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By: Mandy Proctor
It is commonly understood in the insurance industry that the standard CGL policy provides coverage for bodily injury and property damage, which is caused by an “occurrence” resulting in loss during the policy period, as well as personal and advertising injury caused by an “offense” committed during the policy period. “Occurrence” in this context means an “accident, including continuous or repeated exposure to substantially the same general harmful conditions.” An “offense,” by contrast, generally connotes an intentional act. The standard CGL policy defines seven specific “offenses,” which fall within the grant of coverage, including, among others, false arrest, detention, or imprisonment, malicious prosecution, and oral or written publication, in any manner, of material that slanders or libels a person or organization or disparages a person’s or organization’s goods, products or services.
These two acts—the occurrence and the offense—are critical to understanding the trigger of coverage under the standard CGL policy, but the significance of when these acts transpire is often misunderstood by both courts and practitioners alike. Specifically, with respect to coverage for bodily injury and property damage caused by “occurrence,” some mistakenly believe that it is the “occurrence” that must take place during the policy period to trigger coverage. On the contrary, it is the actual bodily injury or property damage—not the event that caused it—that triggers coverage. The confusion arises in part because, as a practical matter, the “occurrence” and the damage generally occur at the same time. But consider the following hypothetical: A roofing company replaces a roof in 2005. A year later, water leaks through the roof because the roof was improperly installed, causing property damage in the attic. If the roofing company is insured under a standard CGL policy in 2006, the property damage would trigger coverage under that subsequent policy, even though the “occurrence” that caused it occurred a year earlier. By contrast, coverage for personal and advertising injury is only triggered if the offense causing the injury is committed during the policy period. The distinction, though seemingly minute, bears repeating as it can have far-reaching implications.