The “Conditions” section is the fourth of five sections in the standard form CGL (Commercial General Liability) policy. It contains several items that are of critical importance, beginning with your duties in the event of an occurrence, offense, claim or suit.
The first thing that you must do when there is an occurrence, or when someone makes a claim or files a lawsuit, is to notify your insurance company. We have a January 11, 2017 post dedicated to providing timely notice. In a nutshell, you should provide written notice, to the name(s) and address(es) listed in the policy, as soon as practicable. If you fail to do this, you may lose the coverage that you paid for. You must also cooperate with your insurance company after providing notice. For more details on cooperation, see our post dated December 1, 2016.
Next, the Conditions section usually contains an “Other Insurance” provision that will specify how things work if there is other insurance that may provide coverage. Typically, this provision will say that the CGL policy provides primary coverage, unless certain other types of insurance are available, in which case the CGL policy will provide excess coverage. In those situations, the other policies are required to respond first and provide you with a defense.
Third, the Conditions section contains a “Transfer of Rights” provision that states that if you have any right to recover all or part of any payments made by the insurance company, those rights are transferred to the insurance company, and you will do nothing to impair those rights (for example, sign a release of those rights).
Finally, the Conditions section includes “Representations” provisions in which you agree that the statements on the Declarations page are accurate and complete; that those statements are based on representations you made to the insurance company; and that the insurance company has issued the policy in reliance on those representations. If any of those representations was false, you may lose coverage, so make sure that whatever information you provide to your insurance company is accurate.