In an earlier post we briefly described the three main parts of a commercial general liability (“CGL”) policy: (1) the declarations page; (2) the policy form; and (3) the endorsements. This post will teach you how to read the first item that you will see in your CGL policy, the declarations page.
The declarations page (or pages) is often called the “Dec Page” or the “Information Page.” It is usually titled “Coverage Part Declarations,” or “Comprehensive Liability Policy Declarations Page.” The purpose of the declarations page is to summarize the key policy information in one or two pages, including (in order) the following items:
- The named insured, the agent or other producer, the policy number and the specific company issuing the policy;
- The policy period, usually expressed as from one date to another date; e.g.: Item 2. Policy Period: From 12:01 A.M. standard time July 1, 2019 to July 1, 2020 at the insured’s mailing address.
- The “Limits of Insurance” for each of the coverages provided, which usually looks something like this:
Item 3. Limits of Insurance
General Aggregate Limit: $2,000,000
Products/Completed Operations Aggregate Limit: $1,000,000
Personal and Advertising Injury Limit: $1,000,000 for any one person or organization
Each Occurrence Limit: $1,000,000
Damage to Premises Rented to Your Limit: $50,000 for any one premises
Medical Expense Limit: $100,000 for any one person
- The General Aggregate limit in a CGL policy is the most that the insurance company will pay for all losses during the policy period for covered bodily injury, property damage, or advertising injury claims. (Loss in connection with the products/completed operations hazard might be subject to a separate aggregate limit). So, once the paid losses for those items reach the aggregate limit, the policy is “exhausted,” and no further payments will be made.
- The Products/Completed Operations limit is the most that the insurance company will pay for bodily injury or property damage arising from (1) a product that the insured makes, or (2) work that the insured has completed away from premises that it owns or occupies.
- The Personal and Advertising Injury limit is the most that the insurer will pay for personal or advertising injury during the policy period.
- The Each Occurrence (also called Per Occurrence) limit is the most that the insurer will pay for all claims resulting from a single occurrence, no matter how many people are injured, or how much property is damaged, or how many claimants submit claims.
- A brief description of the business (corporation, LLC, etc., and what it does, e.g. manufacturing) and the location of all premises that it owns, rents or occupies;
- A premium summary (how much you are being charged); and
- A list of endorsements that are included with the policy. Endorsements (also called “Riders”) are changes, additions or amendments to the policy — they add, remove, or amend one or more policy provisions.
The Declarations Page is the first step in understanding your insurance policy. Later posts will look at what is included in the policy form itself.