurance that indemnifies the insured for any loss sustained because of an error or oversight on his part.

Excess Limit
(1) That limit provided in a policy which is in excess of the basic limit. See Basic Limit. (2) A limit provided in a separate policy with another insurer which is in excess of the limit provided in the basic policy.

Fire Damage Limit
A General Liability limit that applies only to the coverage for fire legal liability.

Garage Keepers Legal Liability Insurance
An insurance contract that protects a garage keeper against liability for damage to vehicles in his care, custody, or control caused by specific perils.

Garage Liability Insurance
Insurance to protect garage owners or automobile dealers for liabilities arising out of their business operations.

General Aggregate Limit
A Commercial General Liability limit that applies to all damages paid for bodily injury, property damage, personal injury, advertising injury, and medical expenses, except damages included in the products-completed operations hazard.

General Liability Insurance
A form of insurance designed to protect owners and operators of businesses from a wide variety if liability exposures. These exposures could include liability arising out of accidents resulting from the premises or the operations of an insured, products sold by the insured, operations completed by the insured, and contractual liability.

Hold Harmless Agreement
A contractual arrangement whereby one party assumes the liability inherent in a situation, thereby relieving the other party of responsibility. Such agreements are typically found in contracts like leases, sidetrack agreements, and easements. For example, a typical lease may provide that the lessee must "hold harmless" the lessor for any liability from accidents arising out of the premises. The effect of such an agreement is that the lessee must provide a defense for the lessor, and if any judgment is rendered against the lessor, the lessee would have to pay.

Limit of Liability
The maximum amount for which an insurer is liable as set forth in the contract.

Mobile Equipment
A term defined in General Liability policies as land vehicles, including machinery and apparatus attached thereto, whether or not self-propelled, and (1) not subject to motor vehicle registration, or (2) used exclusively on the insured's premises, or (3) designed principally for use off public roads, or (4) designed or maintained for the sole purpose of providing mobility for permanently attached equipment such as cranes, loaders, pumps, generators, or welding equipment.

Occurrence Coverage
A policy form providing liability coverage only for injury or damage that occurs during the policy period, regardless of when the claim is actually made. For example, a claim made in the current policy year could be charged against a prior policy period, or may not be covered, if it arises from an occurrence prior to the effective date. Contrast with Claims-Made Coverage.

Officers and Directors Liability Insurance
A type of insurance which protects the officers and directors of a corporation against damages resulting from negligent or wrongful acts which may harm the corporation or its stockholders.

Owners and Contractors Protective Liability Policy
A policy which protects an insured against losses caused by the negligence of a contractor or subcontractor that he hires. Also sometimes referred to as Independent Contractors Insurance.

Owners, Landlords, and Tenants Liability Insurance (OL&T)
Coverage for an insured against legal liability for bodily injury or property damage caused to others by negligence and arising out of the ownership, maintenance, or use of the premises designated in the policy and all operations necessary or incidental to those premises. A form of Premises and Operations Liability Insurance designed to cover premises where the public is invited. The OL&T form has largely been replaced by the Commercial General Liability Coverage Form.

Personal Injury
Injury other than bodily injury arising out of false arrest or detention, malicious prosecution, wrongful entry or eviction, libel or slander, or violation of a person's right to privacy committed other than in the course of advertising, publishing, broadcasting or telecasting. Contrast with Advertising Injury.

Premises and Operations Liability Insurance
Liability coverage for exposures arising out of an insured's premises and business operations. One of the two major sublines of general liability. Contrast with Products and Completed Operations Insurance.

Products and Completed Operations Insurance
A major general liability subline which provides coverage for an insured against claims arising out of products sold, manufactured, handled, or distributed, or operations which are complete. Claims are covered only after a product has been sold and possession relinquished, or operations have been completed or abandoned by the named insured. Manufacturers and contractors have a need for this coverage. Contrast with Premises and Operations Liability.

Property Damage Liability Insurance
Protection against liability for damage to the property of another, including loss of the use of the property, as distinguished from liability for bodily injury to another. In the majority of cases it is written along with Bodily Injury Liability protection.

Special Multi-Peril (SMP)
A Business policy which combined into one contract the coverages normally purchased under several. Property and Liability coverages were mandatory, Crime and Boiler and Machinery were optional. Many other options and endorsements allowed the SMP to be tailor made for each policyholder. Largely replaced by new commercial forms. See Commercial Package Policy.

Supplementary Payments
A provision in most liability policies under which the insurer agrees to pay defense costs, premiums on various bonds, interest accruing after a judgment, and other reasonable expenses in addition to the limit of liability.

Umbrella Liability Policy
A coverage basically affording high limit coverage in excess of the limits of the primary policies as well as additional liability coverages. These additional coverages are usually subject to a substantial self-insured retention. The term "umbrella" is derived from the fact that it is a separate policy over and above any other basic Liability policies the insured may have.

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